|
on Technology and Industrial Dynamics |
| By: | Aghion, Philippe; Bénabou, Roland; Martin, Ralf; Roulet, Alexandra |
| Abstract: | This paper investigates the joint effect of consumers' environmental concerns and product-market competition on firms' decisions whether to innovate "clean" or "dirty". We first develop a step-by-step innovation model to capture the basic intuition that socially responsible consumers induce firms to escape competition by pursuing greener innovations. To test and quantify the theory, we bring together patent data, survey data on environmental values, and competition measures. Using a panel of 8,562 firms from the automobile sector that patented in 42 countries between 1998 and 2012, we indeed find that greater exposure to environmental attitudes has a significant positive effect on the probability for a firm to innovate in the clean direction, and all the more so the higher the degree of product market competition. Results suggest that the combination of historically realistic increases in prosocial attitudes and product market competition can have the same effect on green innovation as major increase in fuel prices. |
| Keywords: | climate change; Competition; Environment; Innovation; patents; Social Responsibility |
| JEL: | D21 D22 D62 D64 H23 O3 O31 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14581&r=all |
| By: | Jacob, Nicholas; Mion, Giordano |
| Abstract: | Ever since Marshall (1890) agglomeration externalities have been viewed as the key factor explaining the existence of cities and their size. However, while the various micro foundations of agglomeration externalities stress the importance of Total Factor Productivity (TFP), the empirical evidence on agglomeration externalities rests on measures obtained using firm revenue or value-added as a measure of firm output: revenue-based TFP (TFP-R). This paper uses data on French manufacturing firms' revenue, quantity and prices to estimate TFP and TFP-R and decompose the latter into various elements. Our analysis suggests that the revenue productivity advantage of denser areas is mainly driven by higher prices charged rather than differences in TFP. At the same time, firms in denser areas are able to sell higher quantities, and generate higher revenues, despite higher prices. These and other results we document suggest that firms in denser areas are able to charge higher prices because they sell higher demand/quality products. Finally, while the correlation between firm revenue TFP and firm size is positive in each location, it is also systematically related to density: firms with higher (lower) TFP-R account for a larger (smaller) share of total revenue in denser areas. These patterns thus amplify in aggregate regional-level figures any firm-level differences in productivity across space. |
| Keywords: | Agglomeration externalities; demand; density; prices; Quality; Revenue-based TFP; Total factor productivity (TFP) |
| JEL: | D24 L11 R12 R15 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14644&r=all |
| By: | Argente, David; Baslandze, Salomé; Hanley, Douglas; Moreira, Sara |
| Abstract: | We study the relationship between patents and actual product innovation in the market, and how this relationship varies with firms' market share. We use textual analysis to create a new data set that links patents to products of firms in the consumer goods sector. We find that patent filings are positively associated with subsequent product innovation by firms, but at least half of product innovation and growth comes from firms that never patent. We also find that market leaders use patents differently from followers. Market leaders have lower product innovation rates, though they rely on patents more. Patents of market leaders relate to higher future sales above and beyond their effect on product innovation, and these patents are associated with declining product introduction on the part of competitors, which is consistent with the notion that market leaders use their patents to limit competition. We then use a model to analyze the firms' patenting and product innovation decisions. We show that the private value of a patent is particularly high for large firms as patents protect large market shares of existing products. |
| Keywords: | creative destruction; growth; Innovation; patent value; patents; productivity |
| JEL: | O3 O4 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14692&r=all |
| By: | Gamal Atallah (Department of Economics, University of Ottawa, Ottawa, ON); Claudia De Fuentes (Department of Management, Sobey School of Business, Saint Mary’s University); Christine A. Panasian (Department of Finance, Information Systems and Management Science, Sobey School of Business, Saint Mary’s University) |
| Abstract: | Using a large sample of North American firms, from 1999 to 2016, we investigate the effect of corporate governance structures, specifically ownership, board characteristics, and executive compensation contracts on innovation intensity and output. We consider both R&D expenditures and patents as innovation proxies and evaluate consequences of the economic downturns of 2000 and 2008. We find that R&D investment increases with ownership by institutional blockholders and with the number of institutional owners, confirming the key role institutions play in innovation activities of firms. We observe higher R&D levels for firms with more independent boards, more females board members and more outside directorships held by directors. We report that firms with CEO/chair of the board duality have lower R&D intensity, as do firms with higher ownership by directors and with a higher mean board age. Innovation is negatively related to CEO salary levels, but positively related to the ratio of incentives to total compensation, confirming that incentives contribute to aligning shareholders and management interests, which leads to better long-term decisions. However, those incentives reduce the number of patents. We do not find any systematic changes in R&D for the 2000 recession, however there is an increase for the 2008 financial crisis. |
| Keywords: | Corporate Governance, Corporate Finance and Governance, Innovation, R&D investment, Canada, United States. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ott:wpaper:2001e&r=all |
| By: | Fernando DePaolis; Phil Murphy; M. Clara DePaolis Kaluza |
| Abstract: | By applying network analysis techniques to large input-output system, we identify key sectors in the local/regional economy. We overcome the limitations of traditional measures of centrality by using random-walk based measures, as an extension of Blochl et al. (2011). These are more appropriate to analyze very dense networks, i.e. those in which most nodes are connected to all other nodes. These measures also allow for the presence of recursive ties (loops), since these are common in economic systems (depending to the level of aggregation, most firms buy from and sell to other firms in the same industrial sector). The centrality measures we present are well suited for capturing sectoral effects missing from the usual output and employment multipliers. We also develop an R package (xtranat) for the processing of data from IMPLAN(R) models and for computing the newly developed measures. |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2005.11285&r=all |
| By: | Ferrando, Annalisa; Rossi, Stefania P. S.; Bonanno, Graziella |
| Abstract: | This paper aims at investigating the relationship between firms’ profit efficiency, access to finance and innovation activities. We enrich our understanding on firms’ performance by adopting the stochastic frontier approach (SFA), which allows us to estimate profit functions and to obtain efficiency scores for a large sample of European firms. We pioneer the use of a novel dataset that merges survey-based data derived from the ECB Survey on access to finance for enterprises (SAFE) with balance sheet information. Our evidence documents that credit constrained firms display an incentive to improve their efficiency in order to increase profitability. Among firms that have embarked in product innovation, those in the industry and high-tech sectors see their effort translated in higher profit efficiency. From a policy perspective, our results could help to better understand the link between innovation, financial constraints and efficiency, which goes beyond the idea that easier access to finance is the panacea to get higher profit efficiency. JEL Classification: D22, D24, L23, O31, C33 |
| Keywords: | access to finance, innovation, stochastic frontier approach, survey data |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20202419&r=all |
| By: | Riccardo Gianluigi Serio; Maria Michela Dickson; Diego Giuliani; Giuseppe Espa |
| Abstract: | Many studies have analyzed empirically the determinants of survival for innovative startup companies using data about the characteristics of entrepreneurs and management or focusing on firm- and industry-specific variables. However, no attempts have been made so far to assess the role of the environmental sustainability of the production process. Based on data describing the characteristics of the Italian innovative startups in the period 2009-2018, this article studies the differences in survival between green and non-green companies. We show that, while controlling for other confounding factors, startups characterized by a green production process tend to survive longer than their counterparts. In particular, we estimate that a green innovative startup is more than twice as likely to survive than a non-green one. This evidence may support the idea that environment sustainability can help economic development. |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2005.12102&r=all |
| By: | Alje van Dam; Koen Frenken |
| Abstract: | Against the background of renewed interest in vertical support policies targeting specific industries or technologies, we investigate the effects of vertical vs. horizontal policies in a combinatorial model of economic development. In the framework we propose, an economy develops by acquiring new capabilities allowing for the production of an ever greater variety of products with an increasing complexity. Innovation policy can aim to expand the number of capabilities (vertical policy) or the ability to combine capabilities (horizontal policy). The model shows that for low-income countries, the two policies are complementary. For high-income countries that are specialised in the most complex products, focusing on horizontal policy only yields the highest returns. We reflect on the model results in the light of the contemporary debate on vertical policy. |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2006.04624&r=all |
| By: | Eduardo Levy Yeyati |
| Abstract: | Using job transition data from Argentina’s Household Survey, we document the extent to which human capital is specific to occupations and activities. Based on workers’ propensity to move between occupations/industries, we build Occupation and Industry Spaces to illustrate job similarities, and we compute an occupation and industry similarity measures that, in turn, we use to explain wage transition dynamics. We show that our similarity measures influence positively post-transition wages. Inasmuch as wages capture a worker´s marginal productivity and this productivity reflects the degree to which a worker matches the job’s skill demand, our results indicate that a worker´s human capital is specific to both occupation and activity: closer occupations share similar skill demands and task composition (in other words, demand similar workers) and imply a smaller human capital loss in the event of a transition. |
| Keywords: | Skills and Human Capital |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:cid:wpfacu:379&r=all |
| By: | Hiroya Taniguchi; Ken Yamada |
| Abstract: | In recent decades, the male-female wage gap has fallen, while the skilled-unskilled wage gap has risen in advanced countries. The rate of decline in the gender wage gap has tended to be greater for unskilled than skilled workers, while the rate of increase in the skill wage gap has tended to be greater for male than female workers. To account for these trends, we develop an aggregate production function extended to allow for gender-specific capital-skill complementarity, and estimate it using shift-hare instruments and cross-country panel data from OECD countries. We confirm that information and communication technology (ICT) equipment is not only more complementary to skilled than unskilled workers but also more complementary to female than male workers. Our results show that changes in gender and skill premia are the outcome of the race between progress in ICT and advances in female educational attainment and employment. |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2005.12600&r=all |
| By: | Atta-Owusu, Kwadwo; Fitjar, Rune Dahl; Rodríguez-Pose, Andrés |
| Abstract: | Research and innovation policy aims to boost research output and university-industry collaboration (UIC) at least in part to allow firms access to leading scientific knowledge. As part of their mission, universities are expected to contribute to innovation in their regions. However, the relationship between research output and UIC is unclear: research-intensive universities can produce frontier research, which is attractive to firms, but may also suffer from a gap between the research produced and the needs of local firms, as well as mission overload. This may hinder local firms' ability to cooperate with universities altogether or force them to look beyond the region for other suitable universities to interact with. This paper investigates the relationship between the research output of local universities and firms' participation in UICs across different geographical scales. It uses Community Innovation Survey (CIS) data for Norwegian firms and Scopus data on Norwegian universities' research output across various disciplines. The results demonstrate that local university research intensity and quality are negatively associated with firm participation in UICs at the local level. Firm characteristics, in particular the firm's general strategy towards cooperation and its geography, turn out to be much more important than university characteristics in explaining UICs. Notably, firms' cooperation with other external partners at the same scale is a strong predictor of UICs. |
| Keywords: | firms; Norway; Research; Universities; university-industry collaboration |
| JEL: | O31 O32 O33 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14565&r=all |
| By: | Wolfgang Habla (ZEW – Leibniz Centre for European Economic Research); Vera Huwe (ZEW – Leibniz Centre for European Economic Research); Martin Kesternich (University of Kassel) |
| Abstract: | We use car-level micro data to provide empirical evidence on the usage of conventional and electric vehicles (EVs) in private and car sharing fleets in Germany. We shed light on both monetary and non-monetary barriers to EV adoption and usage by exploiting the feature that variable costs are identical for shared vehicles but different for private car owners across engine types. While drivers respond to monetary incentives when using conventional cars, this does not hold for EVs. We find that EVs are, on average, driven shorter distances than conventional vehicles, both in terms of annual and single-day mileage, even if costs are identical. We also document that car sharing intensifies the usage of conventional cars but not that of EVs. |
| Keywords: | Electric vehicles, internal combustion engine vehicles, barriers to adoption, cruising range, driving patterns, car sharing, range limitations, range anxiety |
| JEL: | R41 D12 Q50 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:202028&r=all |
| By: | Herzer, Dierk |
| Abstract: | Several studies have examined the long-run effects of public and private R&D on TFP with mixed results. A common feature of these studies is the use of stocks of public and private R&D capital, constructed under the implicit assumption that the prices of GDP, public R&D, and private R&D move identically. Thus, the results of these studies may be biased to the extent that this assumption is violated. The main contribution of this note is to avoid this bias by using numbers of public and private sector researchers to measure R&D activity in the public and private sector. Contrary to previous studies, it is found—using numbers of researchers in the public and private sector—that there is strong evidence of a significant positive long-run effect of both public and private R&D on TFP and of a greater effect of public R&D than private R&D. Consistent with the mixed evidence reported in the literature, it is also found that the use of public and private R&D stocks produces mixed results regarding the long-run effects of public and private R&D on TFP. |
| Keywords: | public R&D, private R&D, total factor productivity, panel cointegration |
| JEL: | O11 O30 O47 |
| Date: | 2020–05–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:100757&r=all |
| By: | Ndubuisi, Gideon (UNU-MERIT, Maastricht University); Owusu, Solomon (UNU-MERIT, Maastricht University) |
| Abstract: | Exporting higher-quality and complex products are deemed pathways to economic growth and development. However, producing such products are knowledge-intensive and require quality intermediate inputs and advanced technologies. Integration into global trade networks is increasingly argued to be amongst the pathways to obtain such inputs and technologies, although not all countries may benefit equally from such integration. This paper builds on these arguments and investigates how participation in the global value chain (GVC) affects export-quality. We use a sample of 120 developed and developing countries and find that participation in GVC impacts positively on export quality and, also, brings the export quality of countries closer to the quality frontier, but these effects only work through backward linkages. While this result persists in the sub-sample comprising developing economies, we, however, find that developed countries benefit from both forward and backward linkages in GVC. Overall, the results indicate that GVC participation matters to export upgrading but points to a potential heterogeneity on the channel of impact across countries at different levels of development. |
| Keywords: | Global Value Chains, Quality Products, Export Products, Quality of Exports |
| JEL: | F00 F01 F14 O10 O24 O25 |
| Date: | 2020–06–05 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2020026&r=all |
| By: | Crafts, Nicholas |
| Abstract: | I examine the implications of technological change for productivity, real wages and factor shares during the industrial revolution using recently available data. This shows that real GDP per worker grew faster than real consumption earnings but labour's share of national income changed little as real product wages grew at a similar rate to labour productivity in the medium term. The period saw modest TFP growth which limited the growth both of real wages and of labour productivity. Economists looking for an historical example of rapid labour-saving technological progress having a seriously adverse impact on labour's share must look elsewhere. |
| Keywords: | Engels' pause; Factor shares; industrial revolution; labour productivity; real wages |
| JEL: | N13 O33 O47 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14762&r=all |