Publications

The Aggregate Effects of the Decline of Disruptive Innovation

Published in IWH Working Paper, 2023

This paper proposes a model that explains both recently documented facts about the decline of disruptive innovation and the decline in productivity growth as the result of large firms trying to monopolize technologies by poaching inventors from disruptive activities. To come to this conclusion, the paper builds an endogenous growth model with inventor labor markets on which firms can interact strategically. To inform this model, I perform an event study of the effect of disruptive inventions on their technology fields. I document that technology classes without disruption slowly trend towards incrementalism and that after a disruption, more patents get registered and research becomes less incremental.

Recommended citation: Richard Bräuer, The Aggregate Effects of the Decline of Disruptive Innovation, IWH Working Paper, 2023 http://Richardbraeuer.github.io/files/braeuer_disruptive.pdf

Trade shocks, labour markets and migration in the First Globalisation

Published in The Economic Journal, 2023

This paper studies the economic and political effects of a large trade shock in agriculture—the grain invasion from the Americas—in Prussia during the first globalisation (1870-1913). We show that this shock led to a decline in the employment rate and overall income. However, we do not observe declining per capita income and political polarization, which we explain by a strong migration response. Our results suggest that the negative and persistent effects of trade shocks we see today are not a universal feature of globalisation, but depend on labour mobility. For our analysis, we digitize data from Prussian industrial and agricultural censuses on the county level and combine it with national trade data at the product level. We exploit the cross-regional variation in cultivated crops within Prussia and instrument with Italian and US trade data to isolate exogenous variation.

Recommended citation: Richard Bräuer , Felix Kersting, Trade shocks, labour markets and migration in the First Globalisation, The Economic Journal, 2023 http://Richardbraeuer.github.io/files/braeuer_kerstig_2023.pdf

Import competition and firm productivity: Evidence from German manufacturing

Published in The World Economy, 2023

We study how different types of import competition affect firm productivity using firm-product data from German manufacturing (2000–2014). Competition from high-income countries causes affected domestic firms to increase their productivity and lower their prices. Oppositely, import competition from low-wage countries does not lead to firm productivity gains. Instead, domestic firms’ sales and input usage decline. Our findings confirm the intuition of ladder models that the effect of competition depends on the “closeness” of competitors. They are in line with widespread X-inefficiencies throughout the economy, which firms reduce in response to competition from high-income countries.

Recommended citation: Braeuer, R., Mertens, M., Slavtchev, V. (2023). Import competition and firm productivity: Evidence from German manufacturing. The World Economy, 00, 00–21. https://doi.org/10.1111/twec.13409. http://Richardbraeuer.github.io/files/braeuer_mertens_slavtchev_2023.pdf

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