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Christmas reading from IFN

21 December 2023

Throughout the year, our researchers have contributed significantly to various fields by producing a substantial number of scientific papers. The following is a curated selection of noteworthy papers that were published in prominent academic journals during 2023.

Making a Market: Infrastructure, Integration and the Rise of Innovation

We exploit exogenous variation arising from the historical rollout of the Swedish railroad network across municipalities to identify the impacts of improved transport infrastructure on innovative activity. A network connection led to a local surge in patenting due to an increased entry and productivity of inventors. As the railroad network expanded, inventors in connected areas began to develop ideas with applications outside the local economy, which were subsequently sold to firms along the network. Our findings suggest that reductions in communication and transportation costs were an important driver of the historical emergence of a market for ideas.

Andersson, David, Thor Berger and Erik Prawitz (2023). “Making a Market: Infrastructure, Integration and the Rise of Innovation”. Review of Economics and Statistics 105(2), 258–274.

The Long-term Effects of Student Absence: Evidence from Sweden

Despite the relatively uncontested importance of promoting school attendance in the policy arena, little evidence exists on the causal effect of school absence on long-run outcomes. We address this question by combining historical and administrative records for cohorts of Swedish individuals born in the 1930s. We find that elementary school absence significantly reduces contemporaneous academic performance, final educational attainment and labor income throughout the life-cycle. The findings are consistent with a dynamic model of human capital formation, whereby absence causes small immediate learning losses, which cumulate to larger human capital losses over time and lead to worse labor market performance.

Cattan, Sarah, Daniel A. Kamhöfer, Martin Karlsson and Therese Nilsson (2023). “The Long-term Effects of Student Absence: Evidence from Sweden”. Economic Journal 133(650), 888–903.

The Dynamic Impact of Exporting on Firm R&D Investment

This article estimates a dynamic structural model of firm R&D investment in twelve Swedish manufacturing industries and uses it to measure rates of return to R&D and to simulate the impact of trade restrictions on the investment incentives. R&D spending is found to have a larger impact on firm productivity in the export market than in the domestic market. Export market profits are a substantial source of the expected return to R&D.

Maican, Florin, Matilda Orth, Mark J. Roberts and Van Anh Vuong (2023). “The Dynamic Impact of Exporting on Firm R&D Investment”. Journal of the European Economic Association 21(4), 1318–1362.

The Electoral Consequences of Environmental Accidents: Evidence from Chernobyl

This paper examines the relationship between environmental accidents and voting. Following the 1986 Chernobyl disaster, environmentalist parties entered parliaments in several nations. This paper uses Chernobyl as a natural experiment creating variation in radioactive fallout exposure over Sweden. I match municipality-level data on cesium ground contamination with election results for the environmentalist Green Party, which was elected to parliament in 1988. After adjusting for pre-Chernobyl views on nuclear power, the results show that voters in high-fallout areas were more likely to vote for the Greens. Detailed individual-level survey data suggests that resistance to nuclear energy increased in fallout-effected areas after the accident, and that this change was driven by voters who followed local media closely.

Mehic, Adrian (2023). “The Electoral Consequences of Environmental Accidents: Evidence from Chernobyl”. Journal of Public Economics 225, 104964.