Import-push or export-pull? An industry-level analysis of the impact of trade on firm exit

Does the selection effect of trade work solely through competition from imports, or does the export market further contribute to firm selection? This paper provides a re-interpretation of the different mechanisms in terms of selection on profitability—rather than productivity—and derives novel predictions regarding the export market and the role of product differentiation. Empirical results for a sample of Danish manufacturing industries confirm the import-“push” hypothesis as well as the export-“pull” hypothesis, but also reveal differences across industries. The selection effect of trade is mainly driven by the “import-push” if product differentiation is high, whereas it is driven by the “export-pull” if goods are homogeneous.     

Engines of growth. Innovation and productivity in industry groups

The diversity of technological activities that contribute to growth in labour productivity is examined in this article for manufacturing and services industries in eight major EU countries. We test the relevance of two “engines of growth”, i.e., the strategies of technological competitiveness (based on innovation in products and markets) and cost competitiveness (relying on innovation in processes and machinery) and their impact on economic performance. We propose models for the determinants of changes in labour productivity and we carry out empirical tests for both the whole economy and for the four Revised Pavitt classes that group manufacturing and services industries with distinct patterns of innovation. Tests are carried out by pooling industries, countries and three time periods, using innovation survey data from CIS 2, 3 and 4, linked to economic variables. The results confirm the specificity of the two “engines of growth”; economic performances in European industries appear as the result of different innovation models, with strong specificities of the four Revised Pavitt classes.     

Demand and innovation in productivity growth

The labour productivity impact of demand and innovation is investigated in this paper combining insights from the Kaldorian and Schumpeterian traditions. After a review of studies in such traditions, a general model is proposed for explaining productivity growth in European manufacturing and service industries in the late 1990s, followed by two distinct specifications for the industries oriented toward product innovation, and for those where process innovation dominates. The empirical analysis is based on the match of the SIEPI‐CIS2 database developed at the University of Urbino and Eurostat Input–Output Tables at the industry level, for 22 manufacturing sectors and 10 services sectors. Six European countries are considered: Germany, France, Italy, the Netherlands, Portugal and the United Kingdom. The results show that productivity growth in European industries can be explained by a combination of technology factors and demand dynamics, confirming the complementarity of technology and demand effects. On the demand side, household consumption emerges as the most pervasive component of demand, able to stimulate greater efficiency in all manufacturing and service industries. Investment also has a role, focused however on the capital goods producing industries. On the technology side, the mechanisms of productivity growth are fundamentally different in the industries oriented towards product innovation and in those dominated by process innovation. This evidence supports the view that innovation in firms and industries can be associated to two contrasting strategies, searching either for technological competitiveness, through knowledge generation, product innovation and expansion of new markets, or aiming at greater cost competitiveness, through job reductions, labour saving investment, flexibility and restructuring.     

Innovation strategies,process and product innovations and growth: Firm-level evidence from Brazil

Using World Bank ICS 2000–2002 data from Brazilian manufacturing firms, this paper identifies innovation strategies of firms – in particular internal development (“technology make”) and external acquisition (“technology buy)” – and their effect on successful process and product innovations. It subsequently explores the importance of process and product innovations for firm growth. Successful process and product innovations occur mostly through “technology buy” (mostly through the purchase of machinery and equipment), either alone or in combination with a “technology make” strategy. The option of only relying on internal development is less successful. The results on firm growth indicate that innovative performance is an important driver for firm growth. It is particularly the combination of product and process innovations that significantly improves firm growth. Both innovation and growth performance are supported by access to finance. Skills of workforce and management matter, but not necessarily tertiary education levels. The impact of international linkages on innovative and growth performance is mixed.     

Product Market Reform and Innovation in the EU*

European Union countries have implemented widespread reforms to product markets to stimulate competition, innovation, and economic growth. We provide empirical evidence that the reforms carried out under the EU Single Market Programme (SMP) were associated with increased product market competition, as measured by a reduction in average profitability, and with a subsequent increase in innovation intensity and productivity growth for manufacturing sectors. Our analysis exploits exogenous variation in the expected impact of the SMP across countries and industries to identify the effects of reforms on average profitability, and the effects of profitability on innovation and productivity growth.     

Employment Effects of Product and Process Innovation in Europe

This paper develops a model of the employment impact of innovation considering, on the one hand, the interactions with demand and labour costs and, on the other, the variety of patterns of technological change. Different technological strategies are considered. First, a search for technological competitiveness is based on product innovation and productivity rooted in quality advantages; second a strategy of active price competitiveness has productivity growth rooted in process innovation-based restructuring; third a passive price competitiveness strategy is pursued by non-innovators relying on cost-cutting. The new European innovation database drawn from the Community Innovation Survey 1994-96, merged with structural and macroeconomic data 1994-99 drawn from the OECD are analysed at a sectoral level across eight European countries: Italy, France, Germany, Denmark, Netherlands, Finland, the UK, and Sweden. The innovation survey data provide information on several quantitative and qualitative aspects of firms' innovative activities. A comparison of the results from the first (1990-92) and second (1994-96) Community innovation survey data is also carried out. The results show that, in the last decade, technological change has had a major impact on employment in manufacturing industry, associated with the dominance of an active price competitiveness strategy.     

New evidence on the sources of EU countries’ productivity growth—industry growth differences from R&D and competition

Recent studies on productivity growth show how competition affects innovation and TFP growth in OECD countries, but do not explicitly account for sectoral parameter heterogeneity. This paper examines whether competition and innovation have a direct effect on labor productivity growth in EU goods-producing industries separated by three different industry types. The results show that the effect of R&D on labor productivity growth is not equal across industries, but rather depends on the innovation activities of sectors. The same is true for competition and labor productivity growth. The empirical evidence indicates that in unleveled industries (i.e. industries characterized by technologically unequal firms) like Specialized Goods Suppliers and Science-Based Innovators strong labor productivity growth originates with decreased competition and increased R&D, thereby supporting Schumpeterian arguments. The findings suggest Schumpeterian effects in Supplier-Dominated Goods-Producing Industries, but reveal decreasing labor productivity growth in these sectors when competition is strongly restricted.     

Innovation and Productivity in European Industries

The labour productivity impact of innovation is investigated in this paper combining neo-Schumpeterian insights on the variety of innovation with the importance of industrial structures and firm size; two models are proposed for explaining productivity and export success in European manufacturing industries and firm-size classes. The empirical estimates are based on data from the European innovation survey (CIS 2), covering Austria, France, Italy, the Netherlands, and the UK, broken down by 22 sectors and for large, medium, and small firms. The econometric results, obtained adopting cross-sectional estimation methodologies able to account for unobserved industrial characteristics, show that productivity in Europe relies on product and process innovation, with the support of the efficiency gains provided by grouped business structures. Conversely, in Italy the introduction of new machinery linked to innovation appears as the key mechanism supporting domestic productivity. When export success is considered, all countries have to rely on an innovation-based model of competitiveness.     

Influence of export on innovation activities of domestic enterprises

Using the panel data from 2001 to 2003 across manufacturing industries in China, this paper analyzes the intra-industry and inter-industry spillovers from export on the productivity and innovation activities of domestic enterprises in China. Among the industries we investigate and in the sample session, there are evidences of positive backward linkage spillovers to the process innovation of domestic enterprises, and negative backward linkage spillovers to the product innovation activities. Based on the findings, we make some policy suggestions.      

Broad-based intangibles as generators of growth in Europe

This paper analyzes broad performance-based measures of intangibles in European Union countries to find new sources of growth and shows that intangible capital (IC)-driven growth was halted in European industries during the 2008–2013 financial crisis period. Much of this IC, such as purchased organizational, research and development (R&;D) and information and communication technology capital, is unaccounted for in systems of national accounts, so that total IC investment is 29.6% of value added, with R&;D having the lowest gross domestic product share at 5.0%. On average, deteriorating IC growth has decreased labor productivity by ?2.9% annually. Policies fostering multifactor productivity growth have been strongly biased and have ignored the loss of those skills necessary for long-term growth. During 2008–2013, innovation thus failed to compensate for Europe’s dwindling fixed-capital-intensive manufacturing and job losses, but broad-based IC offers a roadmap for recovery by relying on an increasing role for IC-producing services.     

Evaluating the effects of investment in information and communication technology

Most of the studies on the consequences of information and communication technology (ICT) have been focused on US aggregate data. In contrast to these studies, this paper empirically assesses the industrial effect of ICT investment on three key variables – real output, employment, and labour productivity – in some European Union-15 (EU-15) countries and the USA using panel-vector autoregression models. An increase in ICT investment is positive for the economies of these countries, giving rise to larger growth in real output, employment, and labour productivity at the industrial level. The pattern of responses to changes in ICT investment is quantitatively diverse across most of the EU-15 countries studied and in the two types of industries considered (i.e. ICT-intensive and less intensive industries). Moreover, the positive impact on labour productivity in ICT-intensive industries is larger after the mid-1990s, with the USA being the most positively affected country.     

Export,R&D and new products. a model and a test on European industries

In this article we extend the model developed by Bogliacino and Pianta (Industrial and Corporate Change 22 649, 2013, b) on the link between R&D, innovation and economic performance, considering the impact of innovation on export success. We develop a simultaneous three equation model in order to investigate the existence of a ‘virtuous circle’ between industries’ R&D, share of product innovators and export market shares. We investigate empirically – at the industry level – three key relationships affecting the dynamics of innovation and export performance: first, the capacity of firms to translate their R&D efforts in new products; second, the role of innovation as a determinant of export market shares; third, the export success as a driver of new R&D efforts. The model is tested for 38 manufacturing and service sectors of six European countries over three time periods, from 1995 to 2010. The model effectively accounts for the dynamics of R&D efforts, innovation and international performance of European industries. Moreover, important differences across countries emerge when we split our sample into a Northern group – Germany, the Netherlands and the United Kingdom – and a Southern group – France, Italy and Spain. We find that the ‘virtuous circle’ between innovation and competitiveness holds for Northern economies only, while Southern industries fail to translate innovation efforts into export success.     

数字化转型研究知识结构与热点趋势

随着信息通信技术的渗透扩散,数字化转型已成为重要研究方向之一,把握数字化转型研究热点和趋势,可为未来研究提供指引和参考。针对WOS数据库935篇文献,运用CiteSpaceV进行可视化分析,探索数字化转型领域的知识结构、热点和趋势。结果表明,数字化转型研究高产国家为美国、德国和英国,高产机构为哥本哈根商学院、瓦萨大学、麻省理工学院等,《TechnologicalForecastingandSocialChange》是发表文章最多的期刊,研究热点包括“信息技术、组织变革和绩效”、“工业4.0和数字化转型”与“商业模式创新”等。关键词突现分析表明,以客户为中心的商业模式创新和新的价值创造方式是新趋势。最后,从前因—过程—结果三方面提出数字化转型研究内容框架与未来展望。     

Once again “smile curve”: Is chain upgrading possible?

The geographic fragmentation of the production process inevitably leads to the question of whether or not there is a relationship between the level of value-added and the position of production stages along with a global production/value chain, known as the “smile curve” as the theoretical literature suggests. This study investigates the relationship between value-added and production stages across more than 34 sectors over 40 countries for two different periods, 1995–2011 and 2000–2014, by taking into account a variety of different measures of production stage and country-sector heterogeneity. In the first step, we utilize the decomposition methodology of Wang, Wei, Yu, and Zhu (2017) to track the production stages across country sector. In the second step, we test our hypotheses by employing the fixed effects (FE) estimation technique. The results show that the relationship between value-added content in output and backward length exhibits a U-shaped distributional pattern. The significant results for both developed and developing economies indicate the potential of economies to benefit from the functional upgrading along with production stages. Our general conclusion regarding production chains is also valid for stages mainly related to the global value chain (GVC), especially for developed countries. Furthermore, capital intensity and total factor productivity appear to be crucial factors for improvements in process upgrading. Given the robust and positive impacts of chain upgrading in all countries considering both the total production process and GVC part, industries should exploit the opportunities for higher value-added in the global production system.     

面向高质量发展的黄河流域科技创新空间极化效应演化研究

针对黄河流域科技创新发展中无序竞争、缺乏合作、强弱不均等现状，构建面向高质量发展的黄河流域科技创新集中度与极化度模型，分析其科技创新极化效应演化过程，并识别省际间“虹吸”效应与“涓滴”效应。结果表明，从流域整体层面看，黄河流域科技创新处于极低极化水平并呈持续下降趋势，强科技创新省区对弱科技创新省区形成弱“涓滴”效应；从上、中、下游分区域层面看，各区域科技创新均处于极低极化水平，并分别呈现持续上升、先升后降、持续下降趋势，强科技创新省区对弱科技创新省区依次表现为弱“虹吸”效应、先“虹吸”后“涓滴”、弱“涓滴”效应。最后，从提升科技创新资源配置质量、优化科技创新空间布局两方面提出政策建议。     

数据要素与研发决策对工业全要素生产率的影响——来自2010—2019年中国工业的经验证据

在高质量发展阶段,工业全要素生产率不仅取决于数据要素的市场化配置,同时在很大程度上还受到研发决策影响。利用2010—2019年中国工业面板数据,估计数据要素与研发决策对工业全要素生产率的影响效应。结果表明,数据要素赋能资本、劳动要素后的要素深度融合,对工业全要素生产率具有显著改善作用;与劳动密集型工业相比,数据要素对资本密集型工业全要素生产率的改善作用更加显著。将研发决策纳入后发现,探索型研发决策对资本密集型工业全要素生产率提升具有显著促进作用,而囿于高风险的利用型研发决策则对工业全要素生产率的改善作用不显著。进一步研究发现,探索型研发决策能够促进数据要素赋能传统要素,二者有效融合能够显著提高工业全要素生产率。     

Comparative Advantage and Heterogeneous Firms

This paper examines how country, industry, and firm characteristics interact in general equilibrium to determine nations' responses to trade liberalization. When firms possess heterogeneous productivity, countries differ in relative factor abundance, and industries vary in factor intensity, falling trade costs induce reallocations of resources both within and across industries and countries. These reallocations generate substantial job turnover in all sectors, spur relatively more creative destruction in comparative advantage industries than in comparative disadvantage industries, and magnify ex ante comparative advantage to create additional welfare gains from trade. The improvements in aggregate productivity as countries liberalize dampen and can even reverse the real-wage losses of scarce factors.     

Product and process innovation and total factor productivity: Evidence for manufacturing in four Latin American countries

The literature on firm productivity recognizes the important role played by firm innovation activities on firm productivity in developed countries. However, the literature for developing and emerging economies is scarce and far from conclusive. The aim of this paper is to study the innovation–productivity link (distinguishing between process and product innovations) for manufacturing at the firm level for four Latin American countries (two classified as upper‐middle income countries by the World Bank—Argentina and Mexico—and two as lower‐middle income—Colombia and Peru). We aim testing whether the level of development is a mediating factor in the innovation–productivity link. The data used have been drawn from the World Bank panel enterprise surveys, for 2006 and 2010. First, we estimate total factor productivity (TFP) and, second, we use the estimated TFP as a regressor or as dependent variable, in two models for testing self‐selection of the most productive firms into innovation or the existence of returns to innovation in terms of productivity. Our results confirm the mediating role of the level of development in the innovation–productivity link: both the self‐selection and the returns‐to‐innovation hypotheses work only for the upper‐middle income countries.     

Trade and product market policies in upstream sectors and productivity in downstream sectors: Firm-level evidence from China

This paper explores the heterogeneous productivity impact of trade, product market and financial market policies over the last decade in China. The paper makes a critical distinction between downstream and upstream industries, focusing on the indirect effects of regulation in upstream industries on firm performance in downstream manufacturing industries. We identify the differential effect of these policies on firm productivity growth depending on how far incumbents are relative to the technological frontier. Trade and product market reforms are found to deliver stronger gains for firms that are closer to the industry-level technological frontier, while the reverse holds for financial market reforms. The key conclusion that can be derived from the empirical analysis is that further product, trade and financial market reforms would bring substantial gains in China and could therefore speed up the convergence process. Taken at face value, the empirical estimates would imply that aligning product, trade and financial market regulation to the average level observed in OECD countries would bring aggregate manufacturing productivity gains of respectively 9%, 3% and 6.5% after 5 years.     

The impact of product innovation on firm-level markup and productivity: evidence from China

This article empirically evaluates the impact of product innovation on firms’ markup and productivity. Based on a large sample of Chinese manufacturing firms, we estimate firm-level markup using the wedge between output elasticities of intermediate input and its cost share in total revenue. Firm productivity is measured as revenue productivity and adjusted with the estimated markup. The results suggest that product innovation increases firm-level markup and revenue productivity. However, the effect of product innovation on the adjusted productivity is mostly negative or insignificant. The observed relationships also vary in response to market structures. Our results indicate that the positive impact of product innovation on revenue productivity is mainly driven by price-cost markup changes rather than physical productivity improvements. Our study suggests the widely observed positive relationship between product innovation and revenue productivity should be interpreted with caution.