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on Business Economics |
| By: | Axel Dreher (Swiss Institute for Business Cycle Research (KOF), Swiss Federal Institute of Technology Zurich (ETH)); Noel Gaston (Faculty of Business, Bond University, Gold Coast, Queensland 4229, Australia.) |
| Abstract: | For a number of OECD countries, the deterioration of labour market outcomes for less-skilled workers since the early 1980’s has coincided with a steady decline in union membership. Globalisation is commonly believed to have contributed to both developments. However, recent studies fail to find support for the presumption that globalisation adversely affects unions. Revisiting this issue by using a novel globalisation index we find that globalisation has indeed contributed to deunionisation. In delving further into the issue, we find that it is social integration, rather than economic or political integration, that has been the main contributor to the decline in union membership. |
| Keywords: | Deunionisation; globalisation; integration; panel regressions. |
| JEL: | F02 J50 O57 C82 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:05-110&r=bec |
| By: | Martin Uribe |
| Abstract: | This paper characterizes the equilibrium dynamics in an economy facing an aggregate debt ceiling. This borrowing limit is intended to capture an environment in which foreign investors base their lending decisions predominantly upon macro indicators. Individual agents do not internalize the borrowing constraint. Instead, a country interest-rate premium emerges to clear the financial market. The implied equilibrium dynamics are compared to those arising from a model in which the debt ceiling is imposed at the level of each individual agent. The central finding of the paper is that the economy with the aggregate borrowing limit does not generate higher levels of debt than the economy with the individual borrowing limit. That is, there is no overborrowing in equilibrium. |
| JEL: | F4 |
| Date: | 2006–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11913&r=bec |
| By: | Donna Brown (Royal Holloway College, University of London); Peter Ingram (University of Surrey); Jonathan Wadsworth (CEPR and Royal Holloway College, University of London) |
| Abstract: | Against a background of increased decentralisation in the structure of wage decision making, we analyse the effects of unions on the dispersion and persistence of pay settlements over the medium term using a longitudinal data set covering British private sector establishments over the period 1987-2001. It seems that the union effect of a reduction in wage dispersion in pay levels observed in earlier studies is repeated when we follow wage changes (settlements) over the medium term. Declining union presence seems therefore to account for some of the increase in longer-term wage dispersion over the sample period. The increase in aggregate wage settlement dispersion seems to have been accompanied by an increase in the permanent rather than transitory components of the variance and this stems mostly from the non-union sector. |
| Keywords: | Pay, Wage Change, Unions, Persistence, Inequality |
| JEL: | J3 J5 J6 |
| Date: | 2004–10 |
| URL: | http://d.repec.org/n?u=RePEc:sur:surrec:1104&r=bec |
| By: | Mario Quagliariello |
| Abstract: | This paper discusses the role that macroeconomic uncertainty plays in banks’ choices regarding the optimal asset allocation. Following the portfolio model proposed by Baum et al. (2005), the paper aims at disentangling how Italian banks choose between loans and risk-free assets when the uncertainty on macroeconomic conditions increases. The econometric results confirm that macroeconomic uncertainty is a significant determinant of Italian banks’ investment decisions, also after controlling for other factors. In periods of increasing turmoil, bank-specific ability to accurately forecast future returns is hindered and herding behaviour tends to emerge, as witnessed by the reduction of the cross-sectional variance of the share of loans held in portfolio. |
| Keywords: | Bank, business cycle, uncertainty, lending decisions, GARCH |
| JEL: | E44 G21 G28 |
| Date: | 2006–01 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:06/02&r=bec |
| By: | David Card; Brian P. McCall |
| Abstract: | Despite the adoption of no-fault Workers' Compensation legislation in most states, there is substantial litigation over the issue of employer liability for injury claims. We develop a sequential asymmetric information model of liability disputes and estimate the model using data on injury claims from the state of Minnesota. The key insight of our model is that when workers differ in their costs of pursuing a injury claim, employers have an incentive to deny liability and force those with higher costs to abandon their claim. Likewise, workers who expect a bigger return from pursuing their claim are more likely to fight back when liability is denied. Estimates of the structural model confirm that the decision rules of both parties depend on the expected costs and benefits of continuing the dispute. The model provides a parsimonious but relatively successful explanation for the distribution of liability disputes across different workers and types of injuries. |
| JEL: | K41 J28 |
| Date: | 2006–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11918&r=bec |
| By: | Charles Engel; John H. Rogers |
| Abstract: | We investigate the possibility that the large current account deficits of the U.S. are the outcome of optimizing behavior. We develop a simple long-run world equilibrium model in which the current account is determined by the expected discounted present value of its future share of world GDP relative to its current share of world GDP. The model suggests that under some reasonable assumptions about future U.S. GDP growth relative to the rest of the advanced countries -- more modest than the growth over the past 20 years -- the current account deficit is near optimal levels. We then explore the implications for the real exchange rate. Under some plausible assumptions, the model implies little change in the real exchange rate over the adjustment path, though the conclusion is sensitive to assumptions about tastes and technology. Then we turn to empirical evidence. A test of current account sustainability suggests that the U.S. is not keeping on a long-run sustainable path. A direct test of our model finds that the dynamics of the U.S. current account -- the increasing deficits over the past decade -- are difficult to explain under a particular statistical model (Markov-switching) of expectations of future U.S. growth. But, if we use survey data on forecasted GDP growth in the G7, our very simple model appears to explain the evolution of the U.S. current account remarkably well. We conclude that expectations of robust performance of the U.S. economy relative to the rest of the advanced countries is a contender -- though not the only legitimate contender -- for explaining the U.S. |
| JEL: | F3 F4 |
| Date: | 2006–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11921&r=bec |
| By: | Michel Normandin; Bruno Powo Fosso |
| Abstract: | This paper documents the relative importance of global and country-specific shocks for international business cycles. For this purpose, we rely on a symmetric two-country, dynamic, general-equilibrium model with costly, incomplete, international financial markets. We also relate exogenous technologies and government expenditures to unobservable common and idiosynchratic components, and apply a Kalman filter to extract the associated global and country-specific shocks. We show that the baseline parametrization of the model, including all shocks, closely matches the cyclical fluctuations of key macroeconomic variables for the United States and a non-US aggregate over the post-1975 period. We then experiment alternative parametrizations, isolating the effects of each shock, and find that country-specific technology shocks constitute a prime determinant of international business cycles. Also, global technology shocks have marginal contributions, whereas global and country-specific government-expenditure shocks have negligible effects on cyclical fluctuations. |
| Keywords: | General Equilibrium, Kalman Filter, Symmetric Economies |
| JEL: | F32 F41 C32 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:lacicr:0601&r=bec |
| By: | CASTRO, Rui; COEN-PIRANI, Daniele |
| Abstract: | This paper documents and discusses a dramatic change in the cyclical behavior of aggregate hours worked by individuals with a college degree (skilled workers) since the mid-1980’s. Using the CPS outgoing rotation data set for the period 1979:1-2003:4, we find that the volatility of aggregate skilled hours relative to the volatility of GDP has nearly tripled since 1984. In contrast, the cyclical properties of unskilled hours have remained essentially unchanged. We evaluate the extent to which a simple supply/demand model for skilled and unskilled labor with capital-skill complementarity in production can help explain this stylized fact. Within this framework, we identify three effects which would lead to an increase in the relative volatility of skilled hours: (i) a reduction in the degree of capital-skill complementarity, (ii) a reduction in the absolute volatility of GDP (and unskilled hours), and (iii) an increase in the level of capital equipment relative to skilled labor. We provide empirical evidence in support of each of these effects. Our conclusion is that these three mechanisms can jointly explain about sixty percent of the observed increase in the relative volatility of skilled labor. The reduction in the degree of capital-skill complementarity contributes the most to this result. |
| Keywords: | Macroeconomics, Business Cycles, Volatility, Skilled Hours, Skill Premium, Catal- Skill Comementarity |
| JEL: | E24 E32 J24 J31 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:mtl:montde:2005-19&r=bec |
| By: | M. Hashem Pesaran |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:scp:wpaper:05-41&r=bec |
| By: | Pierre Ouellette (Département des sciences économiques, Université du Québec (Montréal)); Li Yan (Département des sciences administratives, Université du Québec (Outaouais) et LRSP) |
| Abstract: | A dynamic version of Data Envelopment Analysis (DEA) is developed in the present paper. Our model introduces investment in traditional DEA and imposes intertemporal cost minimization. Adding an intertemporal adjustment constraint into the cost minimization problem, we derive the relation between the DEA variables of the cost function and those of the primary production frontiers’ coefficients. The augmented DEA model can be solved using standard linear programming. This dynamic framework enables computing the production frontiers, measuring the productive efficiencies and evaluating the potential economies all in the presence of adjustment costs. |
| Keywords: | Adjustment cost, Data envelopment analysis, Efficiency, Multiple outputs/inputs, Quasi-fixed inputs. |
| JEL: | D24 L23 |
| Date: | 2006–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:pqs:wpaper:012006&r=bec |
| By: | Sanjiv Das; Darrell Duffie; Nikunj Kapadia; Leandro Saita |
| Abstract: | We develop, and apply to data on U.S. corporations from 1979-2004, tests of the standard doubly-stochastic assumption under which firms'default times are correlated only as implied by the correlation of factors determining their default intensities. This assumption is violated in the presence of contagion or "frailty" (unobservable explanatory variables that are correlated across firms). Our tests do not depend on the time-series properties of default intensities. The data do not support the joint hypothesis of well specified default intensities and the doubly-stochastic assumption. There is also some evidence of default clustering in excess of that implied by the doubly-stochastic model with the given intensities. |
| JEL: | G3 |
| Date: | 2006–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11961&r=bec |
| By: | Francois-Éric Racicot (Département des sciences administratives, Université du Québec (Outaouais) et LRSP); Raymond Théoret (Département de stratégie des affaires, Université du Québec (Montréal)) |
| Abstract: | Since the end of the nineties, Basle Committee has required that banks compute periodically their VaR and maintain sufficient capital to pay the eventual losses projected by VaR. Unfortunately, there is not only one measure of VaR because volatility, which is a fundamental component of VaR, is latent. Therefore, banks must use many VaR models to compute the range of their prospective losses. These computations might be complex because the distribution of high frequency returns is not normal. This article analyses many VaR models and produces their programs in Visual Basic. It considers also other new measures of market risk and the use of copulas and Fourier Transform for the computation of VaR. |
| Keywords: | Ingénierie financière, simulation de Monte Carlo, banques, copules, transformée de Fourier. |
| JEL: | G12 G13 G33 |
| Date: | 2006–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:pqs:wpaper:022006&r=bec |
| By: | Frank T. Denton; Christine H. Feaver; Byron G. Spencer |
| Abstract: | This report has two purposes: (1) to introduce a new version of the MEDS (Models of the Economic Demographic System) software; and (2) to apply it in a series of illustrative projections. The software is designed to illustrate the medium- to longer-term responses of the Canadian population and economy to a wide range of factors on either the demographic side, such as changes in rates of fertility, migration, and mortality, or the economic side, such as changes in the rate of technical progress or the educational attainment of young people or of new immigrants. "Standard" projections are provided, together with nineteen alternative projections. (For some illustrative projections, see http://socserv.mcmaster.ca/qsep.) The range of projections indicates the breadth of applications for which MEDS has been designed. It serves also to provide some quantitative measures of the likely demographic and economic consequences of population aging, and indicates the scope for evaluating policy initiatives by means of simulation. |
| Keywords: | macroeconomic projections, economic-demographic system |
| JEL: | E10 E17 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:qseprr:403&r=bec |
| By: | Arijit Mukherjee (University of Nottingham and The Leverhulme Centre for Research in Globalisation and Economic Policy, UK); Enrico Pennings (Faculty of Economics, Erasmus Universiteit Rotterdam, the Netherlands) |
| Abstract: | Taking technological differences between firms as given, we show that the technologically advanced firm has a stronger incentive for technology licensing under a decentralized unionization structure than with centralized wage setting. Furthermore, We show that, in presence of licensing, the incentive for innovation may also be stronger under decentralized unions. Unions have a clear preference for centralization only if productivity improvements are relatively small. |
| Keywords: | Licensing; downstream market; upstream market; innovation; welfare |
| JEL: | D43 L13 O34 |
| Date: | 2005–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20050109&r=bec |
| By: | Mario Fortin (GREDI, Département d'économique, Université de Sherbrooke); Andre Leclerc (Secteur sciences humaines, Université de Moncton, campus d’Edmundston); Jean-Baptiste Nesmy (Département d’économique, Université de Sherbrooke) |
| Abstract: | This study seeks to establish how banking productivity is affected by taking into account, in addition to loans and deposits, transactions carried out by banks for their customers. We use a panel of data on Desjardins covering the period 1999 - 2002. Two methods are applied to measure productivity growth, that is, a variant of the standard accounting method used by Statistics Canada based on the Fisher ideal index, and the Malmquist index based on the nonparametric DEA model. We also apply two different methods for determining the price of loans and deposits. The first is the Barnet/Donovan user cost approach which is based on the difference between the effective rate and a reference rate representing the pure cost of the funds borrowed without allowance for risk. The other is the effective interest rate. As a whole, we find that transaction products do not change importantly the productivity growth. The main reason is that these products represent quite a small share in the aggregate output (between 6,8% and 21,4%). We observe however that the index of productivity based on the Fisher ideal indexes is higher than the aggregative indexes Malmquist for all the studied period. |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:shr:wpaper:06-01&r=bec |
| By: | Alberto Baffigi (Banca d'Italia); Antonio Bassanetti (Banca d'Italia) |
| Abstract: | We present tools for real-time detection of turning points in the industrial production growth-cycle of the euro area and its four largest economies. In particular, we apply a multivariate hidden Markov model to national survey results – i.e. to the earliest information about current economic developments - in order to estimate the probability of expansionary and recessionary phases. The balances of opinions used as inputs of the model are selected by ranking them according to their degree of commonality with respect to the cyclical fluctuations of the industrial sector, as estimated with the Generalized Dynamic Factor Model. The indicators appear reliable and stable. |
| Keywords: | business cycle, hidden Markov model, business surveys |
| JEL: | E32 E37 |
| Date: | 2004–06 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_500_04&r=bec |
| By: | Paul Gregg; Sarah Jewell; Ian Tonks |
| Abstract: | This paper examines the relationship between executive cash compensation and company performance for a sample of large UK companies over the period 1994-2002. This relationship is examined against a background of a series of reports into corporate governance mechanisms in UK companies. We show that base pay compensation of UK executives has increased substantially over this period, and we provide evidence on the movement in the pay-performance sensitivity over time. We identify an asymmetric relationship between pay and performance: in years and for companies in which stock returns are relatively high, pay-performance elasticities are high, but we find that executive pay is less sensitive to performance in those cases when stock returns are low. This suggests that overall there is little relationship between pay and performance. We also explore the heterogeneity of the pay-performance relationship across firms, and find that board structure, firm size, industry and firm risk are all significant determinants of executive compensation. |
| Keywords: | Executive compensation, pay and performance |
| JEL: | G34 J33 M52 |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:bri:cmpowp:05/122&r=bec |
| By: | Cronqvist, Henrik; Heyman, Fredrik; Nilsson, Mattias; Svaleryd, Helena; Vlachos, Jonas |
| Abstract: | Based on a two-million-observation panel dataset that matches public firms with detailed data on their employees, we find that entrenched managers pay their workers more. For example, our estimates show that CEOs with more control rights (votes) than all other blockholders together, pay their workers about 6%, or $2,200 per year, higher wages. Because cash flow rights ownership by the CEO and better corporate governance are found to mitigate such behaviour, we interpret the higher pay as evidence of agency problems between shareholders and managers affecting workers' pay. The findings do not appear to be driven by endogeneity of managerial ownership and are robust to a series of robustness checks. These results are consistent with an agency model in which managers pay high wages because they come with private benefits for the manager, such as lower-effort wage bargaining and better CEO-employee relations, and suggest more broadly an important link between the external corporate governance of large public firms and labour market outcomes. |
| Keywords: | agency problems; corporate governance; matched employer-employee data; private benefits; wages |
| JEL: | G32 G34 J31 J33 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5371&r=bec |
| By: | Na, H.S.; Couto Miranda, L.; Berg, J. van den; Leipoldt, M. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | In 2004, the Basel Committee on Banking Supervision defined Operational Risk (OR) as the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. After publication of the new capital accord containing this dfinition, statistical properties of OR losses have attracted considerable attention in the financial industry since financial institutions have to quantify their exposures towards OR events. One of the major topics related to loss data is the non-availability of a suficient amount of data within the Financial Institutions. This paper describes a way to circumvent the problem of data availability by proposing a scaling mechanism that enables an organization to put together data originating from several business units, each one having its specific characteristics like size and exposure towards operational risk. The same scaling mechanism can also be used to enable an institution to include external data originating from other institutions into their own exposure calculations. Using both internal data from different business units and publicly available data from other (anonymous) institutions, we show that there is a strong relationship between losses incurred in one business unit respectively institution, and a specific size driver, in this case gross revenue. We study an appropriate scaling power law as a mechanism that explains this relationship. Having properly scaled the data from different business units, we also show how the resulting aggregated data set can be used to calculate the Value-at-OR for each business unit and present the principles of calculating the value of the OR capital charge according the minimal capital requirements of the Basel committee. |
| Keywords: | Operational Risk;Power Law Scaling;Loss Distribution;Value at Operational Risk;Minimal Capital Requirements; |
| Date: | 2006–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:30007880&r=bec |
| By: | Marloes de Graaf-Zijl (SEO, Universiteit van Amsterdam) |
| Abstract: | In this paper I analyse job satisfaction using fixed effect analysis and a multiple equation model. Overall job satisfaction is analysed as an aggregate of satisfaction with several job aspects. I find that overall job satisfaction is mainly determined by satisfaction with job content. All aspect satisfactions are subsequently explained from observed characteristics, with special focus on contingent employment contracts. Satisfaction with job security is the aspect satisfaction with the strongest relation to type of contract. Since this is also the aspect that receives least weight in overall job satisfaction this has little impact on workers total happiness. More influential is the low satisfaction with job content due to agency work. Overall, temporary agency work leads to the lowest job satisfaction. On-call work and fixed-term work arrangements do not differ from regular work in overall job satisfaction they provide, even though they do lead to highe! r or lower satisfaction with some aspects of the job. |
| Keywords: | temporary employment; job satisfaction |
| JEL: | J28 J40 C23 |
| Date: | 2005–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20050119&r=bec |
| By: | Thomas J. Dohmen (IZA Bonn) |
| Abstract: | High rewards or the threat of severe punishment do not only provide incentives to exert high levels of effort but also create pressure. Such pressure can cause paradoxical performance effects, namely performance decrements despite strong incentives and high motivation. By analyzing the performance of professional football players on a well-defined task, namely to score on a penalty kick, the paper provides empirical evidence for the existence of such detrimental incentive effects. Two pressure variables are considered in particular: (1) the importance of success and (2) the presence of spectators. There are plenty of situations in which pressure arises in the workplace. Knowing how individuals perform under pressure conditions is crucial for labor economists because it has implications for the design of the workplace and the design of incentive schemes. |
| Keywords: | choking under pressure, paradoxical performance effects of incentives, social pressure |
| JEL: | M54 Z13 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1905&r=bec |
| By: | Jakob Roland Munch (University of Copenhagen and CEBR); Jan Rose Skaksen (Copenhagen Business School, CEBR and IZA Bonn) |
| Abstract: | This paper studies the impact of outsourcing on individual wages. In contrast to the standard approach in the literature, we focus on domestic outsourcing as well as foreign outsourcing. By using a simple theoretical model, we argue that, if outsourcing is associated with specialization gains arising from an increase in the division of labor, domestic outsourcing tends to increase wages for both unskilled and skilled labor. We use a panel data set of workers in Danish manufacturing industries to show that domestic and foreign outsourcing affect wages as predicted by the theory. |
| Keywords: | outsourcing, comparative advantage, specialization, wages |
| JEL: | F16 J31 C23 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1907&r=bec |
| By: | Tracy L. Regan (University of Miami); Ronald L. Oaxaca (University of Arizona and IZA Bonn) |
| Abstract: | We address the bias from using potential vs. actual experience in earnings models. Statistical tests reject the classical errors-in-variable framework. The nature of the measurement error is best viewed as a model misspecification problem. We correct for this by modeling actual experience as a stochastic regressor and predicting experience using the NLSY79 and the PSID. Predicted experience measures are applied to the IPUMS. Our results suggest that potential experience biases the effects of schooling and the rates of return to labor market experience. Using such a measure in earnings models underestimates the explained portion of the male-female wage gap. |
| Keywords: | experience, specification error, decomposition, gender |
| JEL: | C81 J24 J31 |
| Date: | 2006–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1920&r=bec |
| By: | Mary Amiti; Shang-Jin Wei |
| Abstract: | The practice of sourcing service inputs from overseas suppliers has been growing in response to new technologies that have made it possible to trade in some business and computing services that were previously considered non-tradable. This paper estimates the effects of offshoring on productivity in US manufacturing industries between 1992 and 2000, using instrumental variables estimation to address the potential endogeneity and errors in measurement of offshoring. It finds that service offshoring has a significant positive effect on productivity in the US, accounting for around 11 percent of productivity growth during this period. Offshoring material inputs also has a positive effect on productivity, but the magnitude is smaller accounting for approximately 5 percent of productivity growth. |
| JEL: | F1 F2 |
| Date: | 2006–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11926&r=bec |
| By: | Chiara Fumagalli (Università Luigi Bocconi and CSEF); Massimo Motta (European University Institute, Universitat Pompeu Fabra and CEPR); Lars Persson (IUI (The Research Institute of Industrial Economics) and CEPR) |
| Abstract: | We extend the literature on exclusive dealing by allowing the incumbent and the potential entrant to merge. This uncovers new effects. First, exclusive deals can be used to improve the incumbent’s bargaining position in the merger negotiation. Second, the incumbent finds it easier to elicit the buyer’s acceptance than in the case where entry can occur only by installing new capacity. Third, exclusive dealing reduces welfare because (i) it may trigger entry through merger whereas de-novo entry would be socially optimal (ii) it may deter entry altogether. Finally, we show that when exclusive deals include a commitment to future prices, they will increase welfare. |
| Keywords: | Countervailing Power; Exclusion; Buyers’ Fragmentation |
| JEL: | D4 L13 L41 |
| Date: | 2006–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:153&r=bec |
| By: | Ulrich Witt (Max-Planck-Institute Jena, Evolutionary Economics group); Christian Zellner (Ecole Polytechnique Fédérale de Lausanne, Chaire en Economie et Management de l'Innovation) |
| Abstract: | New knowledge with commercial potential is continually created in academic institutions. How is it turned into economically valuable businesses? This paper argues that the transfer is an entrepreneurial process. To understand this, the actions and the constraints characteristic for the entrepreneurial reshaping of the division of labor must be recognized. In the case of knowledge-based entrepreneurship, specific constraints result from the peculiarities of scientific knowledge – epitomized by constrasting tacit and encoded knowledge. Scientifically trained labor is required for transferring both forms of knowledge. However, the mode of transfer differs crucially and shapes the organizational form of commercializing new scientific knowledge. |
| Keywords: | entrepreneurship, knowledge transfer, technology commercialization |
| JEL: | L23 M13 O31 O32 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:cmi:wpaper:cemi-report-2005-002&r=bec |