The workforce of pioneer plants: The role of worker mobility in the diffusion of industries

Does technology require labour mobility to diffuse? To explore this, we use German social-security data and ask how plants that pioneer an industry in a location – and for which the local labour market offers no experienced workers – assemble their workforces. These pioneers use different recruiting strategies than plants elsewhere: they hire more workers from outside their industry and from outside their region, especially when workers come from closely related industries or are highly skilled. The importance of access to experienced workers is highlighted in the diffusion of industries from western Germany to the post-reunification economy of eastern German. While manufacturing employment declined in most advanced economies, eastern German regions managed to reindustrialise. The pioneers involved in this process relied heavily on expertise from western Germany: while establishing new manufacturing industries in the East, they sourced half of their experienced workers from the West.     

The impact of the French policy mix on business R&D: How geography matters

Based on a spatial extension of an R&D investment model, this paper measures the macroeconomic impact of the French R&D policy mix on business R&D using regional data. Our measure takes into account not only the direct effect of policies but also indirect effects generated by the existence of spatial interaction between regions. Using a unique database containing information on the levels of various R&D policy instruments received by firms in French NUTS3 regions over the period 2001–2011, our estimates of a spatial Durbin model with structural breaks and fixed effects reveal the existence of a negative spatial dependence among R&D investments in regions. In this context, while a-spatial estimates would conclude that all instruments have a crowding-in effect, we show that national subsidies are the only instrument that is able to generate significant crowding-in effects. On the contrary, it seems that the design, size and spatial allocation of funds from the other instruments (tax credits, local subsidies, European subsidies) lead them to act (in the French context) as beggar-thy-neighbor policies.     

The economic impact of technological procurement for large-scale research infrastructures: Evidence from the Large Hadron Collider at CERN

The Large Hadron Collider at CERN, the European Organisation for Nuclear Research, is the world’s highest-energy particle accelerator. Its construction (1995–2008) required frontier technologies and close collaboration between CERN scientists and contracting firms. The literature on “Big Science” projects suggests that this collaboration generated economic spillovers, particularly through technological learning. CERN granted us access to its procurement database, including suppliers of LHC from 35 countries for orders over 10,000 Swiss Francs. We gathered balance-sheet data for more than 350 of these companies from 1991 to 2014, which include the years before and after that of the first order received. The study assesses, in quantitative terms, whether becoming a CERN supplier induced greater R&D effort and innovative capacity, thus enhancing productivity and profitability. The findings – which controlled for firms’ observable characteristics, macroeconomic conditions, and unobserved time, country, industry and firm-level fixed effects – indicate a statistically significant correlation between procurement events and company R&D, knowledge creation and economic performance. The correlation is chiefly driven by high-tech orders; for companies receiving non-high-tech orders, it is weaker, or even statistically not significant.     

The wider impacts of high-technology employment: Evidence from U.S. cities

Innovative, high-technology industries are commonly described as drivers of regional development. ‘Tech’ workers earn high wages, but they are also said to generate knock-on effects throughout the local economies that host them, spurring growth in jobs and wages in nontradable activities. At the same time, in iconic high-tech agglomerations like the San Francisco Bay Area, the home of Silicon Valley, the success of the tech industry creates tensions, in part as living costs rise beyond the reach of many non-tech workers. Across a large sample of U.S. cities, this paper explores these issues systematically. Combining annual data on wages, employment and prices from the Quarterly Census of Employment and Wages, the Department of Housing and Urban Development and the Consumer Price Index, it estimates how growth in tradable tech employment affects the real, living-cost deflated wages of local workers in nontradable sectors. Results indicate that high-technology employment has significant, positive, but modest effects on the real wages of workers in nontradable sectors. These effects appear to be spread consistently across different kinds of nontradable activities. In terms of substantive wider impacts, tech appears benign, though fairly ineffectual.     

The impact of public basic research on industrial innovation: Evidence from the pharmaceutical industry

While most economists believe that public scientific research fuels industry innovation and economic growth, systematic evidence supporting this relationship is surprisingly limited. In a recent study, Acemoglu and Linn (2004) identified market size as a significant driver of drug innovation in the pharmaceutical industry, but they did not find any evidence supporting science-driven innovation from publicly funded research. This paper uses new data on biomedical research investments by the U.S. National Institutes of Health (NIH) to examine the contribution of public research to pharmaceutical innovation. The empirical analysis finds that both market size and NIH funded basic research have economically and statistically significant effects on the entry of new drugs with the contribution of public basic research coming in the earliest stage of pharmaceutical drug discovery. The analysis also finds a positive return to public investment in basic biomedical research.     

The impact of cognitive communities on the diffusion of academic knowledge: Evidence from the networks of inventors of a French university

Looking at micro-data on the networks of inventors of a French science university, we investigate whether the kind of cognitive relationships between researchers influences the geography of their collaborations.The hypothesis we test (and confirm empirically) is that academic knowledge diffuses in a restricted geographic area when the connected researchers belong to epistemic communities, whereas communities of practice entail less localised effects. We also show that institutionally mixed research teams do not impede large knowledge diffusion.     

The endogenous relationship between innovation and diversification, and the impact of technological resources on the form of diversification

This research has endeavoured to build on earlier research on the relationship between a firm's technological resources and the direction of its diversification, by trying to confirm the endogeneity of this relationship and by addressing the influence of innovation on the choice of the mode of diversification. Based on a sample of Spanish firms, our results suggest that innovation drives diversification, but not the reverse. The second important finding of this research is the empirical confirmation that knowledge assets are not related to the diversification mode.