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on Technology and Industrial Dynamics |
| By: | Uwe Cantner (University of Jena, Faculty of Economics); Kristina Dreßler (University of Jena, Faculty of Economics); Jens J. Krüger (University of Jena, Faculty of Economics) |
| Abstract: | Knowledge is one of the most important determinants in single-industry studies of firm survival over the life cycle. Different kinds of knowledge, namely post-entry experience, pre-entry experience, and knowledge acquired by innovative activity positively influence the survival chances of firms. This paper investigates how the kinds of knowledge are able to compensate for each other. Therefore, a statistical survival analysis is performed for the German automobile industry which applies a new approach that combines the Cox regression with instrumental variable estimation. The results show that innovative activity is able to compensate for lacking post-entry experience, supporting Schumpeterian creative destruction. |
| Keywords: | firm survival, patents, innovation, automobile industry, hazard rates |
| JEL: | L10 L62 O33 C41 |
| Date: | 2005–09–26 |
| URL: | http://d.repec.org/n?u=RePEc:jen:jenasw:2005-11&r=tid |
| By: | Sujoy Chakravarty; Martin Gaynor; Steven Klepper; William B. Vogt |
| Abstract: | We examine the evolving structure of the U.S. hospital industry since 1970, focusing on how ownership form influences entry and exit behavior. We develop theoretical predictions based on the model of Lakdawalla and Philipson, in which for-profit and not-for-profit hospitals differ regarding their objectives and costs of capital. The model predicts for-profits would be quicker to enter and exit than not-for-profits in response to changing market conditions. We test this hypothesis using data for all U.S. hospitals from 1984 through 2000. Examining annual and regional entry and exit rates, for-profit hospitals consistently have higher entry and exit rates than not-for-profits. Econometric modeling of entry and exit rates yields similar patterns. Estimates of an ordered probit model of entry indicate that entry is more responsive to demand changes for for-profit than not-for-profit hospitals. Estimates of a discrete hazard model for exit similarly indicate that negative demand shifts increase the probability of exit more for for-profits than not-for-profits. Finally, membership in a hospital chain significantly decreases the probability of exit for for-profits, but not not-for-profits. |
| JEL: | I11 L11 L2 L3 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11705&r=tid |
| By: | Brice Fallick; Charles A. Fleischmann; James A. Rebitzer |
| Abstract: | In Silicon Valley's computer cluster, skilled employees are reported to move rapidly between competing firms. This job-hopping facilitates the reallocation of resources towards firms with superior innovations, but it also creates human capital externalities that reduce incentives to invest in new knowledge. Using a formal model of innovation we identify conditions where the innovation benefits of job-hopping exceed the costs from reduced incentives to invest in human capital. These conditions likely hold for computers, but not in most other settings. Features of state law also favor high rates of inter-firm mobility in California. Outside of California, employers can use non-compete agreements to inhibit mobility, but these agreements are unenforceable in California. Using new data on labor mobility we find higher rates of job-hopping for college-educated men in Silicon Valley's computer industry than in computer clusters located out of the state. Mobility rates in other California computer clusters are similar to Silicon Valley's, suggesting some role for state laws restricting non-compete agreements. Consistent with our model of innovation, we also find that outside of the computer industry, California's mobility rates are no higher than elsewhere. |
| JEL: | R12 L63 O3 J63 J48 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11710&r=tid |
| By: | Poul Houman Andersen; Poul Rind Christensen |
| Abstract: | MNCs and regional innovation systems differ widely in their knowledge generation and dissemination processes. We propose these differences provide systematic challenges for MNC units tapping into locally vested skills, combining their findings with existing knowledge and disseminating this internally. Our aim is to develop a framework for conceptualising the knowledge transfer process between MNCs and regional innovation systems. For that purpose we develop a conceptual model of the knowledge tapping process and a set of propositions. |
| Keywords: | MNCs; Knowledge management; Industrial districts |
| JEL: | D83 F23 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:05-16&r=tid |
| By: | Yi Deng |
| Abstract: | This paper aims at quantifying the economic value of knowledge spillovers by exploring information contained in patent citations. We estimate a market valuation equation for semiconductor firms during the 1980s and 1990s, and find an average value in the amount of $0.6 to 1.2 million "R&D-equivalent" dollars for the knowledge spillovers as embodied in one patent citation. For an average semiconductor firm, such an estimate implies that the total value of knowledge spillovers the firm received during the sample period could be as high as half of its actual total R&D expenditures in the same period. This provides a direct measure of the economic values of the social returns or externalities of relevant technological innovations. We also find that the value of knowledge spillovers declines as the size of the firm's patent portfolio increases, and that self citations are more valuable than external citations, indicating a significant amount of tacit knowledge or know-how spillovers that occur within the firm. |
| Keywords: | Patents ; Research and development ; Semiconductor industry |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2005-14&r=tid |
| By: | Hansson, Åsa (Department of Economics, Lund University) |
| Abstract: | Entrepreneurship is often credited with generating important positive economic externalities. For example, entrepreneurs are often credited for promoting innovation, discovering new markets, and serving as a mechanism for knowledge spillover. Governments increasingly view encouraging entrepreneurship as an important policy objective. Economists have long studied the determinants of entrepreneurship. Taxation has also been found to be important, in particular income taxes and capital taxes. One form of taxation that has not been considered so far, however, is the wealth tax. The wealth tax is likely to influence entrepreneurship negatively, by affecting the pool of capital available to start up businesses as well as reducing the net return to successful entrepreneurship. This paper illustrates the impact of a tax on wealth on entrepreneurship using a simple model of the choice between becoming an entrepreneur or an employee. Actual data is then used to crudely investigate whether the wealth tax indeed has a measurable effect on self-employment in OECD countries, using increasingly sophisticated techniques. A difference-in-difference type estimator using the abolishment of the wealth tax as a ”natural experiment” points to a consistent pattern of a perceptible, but small impact. |
| Keywords: | Entrepreneurship; wealth tax; difference-in-difference estimation |
| JEL: | H24 H31 J23 |
| Date: | 2005–10–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2005_043&r=tid |
| By: | Heiko Gerlach (University of Auckland, h.gerlach@auckland.ac.nz); Thomas Rønde (University of Copenhagen, CEBR, and CEPR, thomas.ronde@econ.ku.dk); Konrad O. Stahl (University of Mannheim, CEPR, CESifo, and ZEW, kos@econ.uni-mannheim.de) |
| Abstract: | We investigate firms’ incentives to locate in the same region to gain access to a large pool of skilled labor. Firms engage in risky R&D activities and thus create stochastic product and implied labor demand. Agglomeration in a cluster is more likely in situations where the innovation step is large and the probability for a firm to be the only innovator is high. When firms cluster, they tend to invest more and take more risk in R&D compared to spatially dispersed firms. Agglomeration is welfare maximizing, because expected labor productivity is higher and firms choose a more effcient, technically diversified portfolio of R&D projects at the industry level. |
| JEL: | L13 O32 R12 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:64&r=tid |
| By: | David S. Evans; Albert L. Nichols; Richard Schmalensee |
| Abstract: | U.S. v. Microsoft and the related state suit filed in 1998 appear finally to have concluded. In a unanimous en banc decision issued in late June 2004, the D.C. Circuit Court of Appeals rejected challenges to the remedies approved by the District Court in November 2002. The wave of follow-on private antitrust suits filed against Microsoft also appears to be subsiding. In this paper we review the remedies imposed in the United States, in terms of both their relationship to the violations found and their impact on consumer welfare. We conclude that the remedies addressed the violations ultimately found by the Court of Appeals (which were a subset of those found by the original district court and an even smaller subset of the violations alleged, both in court and in public discourse) and went beyond them in important ways. Thus, for those who believe that the courts were right in finding that some of Microsoft's actions harmed competition, the constraints placed on its behavior and the active, ongoing oversight by the Court and the plaintiffs provide useful protection against a recurrence of such harm. For those who believe that Microsoft should not have been found liable because of insufficient evidence of harm to consumers, the remedies may be unnecessary, but they avoided the serious potential damage to consumer welfare that was likely to accompany the main alternative proposals. The remedies actually imposed appear to have struck a reasonable balance between protecting consumers against the types of actions found illegal and harming consumers by unnecessarily restricting Microsoft's ability to compete. |
| JEL: | K21 L1 L4 L6 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11727&r=tid |
| By: | Virgiliu Midrigan (Ohio State University) |
| Abstract: | If firm pricing is state, rather than time-dependent, firms are more likely to change prices whenever aggregate and idiosyncratic shocks reinforce each other and trigger desired price changes in the same direction. The distribution of idiosyncratic shocks across adjusting firms therefore varies over time in response to economy-wide disturbances: in times of, say, monetary expansions, the fraction of adjusting firms that have negative idiosyncratic technology shocks should increase. Using measures of technology shocks derived from production function estimates for four-digit US manufacturing industries, we find that sectoral inflation rates are more responsive to negative, as opposed to positive technology disturbances in periods of higher economy-wide inflation, commodity price increases and expansionary monetary policy shocks. We argue, using a quantitative state-dependent sticky price model calibrated to match key features of the US micro-price data, that these results suggest that pricing is state-dependent in US manufacturing. |
| Keywords: | state-dependent pricing, time-dependent pricing, technology shocks |
| JEL: | E31 E32 |
| Date: | 2005–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpma:0511005&r=tid |