a history friendly model of the successive changes in industrial leadership and the catch up by latecomers abstract successive changes in industrial leadership between both firms and countries described here as catch up cycles have been common in several sectors this article develops a history friendly model to explore the role played by technological conditions in the emergence of such leadership changes the model is inspired by two cases where the emergence of disruptively novel technology played an important role mobile phones and semiconductors in the baseline setting the model is able to generate the benchmark case of three cycles with two leadership changes in particular the simulation analysis reveals that a the more disruptive the new technology and the lower the incumbents capabilities the greater the shake up of market shares between incumbents and latecomers b leadership change is more likely to occur when it coincides with certain responses by the actors to the technological disruption such as a high lock in behaviour on the part of incumbents and c a technology driven change of industrial leadership is more likely to occur in the presence of increasing returns to technological investments the counterfactual experiments show that different catch up dynamics can emerge depending on the magnitude of technological disruption the degree of lock ins the shape of technological landscape and incumbents initial capabilities in particular four other types of catch up cycle are generated the aborted cycle persistent leadership return of the old leadership and coexistence in leadership between latecomers and incumbents each of these cycles is identified with a specific historical case of catch up

competition and industrial policies in a history friendly model of the evolution of the computer industry abstract in this paper we explore some problems that industrial policy faces in industries characterized by dynamic increasing returns on the basis of a history friendly model of the evolution of the computer industry how does policy affect industry structure over the course of industry evolution is the timing of the intervention important do policy interventions have indirect and perhaps unintended consequences on different markets at different times we focus on two sets of policies antitrust and interventions aiming at supporting the entry of new forms in the industry the results of our simulations show that if strong dynamic increasing returns are operative both through technological capabilities and through customer tendency to stick with a brand there is little that antitrust and entry policy could have done to avert the rise of a dominant firm in mainframes on the other hand if the customer lock in effect had been smaller either by chance or through policies that discouraged efforts of firms to lock in their customers the situation might have been somewhat different in the first place even in the absence of antitrust or entry encouraging policies market concentration would have been lower albeit a dominant firm would emerge anyhow second antitrust and entry encouraging policies would have been more effective in assuring that concentration would decrease the leading firm would continue to dominate the market but its relative power would be reduced

the relation between price and marginal cost in u s industry a contradiction in a recent article in this journal hall 1988 examined productivity shocks at the industry level derived from constant returns to scale production functions in which firms were assumed to be competitive hall had two important conclusions first he showed that productivity shocks i e solow residuals were correlated with aggregate demand variables implying that the former are not exogenous impulses second his results implied that firms persistently charge prices above marginal costs making inappropriate the constant returns to scale competitive production function assumed in many theoretical frameworks because of the importance of hall s findings the article has led to many extensions evans 1992 confirms the empirical finding of significant correlations between productivity shocks and aggregate demand variables burnside eichenbaum and rebelo 1993 show that this correlation can be explained by introducing labor hoarding into a theoretical model with competitive firms and constant returns to scale production functions the markups above marginal cost are explained by eden and griliches 1991 and galeotti and schiantarelli 1991 by modifying the theoretical production function caballero and lyons 1992 using the hall data and methodology examine the possibility of external economies in the aggregate manufacturing production finally waldmann 199 1 argues in this journal that the

catch up cycles and changes in industrial leadership windows of opportunity and responses of firms and countries in the evolution of sectoral systems this study proposes a framework that aims to explain why successive changes in industry leadership called also the catch up cycle occur over time in a sector in catch up cycles latecomer firms and countries emerge as international leaders whereas incumbents lose their previous positions new leaders are then dethroned by newcomers to identify factors at the base of catch up cycles this article adopts a sectoral system framework and identifies windows of opportunity that may emerge during the long run evolution of an industry this study proposes three windows related to the specific dimensions of a sectoral system one dimension is related to changes in knowledge and technology the second dimension pertains to changes in demand and the third includes changes in institutions and public policy the combination of the opening of a window technological demand or institutional policy and the responses of firms and other components of the sectoral system of the latecomer and incumbent countries determines changes in industrial leadership and catch up sectors differ according to the type of windows that may open and the responses of firms and other components of systems empirical evidence of catch up cycles is presented from six sectors namely mobile phones cameras semiconductors steel mid sized jets and wines

successive changes in leadership in the worldwide mobile phone industry the role of windows of opportunity and firms competitive action abstract we take a historical perspective to gain insight into the determinants of changes in industrial leadership in the global mobile phone industry from the beginning of the 1980s to 2012 the theoretical foundation of our analysis is a the concept of windows of opportunity proposed by industry evolution studies i e changes in the technological regulatory and consumer demand environment offering latecomers the opportunity to overtake leading rivals and b the concept of action aggressiveness proposed by the competitive dynamics literature i e the extent to which a firm forcefully takes a large number and a wide variety of actions to outperform its competitors we show that the potential for leadership changes is greater for firms that are able to undertake aggressive competitive actions at the time when significant windows of opportunity are open in particular we analyze the determinants of two leadership changes 1 in the second half of the 1990s when the us giant motorola lost its number one position dethroned by its finnish competitor nokia and 2 in the first half of the 2010s when samsung of south korea caught up with nokia

preconditions windows of opportunity and innovation strategies successive leadership changes in the regional jet industry abstract we analyse the drivers of two successive leadership changes in the regional or mid sized jet market a particularly dynamic segment of the commercial aircraft industry in the first instance bombardier a canadian newcomer assumed leadership over the incumbents bae and fokker in 1995 in 2005 the brazilian firm embraer became the market leader in terms of number of regional jet deliveries our theoretical framework considers discontinuities in the building blocks of sectoral innovation systems as windows of opportunity for which challenger firms can devise strategic responses allowing them to assume market leadership it also considers preconditions as necessary capabilities limiting the number of potential challenger companies the analysis of leadership change shows that more efficient engines and technological improvements in subsystems changing oil prices business cycles liberalization of air transport services scope clauses and government interventions provided technological demand and regulatory windows of opportunity launching new aircraft families an architectural innovation targeting the 50 and the 100 120 seat niche markets gave first bombardier s crj family and later embraer s e jet family the leadership the fate of failed challengers and incumbents point to the importance of incumbent traps technological and financial capabilities the timing of windows of opportunity speedy strategic response a proper evaluation of future demand and sheer luck as long lead times and sunk costs entrap incumbents and other inadequately responding companies

history friendly models of industry evolution the computer industry the model presented in this paper is the first of a new generation of evolutionary economic models history friendly models history friendly models are formal models that aim to capture in stylized form qualitative and appreciative theories about the mechanisms and factors affecting industry evolution technological advance and institutional change put forth by empirical scholars of industrial economics technological change business organization and strategy and other social scientists in this paper we have analyzed the long term evolution of the computer industry in particular we have examined the emergence of a dominant firm in mainframes the introduction of a major innovation microprocessor the opening up of a new market segment personal computers ad the competition there between newcomers and diversified old established firms we have taken a body of verbal appreciative theorizing developed a formal representation of that theory and found that the formal version of that theory is consistent and capable of generating the stylized facts the appreciative theory purports to explain going through this analytic exercise has significantly sharpened our theoretical understanding of the key factors behind salient aspects of the evolution of the computer industry copyright 1999 by oxford university press

technological capabilities and industrialization abstract this paper reviews the implications for industrial strategy of recent research on technological capabilities at the firm and national levels after exploring the nature and determinants of microlevel technological development a simple framework for explaining the growth of national capabilities is set out based on the interplay of incentives capabilities and institutions each may suffer market failure and so require corrective intervention the experience of some industrializing countries is described to assess the validity of this framework it is concluded that interventions carefully and selectively applied are necessary for industrial success

globalization r d and the ipod cycle abstract this paper constructs a dynamic scale free north south model of trade with endogenous innovation in the north a local sourcing targeted race and an outsourcing targeted r d race take place simultaneously within each industry the former results in the winner firm manufacturing in the north while the latter culminates in the winner firm s immediate outsourcing to the south generating the ipod cycle we study three aspects of globalization reductions in the resource requirement in outsourcing targeted r d increased subsidies to outsourced production and reduced southern imitation due to trips each event boosts outsourcing targeted r d and increases the frequency of ipod cycles the aggregate innovation rate rises despite a possible fall in local sourcing targeted r d and the north south relative wage decreases

competitiveness indices and developing countries an economic evaluation of the global competitiveness report developing countries policy makers worry about national competitiveness and closely watch indices ranking international competitive performance this paper analyzes from a development economics perspective if competitiveness is a legitimate concern and if the leading indices deserve the attention they get it assesses the best known index the global competitiveness report of the world economic forum and finds deficiencies at several levels its definitions are too broad the approach biased and the methodology flawed many qualitative measures are vague redundant or wrong these weak theoretical and empirical foundations reduce the value of the indices for analytical or policy purposes

labor market policy evaluation with ace abstract i develop an agent based computational economics ace model with which i evaluate the aggregate impact of labor market policies the findings are that government financed training measures increase the outflow rate from unemployment to employment although the overall effect is positive this effect is achieved by reducing the outflow rate for those who do not receive subsidies furthermore the outflow rate would have been downward biased had one supposed a matching function that is exogenous to policies

gradual catch up and enduring leadership in the global wine industry the wine industry is an extremely interesting sector from a catch up point of view because the latecomers in the international market have changed how wine is produced sold and consumed and in doing so they have challenged the positions of incumbents until the end of the 1980s the european countries and particularly france and italy dominated the international market for wine subsequently significant changes in the market namely decreases in consumption by traditional consuming countries the entry of new inexperienced consumers and the increasing importance of large distribution have threatened this supremacy initially the usa and australia and later emerging countries such as chile and south africa gained increasing market shares in both exported volumes and value at the expense of incumbents however some of these newcomers e g australia have shown slower growth opening opportunities for newer entrants such as argentina and new zealand at the same time some of the incumbents especially italy have innovated challenging the leadership of france in key markets such as the usa in this article we investigate the different catch up cycles in the global wine sector that occurred between the 1960s and 2010 through a detailed analysis of export volumes values and unit prices we address issues related to the increasing share in the global market of latecomer countries and the relative decline of the incumbents as well as possible changes in the market leadership within these two groups

public policy and catching up by developing countries in global industries a simulation model this paper examines the effects of different public policies strengthening capability building favouring firms learning protectionism and support of entry of new domestic firms on the catch up of a latecomer with respect to an incumbent country in changing and uncertain technological environments the effects of these policies are analysed with a simulation model first separately and then jointly to assess possible complementarities we reach several results first we confirm that capability building and firms learning are important drivers of catch up second we find that when a large technological discontinuity takes place entry support favours catch up while protectionism has the opposite effect protectionism favours catch up only when no technological discontinuity opens up third we find that depending on the technological conditions different policy complementarities exist therefore different policy mixes should be at the base of a country catch up strategy these results add to the previous literature on public policy and catching up by developing countries in an industry by distinguishing the different effects of various types of public policy and relating them to the technological conditions that are present in an industry

public procurement and innovation resurrecting the demand side abstract demand is a major potential source of innovation yet the critical role of demand as a key driver of innovation has still to be recognised in government policy this article discusses public procurement as one of the key elements of a demand oriented innovation policy the paper starts by signaling the new significance of public procurement for innovation policy strategies at the eu level and in a range of european countries it then defines the concept of public procurement and embeds this concept within a taxonomy of innovation policies the rationales and justifications of public procurement policies to spur innovation are discussed followed by a consideration of the challenges and potential pitfalls as well as appropriate institutional arrangements and strategies including some recent empirical examples of good practice it concludes by confronting the public procurement approach with two of the most common objections to it and by considering future prospects

the political economy of international trade essays in honour of robert e baldwin part 1 theory of trade policy with imperfect information avinash dixit strategic trade policy and the new international economics a critical analysis gottfried haverlay the role of services in production and international trade a theoretical framework ronald w jones and henry kierzkowski the coefficient of trade utilization back to the baldwin envelope james e anderson and j peter neary part 2 trade policy issues reflections on uniform taxation arnold c harberger intellectual property rights and north south trade judith c chin and gene m grossman optimal tariff retaliation rules david f burgess international trade in capital and capital goods rachel mcculloch and j david richardson part 3 political economy of trade policy asymmetries in policy between exportables and import competing goods anne d krueger trade policy development and the new political economy gerald m meier does 1992 come before or after 1990 on regional versus multilateral integration andre sapir part 4 empirical studies of trade issues the structure and effects of tariff and non tariff barriers in 1983 edward leamer a computational analysis of alternative safe guards of policy scenarios in international trade alan v deardorff and robert m stern direct foreign investments and trade in east and southeast asia seiji naya

incomplete contracts and the product cycle the incomplete nature of contracts governing international transactions limits the extent to which the production process can be fragmented across borders in a dynamic general equilibrium ricardian model of north south trade the incompleteness of international contracts is shown to lead to the emergence of product cycles because of contractual frictions goods are initially manufactured in the north where product development takes place as the good matures and becomes more standardized the manufacturing stage of production is shifted to the south to benefit from lower wages following the property rights approach to the theory of the firm the same force that creates product cycles i e incomplete contracts opens the door to a parallel analysis of the determinants of the mode of organization the model gives rise to a new version of the product cycle in which manufacturing is shifted to the south first within firm boundaries and only at a later stage to independent firms in the south relative to a world with only arm s length transacting allowing for intrafirm production transfer by multinational fi rms is shown to accelerate the shift of production towards the south while having an ambiguous effect on relative wages the model delivers macroeconomic implications that complement the work of krugman 1979 as well as microeconomic implications consistent with the findings of the empirical literature on the product cycle

public research institutions and economic catch up abstract public research institutions often but not always connected with universities have been in the past important elements of the structures supporting economic catch up recent changes in the international economic environment and the growing scientific basis for contemporary technologies will make those institutions even more important in the future universities and public labs have contributed to the development of technological capabilities in different forms across countries and economic sectors in contrast with current emphasis on university based embryonic inventions and fundamental research effective research programs have predominantly occurred in the application oriented sciences and engineering and have been oriented towards problem solving and the advancement of technologies of interest to a well defined user community

intellectual property rights and foreign direct investment abstract this paper develops a product cycle model with endogenous innovation imitation and foreign direct investment fdi we use this model to determine how stronger intellectual property rights ipr protection in the south affects innovation imitation and fdi we find that stronger ipr protection keeps multinationals safer from imitation but no more so than northern firms instead the increased difficulty of imitation generates resource wasting and imitation disincentive effects that reduce both fdi and innovation the greater resources absorbed in imitation crowd out fdi reduced fdi then transmits resource scarcity in the south back to the north and consequently contracts innovation

income distribution credit and fiscal policies in an agent based keynesian model this work studies the interactions between income distribution and monetary and fiscal policies in terms of ensuing dynamics of macro variables gdp growth unemployment etc on the grounds of an agent based keynesian model the direct ancestor of this work is the keynes meeting schumpeter formalism presented in dosi et al 2010 to that model we add a banking sector and a monetary authority setting interest rates and credit lending conditions the model combines keynesian mechanisms of demand generation a schumpeterian innovation fueled process of growth and minskian credit dynamics the robustness of the model is checked against its capability to jointly account for a large set of empirical regularities both at the micro level and at the macro one the model is able to catch salient features underlying the current as well as previous recessions the impact of financial factors and the role in them of income distribution we find that different income distribution regimes heavily affect macroeconomic performance more unequal economies are exposed to more severe business cycles fluctuations higher unemployment rates and higher probability of crises on the policy side fiscal policies do not only dampen business cycles reduce unemployment and the likelihood of experiencing a huge crisis in some circumstances they also affect positively long term growth further the more income distribution is skewed toward profits the greater the effects of fiscal policies about monetary policy we find a strong non linearity in the way interest rates affect macroeconomic dynamics in one regime with low rates changes in interest rates are ineffective up to a threshold beyond which increasing the interest rate implies smaller output growth rates and larger output volatility unemployment and likelihood of crises

knowledge diffusion market segmentation and technological catch up the case of the telecommunication industry in china abstract this paper examines the growth of technological capability in the telecommunication industry in china we apply a modified version of lee and lim s lee k lim c 2001 the technological regimes catch up and leapfrogging findings from the korean industries research policy vol 30 model of technological learning and catching up using the three cases of the shanghai bell the cit led r d consortium and indigenous companies such as huawei we analyze how the catching up in the telecommunication industry occurred we find that the important factors in the catch up are the strategy of trading market for technology the knowledge diffusion from shanghai bell both to the r d consortium and to huawei and industrial promotion by the government as a condition for successful catch up the paper points out that the technological regime of the telephone switches is featured by a more predictable technological trajectory and a lower cumulativeness these conditions and strategies helped the chinese firms to achieve a stage skipping catch up namely by skipping the stage of analogue electronic switches to jump to digital electronic switches

does structure matter the impact of switching the agricultural policy regime on farm structures abstract this paper investigates the relationship between structural change in agriculture and a policy regime switch at the regional level using the agent based spatial and dynamic simulation model agripolis we simulate structural change for two different farm structures in response to a policy change results show that structural adjustment differs depending on the initial structure

rise of latecomers and catch up cycles in the world steel industry abstract this study analyzes the sources of changes in industrial leadership and catch up by latecomers in the world steel industry since world war ii the shift of leadership from the united states to japan in 1980 and the subsequent rise of korea with posco s output surpassing that of nippon steel in 1998 is explained on the basis of a single theoretical framework we rely on the neo schumpeterian concepts of sectoral innovation systems and windows of opportunity for latecomers in catching up with leading countries these windows include changing generations of technologies business cycles and demand shifts and government regulations and other interventions japan realized a path creating catch up by taking advantage of the opportunity window associated with the emergence of new technologies entering as a state owned enterprise posco engaged in stage skipping catch up by utilizing the downturn as a window of opportunity to pay low prices for expanding its facilities and updating its technologies

a north south model of intellectual property rights protection and skill accumulation this paper examines how stronger intellectual property rights ipr protection in the south affects the processes of r d investment technology transfer and skill accumulation it finds that stronger ipr protection has only a temporary impact on the innovation rate while it has a negative impact on the long run imitation rate in the north the impact on the process of skill accumulation is negative and increases the within country wage inequality in the south the impact is ambiguous and depends on the externality that skill accumulation generates on the process of education in addition the paper shows that skills play a crucial role in attracting fdi inflows and strengthening ipr protection may be ineffective in attracting technological knowledge when the level of local skill is low

intellectual property rights and quality improvement this paper explores why theories about the effects of intellectual property rights ipr protection on foreign direct investment fdi and innovation have reached mixed conclusions in our model northern firms innovate to improve the quality of existing products and may later shift production to the south through fdi southern firms may then imitate the products of multinationals we find that imitation can increase fdi and innovation for quality improvements whereas the opposite occurs when innovators develop new varieties hence stronger ipr protection by reducing imitation may shift innovation away from improvements in existing products toward development of new products

public policies and the art of catching up matching the historical evidence with a multicountry agent based model in this paper we study the effects of industrial policies on international convergence using a multi country agent based model which builds upon dosi et al 2019b the model features a group of microfounded economies with evolving industries populated by heterogeneous firms that compete in international markets in each country technological change is driven by firms activities of search and innovation while aggregate demand formation and distribution follows keynesian dynamics interactions among countries take place via trade flows and international technological imitation we employ the model to assess the different strategies that laggard countries can adopt to catch up with leaders market friendly policies industrial policies targeting the development of firms capabilities and rd protectionist policies focusing on tariffs only we find that markets cannot do the magic in absence of government interventions laggards will continue to fall behind on the contrary industrial policies can successfully drive international convergence among leaders and laggards while protectionism alone is not necessary to support catching up and countries get stuck in a sort of middle income trap finally in a global trade war where developed economies impose retaliatory tariffs both laggards and leaders are worse off and world productivity growth slows down

industrial policy changes and firm level technological capability development evidence from northern brazil summary much has been written about the impacts of the policy changes of the 1990s on industrial performance particularly in latin america most of the studies are based on aggregated analyses that argue for or against such reforms in the policy regime this study offers an alternative view to this debate based on a longitudinal empirical scrutiny of technological capability development in 46 local and foreign firms from three sectors in northern brazil there were inter sector and inter firm variations in terms of the manner and rate of capability development for specific technical functions overall the patterns of firm level capability development exhibited a positive response to the structural reforms but such responses were not a mere consequence of trade openness a combination of government policy foreign competition and intra firm capability building efforts proved essential for speeding up capability development in some of the sampled firms thus policies for accelerating industrial technological capability development in a developing area such as the one examined here would involve not only macro level incentives and competition but very importantly measures that facilitate intra firm capability building efforts

foreign direct investment and the nature of r d the authors find that the role foreign direct investment fdi plays in international technology transfer itt hinges on whether substitute channels of itt such as imitation exist for the host country if fdi is the sole channel of itt a faster flow of fdi to the south increases the rates of innovation imitation and itt so fdi generates dynamic benefits if fdi and imitation coexist as channels of itt however then fdi merely substitutes for imitation targeting northern firms a faster flow of fdi to the south then leaves the rates of innovation imitation and itt essentially unaffected so fdi generates mostly static benefits

sectoral systems of innovation and production the concept sectoral system of innovation and production provides a multidimensional integrated and dynamic view of sectors it is proposed that a sectoral system is a set of products and the set of agents carrying out market and non market interactions for the creation production and sale of those products a sectoral systems has a specific knowledge base technologies inputs and demand agents are individuals and organizations at various levels of aggregation they interact through processes of communication exchange co operation competition and command and these interactions are shaped by institutions a sectoral system undergoes change and transformation through the co evolution of its various elements 2002 elsevier science b v all rights reserved

innovation and recurring shifts in industrial leadership three phases of change and persistence in the camera industry abstract this study examines factors underlying three phases of change or persistence in industrial leadership in the sector of interchangeable lens cameras over the past century during this period there were two major phases of leadership change both associated with the emergence of innovations involving major discontinuities in the industry s core technologies first japan won market leadership from germany in the mid 1960s after commercializing the single lens reflex slr camera that replaced the previously dominant german rangefinder camera second in the late 2000s japanese latecomer firms and a korean firm developed mirrorless cameras which allowed them to capture the majority of market share from the incumbent japanese leaders we also examine the long period about 60 years between these two phases of change during which leading japanese firms were able to sustain their market leadership despite the digital revolution from the 1980s to 1990s this paper explores the factors influencing these contrasting experiences of change and persistence in industry leadership the analysis integrates several aspects of sectoral innovation systems i e windows of opportunity associated with technology demand and institution as well as the strategies of incumbents and latecomer firms the conclusions highlight the complex and diverse combinations and importance of the factors that help explain the patterns of shifts in leadership

public policies and changing boundaries of firms in a history friendly model of the co evolution of the computer and semiconductor industries in this paper we explore the effects of alternative policies ranging from antitrust to public procurement open standards information diffusion and basic research support on the dynamics of two vertically related industries in changing and uncertain technological and market environments the two industries are a system industry and a component industry and the evolution of these industries is characterized by periods of technological revolutions punctuating periods of relative technological stability and smooth technical progress we have been inspired by the co evolution of the computer and component industries from their inceptions to the 1980s on the basis of that evolution we have developed a history friendly model this co evolution in sum this paper has stressed that various types of policies may sometimes have contrasting effects on the industry mainly on concentration and technical change and innovation it has also shown that the consequences of policies may spillover from one industry to another and from one type of firms to another policies that aim at a specific industry may provoke major changes in a related industry through the product market the changing boundaries of firms or knowledge and technological interdependencies the policy maker has to be aware of that finally a major point of the paper regards the unintended consequences of policies

using an artificial financial market for assessing the impact of tobin like transaction taxes abstract the tobin tax is a solution proposed by many economists for limiting the speculation in foreign exchange and stock markets and for making these markets stabler in this paper we present a study on the effects of a transaction tax on one and on two related markets using an artificial financial market based on heterogeneous agents the microstructure of the market is composed of four kinds of traders random traders fundamentalists momentum traders and contrarians and the resources allocated to them are limited in each market it is possible to levy a transaction tax in the case of two markets each trader can choose in which market to trade and an attraction function is defined that drives their choice based on perceived profitability we performed extensive simulations and found that the tax actually increases volatility and decreases trading volumes these findings are discussed in the paper

schumpeter meeting keynes a policy friendly model of endogenous growth and business cycles this paper studies an agent based model that bridges keynesian theories of demandgeneration and schumpeterian theories of technology fueled economic growth we employ the model to investigate the properties of macroeconomic dynamics and the impact of public polices on supply demand and the fundamentals of the economy we find profound complementarities between factors influencing aggregate demand and drivers of technological change that affect both short run fluctuations and longterm growth patterns from a normative point of view simulations show a corresponding complementarity between keynesian and schumpeterian policies in sustaining long run growth paths characterized by milder fluctuations and relatively lower unemployment levels the matching or mismatching between innovative exploration of new technologies and the conditions of demand generation appear to suggest the presence of two distinct regimes of growth or absence thereof characterized by different short run fluctuations and unemployment levels

innovation and wage effects of international outsourcing abstract we investigate the effects of increased outsourcing of production to a low wage country such international outsourcing lowers the marginal cost of production and thus increases profits creating greater incentives for innovation a reduction in the resource requirement in adapting technology relative to improving products or an expansion in the portion of production that can be outsourced generates a greater extent of international outsourcing a lower relative wage and a faster rate of innovation an increase in production taxes in the north production subsidies in the south or a subsidy to adapting technologies has similar effects

patent protection and the industrial composition of multinational activity evidence from u s multinational firms using data on u s firms technology licensing to local agents in developing countries this paper examines the impact of patent protection on internal and arms length technology transfer the effects of protection vary across products according to their complexity consistent with theories of internalization we find that patent reforms enable local firms to attract more arms length technology transfer especially of simple products which are relatively easy to imitate affiliated licensing also rises among simple products but falls among complex products the results withstand several robustness checks including controlling for endogeneity by using colonial origin as an instrument and are equally strong whether patent protection is measured by its intensity or by the timing of reforms the results have significance for patent policy in the developing world where access to knowledge is critical through arms length technology contracts proprietary knowledge diffuses beyond firm boundaries enabling local agents to access not only the protected technology but also know how

moving up or moving out a unified theory of r d fdi and trade abstract this paper introduces industrial heterogeneity in r d productivity into the quality ladder model of the north south trade to study how firms choices made between r d and foreign direct investment fdi vary across industries and how such choices consequently determine the evolution of comparative advantage and trade it shows that trade reveals product cycle dynamics in medium tech industries but remains static in others high tech industries experience continued innovation in the north with no migration of product lines medium and low tech industries migrate south via fdi to exploit low production costs with the south then replacing the north as the dominant exporter however medium tech industry production eventually shifts back to the north when superior products are marketed by northern innovators making the end of one complete product cycle and the start of the next because of marginal r d productivity the relocated low tech industries are not presented with the option of moving up and thus stagnate

smooth quantile based modeling of brand sales price and promotional effects from retail scanner panels semiparametric quantile regression is employed to flexibly estimate sales response for frequently purchased consumer goods using retail store level data we compare the performance of models with and without monotonic smoothing for fit and prediction accuracy we find that a flexible models with monotonicity constraints imposed on price effects dominate both in sample and out of sample comparisons while being robust even at the boundaries of the price distribution when data is sparse b quantile based confidence intervals are much more accurate compared to least squares based intervals c specifications reflecting that managers may not have exact knowledge about future competitive pricing perform extremely well