Essays on Productivity and Innovation
Creators: name: Novaes De Amorim, Arthur
Publisher: name: Arts
Year: 2023
Subjects: subject: Productivity
subject: Innovation
subject: Economics

description: Productivity and innovation are essential components for economic growth. This dissertation studies the determinants of productivity and innovation from various perspectives. The first chapter investigates the historical role taken by mass media in increasing agricultural productivity. I use the early twentieth-century establishment of commercial radio in the United States to quantify the impact of locally relevant farm programming on productivity growth. Using variation in exposure to radio due to topography, my analysis shows that the broadcasting of local farm programming led to an increase in the productivity of land used in agriculture that persisted for at least two decades. This positive effect was not limited to a certain region, and was felt in a variety of important crops grown across the country. Consistent with radio reducing information barriers, the productivity gains were more pronounced for farmers in areas with lower literacy rates and economic status, lower media saturation, and reduced transport connectivity via railroads. While the first chapter is about productivity growth in the scale of a country, the second chapter zooms into the productivity of an individual high-skilled worker. I provide evidence that Asian dust storms affect the cognitive performance of high-skilled individuals as they make complex decisions in the strategy board game Go. I develop a novel data set linking historical records of high-level Go games with localized measurements of dust storm activity. Using a powerful artificial intelligence as an expert evaluator of over 400,000 game moves, I examine how quasi-random variation in exposure to Asian dust events affect player performance. I document that dust storms lead to a short-lived but sharp increase of on average 75𝜇𝑔/𝑚3 in 𝑃𝑀10. My main results show players exposed to Asian dust on the game day remain able to find the best moves in a position, but also become more susceptible to human error, making 8.3% more inaccurate moves. I subsequently establish that these adverse effects on human error are mostly driven by older individuals while players younger than 30 years old are not significantly affected by the deteriorated air quality. My findings reveal a hidden cost of air quality for mature workers performing tasks that require mental acuity and involve critical thinking, satisficing, and other problem-solving concepts demanded in various modern professional occupations. The final chapter studies, in the context of energy storage, the interplay between market size, policy, and innovation. I utilize geolocated data on energy storage projects in the United States to show that the arrival of a new project in a county causes an immediate increase in local patenting activity on storage-related technologies. This effect is short-lived, contrary to what might be expected if the project results in local knowledge spillovers that culminate in follow-on innovation. I additionally examine a policy change that increases the potential market size for energy storage solutions by compensating frequency regulation resources for increasing regulation capacity, accuracy, and speed. This policy led to a significant increase in the national output of energy storage-related patents. These findings suggest that incentivizing the expansion of energy storage projects can indirectly help promote innovation, eventually allowing energy storage to realize its full potential in supporting the transition to clean energy generation.