-
INNOVATION OUTPUT CHOICES AND CHARACTERISTICS OF FIRMS IN THE U.S.
October 2014
Working Paper Number:
CES-14-42
This paper uses new business micro data from the Business Research and Development and Innovation Survey (BRDIS) for the years 2008-2011 to relate the discrete innovation choices made by U.S. companies to features of the company that have long been considered to be important correlates of innovation. We use multinomial logit to model those choices. Bloch and Lopez-Bassols (2009) used the Community Innovation Surveys (CIS) to classify companies according dual, technological or output-based innovation constructs. We found that for each of those constructs of innovation combinations considered, manufacturing and engaging in intellectual property transfer increase the odds of choosing innovation strategies that involve more than one type of categories (for example, both goods and services, or both tech and non-tech) and radical innovations, controlling form size, productivity, time and type of R&D. Company size and company productivity as well as time do not lean the choices in any particular direction. These associations are robust across the three multinomial choice models that we have considered. In contrast with other studies, we have been able to use companies that do and companies that do not innovate, and this has allowed to rule out to some extent selectivity bias.
View Full
Paper PDF
-
None
September 2014
Working Paper Number:
CES-14-35
This paper presents a novel empirical study of innovation practices of U.S. companies and their relation to productivity levels using new business micro data from the Business Research and Development and Innovation Survey (BRDIS) for the years 2008-2011. We use factor analysis to reduce a set of inputs and outputs of innovation activities into four latent unobserved innovation modes or practices. Companies are grouped according to their scores across the four factors to see that in large, small and medium companies more than one mode of innovation practices prevails. The next step in the analysis links different types of innovation practices to levels of productivity using regression analysis. The innovation modes have a statistically significant positive relation with the level of productivity. The paper demonstrates the possibility of taking into account the multidimensionality of innovation without the use of composite indicators.
View Full
Paper PDF
-
TRADE LIBERALIZATION AND LABOR SHARES IN CHINA
May 2014
Working Paper Number:
CES-14-24
We estimate the extent to which firms responded to tariff reductions associated with China's WTO entry by altering labor's share of value. Firm-level regressions indicate that firms in industries subject to tariff cuts raised labor's share relative to economy-wide trends, both through input choices and rent sharing. Labor's share of value is an estimated 12 percent higher in 2007 than it would be if tariffs had remained at their 1998 levels. There is significant variation across firms: the impact is larger where market access is better and it is influenced by union presence and state ownership.
View Full
Paper PDF
-
FLUCTUATIONS IN UNCERTAINTY
March 2014
Working Paper Number:
CES-14-17
This review article tries to answer four questions: (i) what are the stylized facts about uncertainty over time; (ii) why does uncertainty vary; (iii) do fluctuations in uncertainty matter; and (iv) did higher uncertainty worsen the Great Recession of 2007-2009? On the first question both macro and micro uncertainty appears to rise sharply in recessions. On the second question the types of exogenous shocks like wars, financial panics and oil price jumps that cause recessions appear to directly increase uncertainty, and uncertainty also appears to endogenously rise further during recessions. On the third question, the evidence suggests uncertainty is damaging for short-run investment and hiring, but there is some evidence it may stimulate longer-run innovation. Finally, in terms of the Great Recession, the large jump in uncertainty in 2008 potentially accounted for about one third of the drop in GDP.
View Full
Paper PDF
-
AN 'ALGORITHMIC LINKS WITH PROBABILITIES' CONCORDANCE FOR TRADEMARKS: FOR DISAGGREGATED ANALYSIS OF TRADEMARK & ECONOMIC DATA
September 2013
Working Paper Number:
CES-13-49
Trademarks (TMs) shape the competitive landscape of markets for goods and services in all countries through branding and conveying information and quality inherent in products. Yet, researchers are largely unable to conduct rigorous empirical analysis of TMs in the modern economy because TM data and economic activity data are organized differently and cannot be analyzed jointly at the industry or sectoral level. We propose an 'Algorithmic Links with Probabilities' (ALP) approach to match TM data to economic data and enable these data to speak to each other. Specifically, we construct a NICE Class Level concordance that maps TM data into trade and industry categories forward and backward. This concordance allows researchers to analyze differences in TM usage across both economic and TM sectors. In this paper, we apply this ALP concordance for TMs to characterize patterns in TM applications across countries, industries, income levels and more. We also use the concordance to investigate some of the key determinants of international technology transfer by comparing bilateral TM applications and bilateral patent applications. We conclude with a discussion of possible extensions of this work, including deeper indicator-level concordances and further analyses that are possible once TM data are linked with economic activity data.
View Full
Paper PDF
-
Gains from Offshoring? Evidence from U.S. Microdata
April 2013
Working Paper Number:
CES-13-20
We construct a new linked data set with over one thousand offshoring events by matching Trade Adjustment Assistance program petition data to micro-data from the U.S. Census Bureau. We exploit this data to assess how offshoring impacts domestic firm-level aggregate employment, output, wages and productivity. A class of models predicts that more productive firms engage in offshoring, and that this leads to gains in output and (measured) productivity, and potential gains in employment and wages, in the remaining domestic activities of the offshoring firm. Consistent with these models, we find that offshoring firms are on average larger and more productive compared to non-offshorers. However, we find that offshorers suffer from a large decline in employment (32 per cent) and output (28 per cent) relative to their peers even in the long run. Further, we find no significant change in average wages or in total factor productivity measures at affected firms. We find these results robust to a variety of checks. Thus we find no evidence for positive spillovers to the remaining domestic activity of firms in this large sampleof offshoring events.
View Full
Paper PDF
-
The Empirics of Firm Heterogeneity and International Trade
September 2012
Working Paper Number:
CES-12-18
This paper reviews the empirical evidence on firm heterogeneity in international trade. A first wave of empirical findings from micro data on plants and firms proposed challenges for existing models of international trade and inspired the development of new theories emphasizing firm heterogeneity. Subsequent empirical research has examined additional predictions of these theories and explored other dimensions of the data not originally captured by them. These other dimensions include multi-product firms, offshoring, intra-firm trade and firm export market dynamics.
View Full
Paper PDF
-
Getting Patents and Economic Data to Speak to Each Other: An 'Algorithmic Links with Probabilities' Approach for Joint Analyses of Patenting and Economic Activity
September 2012
Working Paper Number:
CES-12-16
International technological diffusion is a key determinant of cross-country differences in economic performance. While patents can be a useful proxy for innovation and technological change and diffusion, fully exploiting patent data for such economic analyses requires patents to be tied to measures of economic activity. In this paper, we describe and explore a new algorithmic approach to constructing concordances between the International Patent Classification (IPC) system that organizes patents by technical features and industry classification systems that organize economic data, such as the Standard International Trade Classification (SITC), the International Standard Industrial Classification (ISIC) and the Harmonized System (HS). This 'Algorithmic Links with Probabilities' (ALP) approach incorporates text analysis software and keyword extraction programs and applies them to a comprehensive patent dataset. We compare the results of several ALP concordances to existing technology concordances. Based on these comparisons, we select a preferred ALP approach and discuss advantages of this approach relative to conventional approaches. We conclude with a discussion on some of the possible applications of the concordance and provide a sample analysis that uses our preferred ALP concordance to analyze international patent flows based on trade patterns.
View Full
Paper PDF
-
The Productivity Advantage and Global Scope of U.S. Multinational Firms
August 2011
Working Paper Number:
CES-11-23
This paper examines whether the productivity of U.S. business establishments is related to the extent to which their parent firms are globally engaged--from being an exporter to being a fledgling multinational that has taken a few cautious forays into foreign markets to being a seasoned multinational with extensive foreign operations. Theory suggests that multinationals possess proprietary assets that confer a productivity advantage over their domestically-oriented rivals, and that this advantage is positively correlated with the global scope of a firm's operations. That is, those firms with the greatest productivity advantage are able to absorb the costs and overcome the risks of operating in a wide range of foreign countries, from those where it is relatively riskfree and economical to operate, to those where it is risky, difficult, and costly. This connection between the multinational's widening of its geographic scope of operations and its productivity can be self-reinforcing. Once a multinational has successfully operated in a risky environment, it may benefit from learning effects that can lower the cost and risk of further enlargement of geographic scope. The positive correlation between a firm's global engagement and its level of productivity has already been demonstrated. This paper extends that research by testing whether the correlation holds up when productivity is measured at the level of the individual establishment, rather than at the level of the consolidated business enterprise. It also examines whether the correlation between global engagement and productivity exists in non-manufacturing industries. Finally, it examines whether linkages between the multinational's domestic and foreign operations, in the form of imports of goods by the parent company from its foreign affiliates, enhance the productivity of the multinational's domestic business establishments. The findings confirm the positive correlation between global scope and productivity and demonstrate that it holds for both manufacturing and non-manufacturing industries. The effect of imports of goods from foreign affiliates on the productivity of the establishments of their parent firm depend on the geographic location of the affiliates: Imports from affiliates in high-income countries tend to be associated with high productivity whereas those from affiliates in low-income countries tend to be associated with low productivity. The study was made possible by combining BEA enterprise-level data on the U.S. operations of U.S. multinational firms with data on all U.S. business establishments collected by the Census Bureau in the U.S. economic census covering 2002.
View Full
Paper PDF
-
Towards Unrestricted Public Use Business Microdata: The Synthetic Longitudinal Business Database
February 2011
Working Paper Number:
CES-11-04
In most countries, national statistical agencies do not release establishment-level business microdata, because doing so represents too large a risk to establishments\' confidentiality. One approach with the potential for overcoming these risks is to release synthetic data; that is, the released establishment data are simulated from statistical models designed to mimic the distributions of the underlying real microdata. In this article, we describe an application of this strategy to create a public use file for the Longitudinal Business Database, an annual economic census of establishments in the United States comprising more than 20 million records dating back to 1976. The U.S. Bureau of the Census and the Internal Revenue Service recently approved the release of these synthetic microdata for public use, making the synthetic Longitudinal Business Database the first-ever business microdata set publicly released in the United States. We describe how we created the synthetic data, evaluated analytical validity, and assessed disclosure risk.
View Full
Paper PDF
