Innovation, Structural Change, and Inclusion. A Cross Country PVAR Analysis

Dr. Tommaso Ciarli, SPRU, University of Sussex, UK

Structural change can be both, a cause or a consequence of innovation, while structural change and innovations are usually accompanied by short-term outcomes of social inclusion or exclusion. Inclusion may, in turn, have an impact on further innovations. Yet, we find little evidence in the literature on the three-way relations between innovation, structural change, and inclusion. This paper advances the first exercise in this direction. Given the multidimensionality of each (innovation, structural change, and inclusion), we extract the underlying unobserved common factor structure from various well-known macro indicators. With a structural vector autoregression (SVAR) model for a short panel of developing countries over 13 years, we find the following main results. First, we confirm virtuous cycle between innovation and structural change, aligning with existing literature. Second, the strongest result is the positive effect of inclusion on both innovation and structural change, that suggests policy to improve inclusion beyond poverty and inequality. Third, on decomposing the innovation index (formal, firm-level and ICT), we find each related differently to both structural change and inclusion, that suggests specific policy roles in their influence on inclusion and structural change.

About the speaker

Tommaso Ciarli is Senior Research Fellow at SPRU, University of Sussex.  His main research interests are in the area of technological change, institutional change, and economic development. He is currently involved in several funded projects, among which: micro macro models of growth and structural change (EC), the relation between innovation, employment, and inequality (ESRC, JRF), violent conflict and economic activity (ESRC, CEPR and DFID), and the relation between inclusive innovation and structural change (IDRC). He is also revising papers on recently finished projects, among which the political economy of research trajectories in agri technologies (ESRC and NSF). He holds a PhD in Economics and in Industrial Development from the University of Birmingham and the University of Ferrara (Italy). He previously worked as a Researcher at the Max Planck Institute of Economics (2008-2011), as a Postdoc at the Manchester Metropolitan University (2007-2008) and at the University of L'Aquila, Italy (2006-2007) and teaching at the University of Bologna (2005-2007). Before the PhD Tommaso has worked for UNIDO and ECLAC (2000-2004).

Venue: Conference room (0.16 & 0.17)

Date: 22 March 2018

Time: 12:00 - 13:00Β Β CET