Francesco Bogliacino

The Job Creation Effect Of R&D Expenditures

In this study we use a unique database covering 25 manufacturing and service sectors for 16 European countries over the period 1996-2005, for a total of 2,295 observations, and apply GMM-SYS panel estimations of a demand-for-labour equation augmented with technology. We find that R&D expenditures have a job-creating effect, in accordance with the previous theoretical and empirical literature discussed in the paper. Interestingly enough, the labour-friendly nature of R&D emerges in both the flow and the stock specifications. These findings provide further justification for the European Lisbon-Barcelona targets.

Innovation and Development. The Evidence from Innovation Surveys

ABSTRACT In this article we investigate the existing evidence on innovation produced by innovation surveys in developing and emerging countries in Europe, Asia, Africa, and Latin America. We review the relevant literature, discuss methodological issues, and analyze the results for the countries with the most comparable surveys, considering the well-established findings of innovation surveys for Europe as a benchmark. From the evidence we considered, regional patterns are identified and some stylized facts on innovation and development are proposed, pointing out the specificity of innovation processes in economies engaged in industrialization and catching up.

THE JOB CREATION EFFECT OF R&D EXPENDITURES*: THE JOB CREATION EFFECT OF R&D EXPENDITURES

In this study we use a unique database covering 25 manufacturing and service sectors for 16 European countries over the period 1996-2005, for a total of 2,295 observations, and apply GMM-SYS panel estimations of a demand-for-labour equation augmented with technology. We find that R&D expenditures have a job-creating effect, in accordance with the previous theoretical and empirical literature discussed in the paper. Interestingly enough, the labour-friendly nature of R&D emerges in both the flow and the stock specifications. These findings provide further justification for the European Lisbon-Barcelona targets.

Pathos & ethos: emotions and willingness to pay for tobacco products

In this article we use data from a multi-country Randomized Control Trial study on the effect of anti-tobacco pictorial warnings on an individual’s emotions and behavior. By exploiting the exogenous variations of images as an instrument, we are able to identify the effect of emotional responses. We use a range of outcome variables, from cognitive (risk perception and depth of processing) to behavioural (willingness to buy and willingness to pay). Our findings suggest that the odds of buying a tobacco product can be reduced by 80% if the negative affect elicited by the images increases by one standard deviation. More importantly from a public policy perspective, not all emotions behave alike, as eliciting shame, anger, or distress proves more effective in reducing smoking than fear and disgust. JEL Classification C26, C99, D03, I18 PsycINFO classification 2360; 3920

The Behavior of Other as a Reference Point

We use prospect theory to model reference dependent consumers, where the reference point is the average behavior of the society in the current period. We show that after a finite number of steps under any equilibrium, the distribution of wealth will become and remain equal, or admit a missing class (a particular form of polarization). Under equilibria that admit the highest growth rates, the initial wealth distribution that maximizes this growth rate is one of perfect equality. Conversely, under equilibria that admit the lowest growth rates, perfect equality minimizes this growth rate and societies with a small level of initial inequality grow the fastest. In addition growth rates in corresponding economics without reference dependent consumers admit lower growth rates.

The challenges and opportunities of ‘nudging’

Consider the following selective evidence of human behaviour in the domain of healthcare. The numeric-cognition feeds typically provided during public vaccination campaigns are less effective than affect-based perception of risk.1 It is common to avoid seeing doctors and/or doing health checks because of anxiety and fear of receiving bad results. The latter means that a perceived ‘loss today’ in the health status has a stronger impact than a ‘gain tomorrow’, namely preventing or curing a potential disease.2 Clinicians fail to act on available knowledge and guidelines despite the intention to do so.3 Instead, consider now the following couple of examples of choice architectures capable of offsetting erroneous conducts. Recent trial studies show that it is enough to change the default settings of electronic order sets to dramatically ‘improve’ clinicians prescribing behaviours.4 A lottery-based financial incentive increased warfarin adherence and anticoagulation control.5 What do these examples have in common? They exemplify the heuristics and biases and the counteracting ‘nudges’ that in the past decade have been presented as part of a behavioural sciences-dictated policy agenda. Altering prescription activities by changing defaults in electronic order sets, for instance, is just a very simple example of a ‘nudge’ leveraging the ‘status quo bias’ to steer clinicians toward a ‘normatively’ defined ‘better’ behaviour. This is achieved by framing the choice set without restricting available options, in other words, acting over presentation of the decision problem, and not on the constraints for the decision maker. This philosophy of policy intervention has been labelled ‘libertarian paternalism’ because by not affecting the options available in the choice set it can be deemed to be libertarian from a consequentialist point of view, while being paternalistic in the sense of trying to induce ‘better’ choices.6 The approach is grounded in behavioural economics (BE), …

Innovation and Demand in Industry Dynamics: R&D, New Products and Profits

The links between three interconnected elements of the Schumpeterian sources of economic change are explored, conceptually and empirically, and related to the role played by demand factors. First, we examine the commitment of industries to invest profits in cumulative RD second, the ability of industries’ RD third, the impact of new products on entrepreneurial profits. We consider the nature and variety of innovative efforts—distinguishing in particular between strategies of technological and cost competiveness—and we introduce the role of demand in pulling technological change and supporting profits. We develop a simultaneous three-equation model and we test it at industry level—for 38 manufacturing and service sectors—on six European countries over two time periods from 1994 to 2006. The results show that the model effectively accounts for the dynamics of European industries and highlights the interconnections between the different factors contributing to growth.

The job creation effect of r&d expenditures

In this study we use a unique database covering 25 manufacturing and service sectors for 16 European countries over the period 1996-2005, for a total of 2,295 observations, and apply GMM-SYS panel estimations of a demand-for-labour equation augmented with technology. We find that R&D expenditures have a job-creating effect, in accordance with the previous theoretical and empirical literature discussed in the paper. Interestingly enough, the labour-friendly nature of R&D emerges in both the flow and the stock specifications. These findings provide further justification for the European Lisbon-Barcelona targets.

Poorer workers. The determinants of wage formation in Europe

Using industry level data for eight European countries, we present empirical evidence of poor wage performance in the two decades straddling the millennium. There was a real wage decline in many sectors and we examine its inequality‐enhancing effect. A theoretical framework is proposed and assessed in order to understand this evolution of wages, identifying their main determinants. We investigate the role played by different types of innovation, increasing international openness, demand, norms limiting competition and employment change. The results are consistent with our thesis that technology and globalization shape the bargaining power of workers; increasing wages are found in industries characterized by product innovation, while process innovation and greater international openness are associated to a reduction of real wages.

Access to finance for innovation: the role of venture capital and the stock market

Financial constraints for young and small firms can prevent them from contributing to innovation and the creation of new jobs. The paper analyzes two of the several institutional mechanisms implemented to overcome that hurdle: the development of the venture capital market and access to the stock market. The analysis is based on the information provided by two of the scoreboards used to monitor innovative activity in Europe: the IUS (Innovation Union Scoreboard) and the RD in the second case, the analysis indicated that unlisted SMEs are more research intensive.