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on Technology and Industrial Dynamics |
| By: | Giovanni Dosi; Anna Snaidero |
| Abstract: | This paper delves into geographical agglomeration patterns of economic activities focusing on the connection between these agglomeration tendencies and sectoral patterns of innovative activities. Within a broad evolutionary perspective, we refine upon incumbent statistical models, trying to distinguish between intra- and inter-sectoral agglomerative forces, conditional on different types of sectoral innovative activities. Utilizing data spanning three distinct years, a decade apart, we investigate the systematic nature of spatial distributions, the relationship between agglomeration drivers and technological paradigms, and shifts in agglomerative tendencies over time. Our findings suggest that economic space is far from uniform, but the spatial heterogeneity differs across sectors as it is driven by various factors, including increasing returns, urbanization advantages, and sector-specific forms of knowledge generation and diffusion. |
| Keywords: | spatial agglomeration, evolutionary economic geography, increasing returns, externalities, knowledge specificities, Pavitt taxonomy |
| Date: | 2024–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2024/07&r=tid |
| By: | Jan Malek; Melissa Newham; Jo Seldeslachts; Reinhilde Veugelers |
| Abstract: | This paper analyzes M&A patterns of R&D projects in the antidiabetics industry. For this purpose, we construct a database with all corporate individual antidiabetics R&D projects over the period 1997 - 2017, and add detailed information on firms’ technology dimension using patent information, next to their position in product markets. This allows us to identify the identity of targets and acquirers (who), the timing of acquisitions along the R&D process (when), and which type of R&D projects changes hands in terms of technology novelty (what). The main results can be summarized as follows. First, most of the action in M&As is in early R&D stages, still far from product markets. Second, most of the early-stage projects that change hands are high-risk/high-gain novel projects. Third, the industry leaders in the product markets are rather inactive in acquiring those novel early-stage projects. The likely acquirers of such projects are small or pipeline firms. Our results put in perspective the narrative that large incumbents acquire small targets with low-risk projects close to product launch. |
| Keywords: | M&As, innovation, R&D, pharmaceutics, technology, novelty, patents |
| JEL: | L41 L65 O31 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp2073&r=tid |
| By: | Mitra, Alessio; Di Girolamo, Valentina; Canton, Erik |
| Abstract: | This paper studies the firm-level drivers of product, process, organisation and marketing innovation in the EU with panel data from 2009 to 2021. Employing conditional logit and linear probability models we investigate how firms’ characteristics, firms’ sources of financing, and firm perception of different challenges influence their likelihood to innovate. In line with the academic literature, we find that firms’ size and profit level improve firms’ innovation performance, while firms’ age decreases it. We also observe that the effectiveness of different financing instruments varies considerably depending on whether the company is pursuing product, process, organisation or marketing innovation. Finally, innovative firms more frequently report access to finance and regulations as important challenges for their future, while the relevance of other challenges (e.g. the availability of skilled staff or finding customers) varies depending on what type of innovation activities companies are engaged in. |
| Keywords: | Access to finance, Financing instruments, Innovation challenges, Firm innovation |
| JEL: | G20 G23 O30 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:283909&r=tid |
| By: | Bijnens, Gert; Anyfantaki, Sofia; Colciago, Andrea; De Mulder, Jan; Falck, Elisabeth; Labhard, Vincent; Lopez-Garcia, Paloma; Meriküll, Jaanika; Parker, Miles; Röhe, Oke; Schroth, Joachim; Schulte, Patrick; Strobel, Johannes; Lourenço, Nuno |
| Abstract: | The impact of climate change on European Union (EU) countries and regions is poised to exhibit considerable diversity, influenced by factors encompassing average temperature, sectoral composition, developmental stages, and adaptation endeavours. The transition towards a more climate-friendly economy demands a well-orchestrated approach to mitigate enduring productivity costs. This shift will have varied implications for businesses, contingent upon their scale, access to financial resources, and capacity for innovation. The formulation of transition policies holds the potential to foster green innovation without displacing other initiatives, yet stringent climate regulations might impede the productivity ascent of pollutant-emitting enterprises. It will thus take time to reap the benefits of innovation. The efficacy of the policy mix is of critical importance in determining the trajectory of success. Market-driven mechanisms exhibit milder distortions compared to non-market-based strategies, though they may not inherently stimulate innovation. Significantly, subsidies earmarked for green research and development (R&D) emerge as a pivotal instrument for fostering innovation, thus constituting a vital component of the policy repertoire during the green transition. The implementation of transition policies will inevitably trigger a substantial reallocation of resources among and within sectors, potentially carrying short-term adverse ramifications. Notably, considerable productivity disparities exist between top and bottom emitters within specific industries. The transition period poses a risk to a substantial proportion of firms and can erode employment opportunities, with a likely decline in new ventures within affected sectors. JEL Classification: D24, L52, O33, O38, Q54, Q58 |
| Keywords: | climate change impact, climate transition policies, economic reallocation, green innovation, physical risk, productivity, transition risk |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbops:2024340&r=tid |
| By: | Malte Schlosser (University of Zurich); Ester Trutwin (University of Zurich); Thorsten Hens (University of Zurich - Department of Banking and Finance; Norwegian School of Economics and Business Administration (NHH); Swiss Finance Institute) |
| Abstract: | We examine whether a company’s green and high–quality innovative strength is related to its environmental impact and what the implications are for its financial performance. By analyzing WIPO patent data and MSCI ESG data, we reveal a notable positive and statistically significant impact of possessing more green patents on a company’s carbon emissions score. Further, we find that the patent related increase in carbon emissions score is driven by the high–quality green patents. Our analysis validates the positive influence of green and high–quality innovation strength on both the E and ESG scores. Despite the positive impact on the environment, investors do not need to sacrifice returns. Investment strategies which invest in companies within the top decile of green patents or green patents ratio do not perform worse than the market. |
| Keywords: | WIPO, Green Innovations, Carbon Emissions Score, ESG Scores, Correlation Analysis, Performance Analysis, Fama–French Analysis |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp2418&r=tid |
| By: | Bao-We-Wal Bambe; Jean-Louis Combes; Pascale Combes Motel; Chantale Riziki Oweggi |
| Abstract: | We investigate the impact of climate change on firms’ investment in research and development (R&D) in developing countries. The paper relies on two contrasting hypotheses. In the first hypothesis, we speculate an optimistic situation where climate change could induce firms to spend on R&D to both reduce their environmental impact and curb the effects of future climate shocks. In the second hypothesis, we propose a pessimistic scenario where climate change would reduce firms’ incentives to invest in R&D. This second hypothesis would mainly be due to tighter conditions for access to finance from lenders, given the increased uncertainty about the firm’s future returns in the face of climate change. The empirical results support the second scenario, small firms being more severely affected. Furthermore, we examine the underlying mechanisms and identify financial access as the key channel through which climate change reduces R&D investment. |
| Keywords: | Climate change • Firm innovation • Developing Countries |
| JEL: | D22 O3 Q54 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:ise:remwps:wp03122024&r=tid |
| By: | David H. Kreitmeir (Department of Economics and SoDa Labs, Monash University); Paul A. Raschky (Department of Economics and SoDa Labs, Monash University) |
| Abstract: | We analyse the individual productivity effects of Italy's ban on ChatGPT, a generative pretrained transformer chatbot. We compile data on the daily coding output quantity and quality of over 36, 000 GitHub users in Italy and other European countries and combine these data with the sudden announcement of the ban in a difference-in-differences framework. Among the affected users in Italy, we find a short-term increase in output quantity and quality for less experienced users and a decrease in productivity on more routine tasks for experienced users. |
| Keywords: | artificial intelligence, productivity |
| JEL: | D8 J24 O33 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:ajr:sodwps:2024-01&r=tid |
| By: | Josh Lerner; Junxi Liu; Jacob Moscona; David Y. Yang |
| Abstract: | Global innovation and entrepreneurship has traditionally been dominated by a handful of high-income countries, especially the US. This paper investigates the international consequences of the rise of a new hub for innovation, focusing on the dramatic growth of high-potential entrepreneurship and venture capital in China. First, using comprehensive data on global venture activities, we show that as the Chinese venture industry rose in importance, entrepreneurship increased substantially in other emerging markets, particularly in sectors dominated by Chinese companies. Using a broad set of country-level economic indicators, we find that this effect was driven by country-sector pairs most similar to their counterparts in China. Second, turning to mechanisms, we show that the baseline findings are driven by local investors and by new firms that more closely resemble existing Chinese companies. Third, we find that this growth in emerging-market investment had wide-ranging positive consequences, including a rise in serial entrepreneurship, cross-sector spillovers, innovation, and broader measures of socioeconomic well-being. Together, our findings suggest that developing countries benefited from more “appropriate” businesses and technology pioneered by China, and that a system where only rich countries lead in innovation could limit entrepreneurial activity in large parts of the world. |
| JEL: | O11 O33 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32193&r=tid |
| By: | Diego Dabed Sitnisky; Sabrina Genz; Emilie Rademakers |
| Abstract: | We investigate the role of task similarity for the resilience of unemployed job seekers exposed to automation of routine tasks. Using a language model, we establish a novel job-to-job task similarity measure. Exploiting the resulting job network to define job markets flexibly, we find that only the most similar jobs affect job finding. Since automation-exposed jobs overlap with other highly exposed jobs, task-based reallocation provides little relief for affected job seekers. We show that this is not true for more recent software exposure, for which task overlap mitigates the distributional consequences. Our counterfactual simulation highlights the potential harm of increasing job mobility as it strengthens the divided exposure of job seekers to routine-task automation. |
| Keywords: | automation, unemployment, occupational reallocation, task overlap, job network |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:2312&r=tid |
| By: | Brynjolfsson, Erik (Stanford U); Li, Danielle (MIT); Raymond, Lindsey R. (MIT) |
| Abstract: | New AI tools have the potential to change the way workers perform and learn, but little is known about their impacts on the job. In this paper, we study the staggered introduction of a generative AI-based conversational assistant using data from 5, 179 customer support agents. Access to the tool increases productivity, as measured by issues resolved per hour, by 14% on average, including a 34% improvement for novice and low-skilled workers but with minimal impact on experienced and highly skilled workers. We provide suggestive evidence that the AI model disseminates the best practices of more able workers and helps newer workers move down the experience curve. In addition, we find that AI assistance improves customer sentiment, increases employee retention, and may lead to worker learning. Our results suggest that access to generative AI can increase productivity, with large heterogeneity in effects across workers. |
| JEL: | D8 J24 M15 M51 O33 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:4141&r=tid |
| By: | Mitra, Alessio; Niakaros, Konstantinos |
| Abstract: | This paper evaluates the causal impact of the Horizon 2020 Framework Programme for Research and Innovation on financial firm-level outcomes using a Difference-in-Differences (DiD) approach. We use administrative data from CORDA and financial data from ORBIS spanning from 2010 to 2022, for a sample of approximately 40 thousand unique private companies that applied for Horizon 2020 funding. The findings suggest that firms receiving Horizon 2020 grants exhibit an average increase of 20% in employment and about 30% in total assets and revenues, compared to comparable companies in the control group, in the years after receiving their first grant. Positive effects persist even after 2.5 years, which is the average duration of a project in our sample. Companies in the “Information and communication” and “Professional, scientific and technical activities” NACE sectors are driving the results, while other sectors show insignificant effects. |
| Keywords: | Horizon 2020, Difference-in-Differences, European Union, Innovation policy |
| JEL: | G38 L52 O38 D22 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:283906&r=tid |
| By: | Moritz Kuhn; Iourii Manovskii; Xincheng Qiu |
| Abstract: | Spatial differences in labor market performance are large and highly persistent. Using data from the United States, Germany, and the United Kingdom, we document striking similarities across these countries in the spatial differences in unemployment, vacancies, and job filling, finding, and separation rates. The novel facts on the geography of vacancies and job filling are instrumental in guiding and disciplining the development of a theory of local labor market performance. We find that a spatial version of a Diamond-Mortensen-Pissarides model with endogenous separations and on-the-job search quantitatively accounts for all the documented empirical regularities. The model also quantitatively rationalizes why differences in job-separation rates have primary importance in inducing differences in unemployment across space while changes in the job-finding rate are the main driver in unemployment fluctuations over the business cycle. |
| Keywords: | Unemployment; Search and matching; Vacancies; Local labor markets |
| JEL: | J64 E24 E32 R13 J63 |
| Date: | 2024–02–29 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmoi:97900&r=tid |