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on Technology and Industrial Dynamics |
| By: | Fixson, Sebastian K.; Park, Jin-Kyu |
| Abstract: | A substantial literature stream suggests that many products are becoming more modular over time, and that this development is often associated with a change in industry structure towards higher degrees of specialization. These developments can have strong implications for an industry€ٳ competition as the history of the PC industry illustrates. To add to our understanding of the linkages between product architecture, innovation, and industry structure we study an unusual case in which a firm Â€Ó through decreasing its product modularity Â€Ó turned its formerly competitive industry into a near-monopoly. Using this case study we explore how existing theories on modularity explain the observed phenomenon, and show that most consider in their analysis technological change in rather long-term dimensions, and tend to focus on efficiencyrelated arguments to explain the resulting forces on competition. Expanding on these theories we add three critical aspects to the theory construct that connects technological change and industry dynamics. First, we suggest re-integating as a new design operator to explain product architecture genesis. Second, we argue that a finer-grained analysis of the product architecture shows the existence of multiple linkages between product architecture and industry structure, and that these different linkages help explain the observed intra-industry heterogeneity across firms. Third, we propose that the firm boundary choice can also be a pre-condition of the origin of architectural innovation, not only an outcome of efficiency considerations. |
| Keywords: | Product Architecture, Integrality, Modularity, Technological Change, Intra-industry Heterogeneity, Industry Structure, Competition, Strategy, |
| Date: | 2007–04–13 |
| URL: | http://d.repec.org/n?u=RePEc:mit:sloanp:37154&r=tid |
| By: | Yoonsoo Lee; Toshihiko Mukoyama |
| Abstract: | This paper analyzes the implications of plant-level dynamics over the business cycle. We first document basic patterns of entry and exit of U.S. manufacturing plants, in terms of employment and productivity between 1972 and 1997. We show how entry and exit patterns vary during the business cycle, and that the cyclical pattern of entry is very different from the cyclical pattern of exit. Second, we build a general equilibrium model of plant entry, exit, and employment and compare its predictions to the data. In our model, plants enter and exit endogenously, and the size and productivity of entering and exiting plants are also determined endogenously. Finally, we explore the policy implications of the model. Imposing a firing tax that is constant over time can destabilize the economy by causing fluctuations in the entry rate. Entry subsidies are found to be effective in stabilizing the entry rate and output. |
| Keywords: | Business cycles ; Manufacturing industries |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:0718&r=tid |
| By: | Alessandro STERLACCHINI (Universita' Politecnica delle Marche, Dipartimento di Management ed Organizzazione Aziendale); Francesco SCHETTINO (Universit… Politecnica delle Marche) |
| Abstract: | This paper presents the results of a survey on a regional sample of Italian inventors who, over the period 1991-2005, have submitted patent applications to the European Patent Office. The inventors' features and patenting activities are mainly examined according to the size of the firms they are working in. Compared to those coming from medium-large companies, `small inventors' (encompassing employees or owners of small firms and independent inventors) have a lower educational level, ascribe less importance to codified sources of knowledge and are less productive in terms of patent applications. However, by using forward citations and other indicators, it emerges that there is no difference in the average quality of patented inventions of the two groups. Nevertheless, one third of small inventors evaluates negatively its patenting experience, while it is true for only a tiny fraction of larger patentees. On the basis of further interviews, we find that the inventors' assessments are particularly influenced by their different capabilities to enforce intellectual property rights. |
| Keywords: | European patents, Firm size, Intellectual property rights, Inventors, Patent quality |
| JEL: | L20 O31 O34 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:anc:wpaper:308&r=tid |
| By: | Cesar Alonso-Borrego; Francisco Javier Forcadell |
| Abstract: | We study the dynamic bidirectional relationship between firm R&D intensity and corporate diversification, using longitudinal data of Spanish manufacturing companies. Our empirical approach takes into account the censored nature of the dependent variables and the existence of firm-specific unobserved heterogeneity. Whereas we find a positive linear effect of R&D intensity on related diversification, the evidence about the effect of related diversification on R&D intensity takes the form of an inverted U. Hence, the effect of related diversification on R&D intensity is positive but marginally decreasing for moderate levels of related diversification, but such effect can turn out negative for high levels of related diversification. Additionally, the consequences of the dynamic relation are that the effects are substantially larger in the long-run than in the short-run. |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:we078249&r=tid |
| By: | Tomaso Duso (Humboldt University and Wissenschaftszentrum Berlin (WZB) Reichpietschufer 50, 10785 Berlin, Germany E-Mail : duso@wzb.eu Tel: +49 30 2549 1403); Enrico Pennings (Dept. of Applied Economics, Erasmus University Rotterdam, P.O. Box 1738, 3000 DR Rotterdam, The Netherlands E-mail: pennings@few.eur.nl Tel: +31 10 40 82166); Jo Seldeslachts (Wissenschaftszentrum Berlin (WZB) Reichpietschufer 50, 10785 Berlin, Germany E-Mail: seldeslachts@wzb.eu Tel: +49 30 2549 1404) |
| Abstract: | The aim of this paper is to test the determinants of Research Joint Ventures’ (RJVs) group dynamics. We look at entry, exit and turbulence in RJVs that have been set up under the US National Cooperative Research Act, which allows for certain antitrust exemptions in order to stimulate firms to cooperate in R&D. Accounting for unobserved project characteristics and controlling for inter-RJV interactions and industry effects, the Tobit panel regressions show the importance of group and time features for an RJV’s evolution. We further identify an average RJV’s long-term equilibrium size and assess its determining factors. Ours is a first attempt to produce robust stylized facts about cooperational short- and long-term dynamics, an important but neglected dimension in research cooperations. |
| Keywords: | research joint ventures, dynamics, panel data |
| JEL: | C23 L24 O32 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:221&r=tid |
| By: | Giammario Impullitti |
| Abstract: | This paper studies the welfare effects of international competition in the market for innovations, and analyzes how competition affects the costs and the benefits of cooperative and non-cooperative R&D subsidies. I set up a two-country quality-ladder growth model where the leader, the home country, has R&D firms innovating in all sectors of the economy, and the follower, the foreign country, shows innovating firms only in a subset of industries. The measure of the set of sectors where R&D workers from both countries compete for innovation determines the scale of international Schumpeterian competition. Both governments engage in a strategic R&D subsidy game and respond optimally to changes in competition. For a given level of subsidies, increases in foreign competition raise the quality of goods available (growth effect) and lowers domestic profits (business-stealing effect); the overall effect of competition on domestic welfare depends on the relative strength of these two counteracting forces. When governments play a strategic subsidy game, increases in foreign competition trigger a defensive innovation policy mechanism that raises the optimal domestic R&D subsidy. Cooperation in subsidies leads both countries to set higher subsidies. Finally, while cooperation is beneficial for the global economy, there exists a threshold level of competition below which the home country experiences welfare losses under cooperation. |
| Keywords: | international competition, endogenous technical change, growth theory, strategic R&D subsidies, international policy cooperation |
| JEL: | O41 O31 O38 F12 F43 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:eui:euiwps:eco2007/55&r=tid |
| By: | Joshua Drucker; Edward Feser |
| Abstract: | In a seminal article, Benjamin Chinitz (1961) focused attention on the effects that industry size, structure, and economic diversification have on firm performance and regional economies. He also raised a related but conceptually distinct question that has been overlooked since: how does the extent to which a regional industry is concentrated in a single or small number of firms impact the performance of other local firms within that industry? He suggested that such regional industrial dominance may impact input prices, limit capital accessibility, deter entrepreneurial activity, and reduce the regional availability of agglomeration economies such as specialized labor and supply pools In this paper, we use an establishment-level production function to quantify the links between industrial dominance, agglomeration economies, and firm performance. We consider two questions. First, do greater levels of regional industrial dominance lead to lower economic performance by small, dominated manufacturing plants? Second, are small plants in dominated regional industries more limited in capturing regional agglomeration benefits and therefore do they face rigidities in deploying production factors to maximum advantage? Our results suggest that regional industrial organization does influence productivity but that the effect tends to be a direct one, rather than an indirect effect via its influence on agglomeration economies. |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:07-31&r=tid |
| By: | Roberta Rabellotti; Anna Carabelli; Giovanna Hirsch (SEMEQ Department - Faculty of Economics - University of Eastern Piedmont) |
| Abstract: | Since the second half of the 1990s the Italian economy has experienced a significant slowdown in the rate of economic growth. The ‘dwarfism’ of its manufacturing firms, their specialisation in traditional sectors and their organisation in industrial districts have been identified by many scholars as major structural weaknesses in the Italian industrial system. Nevertheless, there is a vast and flourishing empirical literature showing that many industrial districts are actually changing in terms of sector specialisation, international and innovation strategies and emergence of new forms of enterprise organisation. In this paper, we provide a critical survey of the new and different patterns of industrial organisation emerging in industrial districts. |
| Keywords: | industrial districts, small and medium sized firms, Italy |
| JEL: | L23 L25 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:upo:upopwp:115&r=tid |
| By: | Sampler, Jeffrey L. |
| Keywords: | BPO, outsourcing, strategic innovation, industry dynamics, |
| Date: | 2007–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:mit:sloanp:39807&r=tid |