r d investments under endogenous cluster formation abstract we provide an innovative theory based explanation for the positive relationship between firms r d intensity and their degree of r d cooperation we show that when oligopolistic firms decide on long term r d investment before forming research clusters among competitors investment incentives are increased by the desire to become a member of an attractive cluster this can result in over investment compared to the welfare optimum and compared to a scenario where research clusters are ex ante fixed thereby as a theoretical contribution we fully characterize the equilibria of the unanimity game on cluster formation with heterogeneous firms

competition cooperation and innovation organizational arrangements for regimes of rapid technological progress abstract discussions of the link between firm size and innovation are outmoded because the boundaries of the firm have become fuzzy in recent decades strategic alliances constellations of bilateral agreements among firms are increasingly necessary to support innovative activities such alliances can facilitate complex coordination beyond what the price system can accomplish while avoiding the dysfunctional properties sometimes associated with hierarchy antitrust law and competition policy need to recognize that these new organizational forms are often the functional antithesis of cartels though they may have certain structural similarities a more complete understanding of bilateral contracts and agreements ought to reveal when and how cooperation can support rather than impede innovation and competition

natural resource prices will they ever turn up abstract natural resource theory predicts that natural resource rents should increase over time however technical progress in resource extraction environmental constraints or great natural abundance could result in stagnant or declining product prices thus there is no theoretical reason to believe that product prices will rise in the near future the prediction of product prices by time series methods is shown to depend critically upon whether the series are modeled as difference or trend stationary dickey fuller and lagrange multiplier tests are used to show that the series are difference stationary long and short sample series are tested trend stationary modeling strongly predicts rising resource prices the result from difference stationary modeling is that there is only a weak supposition that natural resource prices will rise

fiscal paradise foreign tax havens and american business the tax haven affiliates of american corporations account for more than 20 percent of u s foreign direct investment and nearly a third of the foreign profits of u s firms american companies report extraordinarily high profit rates on their tax haven investments in 1982 this behavior implies that the revenue maximizing tax rate for a typical haven is around 5 8 percent american and foreign investment in tax havens has an uncertain effect on u s tax revenue but since low tax rates encourage american companies to shift profits out of high tax foreign countries it is possible that low foreign tax rates ultimately enhance u s tax collections

complementarity and external linkages the strategies of the large firms in biotechnology in biotechnology large firms enter into different kinds of linkages with universities and small medium sized research intensive firms we test the hypothesis that the strategies of external linkage of the large firms with other parties are complementary to one another we show that if any two strategies are complementary i e undertaking more of one strategy raises the marginal value of the other then they are positively correlated using data for a sample large us european and japanese chemical and pharmaceutical producers we find that the strategies above are positively correlated even after controlling for firm specific characteristics

financing investment in the european electricity transmission network consequences on long term sustainability of the tsos financial structure this article focuses on the ability of european tsos to meet the demand for substantial investments in the electricity transmission grid over the next two decades we employ quantitative analysis to assess the impact of the required capital expenditures under a set of alternative financing strategies we consider a best case scenario of full cooperation between the european tsos it appears that under current trends in the evolution of transmission tariffs only half the volumes of investment currently planned could be funded a highly significant increase in transmission tariffs will be required to ensure the whole scale investments can be delivered finally alternative strategies can dampen the impact on tariffs but they can only partially substitute for this increase in charges paid by network users

some macro data on the regionalisation globalisation debate a comment on the rugman verbeke analysis this paper critiques an earlier contribution by rugman and verbeke 2004 and it does so by considering the global distribution of foreign direct investment fdi it also adds several new dimensions to the regionalisation globalisation debate noticeably by i the incorporation of inward multinational enterprise mne activity ii evaluating changes in the geography of fdi between 1990 and 2003 and iii the introduction of the concept of revealed investment comparative advantage rica of countries and regions while broadly supporting the findings of rugman and verbeke our paper shows that much of the explanation for the regional concentration of fdi and mne activity reflects that of the gross domestic product gdp and trade of the countries concerned rather than any distinctive strategy on the part of investing firms

exploration during turbulent times an analysis of the relation between cooperation in innovation activities and radical innovation performance during the economic crisis this article investigates the relation between cooperation in innovation activities and innovation before and during the last economic recession we find that cooperation in innovation activities has a stronger relation with radical innovation performance during the economic recession than before this being true irrespectively of whether the partners are national or international this benefit from cooperation during the economic turmoil is higher in the case of firms having different types of partners simultaneously we also find that past cooperation in innovation activities is positively associated to innovation performance during the crisis

cooperative agreements and the theory of the firm focusing on barriers to change abstract cooperative agreements between firms have become a significant phenomenon in the 1980s and have been analyzed by various approaches including economics organizational theory and business strategy this paper draws on these different strands of the literature to argue that cooperative agreements have led to focus the analysis of firms organization on the issue of change as a consequence cooperative agreements have contributed to recent developments of the theory of the firm in favor of competence based and evolutionary approaches the analysis is then extended to the case of multinational firms

concubinage or marriage informal and formal cooperations for innovation based on a sample of german inno innovating firms that contains information on formal and informal innovation cooperation between customers and suppliers we state that firms perceive informal cooperation as being more important than formal cooperation modes we then investigate the determinants of firms decisions to engage into the respective cooperation modes in line with previous empirical work we do not find much empirical evidence for the relevance of incoming spillovers in addition our results suggest that this finding holds as well for informal cooperations a firms ability to protect its proprietary innovations however seems to be a key determinant of formal as well as informal cooperations furthermore absorptive capacity and the organizational structure of in house r d play an important role another relevant driver of vertical cooperations are the innovation dynamics at the he industry level firms who operate an r d department and firms who are involved in costly r d projects tend to cooperate formally rather than informally

agreements between firms and the technological life cycle model evidence from information technologies abstract contrarily to most previous contributions which have addressed the issue of cooperative agreements essentially in a perspective of comparative statics in this paper a model is proposed that relies on the technological trajectory notion suggested by evolutionary theories and emphasizes the relevance of the technological and market dynamics in explaining why and to what extent firms have recourse to agreements in particular it is claimed that the propensity of firms towards collaborative ventures and the characteristics of the cooperation depend upon the phase of the technological life cycle of the industry branch in which the cooperation takes place based on a cross sectional analysis of 45 industry branches in the information technology industrial system the paper also provides empirical evidence supporting the argument that the propensity towards agreements and the nature of the agreements concluded do change during the technological life cycle to this end it takes advantage of the arpa database developed at the polytechnic of milan and containing detailed information on over 2 000 agreements concluded in the 1980 1986 period all over the world in the semiconductor data processing and telecommunications industries

why and how fdi stocks are a biased measure of mne affiliate activity many international business ib studies have used foreign direct investment fdi stocks to measure the aggregate value adding activity of multinational enterprises mne affiliates in host countries we argue that fdi stocks are a biased measure of that activity because the degree to which they overestimate or underestimate affiliate activity varies systematically with host country characteristics first most fdi into countries that serve as tax havens generate no actual productive activity thus fdi stocks in such countries overestimate affiliate activity second fdi stocks do not include locally raised external funds funds widely used in countries with well developed financial markets or volatile exchange rates resulting in an underestimation of affiliate activity in such countries finally the extent to which fdi translates into affiliate activity increases with affiliate labor productivity so in countries where labor is more productive fdi stocks also result in an underestimation of affiliate activity we test these hypotheses by first regressing affiliate value added and affiliate sales on fdi stocks to calculate a country specific mismatch and then by regressing this mismatch on a host country s tax haven status level of financial market development exchange rate volatility and affiliate labor productivity all hypotheses are supported implying that fdi stocks are a biased measure of mne affiliate activity and hence that the results of fdi data based studies of such activity need to be reconsidered

valuing mineral reserves when capacity constrains production abstract we add a capacity constraint and heterogeneous reserves to the hotelling valuation principle this produces a more general version of the principle that is more consistent with empirical valuations while retaining the underlying relationship between net price and reserve value

how trade and investment agreements affect bilateral foreign direct investment results from a structural gravity model the paper develops a new stand alone structural gravity model for explaining bilateral fdi patterns we employ the model to analyse the impact of preferential trade agreements ptas bilateral investment treaties bits and other policies on bilateral foreign direct investment fdi we use the unctad global database on bilateral fdi stocks and flows to control for the heterogeneous nature of ptas we employ two different indicators of pta depth we find that on average signing a pta increases bilateral fdi stocks by around 30 nevertheless we also find that deeper or comprehensive ptas e g including provisions on investment public procurement and intellectual property rights provisions do not have a significantly different impact than signing regular ptas belonging to the eu single market on the other hand has a strong impact and increases bilateral fdi by around 135 and signing a bit has an effect that is comparable to signing a pta

a perspective on regional and global strategies of multinational enterprises multinational enterprises mnes are the key drivers of globalization as they foster increased economic interdependence among national markets the ultimate test to assess whether these mnes are global themselves is their actual penetration level of markets across the globe especially in the broad triad markets of nafta the european union and asia yet data on the activities of the 500 largest mnes reveal that very few are successful globally for 320 of the 380 firms for which geographic sales data are available an average of 80 3 of total sales are in their home region of the triad this means that many of the world s largest firms are not global but regionally based in terms of breadth and depth of market coverage globalization in terms of a balanced geographic distribution of sales across the triad thus reflects a special and rather unusual outcome of doing international business ib the regional concentration of sales has important implications for various strands of mainstream ib research as well as for the broader managerial debate on the design of optimal strategies and governance structures for mnes journal of international business studies 2004 35 3 18 doi 10 1057 palgrave jibs 8400073

foreign direct investment and economic growth an increasingly endogenous relationship summary this paper investigates whether foreign direct investment fdi affects economic growth based on a panel of data for 84 countries over the period 1970 99 both single equation and simultaneous equation system techniques are applied to examine this relationship a significant endogenous relationship between fdi and economic growth is identified from the mid 1980s onwards fdi not only directly promotes economic growth by itself but also indirectly does so via its interaction terms the interaction of fdi with human capital exerts a strong positive effect on economic growth in developing countries while that of fdi with the technology gap has a significant negative impact

res diffusion and r d investments in the flexibilisation of the european electricity networks abstract the present analysis adds up to the discussion carried around the flexibilisation of the electricity networks as means of higher diffusion of renewable energy sources res inspiring from innovation studies the paper proposes an economic rationale for considering res technology manufacturers as investors in electricity networks moreover the present analysis scrutinize the extent to which the various economic operators within specific segments of the power supply chain invest in a portfolio of research and development activities among which the electricity grids and storage technologies the intensity of these research investments was mapped across the european countries for the year of 2011 their geographic distribution confirms the rationale of an analysis based on canonical correlation testing the associations between res market diffusion and power network indicators the analysis provides useful insights for specific technology such as the one revealing pv market sensitivity to research investments in storage technologies confirming a potential business model coupling the two technologies accommodating this pattern and enabling further diversification of research portfolios the public incentives could be redesigned in order to address the flexibilisation of power networks

on the optimal order of natural resource use when the capacity of the inexhaustible substitute is limited consider a general equilibrium framework where the marginal cost of extraction from several deposits of an exhaustible resource is constant in terms of an inexhaustible perfect substitute and differs between deposits the instantaneous rate of production form the inexhaustible resource is subject to a capacity constraint

evolutionary diffusion internal and external methods used to acquire encompassing complementary and incremental technological changes in the lithotripsy industry this study links theories concerning methods that firms use to acquire technology with theories concerning types of technological change we place particular emphasis on interorganizational relationships we predict that firms will often acquire know how needed for encompassing technological change through equity based arrangements with other organizations complementary technological changes through nonequity interorganizational arrangements and incremental changes through internal r d our theory draws on perspectives that emphasize the need to develop new competencies within a business organization and to protect the value of existing competencies our empirical analysis examines methods of technology acquisition that firms have used in the commercialization of medical lithotripters which are devices that fragment stones in the kidney and gall bladder the analysis contributes to a better understanding of how technology acquisition methods vary with the manner in which technological change relates to a firm s existing capabilities the study also helps develop our understanding of the evolutionary processes by which capabilities diffuse through an industry 1998 john wiley sons ltd

balancing demand pull and supply push measures to support renewable electricity in europe abstract increasing the share of renewable energy is deemed essential to reduce the carbon intensity of the current electricity mix the promotion of renewable energy technologies should thus be as effective and efficient as possible therefore support schemes should explicitly consider the balance between demand pull e g production subsidies and supply push efforts public rdd the cumulative pull push ratio for biogas is about 700 in the 5 year lag case and about 1200 in the other cases 10 yr lag or more although the debate on optimal rd d efforts is not conclusive and very sector specific it is relevant to compare our findings to average pull push ratios of about 20 in the engineering sector overall we can safely conclude that european governments should critically evaluate current renewables subsidy schemes and increase public rd d investments to support next waves of renewable energy technologies

bottom up estimation of industrial and public r d investment by technology in support of policy making the case of selected low carbon energy technologies abstract this paper discusses a bottom up approach to estimate the level of r d investment by technology in areas where data are scarce it develops a four step methodology for the estimation of corporate r d investments at technology level this approach can overcome gaps in existing data by combining publicly available information in a novel way even though it introduces some uncertainty this is illustrated for a set of low carbon energy technologies that were identified as key for meeting europe s long term energy and climate objectives by the european strategic energy technology plan the paper finds that the aggregated r d investments dedicated to these technologies amounted to 3 3 billion in the eu in 2007 including public funding from european union member states and at eu level and industrial research activities from companies with headquarters registered in the eu the results allow conclusions on the european energy research policy to be drawn such as the dominance of industrial funds and have provided significant input to the european policy making in this field the paper ends with suggestions on how to further enhance the accuracy of the approach and how to widen its application to other sectors

foreign direct investment in the united states an analysis by country of origin given the large size and rapid growth of foreign direct investment in the united states this subject is a central concern of u s firms and u s government policymakers this study explores the factors that contribute to the explanation of fdi in the united states by country of origin of investment evidence from the past twelve years shows that the main significant positive influences are home country s exports to the united states and home country market size significant negative influences include the home country s imports from the united states the cultural and geographic distances of the home country from the united states and the exchange rate fx

entry by foreign firms in the united states under exchange rate uncertainty this paper tests the effects that real exchange rate fluctuations had on foreign direct investment into the united states during the 1980s using a sample of foreign investments in sixty one four digit sic u s wholesale industries this paper finds exchange rate volatility to be negatively correlated with the number of foreign investments that occur in these industries this negative effect is most pronounced for industries where sunk investments in physical and intangible assets are relatively high although exchange rate volatility deters investment from all countries its effect was most significant for investments by japanese companies copyright 1993 by mit press

price expectations ore quality selection and the supply of a nonrenewable resource abstract economic models of depletion imply that the present value price of a resource and the quality of extracted ore should be directly related the empirical evidence is that in the short run the average quality of extracted ore and in some cases metal output decline in response to a price increase this paper examines a model of extraction with heterogeneous ore quality within a deposit and revised price expectations in which this seemingly paradoxical supply response is rationalized as the outcome of ore quality selection which maximizes the present value of the mine

r d cooperation in smes the direct effect and the moderating role of human capital abstractwe analyse the determinants of r d cooperation for smes in italy we introduce in the literature human capital as one of the main determinants of r d cooperation concentrating on its moder

determinants of investment under incentive regulation the case of the norwegian electricity distribution networks investment in electricity networks as regulated natural monopolies is among the highest regulatory and energy policy priorities the electricity sector regulators adopt different incentive mechanisms to ensure that the firms undertake sufficient investment to maintain and modernise the grid thus an effective regulatory treatment of investment requires understanding the response of companies to the regulatory incentives this study analyses the determinants of investment in electricity distribution networks using a panel dataset of 129 norwegian companies observed from 2004 to 2010 a bayesian model averaging approach is used to provide a robust statistical inference by taking into account the uncertainties around model selection and estimation the results show that three factors drive nearly all network investments investment rate in previous period socio economic costs of energy not supplied and finally useful life of assets the results indicate that norwegian companies have to some degree responded to the investment incentives provided by the regulatory framework however some of the incentives do not appear to be effective in driving the investments

exploration and scarcity noting that a suggested measure of natural resource scarcity resource rent is unobservable we show that rent is linked to observable marginal exploration cost a two period model of extraction and exploration reveals that rent is equal to this cost when discovery is certain under risky exploration cost data can be used to bound rent the model also indicates how exploration uncertainty affects the competitive firm s extraction and exploration decisions finally the behavior of u s oil and gas exploration costs suggests that these costs were rising in the postwar era which has different implications for scarcity than indicated by other measures of scarcity

dynamic incentives of environmental regulations the effects of alternative policy instruments on technology diffusion abstract we develop a framework for comparing empirically the effects of alternative environmental policy instruments on the diffusion of new technology market based and command and control approaches can he quantitatively compared by estimating the economic penalty that firms through their actions reveal to be associated with violation of standards in the context of concerns about global climate change we empirically examine the likely effects of pigouvian taxes technology adoption subsidies and technology standards we employ state level data on the diffusion of thermal insulation in new home construction comparing the effects of energy prices insulation cost and building codes

incumbents use of pre entry alliances before expansion into new technical subfields of an industry industry incumbents frequently delay entry into emerging technical subfields fearing product cannibalization and uncertain investment and enter only after technical and market uncertainties have subsided we predict that many incumbents particularly stronger firms will participate in alliances with other firms before their standalone entry the alliances will be used to realize part of the value of specialized assets and to gain information about the emerging products and markets we support the predictions with evidence from the us market of the medical diagnostic imaging industry

an analysis of cooperative research and development i analyze the effects of cooperative research whereby member firms agree to share the costs andfruits of a research project before they undertake it in this model industrywide agreements tend to have socially beneficial effects when the degree ofproduct market competition is low when there are r d spillovers in the absence of cooperation when a high degree of sharing is technologically feasible and when the agreement concerns basic research rather than development activities i show that a royalty free cross licensing agreement among any number offirms lowers the equilibrium level of innovation even though it increases the efficiency of r d through sharing

trends in foreign direct investment flows a theoretical and empirical analysis this paper seeks to provide a rationale for changing trends in the flow and determinants of foreign direct investment fdi as a result of macro economic and firm strategy considerations we identify several factors that impact on such trends and develop propositions that could explain the phenomenon generically the study then provides preliminary empirical support for the propositions presented and outlines the path for further research needed to investigate more causal links the statistical analysis of investments by us multinational enterprises mnes reveals significant changes in the regional distribution of fdi and a change in some of its traditional determinants results show that us mnes are now making increasing investments into asia to exploit low wage levels and to secure entry into new markets

impact on firms of the use of knowledge external sources a systematic review of the literature this study summarizes the main conclusions from a systematic review of the empirical literature regarding the impact on firms of the use of knowledge external sources universities research institutes and knowledge intensive business services with the aim to organize the literature we classify the different works according to the research question addressed i which firms use knowledge external sources ii do firms using knowledge external sources achieve better results and iii which firms benefit the most from using knowledge external sources stylized facts are that larger more r d intensive and high tech firms are more likely to use knowledge external sources and that use of knowledge external sources is associated to firms higher technical results less attention has been paid to the third question and evidence is not conclusive several recommendations for future research emerge first to take in greater consideration methodological issues so that potential biases in the results caused by sample selection and endogeneity are handled properly second to pay more attention to heterogeneous outcomes third to use continuous indicators of depth and breadth of links allowing for non linear relationships and fourth to extend evidence for developing countries and service industries

on the nonexistence of market equilibria in exhaustible resource markets with decreasing costs this paper examines the existence of competitive equilibria in markets for exhaustible resources where there are initial economies of scale in either the extraction of the resource or the utilization of the resource as an input in production in such instances which are fairly common we find that the classic hotelling rule for competitive extraction does not apply since competitive price equilibria generally do not exist this is in marked contrast to static markets where the usual textbook example of firms with u shaped average cost curves is not inconsistent with the existence of competitive equilibria furthermore oligopolistic market equilibria in which resource firms act as nash producers may also fail to exist when there are returns to scale in production

indicators of energy security in industrialised countries energy security has become a popular catch phrase both in the scientific arena as well as in the political discussion yet in general the applied concepts of energy security are rather vague this paper sheds some light on concepts and indicators of energy security first we conceptually discuss the issue of energy supply security and explain why it is not to handle by one science alone and what economics may contribute in order to structure the topic after providing a brief survey of existing attempts to define or measure energy security we suggest an additional dimension along which indicators of energy security may be classified ex post and ex ante indicators finally we illustrate our concept on the basis of several simplified indicators while ex post indicators are mostly based on price developments ex ante indicators are to a greater extent aimed at illustrating potential problems our illustration suggests that it is worthwhile to take into account the market structure along with the political stability of exporting countries

talk softly but carry a big stick transfer pricing penalties and the market valuation of japanese multinationals in the united states corporate income tax law in oecd countries requires multinational enterprises mnes to set their transfer prices according to the arm s length standard in 1990 the united states us government introduced a transfer pricing penalty for cases where mnes deviated substantially from this standard more than two dozen other governments have followed suit our paper uses event study methodology to assess the impact of the us transfer pricing penalty on the stock market valuation of japanese mnes with us subsidiaries in the 1990s we find that the penalty caused a drop in their cumulative market value of 56 1 billion representing 12 6 of their 1997 market value

research on international business problems and prospects this paper reflects on the general problems and specific opportunities faced by contemporary research on multinational enterprise the general problems include controlling properly for the firm s opportunities when testing the effectiveness of its policy choices avoiding biases that result from studying surviving business units and ignoring those that disappeared and mobilizing longitudinal data and exploiting the many census based data sets now coming available

reserve characteristics and mining costs an empirical study of the phosphate industry this paper deals with an estimation of phosphate mining cost function here it is argued that other characteristics of reserves besides their size could be quite important in the cost function the result of a cross sectional analysis of phosphate mining in the world shows that reserve size and average total cost have a positive and modest statistically significant relationship in one of the two models among many qualitative characteristics and location factors tested in this paper overburden grade ore product ratio water availability and the price of capital are significant with expected signs finally the results confirm the existence of economies of scale in phosphate mining which seem to be more related to mining technology than to reserve size

the liberalization of retail services in india summary despite the recent controversy about opening up the distribution sector to foreign retailers there is political will that remains in favor of pushing through reforms in india in this paper we quantify the economic impact of the removal of barriers to foreign investment in multi brand retailing on different stakeholders using a newly developed general equilibrium model the model accounts explicitly for both foreign direct investment and the activities of foreign affiliates using heterogeneous production technologies we find that the unilateral reduction of barriers to fdi in distribution services in india benefits the economy as a whole consumers and foreign producers but hurts domestic distributors nevertheless when we consider the associated productivity improvements documented in the literature to downstream and upstream industries we find that domestic producers are expected to benefit from the liberalization of the distribution sector as well

resource characteristics extraction costs and optimal exploitation of mineral resources this paper modifies the traditional theories ofnon renewable resource exploitation where reserve sizeis assumed to be the major determinant of extractioncosts in a competitive model of resourceexploitation characteristics of aggregate reservesare considered as a determinant of extraction cost then dynamic solutions for the price and exploratoryefforts are developed various price paths arefeasible under different assumptions with regard tothe changes in the reserve characteristics over time past empirical research shows that there is noconsistent price path for all materials in fact itis the quality of newly discovered reserves as well astheir size that has affected material prices todemonstrate the complexity of a firm s decision torecover mineral from new deposits potentials forsubstantial high quality marine mineral resources areevaluated as a substitute for land based resources however several factors including the decreasingtrend in marine mining r d expenditures and thepotential impact of large scale marine mining on priceof minerals indicate that mining of mostnon hydrocarbon marine minerals will not take place inthe near future

grade selection under uncertainty least cost last and other anomalies abstract grade selection rules for heterogeneous resource deposits with increasing marginal extraction costs are derived it is shown that contrary to the conventional wisdom it can be optimal to extract the least cost deposits last there are a number of rules that are compatible with dynamic profit maximization under certainty nevertheless none explains empirical regularities in actual extraction patterns when uncertainty about future price is introduced however the theoretical model conforms closely not only to observed grade selection patterns but also to observed mineral industry price paths

the impact of institutional hazards on foreign multinational activity a contingency perspective prior studies have shown that institutional hazards in the form of formal governance deficiencies and informal cultural distance are both negatively related to the amount of foreign multinational activity in countries we argue that the strength of these negative relationships varies systematically with the type of foreign activity horizontal or vertical and the type of institutional hazard governance or cultural because institutional hazards striking vertical affiliates generally also have negative consequences for other parts of a multinational enterprise mne while those striking horizontal affiliates do not we hypothesize that institutional hazards are more negatively related to vertical foreign activity than to horizontal foreign activity since cultural hazards can generally be reduced or resolved once they materialize while governance hazards cannot we also hypothesize that the impact of governance hazards on each type of foreign activity is more negative than the impact of cultural hazards on that type of activity a panel data analysis of sales by us foreign affiliates to affiliated and local unaffiliated customers over the period 1996 2004 lends support to these hypotheses our findings thus show that the impact of institutional hazards on foreign mne activity is more complex than previously assumed

exploration and exhaustible resources the microfoundations of aggregate models the appropriate specifications for aggregate extraction and exploration cost functions are derived from a disaggregate model of the search for low cost deposits of an exhaustible resource the common practice of combining the no discovery extraction cost function with exploration is shown to result in a misspecified model for which the total cost of extracting the resource is not well defined the widely accepted prediction that the anticipated discovery of low cost deposits results in a u shaped price path appears to be an artifact of this misspecification for the authors properly specified cost functions the predicted resource price always rises copyright 1989 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

investment firm value and risk for a system operator balancing energy grids abstract with the liberalization of energy markets integrated energy companies have separated into entities that specialize in production and or transmission of energy transmission of energy requires balancing the grid to guarantee system security which is performed by the independent system operator so when the so faces stochastic demand grid balancing has sizeable consequences on current and future profits and hence on firm value and firm risk we explore these value and risk consequences with and without an investment option to expand transmission capacity we show that firm value consists of the value of the transmission capacity in place plus the value of a short put and a short call option that are the result of the so s balancing actions firm risk without investment option is non linear and determined by the short option positions it is decreasing with increasing energy demand the existence of an option to expand transmission capacity increases firm value and firm risk

stability vs flexibility the effect of regulatory institutions on opportunity type how entrepreneurial opportunities are formed and exploited depends upon the institutional environment in which they are embedded the varying amounts of risk and uncertainty across and within heterogeneous institutional environments have important implications for the types of opportunity developed while the international business and entrepreneurship literatures consider the effect of environmental risk and uncertainty on firms risk and uncertainty are often treated as interchangeable or synonymous and rarely are both considered to be present together to address this we develop a new theoretical model based on institutional economics describing how institutional arrangements promoting stability thus supporting an entrepreneur s ability to assess risk will lead to more imitative opportunities while institutions promoting flexibility thus supporting an entrepreneur s ability to respond to uncertainty by iterating will foster more innovative opportunities we test this framework using cross national data across 40 countries from the gem survey finding that institutional arrangements that promote stability do lead to more imitation while institutions that promote flexibility foster more innovation by treating risk and uncertainty as distinct constructs our study makes theoretical contributions to research on institutional environments and opportunity types with implications for future research on subsidiary initiatives the evolution of mnes and born global firms

sectoral supply of minerals of varying quality in this sectoral model of mineral production investment in capacity and variation in orebody grade and volume help explain some stylized facts more than one grade of ore may be exploited simultaneously mine exhaustion but not necessarily entry occurs in declining order of grade the price may rise or fall but is likely to fall initially young industry and must eventually rise at less than the interest rate unless demand expands rapidly these trends exhibit fluctuations due to entry and exhaustion of deposits resource price cyclicality is reinforced because mines keep producing at capacity when the price is falling

does the development of environmental innovation require different resources evidence from spanish manufacturing firms in recent years environmental innovations are getting increasingly at the center both of the scientific debate and of the policy maker agenda adopting the resource based view this paper provides a comprehensive framework for understanding the specific role of internal external and hybrid resources in the environmental innovation development using a dataset of 4829 spanish manufacturing firms and estimating probit models it is found that internal resources have greater importance for environmental innovations moreover green innovators seem to be characterized by more intensive external relationships for hybrid resources acquisition of equipment but not of patents is more relevant finally evidence suggest the relevance of complementing the analysis of the external factors triggering environmental innovations with those of the internal resources the firm has access to in order to fully understand and support the development of environmental innovations

do multinationals operate flexibly theory and evidence do multinational enterprises operate flexibly i e do they shift production in response to currency changes three theoretical perspectives are developed flexibility optimism premised on information and sunk cost advantages takes a macro efficiency perspective and predicts sizable responses flexibility pessimism premised on inertia and internal opportunism takes an organizational perspective and predicts sticky responses flexibility realism premised on the view that to be flexible in the current period multinational enterprises need to have planned and invested accordingly in previous periods predicts positive but relatively modest responses empirical analysis spanning the period 1977 1993 finds that multinational enterprises systematically exploit currency shifts but even in the face of large exchange rate changes their operational responses are relatively modest the results appear most consistent with flexibility realism and this hypothesis is selected over the alternatives considered

the diversity of r d consortia and firm behavior evidence from japanese data an empirical analysis of japanese government sponsored r d consortia involving 213 firms over 13 years shows that the diversity of a consortium is associated with greater r d expenditure by participating firms diversity is alternatively measured by the montgomery 1982 index based on 3 digit sic codes and branstetter and sakakibara s 1998 modification of the jaffe 1986 patent portfolio based index

the mnc as an agent of change for host country institutions fdi and corruption most empirical research examines how the institutional environment of corruption shapes the behavior of multinational corporations mncs in this study we would like to highlight the other side of the picture how the presence of mncs may shape the institutional environment of corruption over time we propose three avenues through which the mncs may have an impact on its host institutions regulatory pressure effect demonstration effect and professionalization effect based on extensive data on foreign direct investment and corruption for a large sample of countries over the last 30 years the empirical results are generally consistent with our hypothesis such findings provide a glimmer of hope for the future of the host country where corruption is prevalent

extraction costs and the economics of nonrenewable resources the study questions the fundamental assumption of the standard aggregate exploration extraction model of nonrenewable resources that extraction costs and the level of reserves are inversely related it also raises questions about the model s conclusions regarding exploration incentives and the valuation of reserves an empirically tested disaggregate model is presented that suggests that exploration activity occurs from firms attempting to balance marginal extraction plus user costs at the intensive and extensive margins exploration is carried out until the marginal discovery cost of a deposit equals its present asset value and a u shaped price path is indicated

indicators for energy security the concept of energy security is widely used yet there is no consensus on its precise interpretation in this research we have provided an overview of available indicators for long term security of supply sos we distinguished four dimensions of energy security that relate to the availability accessibility affordability and acceptability of energy and classified indicators for energy security according to this taxonomy there is no one ideal indicator as the notion of energy security is highly context dependent rather applying multiple indicators leads to a broader understanding incorporating these indicators in model based scenario analysis showed accelerated depletion of currently known fossil resources due to increasing global demand coupled with increasing spatial discrepancy between consumption and production international trade in energy carriers is projected to have increased by 142 in 2050 compared to 2008 oil production is projected to become increasingly concentrated in a few countries up to 2030 after which production from other regions diversifies the market under stringent climate policies this diversification may not occur due to reduced demand for oil possible benefits of climate policy include increased fuel diversity and slower depletion of fossil resources

an international review of the implications of regulatory and electricity market structures on the emergence of grid scale electricity storage abstract energy storage systems ess have the potential to make a significant contribution to planning and operation practises in power systems while ess can be used to provide multiple benefits in the power sector widespread use has been restricted by high technology costs lack of deployment experience and the barriers and uncertainties caused by the present electricity market and regulatory structures that were designed for conventional electricity systems this paper reviews countries with high renewable targets and with significant current or planned ess deployments to ascertain the common problems affecting the use of ess on the grid and to establish where changes have been made or proposed to the electricity market and regulatory frameworks three major problems were identified as the undetermined asset class for ess and unbundled electricity system limiting stakeholders from determining and realising multiple ess benefits low electricity market liquidity and changing market conditions and a lack of common standards and procedures for evaluating connecting operating and maintaining ess based on the established barriers recommendations to update or create policies regulation and market arrangements to increase the viability and wider use of grid level ess are discussed the three key regulatory and policy recommendations were identified as an alignment of renewable policies to that of ess creating a separate asset class for ess and associated rules for regulated and competitive operations and standardising assessment frameworks connection and operational procedures for the use of ess finally three main electricity market recommendations include updating rules to support simultaneous ess operation across wholesale ancillary services and capacity markets updating market rules to allow compensation for flexible and highly accurate responsive demand and generation technologies such as ess and updating market ancillary services energy requirements

co operative r d why and with whom an integrated framework of analysis abstract firms use r d partnerships to access knowledge and build global r d networks this article develops an integrated framework to examine the determinants of the choice of partners with which firms co operate on r d this resource based perspective underscores the interactions between three major questions why co operate who does and with whom it argues in particular that the choice of partners is dictated by the complementary resources which the latter command the framework is then expanded to predict the relative efficiency of r d co operation with different partners including suppliers clients rivals academic institutions and foreign firms the empirical analysis which is based on responses to france s version of the second european community innovation survey cis 2 strongly supports the overall framework of analysis

trends in natural resource commodity prices an analysis of the time domain abstract this paper attempts to reconcile the theoretical predictions of increasing real prices for nonrenewable natural resource commodities obtained from hotelling style models with the empirical findings of falling prices for these commodities a theoretical model for relative price movements is derived for the case of exogenous technical change and endogenous change in the grade of ores mined the model suggests a u shaped time path for relative prices the implied price movements are tested for all the major metals and fuels and the model parameters are found to be statistically significant for 11 out of the 12 commodities tested

firms motivations for cooperative r d an empirical analysis of spanish firms abstract the aim of this paper is to analyze the motives that have caused industrial firms to cooperate in r d there are many theoretical works devoted to the theme but few empirical studies have been carried out with large samples to analyze the factors which determine why firms cooperate in r d we first review the reasons offered by the literature to explain technological cooperation with this allowing us to determine the conceptual framework and to propose some hypotheses we test these hypotheses with a sample of 1652 spanish firms that have carried out r d activities the results obtained suggest that firms motivations for cooperative r d are the complexity of technology and the fact that innovation is costly and uncertain we find that in order to undertake cooperative r d it is necessary to have certain internal capacities in this area with our results being supported by the theory of absorptive capacity however and by contrast with the results presented in other works questions related to market access and search for opportunities do not appear to exert an influence over cooperative r d besides the large sized firms resort more to cooperation and the reasons for cooperative r d differ as between large and small sized firms

what drives the choice of the type of partner in r d cooperation evidence for spanish manufactures and services abstractwe analyse the heterogeneity in firms decisions to engage in r d cooperation taking into account the type of partner competitors suppliers or customers and research institutions and the sector to which the firm belongs manufactures or services we use information from the technological innovation panel pitec for spanish firms and estimate multivariate probit models corrected for endogeneity which explicitly consider the interrelations between the different r d cooperation strategies we find that placing a higher importance to publicly available information incoming spillovers receiving public funding and firm size increase the probability of cooperation with all kind of partners but the role is much stronger in the case of cooperative agreements with research institutions and universities our results also suggest that r d intensity and the importance attributed to the lack of qualified personnel as a factor hampering innovation are key factors influencing positively r d cooperation

the analysis on photovoltaic electricity generation status potential and policies of the leading countries in solar energy abstract energy which is the main agenda of our world is crucially important for the people many countries frequently held meetings and discussions with energy agenda these countries are working to balance the energy demand and supply for finding the solution are researched researches should be attempted to present a more efficient way to use energy as well as renewable energy resources effectively photovoltaic energy power systems take place as the most dominant source among renewable energy technologies the most important reason is that it is unlimited and clean energy of the solar power systems many studies show that photovoltaic power systems will have an important share in the electricity of the future in this study to generate electricity from solar energy using photovoltaic systems have a leading position in some european countries united states of america china and japan s current status and future policies will be analyzed in various comments were made

internal r d expenditures and external technology sourcing abstract the paper examines the two way relationship between external r d activities and internal r d expenditures on a cross section of flemish r d active companies the analysis extends the classical explanatory variables like size diversification ownership structure and technological opportunities to include the impact of various external sourcing strategies r d cooperation and to a lesser extent r d contracted out are found to have a significant positive effect on internal r d but only if the companies have absorptive capacity in the form of a full time staffed r d department at the same time firms are found to be more frequently engaged in r d cooperation the more they spend on internal r d

governance infrastructure and us foreign direct investment this paper examines the statistical importance of governance infrastructure as a determinant of us foreign direct investment fdi in broad terms governance infrastructure represents attributes of legislation regulation and legal systems that condition freedom of transacting security of property rights and transparency of government and legal processes our econometric analysis uses a two stage estimation procedure in the first stage the probability that a country is an fdi recipient is estimated the results indicate that countries that fail to achieve a minimum threshold of effective governance are unlikely to receive any us fdi countries that receive no us fdi are typically countries that do not promote free and transparent markets that have ineffective governments and that often have legal systems that are not rooted in english common law in the second stage the analysis is restricted to those countries that did receive fdi flows the estimated equations focus on the determinants of the amount of fdi received given that a country is a recipient of us fdi governance infrastructure including the nature of the legal system is an important determinant of the amount received

policy and non policy determinants of u s equity foreign direct investment this study examined the effects of policy and non policy variables on the location of new u s direct investment abroad as distinct from reinvested earnings of existing affiliates using 1977 and 1982 benchmark data the data revealed statistically significant effects for investment incentives positive performance requirements negative and host country effective tax rates negative with interesting differences between the two time periods and between developed versus developing countries significance was also found for non policy variables such as political stability cultural distance gdp per capita and infrastructure

resource taxation with heterogeneous quality and endogenous reserves abstract this paper analyzes the impact of mining taxation on the intertemporal extraction profile for a heterogeneous ore body the extraction profile specifies both quantities and qualities extracted in each period total extraction is thus endogenously determined the taxes explicitly considered are severance taxes ad valorem or per unit on metal or on ore property taxes and profits taxes with depletion allowance the intertemporal framework integrates economic and geological factors generating new results on extraction distortions and providing qualification or reconciliation of previous diverse results in this area

death of the lethargic effects of expansion into new technical subfields on performance in a firm s base business this paper finds that industry incumbents that do not expand into new technical subfields tend to fare poorly in their established businesses even if the market for the established products continues to exist firms that expand from their established businesses survive longer and achieve greater subsequent market share than competitors that do not expand by some measures however a failed attempt to expand into a new subfield may be even more harmful to a base business than nonexpansion the study employs conventional and accelerated event time regression models to analyze market share and survival the sample which includes 371 incumbents in four base subfields of the medical diagnostic imaging industry between 1953 and 1989 examines performance following the emergence of five new technical subfields of the industry

multinational enterprises and wage costs vertical fdi revisited abstract this study explores how wage costs for high skilled and less skilled labor in host countries affect the level of affiliate activities conducted by foreign mnes we find support for vertical fdi in the sense that more fdi is conducted in countries where less skilled labor is relatively cheap in addition we find that skilled wage cost premia also affect fdi activities previously associated with horizontal fdi i e local affiliate sales consequently the potential effects of relative wage costs on mne activities are large rough calculations suggest that more than 20 percent of us affiliate sales in 1998 can be attributed to skilled wage cost premia

pitfalls im a received idea ricardian decreasing returns at the extensive margin of a natural resource the ricardi theo of constantly decreasing returs on addition units of a self renewable resource states that best resources are used firs except for location and technical change using modem economic theory we show this result to be an unfounded prejudice our moel of the origin ricardian ild problem easily splays initial increasing retumsr thus soling a 150 year old empirical puzzle carey s paradox of switches in hstorical land use pattems the ricadi result may be empirically correct in specific cases but cannot claim general theoretica validity le embuches dune ide re ue le rendements d raissants icardens a ia marge extensive duine ressource naturelle la theonre ncardienne des rendements constamment

internationalization of corporate technology through strategic partnering an empirical investigation this paper explores some trends in the internationalization of corporate r d efforts innovation output and strategic technology partnering in the past decade inter firm strategic technology partnering through which companies share their innovation efforts supplements the standard indicators of technological competence to broaden the scope from internal innovation processes to a wider range of innovative activities the international information technology industry is singled out for empirical study the main conclusion of this contribution is that even in a global industry such as information technology internationalization of innovation although by no means insignificant appears less important than expected