Regional Resilience: Are recessionary shocks persistent or transitory?

The response by regional and national economies to exogenous impulses has a well-established literature in both spatial econometrics and in mainstream econometrics and is of considerable importance given the post-2008 economic crisis, which is characterised by a period of severe global instability resulting from unprecedented economic shocks. Martin et al. (2016) note that in economic geography resilience describes regions’ reactions to, and recovery from, negative economic shocks, based on a concept which has been widely used in the engineering and ecological sciences and which has been increasingly adopted in economic geography. This PhD provides an empirical analysis of resilience at the national, regional, and individual level. Four empirical Chapters are presented which feature econometric analysis in the form of vector error correction (VEC) models, dynamic spatial panel models, and pooled crosssectional models. The national analysis focuses on European counties and the US and analyses the impact of shocks from within the EU and from the US on each country. The second empirical Chapter focuses on US metropolitan statistics areas and analyses the impact of industry structure on the resilience of US metropolitan areas. The third empirical Chapter focuses on the resilience of wages in the US to the global economic crisis. The final empirical Chapter analyses the impact of the crisis on individual’s employment outcomes in select European countries. The results of the analysis clearly indicate that industry structure plays an important role in explaining the resilience of nations, regional, and individuals (who reside within broader regions). The findings suggest that diversity of economic structure and structural change can result in more resilient regions. At the individual level there is significant evidence that education plays a critical role in explaining the resilience of individuals’ wages and employment outcomes

Cross sectoral differences in the drivers of innovation: Evidence from the Irish community innovation survey

This paper analyses differences across sectors in firms’ propensity to innovate and the relative importance of inputs to innovation classifying firms into four broad sectors. The propensity and drivers of four types of innovation (new to firm, new to market, process and organisational) within these sectors are then analysed. The results indicate that, for new to firm and new to market innovation, there is a strong degree of heterogeneity in the drivers of innovation across sectors. The propensity to introduce process or organisational innovations varies slightly across sectors but that there is no evidence of differences across sectors in the drivers of innovation. These results have important implications for policy instruments to meet the needs of targeted firms

Economic shocks and growth: spatio-temporal perspectives on Europe's economies in a time of crisis

The response by regional and national economies to exogenous impulses has a well-established literature in both spatial econometrics and in mainstream econometrics and is of considerable importance given the post-2007 economic crisis, which is characterised by a period of severe global instability resulting from unprecedented economic shocks. This paper focuses on dynamic counterfactual predictions and impulse-response functions derived from appropriate econometric models. These provide insight regarding the question of whether responses to economic shocks are transitory or whether they have a permanent effect. Analysis shows that output shocks have had permanent effects on productivity so that economies have tended not to return to the pre-shock path but rather adjust to new levels. This suggests that the current recession will be embodied permanently within the memory of some of Europe's leading economies as a hysteretic effect

Firms' skills as drivers of radical and incremental innovation

Using firm level data from the Irish Community Innovation Survey 2008–2010 we analyse the importance of eight skill sets for the innovation performance of firms. We distinguish between radical and incremental innovation. Our results suggest that there is substantial heterogeneity in the importance of skills for different types of innovation and that some skills are best sourced from outside the firm while others are best developed in-house

Regulation and firm perception, eco-innovation and firm performance

Purpose - Recent reports argue that eco-innovation is the key to realising growth. This paper examines the factors which drive eco-innovation and tests if eco-innovating firms perform better than non-eco-innovating firms. We provide insights into the role government regulation can play in directing and stimulating eco-innovation.Design/methodology/approach - The approach utilised by this paper is empirical in nature. Using a sample of 2,181 firms, gathered as part of the Irish Community Survey 2006-2008, we estimate a modified innovation production function in order to assess the impact of regulation, consumer expectations and voluntary agreements on the performance of ecoinnovation, subsequently a knowledge augmented production function is estimated to assess the impact of eco-innovation on firm performance.Findings - Our findings suggest that regulation and customer perception can explain a firm s decision to engage in eco-innovation. Eco-innovation is also found to be more important than non-eco-innovation in determining firm performance.Research limitations/implications - Due to the limited availability of accounting data thispaper uses turnover per worker as the measure of firm performance. As a result, it is not possible to assess the impact of eco-innovation on firm costs.Social implications - The finding that regulation drives eco-innovation, and that there is no trade-off between eco-innovation and higher profit margins for innovating firms, suggests that regulators and policy makers can stimulate growth and create a greener society.Originality/value - This paper provides an empirical analysis of the Porter and van derLinde s (1995) theory of environmental regulation and firm performance using novel realworld data from over 2,000 Irish businesses

External interaction, innovation and productivity: an application of the innovation value chain to Ireland

This paper analyses the innovation value chain for the Irish Community Innovation Survey (CIS): 2004-2006. In estimating innovation and productivity simultaneously, it extends the CDM methodology to include a range of external knowledge sources. Feedback effects are found to be vital, with more productive firms being more innovative and vice versa. External knowledge sources affect the innovation decision but not innovation performance, thus pointing to the primacy of internal processes for the crucial task of knowledge exploitation. There is evidence of dichotomous knowledge sourcing in Ireland, with some firms sourcing from market and others, especially high-technology businesses, from non-market agents.

The effects of geography on innovation in small to medium sized enterprises in the South-East and South-West of Ireland

This paper analyses the effects of geography on innovation by small and medium sized enterprises in the South-West and South-East regions of Ireland. Using an augmented innovation production function it estimates, both directly and indirectly, the effects of interaction with geographically proximate external agents and agglomeration economies on product and process innovation in these enterprises. The findings question the premise that geography matters for innovation in the Irish case. There is little evidence that local/regional interaction is more important for innovation and the close availability of a skilled labour pool and a range of urbanization indicators have no effect

Intensity of competition and firm innovative behavior

Using a novel self-reported measure competitive intensity and four distinct forms of innovation (product, process, marketing and organisational) from the European Commission Flash Eurobarometer 433 dataset, this paper comprehensively identifies the impact of competitive pressure on firm innovation for four broad sectors of the economy. A logit model by innovation type is used to estimate the impact of the intensity of competition on the firm’s decision to innovate. Firm reported intensity of competition is found to have a positive impact on product and market innovation. Significant heterogeneities exist in the impact of minor and major degrees of competition across innovation types and sectors supporting both Arrow's (1962), and to a lesser degree Schumpeter's (1943), perspectives on this relationship

Are different forms of innovation complements or substitutes?

Purpose – The purpose of this article is to provide an empirical analysis of whether differing forms of innovation act as complements or substitutes in Irish firms’ production functions. Design-Methodology/Approach – The approach adopted by this paper is empirical in nature. Data is obtained for approximately 582 firms from the Irish Community Innovation Survey 2004-06. Four forms of innovation activity are identified; new to firm product, new to market product, process and organisational innovation. Formal tests for complementarity and substitutability are applied to these types of innovation to assess whether they have a complementary effect on firms’ turnover. Findings – The results suggest that there is a substantial degree of complementarity among different forms of innovation. Out of six possible innovation combinations, three are complementary while none exhibit signs of substitutability. Social Implications – From a business perspective, the importance of organisational change to facilitate technological innovation is highlighted while from a policy perspective the importance of the incentivisation of organisation and process innovation is also highlighted. Originality/Value – To date most research has focused on the impact of various forms of innovation, in isolation, on firms’ productivity. They do not consider whether these forms of innovation may in fact be linked, and that by implementing two or more innovations simultaneously, the combined benefits may be greater than the sum of the parts

An analysis of the interdependence of demographic factors, labour effort and economic growth in Ireland

Purpose – The purpose of this article is to analyse the effects of a declining birth rate and an increasing old age-population ratio on Ireland’s economic output. Design-Methodology/Approach – This paper utilises data on the birth rate, old-age population ratio, economic output and labour effort of the Irish economy to estimate a vector-autoregressive model. The results of this model are then analysed to test for the presence of Granger causality among these variables. In doing so it is possible to assess whether there are statistically significant causal relationships existing among these factors. Subsequently, impulse response functions are derived from this model in order to assess the magnitude of the causal relationships. Findings - The results suggest that declining fertility rates and increases in the old-age dependency ratio have a significant impact on labour effort and economic output. Labour effort is also found to explain variation in the fertility rate and economic output. Economic output is found to effect labour effort and the fertility rate. Social Implications – The results derived in this paper raise interesting policy implications. It is evident that Ireland’s declining birth rate and increasing old-age population ratio are creating a demographic situation which will have implications for future economic growth. Policies need to be put in place to mitigate the negative effects these factors will have on Irish growth. Originality/Value – This paper adopts modern econometric techniques to assess the causal relationships which exist between the demographic and economic factors considered. These have not previously been applied to the Irish situation. In doing this, this paper provides an important insight into the changing dynamics of the Irish economy