The Spread of ICT and Productivity Growth: Is Europe really lagging behind in the New Economy?

The economic performance of some OECD countries over the past decade, most notably the United States, has renewed the interest of analysts and policy makers on economic growth and on how policy can eventually support it. This report sheds some light on this issue by relying on harmonised macro and sectoral data for OECD countries and a unique cross-country firm-level dataset. This allows to address a number of issues. What are the key factors explaining differences in output and productivity performances across OECD countries? What is the role of ICT-producing industry and the ICT-driven capital deepening in explaining the different growth patterns of countries? Does the adoption of IC technologies require organisational changes and/or changes in the composition of inputs? What is the contribution of new firms to overall productivity growth in general and in ICT-related sectors? Do ICT-industries show stronger firm and employment turnover rates? Is there any relationship between the spread of ICT and institutional features of the product and labour markets? For example, do stringent regulations on start-ups (as well as those affecting incumbents) affect the diffusion of ICT? Do differences in labour market policy and institutions explain different patterns of adoption of new technologies?Macro data clearly point to widening disparities in growth performance across the OECD countries, even on the basis of cyclically-adjusted series. These disparities are related to differences in labour utilisation rather than to widening differences in labour productivity growth rates: i.e. higher growth rates in output per capita observed in a number of countries have been accompanied by improvements in the utilisation of labour, while sluggish employment in others (mainly in continental Europe) have not been fully compensated by higher labour productivity growth, thereby leading to a further slowdown in output growth. However, observed changes in growth patterns in some countries are also the result of the information and communication technology (ICT) revolution. In particular, it is argued that those countries that have developed an ICT-producing industry -- and/or where other industries have been quick in adopting highly productive ICT equipment -- have been able to shift to higher output and productivity growth paths. In this respect, the United States and some smaller countries (e.g. Australia, Ireland) have benefited the most from this ICT revolution, while most large European economies are still lagging behind. The sectoral and micro analysis also reveals important cross-country differences. The U.S. economy seems to be better able to acquire comparative advantage in rapidly growing ICT market segments than most of its trading partners. At the micro level, there seems to be a different degree of "market experimentation" in the United States compared with Europe, even if aggregate firm turnover rates are similar. The findings suggest that in the U.S. new firms tend to be smaller (relative to average incumbent) and less productive when compared with their European counterparts, but, if successful, they also tend to grow much more rapidly.The micro evidence reported in the paper offers additional elements in our discussion of a growth-enhancing policy setting. Our results seem to suggest that certain institutional and regulatory settings may reduce the degree of market experimentation of new firms. This, in turn, could lower the speed with which a country shifts to a new technology, thereby offering an interpretation to the observed differences in innovation and adoption across the Atlantic. For example, low administrative costs of start-ups and not unduly strict regulations on labour adjustments in the United States, may stimulate potential entrepreneurs to start on a small scale, test the market and, if successful with their business plan, expand rapidly to reach the minimum efficient scale. In contrast, higher entry and adjustment costs in Europe may stimulate a pre-market selection of business plans with less market experimentation. Our econometric results lend some support to these considerations. By using pooled data (country, industry and time) we find that stringent regulatory settings in the product and labour markets contribute to hinder innovation activity and the adoption of leading technologies

Job Growth in Early Transition: Comparing Two Paths

Small start-up firms are the engine of job creation in early transition and yet little is known about the characteristics of this new sector. We seek to identify patterns of job growth in this sector in terms of niches left from central planning and ask about differences in job creation across two different transition economies: Estonia, which experienced rapid destruction of the pre-existing firms, and the Czech Republic, which reduced the old sector gradually. We find job growth within industries to be quantitatively more important than job growth due to across-industry reallocation. Furthermore, the industrial composition of startups is strikingly similar in the two countries. We offer convergence to "western" industry firm-size distributions as an explanation. We also find regularities in wage evolution across new and old firms, including small differences in job quality across the two transition paths.http://deepblue.lib.umich.edu/bitstream/2027.42/39888/3/wp503.pd

A study of patent thickets

Report analysing whether entry of UK enterprises into patenting in a technology area is affected by patent thickets in the technology area

Glycosylation site prediction using ensembles of Support Vector Machine classifiers

Article discussing the performance of different computational methods for prediction of glycosylation sites from amino acid sequences

Determinants of self-reporting under the European corporate leniency program

We empirically investigate the determinants of self-reporting under the European corporate leniency program. Applying a data set consisting of 442 firm groups that participated in 76 cartels decided by the European Commission between 2000 and 2011, we find that the probability of a firm becoming the chief witness increases with its character as repeat offender, the size of the expected basic fine, the number of countries active in one group as well as the size of the firm’s share in the cartelized market. Our results have important implications for an effective prosecution of anti-cartel law infringers