Philippe Aghion, Sergei Guriev, Kangchul Jo, 07 November 2019

Moving from low- to high-income status implies that countries escape the middle-income trap. This implies institutional reform to create innovation-based growth. The column uses firm-level data to show how the Korean government's chaebol reforms in the late 1990s transformed the economy from an investment-based to an innovation-based model. There are lessons here for China.

Alberto Galasso, Hong Luo, 30 October 2019

Higher risk perception may suppress demand for a product class and chill R&D investment, or increase the incentive to innovate risk-mitigating technologies. The column uses media coverage of accidents involving CT scanners to investigate the impact on firm innovation. Higher public risk perception increased patent applications and the rate of new product innovation, even without changes in liability or regulation.

Sotiris Blanas, Gino Gancia, Tim Lee, 10 October 2019

Since the early 1980s, technology has reduced the demand for low and medium-skill workers, the young, and women, especially in manufacturing industries. The column investigates which technologies have had the largest effect, and on which types of worker. It finds that robots and software raised the demand for high-skill workers, older workers, and men, especially in service industries. 

Jon Frost, Leonardo Gambacorta, Yi Huang, Hyun Song Shin, Pablo Zbinden, 04 October 2019

BigTech firms are entering finance, and their access to massive amounts of information may give them an edge in areas like credit assessment and beyond. This column assesses the economic forces behind the adoption of Big Tech services in finance. It shows that BigTech lenders thrive in countries with less competitive banks and less strict regulation, and that they have an information advantage from the use of big data and machine learning.

Ufuk Akcigit, Emin Dinlersoz, Jeremy Greenwood, Veronika Penciakova, 24 September 2019

Differences between the majority of mediocre firms and the exceptional, innovative ones range from the founders’ backgrounds to their paths of innovation. This column assesses the impact of venture capital funding on the growth trajectories firms take. Employment and patenting data show venture capital-backed firms are likely to achieve greater success and contribute more significantly to the aggregate economy. The absence of venture capital funding would lower aggregate growth by 28%.

Philippe Aghion, Antonin Bergeaud, Gilbert Cette, Rémy Lecat, Helene Maghin, 13 September 2019

The impact of access to credit on productivity is not as straightforward as it seems.This column introduces a model that emphasises the coexistence of two opposing effects. Tighter access to credit makes it more difficult for entrepreneurs to invest and innovate, with detrimental long-run effects on productivity. But it also drives less efficient incumbent firms out of the market, easing the entry of new and potentially more efficient innovators. Combining these two opposite effects, the overall relationship between credit access and productivity takes the shape of an inverted-U.

Michele Pezzoni, Reinhilde Veugelers, Fabiana Visentin, 03 September 2019

The diffusion of novel technologies plays a crucial role in stimulating economic growth, but when a novel technology appears it is difficult to predict its later diffusion trajectory in terms of follow-on inventions. This column shows how the antecedents of a novel technology characterise its diffusion pattern by identifying the diffusion trajectories for a large sample of novel technologies using large-scale patent information. Riskier types of novel technologies, while having a larger technological impact, are taken up more slowly.

Robert J. Gordon, Hassan Sayed, 29 August 2019

Since 2005, productivity growth in the US and Europe has dipped below 1%. Using new industry-level from the US and ten EU countries, this column shows that that the industrial composition of the slowdown was similar in Europe and the US. Falling multifactor productivity growth explains both the magnitude and composition of falling productivity growth on both sides of the Atlantic. Decelerating technical change, rather than slowing investment, was the primary driving force in the transatlantic slowdown. 

Lene Kromann, Anders Sørensen, 15 July 2019

The automation of production processes is an important topic on the policy agenda in high-wage countries, but evidence of the economic effects of automation at the firm level is limited. This column presents insights on automation from new survey data for Denmark. The findings reveal that variation in the adoption of automation technologies is high, the change in adoption over time is slow, and almost half of Danish manufacturing firms relied greatly on manual production processes in 2010. Increasing international competition from China is a driver for investments in automation.

Ufuk Akcigit, Sina T. Ates, 04 July 2019

The US economy has witnessed a number of striking trends that indicate rising market concentration and a slowdown in business dynamism in recent decades. This column uses a micro-founded model of endogenous firm dynamics to show that a decline in the intensity of knowledge diffusion from frontier firms to laggard ones plays a key role in the observed shifts. It presents new evidence on higher concentration of patenting in the hands of firms with the largest stock that corroborates declining knowledge diffusion in the economy. 

Martin Watzinger, Monika Schnitzer, 21 June 2019

The role of science is the subject of controversial debate in the academic literature and public discourse. This column studies US patents to establish three new facts about the relationship between science and the value of private-sector inventions. First, patents building on science are on average $2.9 million more valuable than patents unrelated to science. Second, the novelty of patents predicts their value in a similar way as their science content does. Third, science-based patents are more novel. Taken together, these observations show that science introduces new concepts that are valuable for marketplace inventions.

Johannes Eugster, Giang Ho, Florence Jaumotte, Roberto Piazza, 12 June 2019

Technology diffusion to emerging markets helps share growth potential across countries and lift global living standards. Using a global patent citation dataset, this column estimates the magnitude and impact of international knowledge and technology diffusion, as well as the role that globalisation has played. In emerging markets, knowledge flows have increased innovation and productivity. Competition from emerging markets benefits global innovation.

Ramy El-Dardiry, Bastiaan Overvest, Michiel Bijlsma, 24 May 2019

Digitalisation is transforming human life – from the way we interact with each other to the way we work, relax, and create. R&D within companies is no exception. This column lays out pathways for policymakers to successfully adapt R&D policies to these changes based on three guiding principles: direct policies towards spillovers, make policies technology-neutral, and do not favour superstars over challengers.

Mónica Correa-López, Beatriz de Blas, 23 April 2019

Since the end of WWII, advanced economies have experienced long-lasting swings in economic activity. This column takes a look at the historical data and finds that, over the medium term, output and investment fluctuations among European countries have been even more volatile and persistent than in the US. It also reveals that, by diffusing embodied technology through trade inintermediates, large US firms appear to drive Europe's output over the medium term. 

Ann Harrison, Marshall W. Meyer, Will Wang, Linda Zhao, Minyuan Zhao, 07 April 2019

The conventional wisdom that privatisation of state-owned enterprises reduces their dependence on the state and yields positive economic benefits has not always been borne out by empirical work. Using a comprehensive dataset from China, this column shows that privatised SOEs continue to benefit from government support in the form of low-interest loans and subsidies relative to private enterprises that have never been state-owned. Although there are clear improvements in performance post-privatisation, privatised SOEs continue to significantly under-perform compared to private firms.

Jeffrey L. Furman, Markus Nagler, Martin Watzinger, 31 March 2019

It is a concern amongst policymakers that the disclosure component of patents is insufficient in stimulating subsequent innovation. Using evidence on patent trends around Patent Depository Libraries in the US, this column shows that the availability of information on prior art positively impacts innovation in the field. In the pre-internet era, these libraries helped reduce geographical barriers to knowledge diffusion.

Bettina Peters, Mark Roberts, Van Anh Vuong, 30 March 2019

International markets can provide exporting firms with more opportunities to generate and introduce innovations and capitalise on their investments relative to purely domestic firms. Using German data, this column demonstrates that exporting firms introduce innovations more frequently than domestic firms and have higher economic gains from their innovations. Trade restrictions such as tariffs can affect a firm’s economic activities in foreign markets and also their R&D and innovation activities.

Semih Akcomak, Bastiaan Overvest, 22 March 2019

The European Commission plans to spend about €120 billion on research and innovation under mission-oriented programmes between 2021 and 2027. This column shows that planned spending is small both relative to the total R&D spending of individual EU countries and relative to previous missions. In addition, there is a lack of clarity on how missions will be determined, designed and governed. Experiences in other countries suggest that the Commission should find new ways of increasing funding to missions and increase clarity on the implementation of mission-oriented policies.

Stefanie Stantcheva, 19 March 2019

Stefanie Stantcheva of Harvard University discusses how interaction with 'better' inventors increases knowledge and improves inventions.

Philippe Aghion, 08 March 2019

Philippe Aghion, of the College de France and LSE, discusses work on merged datasets from the UK – one detailing occupation & wages, the other looking at R&D and investment.

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