Essays in economic growth and innovation

Bertolotti, Fabio (2023) Essays in economic growth and innovation. PhD thesis, London School of Economics and Political Science.

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Abstract

This thesis explores factors that influence firms' incentives to invest in R&D and innovate. The first chapter examines the effect of patent term on innovation. Leveraging a US policy change that varied patent term across technological fields, I estimate that unanticipated adoption of a longer patent term stimulates R&D and innovation. However, if firms anticipate a longer patent term for future inventions, R&D and innovation decline, also due to technology disclosure externalities. A new structural model highlights that normative evaluation of patent term changes should consider both transitional dynamics and potential anticipation. Moreover, it shows that the unanticipated extension of US patent term to 26 years would increase US welfare compared to current policy. The second chapter studies the role of new-product quality for the dynamics of durable-goods expenditures around the Great Recession. We assemble a rich dataset on US new-car markets during 2004-2012, combining data on transaction prices with detailed information about vehicles' technical characteristics. During the recession, a reallocation of expenditures away from high-quality new models accounts for a significant decline in the dispersion of expenditures. In turn, car manufacturers introduced new models of lower quality, which persistently depressed the technology embodied in vehicles. The third chapter examines the interaction between innovation, productivity, and technological standards. The latter integrate firms' disclosures of standard-essential patents into documents that provide technical and informational coordination on how to combine technologies to achieve interoperability and overcome innovation complementarities that may harm growth. I empirically show that the number of disclosed patents negatively correlates with productivity growth across sectors. I develop a Schumpeterian growth model featuring complementarity, standards, and patents disclosures, and identify conditions under which more disclosures lead to slower productivity growth. Namely, when the degree of complementarity is strong enough. Lastly, I show that this prediction holds in the data.

Item Type:	Thesis (PhD)
Additional Information:	© 2023 Fabio Bertolotti
Library of Congress subject classification:	H Social Sciences > HC Economic History and Conditions T Technology > T Technology (General)
Sets:	Departments > Economics
Supervisor:	Reis, Ricardo and Jaravel, Xavier
URI:	http://etheses.lse.ac.uk/id/eprint/4674

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