variable returns to scale in production and patterns of specialization this paper discusses some trade and welfare implications of the two sector model based on increasing returns to scale irs in one industry and decreasing returns to scale drs in the other it has been shown by horst herberg and murray kemp that given homothetic production functions with irs in one industry and drs in the other the production possibilities frontier ppf is strictly concave to the origin near the irs axis and strictly convex to the origin near the drs axis while this result constitutes an important finding and is contrary to the general impression among economists even twelve years after the publication of herberg and kemp s paper no attempt has been made to analyze its implications for welfare and patterns of specialization in this paper i consider a simple twocommodity model with irs in one industry and drs in the other and discuss some interesting implications of variable returns to scale vrs first i demonstrate that in this model if a small open economy specializes completely in production it will do so in the drs commodity and not in the irs commodity as is generally believed second if at a given price ratio an internal production equilibrium exists a welfaremaximizing small open economy will never specialize completely in production even though the ppf exhibits decreasing opportunity costs over a part of its range third given output generated economies and diseconomies of scale welfare maximization for a small country requires a permanent tax subsidy scheme encouraging expansion of the irs industry and contraction of the drs industry finally in a two country model with identical tastes and technology across the countries free trade equilibrium may result in incomplete specialization by the exporter of the irs commodity and complete specialization by the exporter of the drs commodity in the course of the analysis i argue that tinbergen s formulation of frank graham s case for protecting the irs industry is incorrect i then present a possible reformulation of it in section i the basic production model is introduced in section ii the model is analyzed and in section iii it is argued that all the results continue to hold in the multifactor case

growth accumulation and unproductive activity an analysis of the postwar u s economy preface 1 introduction 2 unproductive activity in a capitalist society 3 a marxian accounting framework 4 a growth model of accumulation and unproductive labor 5 rise of unproductive activity in postwar economy 6 absorption of labor and capital and rate of surplus value 7 absorption of new resources and growth in real income 8 conclusions and speculations appendix data sources and methods references index

scale economies perverse comparative statics results the marshallian stability and the long run equilibrium for a small open economy abstract using a simple general equilibrium model we show that the perverse comparative statics results can occur under scale economies these paradoxes disappear iff the equilibrium is marshallian stable and the latter holds iff it is a stable long run equilibrium under capital adjustment

labour s shares and profitability crisis in the u s recent experience and post war trends extends work on u s rate of profit by t e weisskopf 1979 firstly the author finds by extending weisskopf s data into the early 1980s that continued downward pressure on profitability i s explained by capacity utilization in contrast to weisskopf s explanation of rising labor share secondly it is found that ri sing labor share in the post war period is largely composed of r ising levels of supplemental fringe benefits and is in the earl y part of the period also explained by rising nonproduction lab or costs production worker wage share falls secularly and this may be explained particularly in the 1960s by rising price mar k ups on direct cost copyright 1987 by oxford university press

new labour and work time regulation a marxian analysis of the uk economy this paper examines the impact of work time regulation introduced by the uk s new labour governments 1997 to 2010 in doing so we return to marx s hypotheses regarding the length of the working day these include the arguments that class conflict over the length of the working day is inherently distributional in a surplus value sense and that workers often display a preference for reduced hours even with a proportionate reduction in pay our quantitative marxist methodology provides a way of assessing the pattern of surplus value before and during the period of office of the new labour governments and the distributional effects of regulation the impact of such regulations on workers preferences are examined through an investigation of british household panel survey data although many have been sceptical concerning the record of the last labour governments policies such as the working time regulations 1998 and the work life balance campaign 2000 are found to have been noteworthy innovations in the labour market this is all the more important given recent moves by the successor government to weaken work time regulation our results suggest the impact of these policy initiatives was broadly favourable though the effect on men and women was different

quality improvements and the incentive to leapfrog abstract in a model of an uncovered market of vertically differentiated products incentives of non identical duopolists to improve the technological maximum quality are analyzed it is assumed that initially firms offer products with different qualities and that the r d cost function changes exogenously this induces a reconsideration of firms quality decisions both firms have the same r d costs for improving the maximum quality quality changes within the existing quality range are assumed to incur only fixed adjustment costs it is shown that the firm which initially is in the low quality position always has a higher incentive to improve industry s quality than its rival if adjustments costs are sufficiently high persistence of dominance may occur for a low degree of initial differentiation low adjustment costs and r d cost functions with a high slope

multiple equilibria coordination and transitional growth abstract we study a small open economy with two sectors and two factors of production in one of the sectors external economies of scale are generated through the industry level capital input this leads to a divergence between private and social production possibility frontiers as well as to multiple equilibria the equilibrium selection problem that arises is solved by agents who follow a simple trial and error learning rule the growth path of the economy as agents learn lies below the production possibility frontier and may display cyclical transitional dynamics we also show that coordination problems which may prevent the economy from attaining the good equilibrium may be alleviated by the temporary use of policy instruments that shape the allocation of resources

causes of multiproduct production the case of the engineering industries in developing countries abstract concepts developed in recent literature on multiproduct industries are used to explain the absence of vertical and horizontal specialization in the capital goods industries in developing countries diversification of product mix generally occurs as firms seek to capture positive economies of scope due to idle machine capacity it is argued here that in doing so they fail to take account of organizational diseconomies of scope which result from such diversification with growth in market size greater specialization might be expected as economies of scope due to idle machine capacity are eliminated if however domestic prices for the products a firm produces are higher than world prices for those products there will be a continued incentive for diversification rather than specialization

epochs and essences a review of marxist long wave and stagnation theories this paper criticizes three central traditions in marxist accumula tion theory on grounds that each relies upon the assumption that the accumulation process is shaped by an ultimate determinant or essence in the stagnation argument formulated by j steindl 1976 1979 and p baran and p m sweezy 1966 capitalist firms are shaped by an urge to expand which in tu rn shapes economic growth e mandel s 1980 long wave theory formulates abstractly fixed inner laws of motion the social structures long wave theory of d gordon r edwards and m reich 1982 roots accumulation s pace in abstractly theorized power dynamics the paper suggests a nonreductionist alternative understanding of marxist economic theory copyright 1988 by oxford university press

disruption costs learning by doing and technology adoption abstract we study technology adoption in a dynamic model of price competition adoption involves disruption costs and learning by doing because of disruption costs the adopting firm begins in a market disadvantage which may persist if its rival captures the customers that the adopting firm needs to learn the technology the prospect of future rents by the rival results in i a failure to adopt socially efficient technologies ii an equilibrium preference for technologies that are learned faster but have lower social value and iii more technologies being adopted if more firms enter the market

does sticky information affect the locus of innovation evidence from the japanese convenience store industry abstract scholars have long discussed the locus of innovation and its determinants there is empirical evidence that innovations can be developed by those holding any of a number of functional relationships to them such as manufacturers users or materials suppliers past studies have considered two factors important in predicting the functional locus of innovation one is expected profit of a player involved in the innovation and the other is stickiness of innovation related information although some studies have shown empirically the link between an innovator s expected profits and the locus of innovation no research has yet been conducted to test the hypothesized relationship between stickiness of innovation related information and the locus of innovation in the study reported upon here i explore relationships between these two variables via a study of 24 innovations for the japanese convenience store industry my study shows empirically that stickiness of innovation related information does have the hypothesized relationship to the functional locus of innovation i discuss implications of these findings and some directions for future research

competition or predation consumer coordination strategic pricing and price floors in network markets although network effects can make predation more likely to succeed we find that the leading anti predation rules may lower or raise efficiency and consumer welfare in network markets we find that a the extensive debates about the correct measure of cost on which to base price floors are unlikely to be productive b the ordover willig rule that is widely thought to be correct in theory but difficult to apply in practice is in fact incorrect in theory and c efficient price floors would have to depend on consumer expectations and coordination processes that are unlikely to be observable in practice

a model of the evolution of duopoly does the asymmetry between firms tend to increase or decrease this paper is an attempt to identify some of the factors that affect the evolution of market structure in a model of dynamic competition between two firms the stochastic evolution of the state of competition depends on the respective effort rates of the firms the question is whether the current leader works harder than the laggard does the gap between firms tend to increase or decrease we show that several effects are at work the state tends to evolve in the direction where joint payoffs are greater since joint payoffs are related to joint product market profits less joint effort costs there are two classes of effect the joint profit effect and various joint cost effects the latter result in part from the pattern of profits and in part from endpoint effects that give relief from efforts asymptotic expansions illuminate these influences moreover we show by numerical simulation that there is another kind of joint cost effect the pattern of joint effort costs can influence the pattern of evolution of market structure and the evolution of the pattern of market structure can influence the pattern of efforts in a mutually self reinforcing manner in particular there may be equilibria in which this last effect means that the laggard works harder than the leader even though all the other effects work in favour of the leader

entry and competitive dynamics in the mobile telecommunications market abstract we propose an extension of the gans stern gans j s stern s 2003 the product market and the market for ideas commercialization strategies for technology entrepreneurs research policy 32 2 333 350 framework that includes entry by existing firms an incumbent firm possessing complementary assets and strong appropriability is in a formidable position teece d j 1986 profiting from technological innovation implications for integration collaboration licensing and public policy research policy 15 6 285 305 however a de alio entrant can leverage complementary assets to enter along a new technological trajectory and then develop appropriability we illustrate how several mobile telecommunications firms ericsson nokia and samsung pursued this strategy to catch up with the market leader motorola we also identify several shortcomings in motorola s approach it was too inward looking in developing technologies but ironically not inward looking enough in exploiting its most valuable patents

when do auctions ensure the welfare maximizing allocation of scarce inputs we determine when an unfettered auction will ensure the welfare maximizing allocation of a scarce input that enhances product quality and may reduce production costs a supplier values the input for this use value and for its foreclosure value because once the input is acquired it is unavailable to rivals an unfettered auction often ensures the welfare maximizing allocation of an input increment however it can fail to do so when the input would increase relatively rapidly the competitive position of a rival with a moderate competitive disadvantage bidder handicapping that ensures auctions generate welfare maximizing input allocations differ from standard handicapping policies

productive labour price value ratio and rate of surplus value theoretical viewpoints and empirical evidence productive labor is defined in the sense of indirect social labor which includes circulation and supervisory labor as well the calculation of the macroeconomic price value ratio provides an easy method to arrive at theoretically correct estimates of the rate of surplus labor at macro or micro levels and to study the evolution of total labor productivity here in the wage good sector the level and general tendencies of the macroeconomic rate of surplus value appear to be fairly similar in eec countries over the period 1970 86 while productivity increases are much more important in the latter copyright 1990 by oxford university press

when do stronger patents increase continual innovation under continual innovation greater patent strength expands innovating firms profit against imitation but also shifts profit from current to past innovators we show how the impact of patents on innovation as determined by these two opposing effects varies with industry characteristics when the discount factor is sufficiently high the negative profit division effect is negligible and innovation monotonically increases in patent strength otherwise innovation has an inverted u relationship with patent strength and stronger patents are more likely to increase innovation when the discount factor or the fixed innovation cost is higher we also show how the impact of patents on innovation may change with firms innovation capability and with the intensity of competition from imitators

big business and urban congestion in taiwan the origins of small enterprise and regionally decentralized industry respectively abstract two pillars of taiwan s economy that are regarded as models for other developing countries to follow are small and medium size enterprises smes and regional decentralization of industry this paper suggests that the historical roots of both phenomena make the policies necessary to reproduce the taiwan model elsewhere less straightforward than is typically supposed by the mid 1960s the major factor behind regional decentralization was urban congestion big business seems to have been instrumental in the growth of smes

choosing the competition and patent licensing this article examines licensing as a means of choosing the competitors which a patentee monopolist will face in the period after the patent expires the queue of entrants consists of two firms which differ in their relative strengths as competitors for example by size or level of marginal cost by structuring the industry to be composed of weak competitors the incumbent is able to prolong its dominant position in the industry after the patent expires examples are presented in which the evidence suggests that choosing the competition was an important motivation of the licensor s behavior

the positive theory of production externalities under perfect competition abstract aggregate cost and factor demand functions are used to develop a local envelope function which is applied in a general equilibrium model with production externalities to shed new light on the relationship between the true economy marginal costs and outputs this relationship induces a structure to the relationship between actual prices and outputs by means of the assumption of no factor demand reversals associated with externality effects we also provide generalisations of the stolper samuelson and rybczynski theorems highlighting the role of the externality effects

latecomer systems integration capability in complex capital goods the case of iran s electricity generation systems this article introduces the concept of latecomer systems integration capability lsic as a construct for theory development in the area of emergence and competitiveness of producers of complex capital goods from developing economies the study draws on three bodies of the literature to conceptualize lsic and then presents an in depth case study of the development of lsic in a major iranian firm engaged in producing electricity generation systems although an exploratory study the findings suggest that in this case lsic evolved in a fairly short period of time from simple low cost project management skills to innovative capabilities supported by some sophisticated engineering and design know how leading to successes in local and overseas markets the conclusion touches on the implications of the study for theory business strategy and policy

optimal price cap regulation the author considers the problem of a regulator who cannot observe the r d expenditures of a firm devoted to reductions in the costs of production it is shown for a finite horizon model that price cap regulation does not only provide stronger incentives for cost reductions than does rate of return regulation but that it is also capable of achieving a higher social welfare level even if the costs of reviewing the current production costs are negligible these conclusions are reinforced in an infinite horizon model copyright 1991 by blackwell publishing ltd

is it a car or a truck managerial beliefs the choice of product architecture and the emergence of the minivan market segment new markets segments are a common setting for studies in technology strategy these studies generally assume that new segments already exist or have formed following the introduction of a product innovation by an entering firm thus theory on the role of established firms in the emergence of new market segments is underdeveloped this study informs current research by explaining the product innovation decisions of established firms during the emergence of a new market segment the results of a case study on the development and commercialization of the minivan at chrysler ford and general motors between 1970 and 1985 indicate that existing theories based on managerial cognition firm capabilities economic incentives and organizational structure are insufficient to explain the decisions this article develops theory based on the interrelationship of these four mechanisms

increasing returns urban unemployment and international capital mobility a trade policy analysis abstract this paper compares the effects of tariffs quotas and ver both with and without international capital mobility for a small open economy facing urban unemployment of unskilled labor and external increasing returns in the manufacturing sector expressions for the shadow price of foreign exchange and capital are derived under each type of trade restriction it is shown that international capital mobility in such an economy unambiguously lowers the welfare cost of all forms of trade restriction in contrast to the existing literature on full employment crs economy where international capital mobility unambiguously raises the welfare cost of tariff protection

supply and demand factors of cleaner technologies some empirical evidence this article identifies and analyzes factors that affect the willingness of firms and consumers to develop and adopt cleaner technologies cleaner technologies is used as a general term for pollution abatement technologies re use systems and environmentally sound consumer products and materials the article also contains the findings of three case studies on cleaner technologies cfc substitutes low solvent paints and coatings and membrane technology in which the importance of the identified factors is investigated from the case studies some general conclusions are drawn about these factors and the way in which policy instruments can be used to stimulate innovation in and diffusion of cleaner technologies no single policy instrument is considered to be optimal instead a policy mix is needed involving a much wider use of economic instruments

accumulation of capital and the foundation of the tendency of the rate of profit to fall especially since n okishio 1961 the theory of the tendency of the rate of profit to fall is controversial in marxist economics because the microeconomic foundations for it seem inadequate the okishian argument is based on a comparative static equilibrium approach it is indicated how within a dynamic disequilibrium framework of capital stratification these foundations may well be provided the rate of profit for innovating capitals may then rise while that for the economy as a whole may fall nevertheless tendencies are not trends the tendency of the rate of profit to fall seems to be manifest cyclically interconnected with other tendencies of accumulation copyright 1991 by oxford university press

the interaction between forms of insurance contract and types of technical change in medical care a simple three parameter description of medical technology is introduced to investigate the relationships between technical change welfare and type of insurance contract the value of a particular change in technology depends on the existing form of contract the marginal equilibrium expected utility to consumers of different types of technical change hinges on the manner in which the insurance arrangement is designed to mitigate moral hazard these results open the way for a positive model of the effects of insurance arrangements on the types of technology that are adopted and the effects of technical changes on the prevalent forms of insurance contract

innovation and the persistence of monopoly abstract the auction framework enables us to highlight a crucial feature of many r d races the losing firm can recoup part but not the entirety of its r d investments this feature is shown to account for the marked differences in results obtained by gilbert and newbery and by reinganum when the firm investing the largest amount wins with certainty we establish the existence of a unique equilibrium neither firm employs a pure strategy and the incumbent wins more often than the challenger

trade factor prices and the gains from trade with increasing returns to scale existing analyses seem to suggest that national increasing returns to scale are not a very useful tool for analysing trade owing to problems such as multiple equilibria and the tendency towards complete specialization the purpose of this paper is to construct a model in which there are in fact determinant relationships among country size the direction of trade the gains from trade and international factor price differences in the model differences in country size determine the direction of trade which in turn determines factor price differences and limits the possible distribution of the gains from trade commerce international prix des facteurs de production et les gains de l change dans un contexte de rendements croissants a l echelle les analyses conventionnelles semblent suggerer que les rendements croissants h l 6chelle au niveau national ne constituent pas une avenue prometteuse dans l analyse du commerce international parce que de tels rendements creent une presomption en faveur de la specialisation complete et conduisent a des situations d 6quilibres multiples le but de ce m6moire est de construire un mod le dans lequel il existe des rapports determinants entre la dimension du pays la direction des 6changes les gains de l echange et les differentiels internationaux entre les prix des facteurs de production dans ce mod le les differences entre les pays en termes de dimension d6terminent la direction du commerce international laquelle d6termine le differentiel entre les prix des facteurs de production et limite l eventail des r6partitions possibles des gains de l echange

does history matter only when it matters little the case of city industry location when will an industry subject to agglomeration economies move from an old high cost site to a new low cost site it is argued that history in the form of sunk costs resulting from the operation of many firms at a site creates a first mover disadvantage that can prevent relocation it is demonstrated that developers of industrial parks can partly overcome this inertia through discriminatory pricing of land over time and empirical evidence is provided that they actually engage in such behavior it is also shown that other aspects of developer land sale strategy can be a source of information on the nature of interfirm externalities

dynamic inducements in r d investment market signals and network locations this research shows that alliance networks shape how firms respond to uncertainty reducing information generated outside a network product awards signal the potential commercial success of the awa

strategic innovation and technology adoption in an evolving industry abstract we introduce a racing model with multiple product generations product innovation spin outs and licensing industry conditions and innovation characteristics affect who wins the race and who markets the resulting product small firms market their innovations when they pioneer a new generation or improve quality in a young generation and license their innovations in mature generations if old generation leaders ever market improvements in young generation goods they do so early on leadership in mature generations persists tests on the rigid disk drive industry 1977 1997 provide empirical support the results have implications for antitrust policies and policies governing employee non compete agreements

regulation innovation and the introduction of new telecommunications services i examine the effects of fcc regulation on the innovation and introduction of advanced telecommunications services in the united states an interim of lighter regulation provides an experiment to test the regulatory regime s impact the econometric model comprises an arrival process for service innovation followed by a duration process for regulatory delay the number of services the firms created during the interim is 60 99 higher than the model predicts they would have created if the stricter regulation had still been in place overall firms would have introduced 62 more services to consumers during the study period if the regulation had not been in place

inflation tax rules and investment some econometric evidence this paper presents econometric evidence on the effect of tax incentives on business investment in the united states in the period from 1953 through1978 the analysis emphasizes that the interaction of inflation and existing tax rules has contributed substantially to the decline of business investment since the late 1960 s because the investment process is far too complex for any simple econometric model to be convincing i have estimated three quite different models of investment behavior the strength of the empirical evidence rests on the fact that all three specifications support the same conclusion more generally the analysis and evidence show that theoretical models of macroeconomic equilibrium should specify explicitly the role of distortionary taxes especially taxes on capital income the failure to include such tax rules can have dramatic and misleading effects on the qualitative as well as the quantitative properties of macroeconomic theories this paper was presented as the fisher shultz lecture at the fourth world congress of the econometric society 29 august 1980 in aix en province this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this abstract was borrowed from another version of this item

persistence of innovation in dutch manufacturing is it spurious this paper studies the persistence of innovation and the dynamics of innovation output in dutch manufacturing using firm data from three waves of the community innovation surveys cis pertaining to the periods 1994 1996 1996 1998 and 1998 2000 we estimate by maximum likelihood a dynamic panel data type 2 tobit model accounting for individual effects and handling the initial conditions problem we find that there is no evidence of true persistence in achieving technological product or process innovations while past shares of innovative sales condition albeit to a small extent current shares of innovative sales

sleeping quotas pre emptive quota bidding and monopoly power abstract we rationalize the puzzling existence of binding quotas that are not fully utilized our model has its roots in bhagwati 1965 in r baldwin et al eds trade growth and the balance of payments essays in honor of g haberler mit press new york on tariffs quotas equivalence and is related to the io literature on preemption we study the conditions that lead a monopolist facing a quota restricted market to buy the quota licenses itself and the conditions under which they may remain unused the divisibility of the quota is crucial for the monopolist to pre emptively buy the quota furthermore we study the implications of use it orlose it clauses commonly imposed on auctioned quotas

intellectual property rights and the mode of technology transfer abstract transferring technology in an environment where patent protection is uncertain can pose significant risks to an innovating firm s ability to appropriate rents this paper incorporates asymmetric information in a screening game where the innovating firm has the choices of licensing a new product at arm s length to a foreign firm exporting it or licensing it to a subsidiary subsidiary production avoids the risk of imitation but involves higher costs for the innovating firm the gains to the southern country from the lack of intellectual property right protection may be offset by strategic behavior by northern firms who opt for technology transfer via subsidiary or monopoly production

invention and innovation under alternative market structures the case of natural resources this paper examines the interactions between market structure and resource allocation over time when there is endogenous technical progress the structures considered are a planned economy pure monopoly and competition with patent rights in an efficient allocation the date of invention coincides with the date of innovation the date at which technology is used this is also true with a pure monopoly but monopoly retards technical progress relative to the efficient level competition for patents rights to a new technology results in excessively rapid technical progress if the resource endowment of the economy is sufficiently large also competition may lead to sleeping patents where invention strictly precedes the date of innovation

price cap regulation and technical change abstract existing analyses of the implications of price cap regulation for the development of cost reducing technologies assume that all r d is done by the regulated industry this is unrealistic we present a simple model of non cooperative r d by a regulated firm and a single external developer under a price cap regime of the sort characterised by cabral and riordan in equilibrium the external developer exerts less r d than is socially optimal the regulated firm may exert more or less a tightening of the regulatory regime impacts the r d incentives of both players though in different ways the optimal regulatory adjustment parameter may be bigger or smaller than that suggested by existing studies despite the scope for duplication of results research by an outsider necessarily enhances welfare

latecomer firm strategies in complex product systems cops the case of iran s thermal electricity generation systems this paper examines the strategies of a local supplier of high technology capital goods or complex product systems cops in a middle income developing economy iran in its efforts to acquire technology and catch up with market leaders the study draws upon both the development and business strategy literatures to develop a novel conceptual framework of latecomer strategy which is then applied to the iranian firm engaged in the design production and implementation of electricity generation systems although exploratory the study shows that the firm was able to exploit its linkages with local clients favorable government policies and a growing domestic demand to overcome barriers to entry and learn how to manufacture and design complex power generation systems this paper contributes to the catch up literature by highlighting the insights that a latecomer strategy perspective can provide into catch up in cops noting in particular differences between strategies of catch up in the iranian case with those of asian electronics and complex goods in latin america and the reasons behind an imbalanced progress in accumulation of production capabilities and technological change capabilities the evidence shows the importance of marketing capabilities and strategy in cops in order for the transition to leadership to take place implications for policy and strategy are discussed and opportunities for further research are outlined

policy designs in a dynamic model of infant industry protection abstract this paper takes the neoclassical infant industry model allows agents to respond to future expectations and reveals previously unexplained relationships between protection and outcome policy which projects to protect the industry until international competitiveness may not necessarily succeed consistent to the mixed empirical evaluations to guarantee success protection has to last longer however for success to be an equilibrium protection can last shorter decline after take off is also an equilibrium when adjustment speed is bounded increasing the protection rate is not isomorphic to decreasing its duration in policy design adjustment speed critical industry scale and policy duration are all relevant

the division of labour is limited by the rate of growth of the market the taiwan machine tool industry in the 1970s in 1974 i visited taiwan to make a study of its machine tool industry amsden 1977 late in 1981 i returned to visit the same factories i had visited seven years earlier in the interim taiwan was transformed from an amateurish supplier of machine tools to southeast asia into the fourth largest exporter of machine tools to the united states cremeans and dalton 1982 this paper analyses the remarkable changes which occurred in the machine tool industry in this short period the object is to study the process of capital accumulation in one industry in a newly industrialising country in order to gain a better understanding of the nature of the process generally between 1970 and 1980 machine tool production in taiwan rose by more than eleven times see table 1 one way to begin to understand the process of capital accumulation is to ask how such an extraordinarily rapid increase in demand alters the nature of production this is the focus adopted in what follows most historians acknowledge a phenomenon of cumulative causation in economic development or decline economies which begin to grow rapidly tend to grow even more rapidly but once growth falters there ensues a self reinforcing downward spiral most economists however recognise only one part of this cumulative process that which runs from technological progress typically taken as exogenous to increases in productivity to increases in output what tends to be ignored is that part which runs from increases in output to increases in productivity with technological change broadly defined sandwiched in between it is this which is examined below

factor income function and an oligopolistic heckscher ohlin model of international trade abstract this paper introduces a new duality concept factor income function in order to establish the factor price equalization theorem and the heckscher ohlin theorem in an oligopolistic heckscher ohlin model with increasing returns to scale

strategic behaviour of incumbent firms in the uk abstract the main purpose of this paper is to examine the incidence of strategic behaviour in the uk by means of a questionnaire study performed across three broad manufacturing industries food electrical engineering and chemicals of the strategies which have received substantial theoretical attention r d and advertising appear widely used patenting pricing and excess capacity much less so vertical instruments such as purchasing policy also stand out as important but possibly only a minority of firms in our sample actively pursue strategic instruments

coalition formation in standard setting alliances we present a theory for predicting how business firms form alliances to develop and sponsor technical standards our basic assumptions are that the utility of a firm for joining a particular standard setting alliance increases with the size of the alliance and decreases with the presence of rivals in the alliance especially close rivals the predicted alliance configurations are simply the nash equilibria i e those sets of alliances for which no single firm has an incentive to switch to another alliance we illustrate our theory by estimating the choices of nine computer companies to join one of two alliances sponsoring competing unix operating system standards in 1988

demand elasticities asymmetry and strategic trade policy abstract this paper shows that demand elasticities and cost asymmetry are important determinants of strategic trade policy in the symmetric case the direction of intervention is critically dependent upon the elasticity of demand under unit elastic demand free trade is optimal under symmetry and a subsidy tax is optimal if the exporting firm has lower higher marginal cost than its competitor if both the exporting governments intervene then the conventional result that the lower cost firm gets the higher subsidy is reversed for inelastic demand however such an equilibrium is unstable in policy space

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

differences in the rates of return to r d for european and us young leading r d firms this paper examines the sources of europe s lagging business r d performance relative to the us particularly the role played by missing young leading innovators in high technology intensive sectors in europe it investigates through econometric analysis differences in the rates of return to r d of european and us large r d firms it finds that while in the us young firms succeed in realizing significantly higher rates of return to r d as compared to their older counterparts including in high tech sectors european firms fail to generate significant rates of return even if they are yollies and even if they are in high tech sectors these findings can at least partly explain why europe has less r d intensive young leading innovators in high technology intensive sectors

two way capital flows cross hauling in a model of foreign investment this paper presents a simple model of a small open economy which is open to both commodity trade and foreign investment of a sector specific kind and which exhibits the phenomenon of cross hauling or reverse flows of internationally mobile capital in two different sectors the model which assumes that a single domestic factor is combined with internationally mobile but sector specific capital in each of two sectors one of which produces a non traded good appears to be the simplest possible which permits cross hauling as an endogenous phenomenon

increasing returns dynamic stability and international trade abstract a simple two country two good model in which economies of scale form the basis of international trade is presented it is shown that the larger country exports the good characterized by increasing returns and imports the good subject to constant returns a key feature of the paper is a comprehensive stability analysis it turns out that a normal output price response is necessary for d stability furthermore the marshall lerner condition must be satisfied in terms of the short run import demand elasticities for local dynamic stability finally if international factor mobility is permitted cross hauling of specific factors may be observed

increasing returns and the specific factors model in recent years trade theorists have been increasingly interested in the role of economies of scale in international trade models yet the literature to date seems to lack a simple treatment of income distribution and related issues in the presence of economies of scale the present paper attempts to fill this gap by incorporating increasing returns to scale irs into the standard specific factors model trade theorists have begun to view the specific factors model as the favored vehicle for analyzing the economy wide effects of changes in commodity prices factor endowments and other exogenous variables the strongest case in favor of this model has been presented by neary 16 who argues that the model provides a rigorous general equilibrium foundation for partial equilibrium analysis as far as the supply side of the economy is concerned whereas with icm partial equilibrium reasoning will frequently be misleading 2 he further conjectures that icm is the source of all the paradoxes which are peculiar to international trade theory with the exception of those which arise from the failure to adopt first best policies in light of these views in the literature it is of interest to investigate how robust the predictions of the specific factors model are in the presence of economies of scale the analysis in this paper has important implications for the literature on irs as well as that on the specific factors model the more important of these implications may be summarized as follows first in a small open economy characterized by national intraindustry irs the condition for local dynamic stability is equivalent to the condition for a normal output price response 3 moreover in contrast with the findings of the irs models based on free intersectoral mobility of all factors as exemplified in herberg and kemp 6 this condition may be satisfied everywhere along the production possibilities frontier second stability of an equilibrium in the presence of irs is not sufficient to guarantee the validity of many results of the standard specific factors model responses of a small

production experiences and market structure in r d competition abstract in the rd and ii the likelihood of persistent leadership increases with the value of being the winner and the value of being a loser but decreases with expected waiting time of r d innovation and the flow of monopoly profits however destructive innovations may still occur even when production experiences are allowed to play an important role in the r d competition

second mover advantages in the strategic adoption of new technology under uncertainty abstract this paper introduces technological uncertainty into a timing game of new technology adoption it is shown that the timing neither necessarily involves first mover advantages in precommitment equilibria reinganum review of economic studies xlviii 1981 395 405 nor rent equalization due to the threat of preemption fudenberg and tirole review of economic studies lii 1985 383 401 rather there may be second mover advantages because of informational spillovers furthermore the model predicts that the equilibrium payoffs will typically be discontinuous and non monotonic in the probability that the new technology is profitable a welfare analysis reveals several market failures and suggests that policy intervention should adequately depend on the nature of uncertainty and the rate of technological progress

external increasing returns and the shadow price of foreign exchange abstract this paper shows that under external increasing returns to scale and a strictly concave production possibilities frontier the shadow price of foreign exchange in the presence of a tariff is the same as that in an economy with purely constant returns to scale however with a quota or a voluntary export restraint this shadow price is in general quite different from that in a purely constant returns to scale economy

increasing returns to scale and the pattern of trade abstract when realization of increasing returns to scale irs requires geographic concentration formation of cities whose optimal size is limited by commutation costs results if this size is small relative to the population of a country then efficiency of city formation rather than country size dictates comparative advantage with respect to irs goods under restrictive assumptions it can even be shown in a ricardian model with cities that ratios of labor requirement coefficients alone rank goods in comparative advantage order so that country size and the degree of increasing returns displayed by any good are irrelevant to the pattern of trade

factor mobility trade and welfare abstract the paper develops a north south model which is driven by scale economies in the modern sector the model predicts that skilled and unskilled labor migrate from south to north and capital migrates from north to south migration of skilled labor and capital exhibits complementarity with trade while migration of labor may exhibit complementarity or substitutability if the terms of trade effects are ignored small movements of all factors affect the welfare of the population in south negatively and of that in north positively the effects of migration on the terms of trade are ambiguous in general

monopoly incentives for cost reducing r d abstract it is shown in this paper that there exist cost innovations for which a monopolist has a higher incentive to invest than a social planner this unveils the limits of the claim based on arrow 1959 that a monopoly always has a lower incentive to innovate than a social planner and therefore than is socially desirable in contrast to previous results the comparison of incentives may also depend upon the demand function finally for a restricted domain of analysis a rule for comparing the monopoly and the social planner incentives is derived

and the winner is acquired entrepreneurship as a contest yielding radical innovations new entrants to a market tend to be superior to incumbents in originating radical innovations we provide a new explanation for this phenomenon based on markets for technology it applies in industries where successful entrepreneurial firms or their technologies are acquired by incumbents that then commercialize the innovation to this end we analyze an innovation game between one incumbent and a large number of entrants in the first stage firms compete to develop innovations of high quality they do so by choosing at equal cost the success probability of their rd the bigger the number of entrants the more radical the most radical project generally entrants tend to choose more radical r d approaches and generate the highest value innovation in case of success we illustrate our theoretical findings by a qualitative empirical study of the electronic design automation industry and derive implications for research and management

analyzing literature based innovation output indicators the italian experience abstract this paper presents the results of a study on the product innovations introduced in the italian market in 1989 and reported in a selected number of trade journals the analysis of data collected by means of this literature based counting procedure confirms that r d oriented industries and large firms do not in italy have a marked competitive advantage in innovation the country appears to be instead characterized by a significant presence of consumer goods industries and small firms in innovation our data indicate a statistically significant association between trade competitiveness and strength in product innovation and show the comparatively higher capacity for product innovation of some of the industries in which italy achieves a positive performance in international trade moreover the presence of spillovers at the regional level from both private and public r d expenditures proves to be positively correlated with the development of product innovations finally small firms with fewer than 50 employees appear to be more innovative than is usually believed to be the case

sequential auctions of endogenously valued objects two completely informed but possibly asymmetric bidders buy or sell identical claims in sequential auctions they subsequently receive monetary prizes that depend upon the final allocation of claims iterated elimination of weakly dominated strategies leaves a unique nash equilibrium for any prize schedule prices weakly decline as the auctions progress and points of strict decline have a simple characterization for one class of prize schedules which arises naturally if duopolists bid for a scarce input the equilibrium is completely characterized many initial allocations generate the same final unequal division of claims which may be interpreted as the natural market structure journal of economic literature classification numbers d43 d44 l11

licensees as entry barriers in a more general setting than has been considered hitherto this paper examines how the incumbent in a market threatened by entry can exploit its first mover advantage by licensing its technology not to a potential entrant but to firms that would have remained outside the industry it is shown among other things that the incumbent may subsidize the variable costs of its licensees in order to deter entry even when entry is not deterred it is demonstrated that the incumbent might opt to invite outsiders as licensees

the rate of surplus value in the postwar us economy a critique of weisskopf s estimates the rate of surplus value is one of the three key variables in marx s theory of capitalist crises along with the rate of profit and the composition of capital marx expected a secular tendency for the rate of surplus value to increase owing to the rise in labour productivity under capitalism in marx s theory the necessary condition for an increase in the rate of surplus value is that the productivity of labour increases faster than the average real wage marx argued that in general this condition would be fulfilled because of downward pressure on wages exerted by a large and growing reserve army of unem ployed workers marx 1977 chs 17 and 25 moseley 1982 ch 4 marx argued further that this increase in the rate of surplus value would delay but not prevent the tendency of the rate of profit to fall owing to a rise in the composition of capital marx 1982 part 3 weisskopf 1979 argued that the profit share of total income is a reasonable proxy for marx s concept of the rate of surplus value p 343 he estimated the profit share in the non financial corporate business nfcb sector of the us economy over the period 1949 1975 1 showing a secular decline of 28 over the period of study p 351 table 2 contrary to marx s expectation of a secular increase in the rate of surplus value 2 however there is a fundamental theoretical problem with weisskopf s estimates namely that they do not take into account marx s distinction between productive labour and unproductive labour a number of authors have argued that marx s distinction between productive labour and unproductive labour is an integral part of his theory of value and surplus value and that his concepts of surplus value and variable capital the

unproductive accumulation in the usa a new analytical framework in this paper i offer an innovative analysis of unproductive accumulation in the united states economy from 1947 to 2011 i develop a new theoretical and empirical framework to analyze the accumulation of capital in its productive and unproductive forms i also develop a methodology to compute marxist categories predicated on the idea that the production of knowledge and information is an unproductive activity that relies on the creation of knowledge rents in particular i provide new empirical estimates to uncover the shifting balance between productive and unproductive forms of accumulation the accumulation pattern observed during the 1947 1979 phase that prioritized productive accumulation gave way after the 1980s to a contrasting pattern prioritizing unproductive accumulation unproductive activity has been growing at a fast pace in terms of incomes fixed assets and employment among all forms of unproductive activity my approach places special attention on how the production of knowledge and information has constituted a rising share of total unproductive income and capital stock additionally productive stagnation and rapid unproductive accumulation have been related to greater exploitation of productive workers and to widening income inequality