Innovation and Technology Adoption: Role of Human Capital and Market Structure, With Pavel Ševčík, Work in progress.
Abstract: We study firms' R&D and technology adoption decisions in an environment where technology producers are potentially different from technology users. New inventions can be generated by investment in experimental R&D and are protected by patents that guarantee monopoly rights on use of the technology for a given length of time. Technologies depreciate over time, leading to a gradual continuous decrease in their productivity. Firms, which are heterogeneous in their human capital, trade patents of different vintages on a competitive market by means of licensing agreements in order to acquire the technologies that are appropriate for them. We show that in the equilibrium high human capital firms invest more in R&Ds (experimental and applied) and buy more recent technologies. We intent to use firm-level data from Statistics Canada to (i) test empirically the model's qualitative prediction and (ii) estimate model's key parameters. The resulting quantitative framework will be used to evaluate the role of firm heterogeneity and economic policies in explaining aggregate level of innovation and technology adoption in the economy.
Social Welfare Growth Accounting: The Power of Population Growth, Work in progress.
Abstract: We analyze the increase in social welfare - measured in consumption equivalent (CE) units - by separating the contributions of population growth, technology growth and per capita consumption growth in the 10 Canadian provinces. Our social welfare growth accounting reveals that population growth is adjusted by a value-of-life factor, v, that empirically averages around 6.46 across provinces and over time. On average, across provinces, CE welfare growth amounts to 9.67%, with population and technology growth contributing respectively 4.91% and 3.04% while consumption growth contributes 1.72%. We conduct several robustness analysis including considering within-province heterogeneity and consumption inequality. Because the population growth is scaled up by a value-of-life factor, one percent increase in population growth generate v percent increase in CE welfare growth. This basically makes population growth the predominant factor to CE welfare growth. Finally, we examined the elements that impact the value-of-life factor and we found that it increases with personal income and inflows migration while decreasing with mortality and outflows migration.
Shaping Research Directions: The Interplay of R&D Incentives and Firm Size, JMP.
Abstract: We propose a model designed to capture three key economic aspects related to the efficiency of R&D incentive programs: (i) how firms reallocate limited resources between experimental and applied R&D, (ii) how the impact of R&D incentives varies by firm size, and (iii) how these incentives influence the geographic distribution of research activities. R&D tax credits tend to shape the research direction toward more experimental R&D within small-sized firms. Subsidies provide proportionally significant benefits to both small and large firms, potentially influencing the research direction toward greater applied R&D. At the economy-wide level, a higher proportion of small firms is more likely to shift toward experimental R&D under full support. The empirical results from Canadian firms are aligned with our theoretical predictions.
Efficacité des politiques de soutien aux entreprises pour la recherche et développement, With Martin, J., Mayneris, F., & Mohnen, P., Working paper.