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.

Javier Miranda, Nikolas Zolas, 18 February 2019

Private households have often been disregarded as sources of invention and innovation, but evidence has begun to emerge of this sector’s importance. This column examines data from the US Patent and Trademark Office and the US Census Bureau to describe patented household innovations and characteristics of US household inventors, who are predominantly male, white, and US-born. It estimates that in between 2000 and 2011, patented household innovations generated a revenue flow of $1.7 billion, and calls for further efforts to understand the economic role of household innovations.

, 28 January 2019

This video summarises the ZEW Lunch Debate "Beyond Horizon 2020: Translating Public Research into Innovation". 

James Harrigan, Ariell Reshef, Farid Toubal, 23 January 2019

Economists have studied the nexus between labour demand, globalisation, and technology adoption for decades, but quantifying the relative importance of these factors is challenging. Using firm-level data from France, this column proposes a new measure of productivity based on the number of workers in technology-related occupations. It finds large effects of importing, ICT, and R&D on the relative demand for skilled workers through their effects on productivity. Interestingly, the demand for both skilled and unskilled workers rises when firms hire ‘techies’ or engage in offshoring.

Debora Revoltella, 22 January 2019

Europe is at risk of falling behind its global competitors. In a period of radical technological transformation, European firms are investing too little, with a gap both in tangible and intangible investment compared to the US. This column calls for a ‘retooling’ of Europe’s economy in relation to skills, innovation finance, the business environment, infrastructure, and deepening the Single Market.

Peter Egger, Nicole Loumeau, 16 January 2019

Innovative activity is unevenly distributed geographically, with regional characteristics such as global market accessibility or an innovation-promoting policy environment affecting the spatial distribution. Using global data on regional characteristics, regional patenting output, and innovation-promoting policy environments, this column examines the origins of innovation clusters, and particularly the role of R&D tax policy instruments, in attracting innovative firms. It estimates that innovation-promoting R&D tax policy instruments contribute to about one-tenth of the long-term economic growth around the globe.

Jian Jia, Ginger Jin, Liad Wagman, 07 January 2019

The EU’s General Data Protection Regulation was a landmark piece of legislation stipulating how businesses approach consumers’ privacy with regards to data. Using EU and US data, this column explores how the legislation impacted technology venture investment. The implementation of GDPR had an immediate, pronounced, and negative effect on investment. However, these results do not necessarily constitute a welfare loss, and the long-term effects of GDPR remain to be seen. 

Jacques Bughin, 23 December 2018

Advances in artificial intelligence have led to fears of job losses. This column uses a global survey covering more than 3,000 executives across 14 sectors and ten countries to examine the impact of AI on the demand side of the labour market. Ultimately, the effect on employment will depend on whether companies choose to use current forms of AI for innovation or pure automation, and whether they foresee a return from it.

Jing Cai, Yuyu Chen, Xuan Wang, 17 December 2018

R&D tax breaks are often offered to businesses to encourage innovation. This column uses evidence from a tax reform in China to study the relationship between tax enforcement and firm innovation. Lower taxes improve both the quantity and quality of firm innovation, and have a bigger impact on those firms that are either financially constrained or those that engage more in tax evasion. 

Ufuk Akcigit, Salome Baslandze, Francesca Lotti, 30 November 2018

Corruption, especially rent-seeking behaviour by politicians and firms, has adverse consequences for competition and ultimately growth. This column explores how political connections influence firms’ outcomes in Italy. The results point to a ‘leadership paradox’, whereby market-leading firms are more likely to be politically connected than their competitors, but less likely to innovate. At the aggregate level, political connections tend to be associated with worse industry dynamics, including lower entry, reallocation, growth, and productivity.

Pehr-Johan Norbäck, Lars Persson, Roger Svensson, 03 November 2018

Most OECD countries provide subsidies to stimulate the entry and growth of small entrepreneurial firms. This column argues that a better policy would be to combine these subsidy schemes with policies that improve the merger and acquisition market for small entrepreneurial firms, because the best strategy for such firms is to make an early entry to market to signal innovation quality and overcome asymmetry problems. Entrepreneurs would be able to create bidding competition among incumbents and receive a higher acquisition price, incentivising them to develop breakthrough innovations that will raise welfare.   

William Kerr, 26 October 2018

The US has held a very special place in terms of absorbing global talent. This column brings together various data sources to demonstrate how high-skilled immigration has transformed US innovation over the past five decades. Among the trends identified are rates of international migration rising by skill level, a huge share of skilled immigration going to the US, and a disproportionate immigration impact on the US at higher skill levels. Not surprisingly, these changes have had enormous economic impact.

Ufuk Akcigit, John Grigsby, Tom Nicholas, Stefanie Stantcheva, 16 October 2018

Understanding how taxation influences innovation is of central importance to create investment incentives for R&D, yet our knowledge remains limited due to a lack of data, especially covering a long period of time. This column uses newly constructed datasets from the 20th century to examine the effects of both personal and corporate income taxation on inventors, as well as on firms that do R&D. It finds consistently negative effects of high taxes on innovation over time as well as on individual inventors and firms. 

Costas Arkolakis, Natalia Ramondo, Andres Rodríguez-Clare, Stephen Yeaple, 08 October 2018

One consequence of the last decades of globalisation is that, thanks to multinational firms, goods are increasingly being produced far from where ideas are created. Using general equilibrium modelling, this column analyses the welfare and distributional effects of the recent wave of protectionism. Central to the results is the flexibility that multinational firms have in locating their innovation and production activities around the globe.

Andrés Rodríguez-Pose, Callum Wilkie, 01 October 2018

Economically disadvantaged regions are, arguably by definition, less innovative than advantaged regions. But not all economically disadvantaged areas are the same. This column compares the innovative capacity of economically less-developed areas in North America and Europe, and reveals that less-developed regions in Canada and the US are far more innovative than their European counterparts. Key factors affecting innovation processes include the ability to absorb skilled young labour into the workforce and the types of knowledge flows that are capitalised upon. 

Zhao Chen, Zhikuo Liu, Juan Carlos Suárez Serrato, Daniel Yi Xu, 28 August 2018

Tax incentives to encourage firms to invest in R&D may also encourage firms to fraudulently relabel other expenses as R&D. The column finds that 30% of the increase in reported R&D in response to a Chinese incentive programme was due to relabelling. The size and type of tax break has a large effect on both the level of participation and the incentive to relabel.

Lee Branstetter, Britta Glennon, J. Bradford Jensen, 21 August 2018

US firms have begun shifting R&D investment towards non-traditional destinations such as China, India, and Israel. The column argues that this is a response to a shortage in software and IT-related human capital within the US. When US multinationals are able to import talent or export R&D work, this reinforces US technological leadership. Conversely, politically engineered constraints on this response will undermine the competitiveness of US-based firms.

Mariassunta Giannetti, 02 August 2018

Some economists argue that corruption can contribute to economic growth by bypassing red tape and financing issues. Using data from China's anti-corruption campaign in 2012, Mariassunta Gianetti shows that small, young - and potentially more productive - firms tend to perform better when corruption is cut. This video was recorded at CEPR's Third Annual Spring Symposium.

Dong Lou, 19 July 2018

Superstar firms like Facebook and Tesla make a substantial difference to overall industry productivity. In his research, Dong Lou asks whether they also impact students’ choices of degree majors. Using data on students' college major choices and the stock returns and media coverage of relevant companies in the US, he shows that firm performance had a positive effect on encouraging students to choose relevant majors. But the relevant labour demand in those industries has not risen accordingly, which has depressed wages.

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