chaos in oil prices evidence from futures markets abstract we test for the presence of low dimensional chaotic structure in crude oil heating oil and unleaded gasoline futures prices from the early 1980s evidence on chaos will have important implications for regulators and short term trading strategies while we find strong evidence of non linear dependencies the evidence is not consistent with chaos our test results indicate that arch type processes with controls for seasonal variation in prices generally explain the non linearities in the data we also demonstrate that employing seasonally adjusted price series contributes to obtaining robust results via the existing tests for chaotic structure maximum likelihood methodologies that are robust to the non linear dynamics lend support for samuelson s hypothesis on contract maturity effects in futures price changes however the tests for chaos are not found to be sensitive to the maturity effects in the futures contracts the results are robust to controls for the oil shocks of 1986 and 1991

the firm as an epistemic community the knowledge based view revisited based on a social constructivist conceptualization of knowledge as residing in groups of practitioners epistemic communities this paper proposes a new perspective on the knowledge based view of the firm and sketches the outline of a new research agenda it argues that the cost of governing knowledge processes depends as much on the cognitive background of the exchange partners as on the tacitness of the knowledge firms exist because they may form epistemic communities in their own right with enabling and motivational properties superior to those of markets in the governance of knowledge processes across epistemic boundaries establishing a firm as an epistemic community requires transaction specific investments that are difficult to realize under market forms of governance

strategy research governance and competence perspectives business strategy is a complex subject and is usefully examined from several perspectives this paper applies the lenses of governance and competence to the study of strategy both the governance and the competence perspectives have had the benefit of distinguished antecedents they have also had to deal with tautological reputations i begin with the governance perspective with emphasis on the six key moves through which it has been operationalized i then examine the competence perspective in these same six respects governance challenges the competence perspective to apply itself more assiduously to operationalization including the need to choose and give definition to one or more units of analysis of which the routine is a promising candidate the research challenges posed by competence to which governance can and should respond include dynamic transaction costs learning and the need to push beyond generic governance to address strategy issues faced by particular firms with their distinctive strengths and disabilities a lively research future for these two perspectives individually and in combination is projected copyright 1999 john wiley sons ltd business strategy is an expansive enterprise not only do all of the functional areas in the business school relate but strategy is by nature interdisciplinary all of the social sciences especially economics and organization theory plus contract law are implicated indeed in the high technology arena where some of the most difficult strategy issues reside engineering and the law on intellectual property rights also have a bearing of the various approaches to the study of strategy this paper focuses on the governance and competence perspectives both perspectives combine economic reasoning with organization theory as between these two the governance

testing for common features in north american energy markets abstract using recent advances in the field of applied econometrics we explore the strength of shared trends and shared cycles between north american natural gas and crude oil markets in doing so we use daily data from january 1991 to april 2001 on spot u s henry hub natural gas and wti crude oil prices the results show that there has been decoupling of the prices of these two sources of energy as a result of oil and gas deregulation in the united states we also investigate the interconnectedness of north american natural gas markets and find that north american natural gas prices are largely defined by the u s henry hub price trends

the underdetermined knowledge based theory of the mnc in this note we revisit two core propositions of the knowledge based view of the firm found in the seminal work of kogut and zander 1 that multinational corporations mncs exist because transfers and re combinations of knowledge occur more efficiently inside mncs than between mncs and third parties and 2 that the threat of opportunism is not necessary although it may be sufficient to explain the existence of the mnc their knowledge based view shifted the conceptualization of the firm from an institution arising from market failure and transaction costs economizing to a progeny of superior knowledge governance we question these conclusions arguing that firms are but one of the many types of epistemic communities possessing and nurturing procedural norms identity and the cognitive linguistic and reflexive attributes conducive to efficient exchange and re combination of knowledge among their members important insights may be gained by applying the concept of epistemic communities implicit in the knowledge based perspective beyond firm level hierarchies journal of international business studies 2011 42 427 435

an empirical test of the asymmetric models on innovative activity who invests more into r d the incumbent or the challenger the theoretical discussion concerning the question whether the incumbent or the potential entrant invests more into r d has attracted considerable interest this paper reports the results of an empirical study on this question using data of about 3500 german firms over the years 1992 to 1995 the survey explicitly asks the firms for their motives to undertake innovative activity it is thus possible to take account of intended not just completed market entry it turns out that the challenger invests more into r d in order to enter a new market than the incumbent thus the patent racing model by reinganum and others seems to characterize innovative activity more accurately than the competing auction model of gilbert and newbery we use a heteroscedastic tobit as well as a tobit model with selectivity in order to deal with the econometric problems of double censoring

uncertain innovation and persistence of monopoly revisited abstract does monopoly persist in a dynamic industry with opportunities for technological innovations this paper points out that the persistence of monopoly under uncertain innovations depends on how r d competition is modeled if the incumbent and the entrant bid for a stochastic r d technology in an auction framework as in gilbert and newbery american economic review 1982 72 514 526 before engaging in r d competition as in reinganum american economic review 1983 73 741 748 then the incumbent monopolist wins the auction with probability one both for drastic and nondrastic innovations

the significance of bruce kogut s and udo zander s article knowledge of the firm and the evolutionary theory of the multinational corporation the journal of international business article knowledge of the firm and the evolutionary theory of the multinational corporation by kogut and zander 1993 is an important marker in the transition of the dominant conceptual model of the multinational firm from the market failure approach of internalization theory and transaction cost economics theory to the market imperfections approach of capabilities or knowledge based theories of the firm in a similar manner peter buckley and mark casson s 1976 book the future of multinational enterprise while not the first or necessarily the most comprehensive contribution to the application of coasian economics to the mne marked the switch of focus from market power to market failure as an explanation for the existence of mnes while the article itself is an important and well cited contribution it is also a fundamental statement that a new theory has arrived to supplement and partly to displace the old also similar to buckley and casson it arrived at a time that the same transition was gaining traction in the more generic field of business policy and strategy the ascendancy of williamson s 1975 version of transaction cost economics in the earlier case and the rise of a variety of resource based capability based and knowledge based models barney 1991 teece et al 1997 grant 1996 in the case of kogut and zander the critical distinction made by kogut and zander is that if the value of the firm is defined as its store of knowledge and expansion of the firm s boundaries is related to the transfer of knowledge then inescapable uncertainties about the value of this knowledge are enough to explain internal transmission and therefore the existence of firms opportunism is not required therefore they find the critical role that opportunistic behavior by transactional partners in markets plays in internalization models is not necessary but leads to an overdetermined model kogut and zander maintain that differential costs of transmission of knowledge within the firm journal of international business studies 2003 34 495 497 2003 palgrave macmillan ltd all rights reserved 0047 2506 25 00

the explicit economics of knowledge codification and tacitness this paper attempts a greater precision and clarity of understanding concerning the nature and economic significance of knowledge and its variegated forms by presenting the skeptical economist s guide to tacit knowledge it critically reconsiders the ways in which the concepts of tacitness and codification have come to be employed by economists and develops a more coherent re conceptualization of these aspects of knowledge production and distribution activities it seeks also to show that a proposed alternative framework for the study of knowledge codification activities offers a more useful guide for further research directed to informing public policies for science technological innovation and long run economic growth copyright 2000 by oxford university press

impact of speculator s expectations of returns and time scales of investment on crude oil price behaviors abstract based on time series of crude oil prices daily spot this paper analyses price fluctuation with two significant parameters speculators time scales of investment and e speculators expectations of return by using zipf analysis technique specifically by mapping returns of prices into 3 alphabeted sequences absolute frequencies and 2 alphabeted sequences relative frequencies containing the fundamental information of price fluctuations this paper empirically explores parameters and identifies various types of speculators cognition patterns of price behavior in order to quantify the degree of distortion a feasible reference is proposed an ideal speculator finally this paper discusses the similarities and differences between those cognition patterns of speculators and those of an ideal speculator the resultant analyses identify the possible distortion of price behaviors by their patterns

martingales nonlinearity and chaos abstract in this article we provide a review of the literature with respect to the efficient markets hypothesis and chaos in doing so we contrast the martingale behavior of asset prices to nonlinear chaotic dynamics discuss some recent techniques used in distinguishing between probabilistic and deterministic behavior in asset prices and report some evidence moreover we look at the controversies that have arisen about the available tests and results and raise the issue of whether dynamical systems theory is practical in finance

oil prices and news based uncertainty novel evidence abstract in this paper using news implied volatility nvix as a key variable to measure news based uncertainty we investigate whether the world price of oil and three classical oil shocks affect news based uncertainty or vice versa our analysis is conducted through the news mechanism that is unrelated to fundamentals this research contributes to the literature on the effect of oil prices on news based uncertainty by studying the dynamics in both the time and frequency domains using the wavelet coherence analysis our results illustrate that oil prices exhibit a statistically and economically significant leading role on nvix especially in the long run further we distinguish the different impacts of oil shocks and find that the oil supply and aggregate demand shocks usually play a leading role on relatively long term nvix while the oil specific demand shocks are sensitive to the fluctuations of nvix we also find that the rules of comovement between oil prices oil shocks and news based uncertainty change at different frequencies and times they usually move together in opposite directions with the exception of the oil supply shocks and nvix these findings apply to both oil spot and futures markets our results present new and interesting implications for investors and policy makers by supporting the news reallocation channel as an important transmission mechanism from oil markets

a knowledge based theory of the firm the problem solving perspective in this paper we develop a knowledge based theory of the firm while existing knowledge based theory focuses on the efficiency of hierarchy in economizing on knowledge exchange we develop a theory of the firm that focuses on the efficiency of alternative organizational forms ingenerating knowledge or capability our theory begins with the problem as the basic unit of analysis arguing that a problem s complexity influences the optimal method of solution search and the optimal means of organizing that search the distinguishing feature that differentiates among organizational alternatives is the different way each resolves conflict over the selection of solution trials that is the way it chooses the path of search our theory predicts that efficiency demands that these governance alternatives be matched in a discriminating way to problems based on their associated benefits and costs in governing solution search thus our theory is among the first to simultaneously treat both the boundary choice i e internal versus external and the choice among alternative internal approaches to organizing

bounded rationality and tacit knowledge in the organizational capabilities approach an assessment and a re evaluation the famous three chapters in nelson and winter s an evolutionary theory of economic change 1982 that focus on firm routines and capabilities are often taken to be solidly founded on an assumption of bounded rationality i argue that in actuality bounded rationality plays a rather limited role in nelson and winter 1982 that the very different assumption of tacit knowledge is much more central and that the links between bounded rationality and routines capabilities are not clear i then argue that the absence in nelson and winter of a clear methodological individualist foundation for notions such as routines capabilities competencies etc has resulted in certain explanatory difficulties in the modern organizational capabilities approach that has taken so much inspiration from their work copyright 2003 oxford university press

long term memories of developed and emerging markets using the scaling analysis to characterize their stage of development the scaling properties encompass in a simple analysis many of the volatility characteristics of financial markets that is why we use them to probe the different degree of markets development we empirically study the scaling properties of daily foreign exchange rates stock market indices and fixed income instruments by using the generalized hurst approach we show that the scaling exponents are associated with characteristics of the specific markets and can be used to differentiate markets in their stage of development the robustness of the results is tested by both monte carlo studies and a computation of the scaling in the frequency domain

the measurement of absorptive capacity from an economics perspective definition measurement and importance this paper starts by recognizing that despite the importance of absorptive capacity economists in particular have made only limited use of the concept most theoretical and empirical studies derive from other fields of research thus the first task is to compare and contrast the different approaches taken in measuring absorptive capacity the rest of the paper then sets out an example of how typically economists have proceeded using nationally representative cis data to measure absorptive capacity across a 10 year period and investigating if it remains stable in the long term this is followed by considering how firms characteristics vary across lower to higher levels of absorptive capacity and whether such capacity determines firms productivity performance across both goods and service industries our results show that relative to other influences absorptive capacity as measured here net of the impact of foreign ownership and human capital has a substantial influence on exporting innovation and undertaking r d and thus consequently firm level productivity finally there is a discussion of why governments should consider helping firms to boost their levels of absorptive capacity

do emerging markets matter in the world oil pricing system evidence of imported crude by china and india abstract this paper provides empirical evidence on the changing structure of world oil price system by identifying an additional driver emerging market factor we choose china and india as a representative of emerging markets to examine if the quantity of crude oil imported by china and india is significant in the existing oil pricing system kaufmann et al 2004 our data starts from january 2002 and ends in march 2010 which includes the oil shock of 2007 2008 we utilize cointegration and error correction model framework developed by engle granger 1987 and gregory hansen 1996 in the analysis our results indicate that demand from emerging markets has become a significant factor in the world oil pricing system since 2003 this result is significant as it lends empirical support to the widely held conjecture that the oil shock of 2007 2008 is a demand led shock hamilton 2009 our result also has significant policy implications that go beyond the oil shock the emerging market factor is there to stay and reflects the changing power between emerging and developed economies in the world economic system as a result of decades of fast economic development in the former it will certainly influence policy issues related to oil and beyond

a wavelet analysis of mean and volatility spillovers between oil and brics stock markets this paper investigates the spillover effects of volatility and shocks between oil prices and the brics stock markets using multivariate approach and wavelet analysis at different time horizons hence we combine a multivariate arma garch model and wavelet multiresolution analysis to study this phenomenon a bivariate arma 1 1 garch 1 1 cdcc student t model was joined with modwt filter to capture a broad range of possible spillover effects in mean and variances of level prices at various time horizons generally empirical results provide strong evidence of time varying volatility in all markets under study however our proposed approach shows that oil price and stock market prices are directly affected by their own news and volatilities and indirectly affected by the volatilities of other prices and wavelet scale the results show also that mean and volatility spillover effects was decomposed into many sub spillovers on different time scales according to heterogeneous investors and market participants the practical implications of this study are critical innovative and useful for the local and international investors and also for the portfolio managers they can utilize this study to formulate the optimal oil bricks stock portfolios as well as lead to more accurate predictions of volatility spillovers patterns also in developing their hedging strategies

are the crude oil markets becoming weakly efficient over time a test for time varying long range dependence in prices and volatility this paper analyzes the efficiency of crude oil markets brent and west texas intermediate by means of estimating the fractal structure of these time series we test for time varying degrees of long range dependence using the rescaled range hurst analysis and find evidence that this market has become more efficient over time these results are robust for controlling for short term autocorrelation by means of a shuffling procedure

a resource based theory of the firm knowledge versus opportunism this paper develops a resource based knowledge based theory of the firm its thesis is that the organizational mode through which individuals cooperate affects the knowledge they apply to business activity we focus on the polar cases of organization within a firm as compared to market contracting there will be a difference in the knowledge that is brought to bear and hence in joint productivity under the two options thus as compared to opportunism based transaction cost theory we advance a separate yet complementary answer to the question why do firms exist our aim is to develop an empirically relevant and complementary theory of why firms are formed a theory based on irreducible knowledge differences between individuals rather than the threat of purposeful cheating or withholding of information we assume limited cognitive abilities on the part of individuals bounded rationality and assume that opportunistic behavior will not occur the latter allows us to determine whether resource based

crossroads the organization of economic activity transaction costs firm capabilities and the nature of governance in a recent 1993 paper in organization science hennart discussed the underlying logic based on transaction cost and agency theory for explaining the choice between firms and markets and the reason why most transactions have both firm like and market like properties relying on williamson s comparative institutional approach which studies economic organization from a transaction cost minimizing point of view under the assumption of opportunism the argument was made that transaction cost tc logic provides a complete theory of the organization of economic activity in this paper i argue that with its purely incentive based logic governed by assumptions of opportunism tc economics is fundamentally incapable of being a complete theory of economic organization the notion of the firm as a bundle of transactions or contracts is an inadequate and shallow basis for a theory of the firm since it basically ignores the essential notion of the firm as a bundle of knowledge and the underlying processes there

introduction epistemic communities and international policy coordination the growing technical uncertainties and complexities of problems of global concern have made international policy coordination not only increasingly necessary but also increasingly difficult if decision makers are unfamiliar with the technical aspects of a specific problem how do they define state interests and develop viable solutions what factors shape their behavior under conditions of uncertainty what are the origins of international institutions and how can we best study the processes through which international policy coordination and order emerge while a variety of analytic approaches have been used to address the problems of international cooperation the approaches have yielded only fragmentary insights at its core the study of policy coordination among states involves arguments about determinism versus free will and about the ways in which the international system is maintained and transformed among the overlapping topics of debate are whether national behavior is determined or broadly conditioned by system level factors unit level factors or some complex interplay between the two whether state policymakers can identify national interests and behave independently of pressures from the social groups they nominally represent and whether states respond consistently to opportunities to create defend or expand their own wealth and power to enhance collective material benefits or to promote nonmaterial values a related question of

knowledge based approaches to the theory of the firm some critical comments it is argued that kogut and zander kogut b u zander 1992 knowledge of the firm combinative capabilities and the replication of technology organ sci 3 383 397 and conner conner k r 1991 a historical comparison of resource based theory and five schools of thought within industrial organization economics do we have a new theory of the firm j management 17 121 154 erred in the specific way in which they claimed that a distinct theory of the multi person firm can be constructed on the basis of a theory of organizational knowledge or from resource based insights it is not possible to tell very much of a story about why there should be firms in lieu of notions such as opportunism or moral hazard however properly interpreted knowledge based theories may help shed light on issues relating to the boundaries and internal organization of the firm

the theoretical and policy implications of knowledge codification the purpose of the following contribution is to present the main consequences in terms of policy of firms and governments that emerged from the theoretical and empirical work achieved under the tipik project in a first part the introduction is devoted to a summing up of the main theoretical dimensions used in tipik that led in particular to a special issue of industrial and corporate change june 2000 then the discussion envisages the main consequences of the theoretical debate in terms of policy issues and addresses the new perspectives of a knowledge oriented policy of firms and governments finally we expose a selected series of policy implications that are derived from the empirical studies presented in this special issue

preemptive patenting and the persistence of monopoly this article takes a different tack and inquires whether institutions such as the patent system create opportunities for firms with monopoly power to maintain their monopoly power the results apply to other situations such as brand identification spatial location and capacity expansion which share the characteristic that early or preemptive actions may lower the returns to potential competitors

the birth of the concept of transaction costs issues and controversies this paper investigates the emergence of the concept of transaction costs in modern economics and explores three controversial issues of the 1970s which keep economists busy to this day transaction costs require a rethinking of the economic notion of efficiency suggest switching to a comparative institutional form of analysis and are difficult to measure the categories of technological versus institutional efficiency technological versus institutional transaction costs and subjective versus objective transaction costs are employed to clarify these issues copyright 2000 by oxford university press

the evolutionary view of the mne and the future of internalization theory kogut and zander s 1993 jibs article which developed an evolutionary perspective on the multinational enterprise mne has had three critical impacts on mne research first it has stimulated scholars to conduct more eclectic empirical analyses which should include both transaction cost related parameters and broader learning competence related variables second it has usefully argued that the rigorous study of mne behavior does not need to reply upon the williamsonian behavioral assumption of opportunism third it has implicitly suggested a new path to be followed by internalization theory scholars in order to remain relevant to the field of international business the transaction cost economics lens adopted in internalization theory clearly remains critical to any analysis of mne strategy with impacts on the boundaries of the firm in addition the co evolution of the mne s governance structure and its technological competences determines present and future strategy choices here both transaction cost considerations and learning effects influence strategy selection

a memoir and reflection knowledge and an evolutionary theory of the multinational firm 10 years later the production of the 1993 article awarded the jibs decade award was written during a time when ideas regarding knowledge and the international expansion of the firm confronted a hostile audience the sources of these ideas were directly related in winter s and roger s prior work but also to a broader literature on category errors and technology transfer the theory of the firm as a social community is a distinctly sociological theory and though sharing many key ideas with the resource based view that developed at the same time is deeply opposed to engineering conceptions of firms as legomodular pieces that can be easily shifted bought and sold we describe our individual biographies and the subsequent intellectual development of the

random fractal structures in north american energy markets this paper uses daily observations on west texas intermediate wti crude oil prices at chicago and henry hub natural gas prices at la over the deregulated period of the 1990s and various tests from statistics and dynamical systems theory to support a random fractal structure for north american energy markets in particular this evidence is supported by the vassilicos et al 1993 multifractal structure test and the ghashghaie et al nature 381 1996 767 turbulent behavior test

modeling and forecasting the volatility of petroleum futures prices we investigate volatility models and their forecasting abilities for three types of petroleum futures contracts traded on the new york mercantile exchange west texas intermediate crude oil heating oil 2 and unleaded gasoline and suggest some stylized facts about the volatility of these futures markets particularly in regard to volatility persistence or long memory properties in this context we examine the persistence of market returns and volatility simultaneously using the following arfima garch class models arima garch arfima garch arfima igarch and arfima figarch although the arfima figarch model better captures long memory properties of returns and volatility the out of sample analysis indicates no unique model for all three types of petroleum futures contracts suggesting that investors should be careful when measuring and forecasting the volatility risk of petroleum futures markets

diversification ricardian rents and tobin s q according to prevailing theory firms diversify in response to excess capacity of factors that are subject to market failure by probing into the heterogeneity of these factors we develop the corollary that firms that elect to diversify most widely should expect the lowest average rents an empirical test with tobin s q as the measure of rents is consistent with this theory