growth patterns of the european venture capital industry abstract although the european venture capital industry has become nearly as important as its american counterpart little research has been done to describe its nature and importance this study gives in the first place an overview of the importance of the venture capital industry in the major european countries thereafter we look for funding and investment patterns in the different european countries we hypothesize that there is a difference between countries in which the venture capital industry is just emerging and those where the venture capital industry is since long established the data are mainly but not solely taken from the yearly statistics of the european venture capital association evca and cover the period 1984 1989 the characteristics we look at are 1 the sources of the funds flowing into the industry broken down with respect to investor type and geographical location of the investor and 2 the investments broken down with respect to investment stage using the evca definitions of the different stages geographical location degree of syndication and industrial sector of the investee companies in europe as a whole the most important group of investors are the banks 28 the pension funds 17 and the insurance companies 12 banks dominate the swiss industry 48 corporate investors dominate the german swedish and portuguese industries whereas these are nearly completely absent in denmark 2 ireland 4 and the united kingdom 5 eighty percent of all venture capital funds are raised domestically 7 in another european country and the remaining 13 in a non european country almost half of the european investments 44 are made in the expansion stage management buy outs mbos account for another 36 only 14 is invested in seed or start up companies much less than the 30 in the u s half of the venture capital investments in the united kingdom are buy outs the highest start up investment activity takes place in austria and spain on average more than half 54 of the invested amount in europe is syndicated but only 6 internationally while 10 is invested internationally we also search for similarities and dissimilarities in the characteristics of the sources of funds and of the investments the hypothesis is that a growth pattern can be distinguished determining the maturity of the venture capital industry in a particular country the characteristics that we think would discriminate most among the different industry stages are the importance of government agencies pension funds and insurance companies sources of funds of start up later stages or mbo investments and the percentage of international and syndicated investments cluster analyses show that there is a growth pattern but it is less clear than expected characteristics of mature industries are a bigger size relative to the gross national product of the country the presence of pension funds and insurance companies as investors in the industry the syndication of the deals and the absence of the government as an investor in the 1980s investments in management buy outs are mainly done by the mature industries no pattern can be distinguished for the investments in early or later stages the major implication from this study is the fact that the european venture capital industry cannot be approached as a single undifferentiated industry each country has its own structures institutions and policies which make the venture capital industries in the different countries have unique characteristics moreover the european venture capital industry has different characteristics than the american industry this has to be taken into account when comparing both industries

equilibrium search models and the transition from school to work this paper applies the burdett mortensen 1998 equilibrium search model to study the school to work transitions of u s high school graduates we consider the case of discrete firm heterogeneity and provide a computational method to obtain the mle our results show that unemployed blacks receive fewer offers than whites and employed blacks are more likely to lose their jobs importantly employed blacks and whites receive job offers at the same rate assigning the whites search parameters to the blacks and re solving reveals that 75 percent of the observed wage differential is explained by the job destruction rate differences

a quantitative evaluation of payroll tax subsidies for low wage workers an equilibrium search approach abstract phelps phelps e 1994 low wage employment subsidies versus the welfare state american economic review 84 54 58 presented the case for a low wage subsidy policy since the mid 1990s france has experimented with this strategy this paper evaluates the effect of this policy on employment and also on output and welfare we construct an equilibrium search model incorporating wage posting and specific human capital investment where unemployment and the distribution of both wages and productivity are endogenous we estimate this model using french data numerical simulations show that the prevailing minimum wage allows a high production level to be reached by increasing training investment even though the optimal minimum wage is lower we show that payroll tax subsidies enhance welfare more than a reduction in the minimum wage when they are spread over a large range of wages in order to avoid specialization in low productivity jobs

installed base and compatibility innovation product preannouncements and predation a good is often more valuable to any user the more others use compatible goods the authors show that this effect may inhibit innovation if an installed base exists and transition to a new standard must be gradual early adopters bear a disproportionate share of transient incompatibility costs this can produce excess inertia the installed base however is stranded if the new standard is adopted this may create excess momentum these dynamic effects have strategic implications temporary price cutting can permanently prevent entry and product preannouncements can be critical in innovation these strategic actions have ambiguous welfare effects

estimating a market equilibrium search model from panel data on individuals from albrecht and axell 1984 and is based on workers who are homogeneous in terms of market productivity and heterogeneous in terms of nonmarket productivity and on firms which are heterogeneous in terms of productive efficiency the equilibrium model is contrasted in terms of its fit to the data with an unrestricted version of the model which is based on a mixture of negative binomial distributions the equilibrium model fails to conform to the data in exactly the dimension of its major focus namely it implies that measurement error accounts for almost all of the dispersion in observed wages the equilibrium model also does not do well in fitting the unemployment duration distribution compared to the unrestricted model the problem is that the duration distribution itself does not support the existence of significant heterogeneity as evidenced by the estimates of the unrestricted model the paper also illustrates the use of such models for policy analysis by simulating the welfare effects of a minimum wage

constructing post carbon institutions assessing eu carbon reduction efforts through an institutional risk governance approach this paper examines three different governance approaches the european union eu and member states ms are relying on to reach a low carbon economy by 2050 current governance literature explains the operational methods of the eu s new governance approach to reduce carbon emissions however the literature neglects to account for the perceived risks that inhibit the roll out of new low carbon technology this article through a novel approach uses a grounded theoretical framework to reframe traditional risk literature and provides a connection to governance literature in order to assess the ability of eu governance mechanisms to reduce carbon emissions the empirical research is based on responses from european energy stakeholders who participated in a delphi method discussion and in semi structured interviews these identified three essential requirements for carbon emissions to be reduced to near zero by 2050 1 an integrated european energy network 2 carbon pricing and 3 demand reduction these features correspond to institutionalized responses by the eu and ms the agency for the cooperation of energy regulators acer european union emission trading scheme eu ets and energy efficiency directives and policies integrated into existing ms institutions the theoretical and empirical findings suggest that governance by facilitation energy efficiency fails to induce significant investment and new policy approaches and cannot be relied on to achieve requisite reductions in demand governance by negotiation acer and governance by hierarchy eu ets do reduce risks and may encourage the necessary technological uptake the term risk governance is used to explain the important role governance plays in reducing risks and advancing new technology and thereby lowering carbon emissions in the energy sector

the innovation potential of new infrastructure development an empirical study of heathrow airport s t5 project abstract we propose a conceptual framework to analyze technology adoption in mega infrastructure projects and assess their potential to innovating large socio technical systems drawing on an in depth empirical analysis of heathrow airport s terminal 5 project we find that innovation hinges on technology adoption decisions that are governed systematically by two intertwined determinants assessment of expected profitability and development of absorptive capacity both of which are distributed across various interdependent actors on an ad hoc basis technological decisions are also affected by other factors namely attitudes toward risk politics and lack of established standards we reveal how a schedule driven project framing creates an underlying boundary condition that constrains the longitudinal process of building a whole collective with capacity to absorb new technologies the innovation potential of mega projects is thus subjected to a fundamental unifying tension on the one hand they offer a one off opportunity to invest in cutting edge technologies and innovate socio technical systems on the other hand project stakeholders have limited time to develop capacity to absorb novel technologies and negotiate differences on assessments of profitability and risk stakeholders may therefore be compelled to agree to adopt proven technologies upfront to reduce uncertainty and mitigate risks thus limiting the innovation potential of new infrastructure development

training turnover and search this article explores a model of firm specific training in a job search environment with labor turnover the main substantive finding is a positive association between training and wages when dispersed the article then precisely characterizes how both wage dispersion and firm profitability depend on the flow value b 0 of workers unmatched time it is shown that i for all high values b no equilibrium exists ii for intermediate values b multiple equilibria arise where firms earn zero profits and choose from a general wage distribution iii for all lower values b there is a unique equilibrium with firms earning positive profits and choosing from an atomless set of wages

an empirical equilibrium job search model with search on the job and heterogeneous workers and firms in this article we present and estimate a synthesis of previous equilibrium search models allowing for continuous distributions of workers opportunity costs of employment as well as firms productivities the model allows for on the job search and we assume that job offer arrival rates for workers are independent of their labor market state we derive the theoretical implications of these assumptions we provide simulations and we develop a semiparametric estimation procedure that we apply to a dataset of individual labor market histories

accounting for labor gaps abstract this study explains the impact of taxes and labor market institutions on the total hours observed in france germany the united kingdom and the united states we develop a balanced growth model with matching frictions in the labor market distinguishing between the extensive margin and intensive margin of labor supply we show that i hours are more sensitive to changes in taxes whereas employment reacts more to shifts in labor market institutions and ii a substitution effect exists between employment and hours counterfactual experiments show that if france had experienced the same trend in labor market institutions as the united states its employment rate would have increased by 25 percentage points whereas its number of hours worked per employee would have reduced by 1 percentage point if france had chosen the us paths of both taxes and labor market institutions then its employment rate would have been larger by 20 percentage points and the number of hours worked by employees would have been larger by 3 percentage points than the current one a situation observed before the 1970s

entrapment in large technology systems institutional commitment and power relations abstract large technology systems cannot be developed without social commitments usually including legal especially in the form of contracts organisational involving producers users and financiers and political involving various actors associated with the state commitments without such commitments there can be no innovation and no investment given the high risks that are entailed however embedded commitments can create inertia causing inferior technologies and technology paths to survive long after they should have been abandoned this form of technological lock in may be reinforced when there are close relations between producers and states which prevent markets and democratic processes from operating effectively these phenomena are illustrated through study of the thermal oxide reprocessing plant thorp a nuclear reprocessing plant in the uk the lesson for technology policy is that much more attention needs to be given to the maintenance of reversibility and adaptability in infrastructural development

normal markets market imperfections and energy efficiency abstract the conventional distinction between economic and engineering approaches to energy analysis obscures key methodological issues concerning the measurement of the costs and benefits of policies to promote the adoption of energy efficient technologies the engineering approach is in fact based upon firm economic foundations the principle of lifecycle cost minimization that arises directly from the theory of rational investment thus evidence that so called market barriers impede the adoption of cost effective energy efficient technologies implies the existence of market failures as defined in the context of microeconomic theory problems of imperfect information and bounded rationality on the part of consumers for example may lead real world outcomes to deviate from the dictates of efficient resource allocation a widely held contrary view that the engineering view lacks economic justification is based on the fallacy that markets are normally efficient

minimum wage effects on labor market outcomes under search matching and endogenous contact rates building upon a continuous time model of search with nash bargaining in a stationary environment we analyze the effect of changes in minimum wages on labor market outcomes and welfare although minimum wage increases may or may not lead to increases in unemployment in our model they can be welfare improving to labor market participants on both the supply and demand sides of the labor market we discuss identification of the model using current population survey data on accepted wages and unemployment durations and show that by incorporating a limited amount of information from the demand side of the market it is possible to obtain credible and precise estimates of all primitive parameters we show that the optimal minimum wage in 1996 depends critically on whether or not contact rates can be considered to be exogenous and we note that the limited variation in minimum wages makes testing this assumption problematic

an equilibrium model of search unemployment this paper develops a simple general equilibrium model with sequential search in which a nondegenerate wage offer distribution is endogenously determined we use this model to analyze the comparati

tracking global carbon revenues a survey of carbon taxes versus cap and trade in the real world abstract we investigate the current use of public revenues which are generated through both carbon taxes and cap and trade systems more than 28 3 billion in government carbon revenues are currently collected each year in 40 countries and another 16 states or provinces around the world of those revenues 27 7 8 billion are used to subsidize green spending in energy efficiency or renewable energy 26 7 4 billion go toward state general funds and 36 10 1 billion are returned to corporate or individual taxpayers through paired tax cuts or direct rebates cap and trade systems 6 57 billion in total public revenue earmark a larger share of revenues for green spending 70 while carbon tax systems 21 7 billion more commonly refund revenues or otherwise direct them towards government general funds 72 of revenues drawing from an empirical dataset we also identify various trends in systems use of carbon revenues in terms of the total revenues collected annually per capita in each jurisdiction and offer commensurate qualitative observations on carbon policy design choices

the governance of sustainable socio technical transitions a quasi evolutionary model of socio technical transitions is described in which regimes face selection pressures continuously differentiated transition contexts determine the form and direction of regime change in response to these pressures the articulation of pressures and the degree to which responses are coordinated and based on resources available within the regime define the transition context four alternative contexts are described endogenous renewal re orientation of trajectories emergent transformation and purposive transitions agency and power in the governance of regime transformation are analysed power to affect change depends on regime membership the distribution of resources for change and expectations

on the job search and the wage distribution the article structually estimates an on the job search model of job separations given each employer pays observably equivalent workers the same but wages are dispersed across employers an employer s separation flow is the sum of an exogenous outflow unrelated to the wage and a job to job flow that decreases with the employer s wage using data from the danish integrated database for labour market research the empirical results imply as predicted by theory that search effort declines with the wage furthermore the estimates explain the employment effect defined as the horizontal difference between the distribution of wages earned and the wage offer distribution

unemployment human capital depreciation and unemployment insurance policy summary this paper presents a structural estimation of a life cycle model with unemployment risk the model allows for human capital depreciation during unemployment it is estimated using german and us household level data the data suggest that the adverse impact of unemployment on individual productivity is important in both countries but quantitatively more relevant in germany moreover simulations show that the combination of skill depreciation with the generous unemployment insurance system that was in place in germany until recently is a key factor in explaining the differences in labour market performance between these countries copyright 2012 john wiley sons ltd

understanding carbon lock in abstract this paper narrative argues that industrial economies have been locked into fossil fuel based energy systems through a process of technological and institutional co evolution driven by path dependent increasing returns to scale it is asserted that this condition termed carbon lock in creates persistent market and policy failures that can inhibit the diffusion of carbon saving technologies despite their apparent environmental and economic advantages the notion of a techno institutional complex is introduced to capture the idea that lock in occurs through combined interactions among technological systems and governing institutions while carbon lock in provides a conceptual basis for understanding macro level barriers to the diffusion of carbon saving technologies it also generates questions for standard economic modeling approaches that abstract away technological and institutional evolution in their elaboration the question of escaping carbon lock in is left for a future paper

a structural model of us aggregate job flows this paper contributes to the analysis of jobs flows dynamics through the explicit modelling of job creations and job destructions we propose a simple matching model extended for endogenous separation and tractable heterogeneity the parameters of the model are estimated using a simulation based estimation method we then test the ability of trade externalities generated by the matching process to i propagate reallocation and aggregate disturbances in the whole labor market and ii generate the observed distribution of aggregate job flows the results clearly indicate that the model is able to match the dynamics of us aggregate job flows copyright 2002 john wiley sons ltd

governing transitions cases and insights from two periods in the history of the uk gas industry the paper aims to inform historically the analyses of future sociotechnical transition pathways in the electricity sector particularly those developed by the transition pathways to a low carbon economy project it also aims to inform the theoretical approach to transitions by focusing on key decisions at branching points that led to transitions in the uk gas energy services regime which occurred under different governance patterns the first historical case study covers the market led transformation of the manufactured gas regime from 1877 to 1914 which developed the end uses of gas beyond lighting to include cooking and extended access to working class consumers the second case study covers the period from 1948 to 1977 historically reconstructing the transition from town gas to natural gas this state led and coordinated conversion to natural gas was preceded by a period of destabilisation of the manufactured gas regime the co existence of several niche technologies and the hybridisation of the key actors and technological infrastructures of the incumbent regime comparing the cases provides insights for future energy service transitions by addressing the significance of power trust and networking in the decision making processes involved in the governance of energy transitions

globalizing carbon lock in this paper extends the arguments surrounding carbon lock in elaborated in unruh energy policy 28 2000 817 30 2002 317 to countries currently undergoing industrialization it argues that for numerous reasons industrializing countries are unlikely to leapfrog carbon intensive energy development on the contrary carbon lock in may be globalizing and could further constrain climate change mitigation options it is then argued that many policy recommendations ignore carbon lock in possibly limiting their potential for successful implementation the paper then discusses four policy approaches that appear to have advantages given lock in conditions it is recognized however that relative ease of implementation does not necessarily equate with superiority instead it is merely a path dependent outcome of past development decisions pursuing policies on the basis of relative implementation ease may help address the issue of climate change but could also result in sub optimal outcomes along other dimensions of sustainable development

the role of shocks and institutions in the rise of european unemployment the aggregate evidence two key facts about european unemployment must be explained the rise in unemployment since the 1960s and the heterogeneity of individual country experiences while adverse shocks can potentially explain much of the rise in unemployment there is insufficient heterogeneity in these shocks to explain cross country differences alternatively while explanations focusing on labour market institutions explain current heterogeneity well many of these institutions pre date the rise in unemployment based on a panel of institutions and shocks for 20 oecd nations since 1960 we find that the interaction between shocks and institutions is crucial to explaining both stylised facts

towards alternative trajectories reconfigurations in the dutch electricity regime abstract in the early 2000s dutch electricity companies are increasingly investing in technologies that enable them to replace coal with biomass replacing large amounts of coal up to 40 requires the companies to invest in technological trajectories alternative to the ones they have supported over the past decades this paper aims to understand why these incumbent firms in the dutch electricity regime are developing alternatives the second aim of the paper is to provide a way for assessing the potential of innovations the paper does so by bringing together insights from literature on socio technical regimes and insights from literature on technological and market niches strategic niche management the main conclusion is that both niche processes at the level of experimenting with alternatives and changes in the incumbent regime are necessary for understanding the innovation journey of a new technology a two by two matrix is developed that can be used for both analysis and governance purposes

the costs of mitigating carbon emissions a review of methods and findings from european studies abstract conventional wisdom has it that top down studies of mitigation costs are too pessimistic while bottom up studies are too optimistic in examining mitigation cost studies for western europe this paper finds this interpretation to be flawed the paper expands the analytical framework for interpreting mitigation cost studies evaluates the treatment of no regrets options and other input assumptions in the various studies and includes findings from recent integrated top down bottom up modeling assessments not covered in the ipcc report based on these new elements it is found that mitigation costs tend to be overestimated not only in top down studies but also in bottom up studies given this pervasive bias toward pessimism the body of existing mitigation cost assessments for western europe can be read as follows over the next three to four decades a combination of tax shifts market transformation instruments and policies to reform subsidies and internalize non climatic externalities could cut carbon emissions in western europe by 40 50 relative to the base year at no loss or at a gain in gdp averaged over the medium term and including a phase in period an economically optimal rate of implementing western europe s no regrets potentials is found to be in the neighborhood of 2 per year relative to base year levels

innovation processes in large technical systems market liberalization as a driver for radical change abstract electricity supply is a large technical system which exhibits strong path dependencies and high barriers for radical innovations recent market liberalization however has initiated a fundamental restructuring the paper analyzes how liberalization has altered innovation processes in the field of electricity supply we examine three radical innovations under monopoly conditions and contrast the findings with the results from a survey on the innovation behavior of electric utilities in liberalized markets we argue that the selection environment for innovations has changed in various respects in our sample new options open to innovation activities have emerged at the level of the firm and utility strategies turn out to be more heterogeneous this may be interpreted as an increase in the variety of search processes which may lead to a mid term decrease of path dependencies

heavy duty gas turbines in iran india and china do national energy policies drive the industries this paper for the first time systematically examines the heavydutygasturbine hdgt industry in the context of developing countries it provides a comparative analysis of the hdgt industries in iran india and china it contrasts their national strategies the historical development of their technological capabilities the similarities and differences in approach the varying evolutionary paths and policy drivers and the reasons for their differing outcomes this paper argues that a high level of state involvement is a prominent feature of hdgt industries in developing countries it also argues that the development and evolution of the hdgt industries in these countries is closely interrelated with the countries national energy policies it clarifies why such an advanced and sophisticated industry is a strategic choice in one country while it is seen as an inferior choice in another

labour market institutions and employment in france the purpose of this paper is to use individual data to study how the minimum wage and the welfare system combine to affect employment in france using the 1997 labour force survey we decompose non employment of married women into three components voluntary classical due to the minimum wage and other a residual category we find that the minimum wage explains close to 15 of non employment for these women and that the disincentive effects of some welfare policy measures may be large our approach also allows us to evaluate various labour and welfare policy experiments in their effects on participation and employment copyright 2002 john wiley sons ltd

humps and bumps in lifetime consumption in this article we argue that the life cycle model that allows demographics to affect household preferences and relaxes the assumption of certainty equivalence can generate hump shaped consumption profiles over age that are very similar to those observed in household level data sources and in particular match the differences in shape across different education groups liquidity constraints or myopia are not required to explain the empirical features of observed life cycle patterns

escaping carbon lock in this article explores the climate policy implications of the arguments made in understanding carbon lock in unruh 2000 which posited that industrial countries have become locked into fossil fuel based energy systems through path dependent processes driven by increasing returns to scale carbon lock in arises through technological organizational social and institutional co evolution culminating in what was termed as techno institutional complex tic in order to resolve the climate problem an escape from the lock in condition is required however due to the self referential nature of tic escape conditions are unlikely to be generated internally and it is argued here that exogenous forces are probably required

the risk return attributes of publicly traded venture capital implications for investors and public policy abstract despite having provided original seed money to extremely successful start ups such as federal express cray research and apple computer the small business administration sba with encouragement from the u s senate has recently placed a moratorium on granting new small business investment company sbic licenses and due to perceived fund mismanagement at least some senators have suggested that the misguided sbis could lead to a mini s l bailout consequently the sba has threatened the existence of the sbic government assisted program two public policy issues arise first should the government sponsor sbics given their past risk return characteristics second if sba support does re emerge should changes be made to the organizational structure of sbics with respect to the first issue our study examines the risk return attributes of two categories of venture capital funds publicly traded business development corporations bdcs and sbics popular folklore as well as a recent study in this journal suggest that a well diversified fund of venture capital containing both sbics and bdcs outperforms the general market while previous research assumes that sbics are similar to bdcs we find striking dissimilarities between these groups during 1980 1986 sbics demonstrate significantly greater total and unsystematic risk but significantly less systematic risk than bdcs in addition sbics experience much higher returns on a risk adjusted basis than either the market proxy or bdcs financial theory suggests a number of reasons for the differential performance among the two groups moreover given the strong investment successes of publicly traded sbics during the early to middle 1980s and the ability of the public to monitor sbic investment in lieu of the sba we conclude that continued sba financing of sbics benefits the investment community however the investment performance of sbics in the late 1980s contrasts with the successes achieved earlier in the decade since 1986 many publicly traded sbics have performed poorly liquidated or changed their organizational status we conclude that many of these problems originate with the investment company act of 1940 this act limits operating flexibility of sbics discourages public trading and related monitoring by public investors and reduces the equity capital cushion accordingly we propose guidelines including audit and equity capital considerations that may mitigate difficulties stemming from the organizational structure of sbics public policy issues related to sba sponsorship of sbics are relevant to individual and institutional investors particularly as they relate to dividends liquidity investment allocation and portfolio risk of venture capital related funds for example our study indicates that publicly traded sbics on average appear to have greater corporate financial leverage and a large percentage of their portfolio invested in fixed income securities compared with private sbics which invest more heavily in equity funds to the extent that the sba relaxes dividend payout restrictions on sbic operating income we might expect lower financial leverage and a greater portfolio allocation to equity instruments this change would tend to reduce the financial risk related to sbic ownership and encourage the provision of equity capital to emerging enterprises

barriers within firms to energy efficient investments abstract many investments in energy efficiency fail to be made despite their apparent profitability internal hurdle rates are often set at levels higher than the cost of capital to the firm reasons for these practices include bounded rationality principal agent problems and moral hazard the policy implication is that government can simultaneously improve overall energy efficiency and increase private sector productivity by providing informational and organizational services that go beyond the traditional regulatory framework

french unemployment a transatlantic perspective french unemployment why france and the usa are alike the paper compares the french and us labour markets it shows that differences in unemployment rates are especially acute for young and old workers but appear to be negligible for middle aged workers all french workers however experience job flows that are quite distinct from their american counterparts as they are exposed to long spells of infrequent unemployment which is the opposite to the us case critical differences across ages and skills regarding the patterns of exit from and entry into employment are also displayed the paper dispels the view that these differences originate from the behaviour of the unemployed or the set of institutions that guide their decisions and that this is new to the french labour market daniel cohen arnaud lefranc and gilles saint paul

technology adoption in the presence of network externalities we analyze technology adoption in industries where network externalities are significant the pattern of adoption depends on whether technologies are sponsored a sponsor is an entity that has property rights to the technology and hence is willing to make investments to promote it key findings include the following 1 compatibility tends to be undersupplied by the market but excessive standardization can occur 2 in the absence of sponsors the technology superior today has a strategic advantage and is likely to dominate the market 3 when one of two rival technologies is sponsored that technology has a strategic advantage and may be adopted even if it is inferior 4 when two competing technologies both are sponsored the technology that will be superior tomorrow has a strategic advantage

niche accumulation and hybridisation strategies in transition processes towards a sustainable energy system an assessment of differences and pitfalls this paper assesses two patterns in transition processes for using them as strategies towards a sustainable energy system i e niche accumulation and hybridisation both play important but different roles in transitions the expected success of these strategies depends on the innovation s history and the innovation context the different strategies are illustrated with several examples from the energy domain

the economics of changing course implications of adaptability and inertia for optimal climate policy this paper reviews evidence that energy technologies and systems adapt over time to accommodate external pressures that technical innovation and systemic change in the energy sector is largely induced by need and restrained by potentially large transitional costs a simple integrated model of optimal greenhouse gas abatement over time is presented in which the abatement cost depends on both fixed and transitional elements it is shown that the optimal current response and long run prospects differ radically between the classical economic case in which the cost of a given cutback in emissions is fixed exogenously and the adaptive case in which the response is ultimately adaptive but heavily constrained by inertia ie low fixed but high transitional cost if energy systems are indeed to a large degree adaptive the results demonstrate that as compared with the classical non adaptive case long run stabilization of atmospheric co2 may be optimal even with moderate damages from climate change greater near term abatement efforts are justified and the cost of a given delay in response may be several times higher neglect of the issue of induced technical change and other adaptive responses may invalidate the policy implications drawn from most integrated assessment models developed to date

green electricity in the market place the policy challenge the paper explores the implications of the liberalization of electricity markets in europe and north america for policy means and mechanisms to enhance the market penetration of renewables applying a co evolutionary approach the argument highlights the need for policy intervention to help producers and consumers move out of technological trajectories favoring non renewable electricity on the production side energy generation is locked into the central power station system deriving from more than a hundred years of technological development along a specific system trajectory on the consumption side the locked in effect results from a similarly long experience with electricity provision by monopoly suppliers and the associated lack of consumer choice and responsibility for product differentiation as the analysis shows policy strategies targeting both the production and consumption sides of the electricity market are needed for effective intervention furthermore policy strategies should draw on a clear analysis of the inertia and dynamism underlying the production and consumption of electricity in the light of such evolutionary dynamics the analysis demonstrates the insufficiency of the policy approaches currently employed to foster the market share of renewables based electricity instead the authors suggest a reflexive policy approach to initiate and support a reorientation towards green electricity emphasizing the need for learning and communication between and among societal actors

getting round the lock in in electricity generating systems the example of the gas turbine abstract the purpose of this paper is to show how in a situation of lock in in the environment of electricity generation a new technology can succeed in overcoming this situation and become competitive our study will show that it is possible to get round the lock in by bringing into play the increasing returns of adoption in particular production niches where the existence of powerful constraints of techno economic consistency leads to a path of increasing specification then a hybridization of the competing technologies will allow the new technology to emerge from the original niche and take advantage of the increasing returns of adoption which were hitherto the reserve of the former technology we shall then draw lessons from the example of the gas turbine in comparison with the basic model of b arthur

emerging strategies in the venture capital industry abstract this article reports a study of the future direction of the venture capital industry by examining the basic strategies and strategic assumptions of a broad sample of venture capital firms there are three main sets of results first the once homogeneous venture capital industry is rapidly dividing into several different strategic groups members of these groups are increasingly distinguishing themselves from other groups on four basic dimensions followed by member firms 1 financial resources equity capital comes from a greater variety of sources five major sources resulting in fundamentally different demands on the mission of the receiving venture capital firm 2 staff resources the way venture capital firms use staff resources particularly regarding investee management assistance is becoming increasingly varied across different groups some firms provide fewer than 2 days per year while others provide up to 450 man days per year per client 3 venture stages while the overall industry retains a primary interest in stage 1 2 and 3 investment specific firms vary considerably in the distribution of investment emphasis across these three stages 4 use of financial resources firms in the industry are becoming increasingly differentiated in the size of minimum investments they make 100 m to 1000 m and in their role as a direct investor versus a broker for institutional funds practicing venture capitalists should make use of this first set of findings in two ways first they may find it useful to compare their firm s orientation along these four strategic dimensions with those of the firm s that comprised this study second they may seek to use these four strategic dimensions as a basis on which they might examine clarify and or redefine the marketing strategy pursued by their firm a second set of results identified three goals and priorities of venture capital firms that have neither changed over time nor across increasingly different strategic groups annualized after tax return on investments of between 25 and 40 remain the most common objective across all firms a 5 to 6 year investment time horizon and a major emphasis on the quality of the management team in evaluating new deals were universal priorities across diverse venture capital firms a third finding in this study was that venture capital firms profess greater certainty about the future direction of the venture capital industry than the direction of their firm the most notable example of this is a strong sense that industry wide rates of return are headed downward yet few senior partners expect their firm to experience this decline practicing venture capitalists may be interested to peruse these results to see what trends are predicted within the venture capital industry by this subsample of that industry second they should consider the finding that industry wide rates of return are headed downward in light of the first two sets of findings to develop their own opinion about the future performance of different strategic groups within the industry it is important to note that the sample of venture capital firms on which this study was based did not include most of the larger older funds some of these funds would be characterized as industry leaders pace setters and innovators the sample provides a solid representation of the broad middle of the venture capital industry and newer entrants into the industry while larger older funds are under represented their impact on future trends and strategies in the industry is captured to some extent in the set of questions about future direction of the venture capital industry finally the emerging strategic groups in the venture capital industry that were identified by this study may be useful information for investors as well as users of venture capital for investors the opportunity to participate in venture capital activity should become more clearly understood and varied basically this study should help investors differentiate the strategic posture of different venture capital firms and funds on four factors rather than simply industry geographic considerations for users of venture capital the results of this study suggest a possibility for multiple options that are both more accessible and more catered to specific needs users of venture capital should find a clearer basis on which to differentiate venture capital firms in terms of venture stage priorities staff utilization orientations sources and uses of financial resources this should make for more informed shopping among different venture capital sources and provide a basis on which to shop for the most compatible firm

a model of venture capitalist investment activity the paper describes the activities of venture capitalists as an orderly process involving five sequential steps these are 1 deal origination the processes by which deals enter into consideration as investment prospects 2 deal screening a delineation of key policy variables which delimit investment prospects to a manageable few for in depth evaluation 3 deal evaluation the assessment of perceived risk and expected return on the basis of a weighting of several characteristics of the prospective venture and the decision whether or not to invest as determined by the relative levels of perceived risk and expected return 4 deal structuring the negotiation of the price of the deal namely the equity relinquished to the investor and the covenants which limit the risk of the investor 5 post investment activities the assistance to the venture in the areas of recruiting key executives strategic planning locating expansion financing and orchestrating a merger acquisition or public offering 41 venture capitalists provided data on a total of 90 deals which had received serious consideration in their firms the questionnaire measured the mechanism of initial contact between venture capitalist and entrepreneur the venture s industry the stage of financing and product development ratings of the venture on 23 characteristics an assessment of the potential return and perceived risk and the decision vis i vis whether to invest the modal venture represented in the database was a start up in the electronics industry with a production capability in place and seeking 1 million median in outside financing there is a high degree of cross referrals between venture capitalists particularly for the purposes of locating co investors factor analysis reduced the 23 characteristics of the deal to five underlying dimensions namely 1 market attractiveness size growth and access to customers 2 product differentiation uniqueness patents technical edge profit margin 3 managerial capabilities skills in marketing management finance and the references of the entrepreneur 4 environmental threat resistance technology life cycle barriers to competitive entry insensitivity to business cycles and down side risk protection 5 cash out potential future opportunities to realize capital gains by merger acquisition or public offering the results of regression analyses showed expected return to be determined by market attractiveness and product differentiation r2 0 22 perceived risk is determined by managerial capabilities and environmental threat resistance r2 0 33 finally a discriminant analysis correctly predicted in 89 4 of the cases whether or not a venture capitalist was willing to commit funds to the deal on the basis of the expected return and perceived risk the reactions of seven venture capitalists who reviewed the model s specification were used to test its validity

low wage employment subsidies versus the welfare state this paper is a brief for the introduction of a subsidy to any qualified firm for its use of low wage employees as a means to reduce the unemployment and raise the pay of disadvantaged workers there would be a case for such a wage subsidy in all the advanced market economies and certainly the american one regardless of recent trends the case has grown stronger however with the worsening of the relative wages and especially the unemployment rates of low age workers the globalization of investment and the bias of technical progress are the causes most often suggested i would add the growth of the welfare system the public entitlements to hospitalization to retirement and disability insurance and to the benefits labeled welfare in the narrow sense since this factor tends to be overlooked i devote section i to it section ii proceeds to the case for a low wage employment subsidy it will be clear that the beneficial effects of the subsidy on disadvantaged workers are the mirror opposite of the harmful side effects of the welfare system side effects that the subsidy would counteract i side effects of the welfare system

do labor tax rebates facilitate firm growth an empirical study on french establishments in the manufacturing industry 2004 2011 in order to reduce labor costs and stimulate job creation many governments implement a large set of devices mainly consisting in reduced rates of social contributions the evaluation of their effect is still controversial unlike previous research our purpose is to appraise to what extent firm growth reacts to a decrease in the cost of labor per employee we tackle this question using an unbalanced panel of french establishments operating in the manufacturing industry between 2004 and 2011 we run estimations using a 2 step estimator making it possible to estimate the impact of explanatory variables on job creation at any point of the distribution of establishments employment growth rate while also controlling for individual fixed effects component our results show that the effect of the decrease in the labor cost generated by tax rebates mainly benefits fast growing and large establishments indeed the change in the number of employees in other establishments is significantly less affected even though the effect remains positive by the reduction in social contributions this is particularly the case for smaller establishments as well as for those whose growth is stagnant or negative these results lead us to reconsider the relevance of large scale policies aiming at reducing labor costs in the same way for all establishments regardless of their size or financial health

active labour market programmes in latin america and the caribbean evidence from a meta analysis abstractwe present a systematic review and meta analysis of impact evaluations of active labour market programmes almps in latin america and the caribbean lac we extract 296 impact estimates f

competing technologies and market dominance standard battles in the local area networking industry the rise of fast ethernet as the dominant standard for high speed connection in the local area networking industry is chosen to study the interaction between increasing returns to adoption and technical change in innovation diffusion contrary to most of the empirical papers on diffusion with increasing returns which study competition between an entrenched technology and a new competitor the focus is on the case in which several and different versions of a new technology are competing at the same time for market dominance within this context this article studies under which conditions an early technology may fail to capitalise on its initial time advantage and a new version without a clear early lead may become dominant in particular we will consider a case in which the initial time advantage is made ineffective by consistently adverse technological expectations then we analyse how the arrival on the market of different categories of buyers sensitive to specific applications further contribute to weaken the early leader and strengthen a competing version this is more likely to occur when buyers are highly familiar with the characteristics of that specific version copyright 2008 oxford university press

integrative re use systems as innovative business models for devising sustainable product service systems re use implies recovering items from the waste stream to use them in identical or similar processes mostly at consumer level currently re use is restricted to niches but by 2020 the european commission wants to mainstream re use as a waste management option to increase resource efficiency ecologically oriented work integration social enterprises focussing on re use re use eco wises might help accomplish as they not only intend to re integrate marginalised people into the labour market but provide comprehensive re use services e g repair and thus constitute a novel kind of sustainable product service system spss this paper contributes to a scientific framework for re use eco wises by linking existing theoretical knowledge on spss to novel knowledge from three cases representing the variety of re use eco wises in austria for analysis we use the so called business model canvas adding a comprehensive stakeholder consideration results show that re use eco wises contribute to all three dimensions of sustainability by helping reduce waste and increasing resource productivity and by providing jobs and affordable goods for disadvantaged people full implementation however will need additional efforts from all stakeholders involved including the eco wises themselves but also public authorities and society at large

recent evolutionary theorizing about economic change this famous passage from marshall s principles of economics it first appeared in the fifth edition which came out in 1907 nicely brings out two issues which are as germane to economics today as they were when marshall wrote the first is the heavy reliance by economists in their formal theorizing on the notion of equilibrium the other is the appeal that biological conceptions3x201d have for many economists particularly when their focus is on economic change

on the job search and strategic bargaining abstract this paper studies wage bargaining in a simple economy in which both employed and unemployed workers search for better jobs the axiomatic nash bargaining solution and standard strategic bargaining solutions are inapplicable because the set of feasible payoffs is nonconvex i instead develop a strategic model of wage bargaining between a single worker and firm that is applicable to such an environment i show that if workers and firms are homogeneous there are market equilibria with a continuous wage distribution in which identical firms bargain to different wages each of which is a subgame perfect equilibrium of the bargaining game if firms are heterogeneous i characterize market equilibria in which more productive firms pay higher wages i compare the quantitative predictions of this model with burdett and mortensen s 1998 wage differentials employer size and unemployment international economic review 39 257 273 wage posting model and argue that the bargaining model is theoretically more appealing along important dimensions

economic history and the modern economist in this book nine economists and economic historians express their concern for the present state of economics and its development in the future from a variety of different approaches these scholars reassert the importance of economic history in the training of economists and urge that this perspective should not be lost in the future

the patchy spread of renewables a socio territorial perspective on the energy transition process abstract in the energy transition process the district heating networks and the wind power facilities play a key role these two technologies can contribute to establish models of co provision involving new social actors in the energy field despite that the socio organizational change appears patchy in italy these options are dominated by large utilities and the few forms of energy co production are to be found in specific contexts the influence of socio territorial features on the energy transition seem relevant this paper aims analysing energy transition while focusing on the institutional relational and territorial dimensions to unfold how energy innovations take place within territorial contexts in this respect energy transition is investigated considering both the district heating and the wind power in italy the analysis suggests that the transition is influenced by the way in which territorial context is destabilized by the perturbations of energy landscape

an empirical equilibrium search model of the labor market in structural empirical models of labor market search the distribution of wage offers is usually assumed to be exogenous however because in setting their wages profit maximizing firms should consider the reservation wages of job seekers the wage offer distribution is essentially endogenous we investigate whether a proposed equilibrium search model in which the wage offer distribution is endogenous is able to describe observed labor market histories we find that the distributions of job and unemployment spells are consistent with the data and that the qualitative predictions of the model for the wages set by employers are confirmed by wage regressions the model is estimated using panel data on unemployed and employed individuals we distinguish between separate segments of the labor market and we show that productivity heterogeneity is important to obtain an acceptable fit to the data the results are used to estimate the degree of monopsony power of firms further the effects of changes in the mandatory minimum wage are examined

publicly traded venture capital funds implications for institutional fund of funds investors abstract institutional investors supply the bulk of the funds which are used by venture capital investment firms in financing emerging growth companies these investors typically place their funds in a number of venture capital firms thus achieving diversification across a range of investment philosophy geography management industry investment life cycle stage and type of security essentially each institutional investor manages a fund of funds attempting through the principles of portfolio theory to reduce the risk of participating in the venture capital business while retaining the up side potential which was the original source of attraction to the business because most venture capital investment firms are privately held limited partnerships it is very difficult to measure risk adjusted rates of return on these funds on a continuous basis in this paper we use the set of twelve publicly traded venture capital firms as a proxy to develop insight regarding the risk reduction effect of investment in a portfolio of venture capital funds i e a fund of funds measurements of weekly total returns for the shares of these funds are compared with similar returns on a set of comparably sized maximum capital gain mutual funds and the daily return of the s p 500 index a comparison of returns on an individual fund basis as well as a correlation of daily returns of these individual funds were made in order to adjust for any systematic bias resulting from the thin market characteristic of the securities of the firms being observed the scholes williams beta estimation technique was used to reduce the effects of nonsynchronous trading the results indicate that superior returns are realized on such portfolios when compared with portfolios of growth oriented mutual funds and with the s p 500 index this is the case whether the portfolios are equally weighted i e naive or constructed to be mean variant efficient ex ante according to the capital asset pricing model when compared individually more of the venture funds dominated the s p market index than did the mutual funds and by much larger margins when combined in portfolios the venture capital funds demonstrated very low beta coefficients and very low covariance of returns among portfolio components when compared with portfolios of mutual funds to aid in interpreting these results we analyzed the discounts and premia from net asset value on the funds involved and compared them to thompson s findings regarding the contribution of such differences to abnormal returns we found that observed excess returns greatly exceed the level which would be explained by these differences the implications of these results for the practitioner are significant they essentially tell us that while investment in individual venture capital deals is considered to have high risk relative to potential return combinations of deals i e venture capital portfolios were shown to produce superior risk adjusted returns in the market place further these results show that further combining these portfolios into larger portfolios i e funds of funds provides even greater excess returns over the market index thus plausibly explaining the fund of funds approach to venture capital investment taken by many institutional investors while the funds studied are relatively small and are either small business investment companies or business development companies they serve as a useful proxy for the organized venture capital industry despite the fact that the bulk of the funds in the industry are institutionally funded private closely held limited partnerships which do not trade continuously in an open market these results demonstrate to investors the magnitude of the differences in risk adjusted total return between publicly traded venture capital funds and growth oriented mutual funds on an individual fund basis they also demonstrate to investors the power of the fund of funds approach to institutional involvement in the venture capital business because such an approach produces better risk adjusted investment results for the institutional investor it seems to justify a greater flow of capital into the business from more risk averse institutional investment sources this may mean greater access to institutional funds for those seeking to form new venture capital funds for entrepreneurs seeking venture capital funds for their young companies it may also mean a lower potential cost of capital for the financing of business venturing from the viewpoint of public policy makers interested in facilitating the funding of business venturing it may provide insight regarding regulatory issues surrounding taxation and the barriers and incentives which affect venture capital investment

wage differentials employer size and unemployment the unique equilibrium solution to a game in which a continuum of individual employers choose permanent wage offers and a continuum of workers search by sequentially sampling from the set of offers is characterized wage dispersion is a robust outcome provided that workers search while employed as well as when unemployed the unique nondegenerate equilibrium distribution of wage offers is constructed for three cases 1 identical workers and employers 2 identical employers and an atomless distribution of worker supply prices and 3 identical workers and an atomless distribution of job productivities copyright 1998 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association