an emerging paradigm or just another trajectory understanding the nature of technological changes using engineering heuristics in the telecommunications switching industry abstract the theoretical literature on technological changes distinguishes between paradigmatic changes and changes in trajectories recently several scholars have performed empirical studies on the way technological trajectories evolve in specific industries often by predominantly looking at the artifacts much less if any empirical work has been done on paradigmatic changes even though these have a much more profound impact on today s industry it follows from the theory that such studies would need to focus more on the knowledge level than on the artifact level raising questions on how to operationalize such phenomena this study aims to fill this gap by applying network based methodologies to knowledge networks represented here by patents and patent citations the rich technological history of telecommunications switches shows how engineers in the post war period were confronted with huge challenges to meet drastically changing demands this historical background is a starting point for an in depth analysis of patents in search of information about technological direction technical bottlenecks and engineering heuristics we aim to identify when such changes took place over the seven different generations of technological advances this industry has seen in this way we can easily recognize genuine paradigmatic changes compared to more regular changes in trajectory

the banzhaf index in complete and incomplete shareholding structures a new algorithm abstract in this global world many firms present a complex shareholding structure with indirect participation such that it may become difficult to assess a firm s controllers furthermore if there are numerous dominant shareholders the control can be shared between them determining who has the most influence is often a difficult task to measure this influence game theory allows the modeling of voting games and the computing of the banzhaf index this paper firstly offers a new algorithm to compute this index in all structures and then suggests some modelisations of the floating shareholder then our model is applied to a real case study the french group lafarge this exemplary case demonstrates how the float s structure and hidden coalition can impact the power relationship between dominant shareholders

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

organizational efficiency and monopoly power the case of french industrial groups abstract in this paper we examine the respective roles of efficiency and of market power considerations in explaining why industrial groups are the predominant form of organization in specific industries our econometric analysis of french industrial groups suggests that administrative and organizational efficiency is an adequate explanation for the existence of these groups and that rivalry between groups differently integrated and diversified is more likely to be the case than collusion

voting power in the european union enlargement abstract the shapley shubik power index in a voting situation depends on the number of orderings in which each player is pivotal the banzhaf power index depends on the number of ways in which each voter can effect a swing if there are n players in a voting situation then the function which measures the worst case running time for computing these indices is in o n 2 n we present a combinatorial method based in generating functions to compute these power indices efficiently in weighted double or triple majority games and we study the time complexity of the algorithms moreover we calculate these power indices for the countries in the council of ministers of the european union under the new decision rules prescribed by the treaty of nice

prospective analysis of technological innovation systems identifying technological and organizational development options for biogas in switzerland abstract in this article we put forward a concept for the identification and analysis of future development options of technological innovation systems the key element of our approach the so called variation analysis is a methodology to identify coherent socio technical and organizational variants within a specific innovation field consistent combinations of these two dimensions may be interpreted as nuclei for alternative future developments of innovation systems the method may be used in discursive foresight processes to inform strategy formulation of firms or policy makers who see a utility in furthering the innovation field the paper has a focus on developing the theoretical background and the analytical structure of the methodology empirically we illustrate the method for the innovation system of biomass digestion in switzerland

the triple helix an evolutionary model of innovations abstract the lock in model by arthur arthur w b 1988 competing technologies in dosi g freeman c nelson r silverberg g soete l eds technical change and economic theory pinter london pp 590 607 can be extended to the case of two and even three sources of random variation thus one can model a triple helix of university industry government relations in the case of two sources the stabilization of a technological trajectory is enhanced while in the case of three a complex regime can be generated conditions for lock in lock out return to equilibrium substitution etc are specified in relation to the assumed complexity of the dynamics under study and with reference to the stage of development that is before or after lock in some normative implications of the triple helix model of innovations can be specified

sovereign insolvency procedures a comparative look at selected proposals abstract the most practicable short term approaches for sovereign debt restructuring would include a code of conduct voluntary approach and collective action clauses contractual approach in the medium term a sovereign insolvency procedure statutory approach may have an important role to play because it would be a comprehensive instrument designed to coordinate different creditor groups prior to and during a debt crisis this paper provides a survey of six comprehensive policy proposals for a sovereign bankruptcy procedure it points to approaches that could improve existing proposals and creates a basis for new proposals which could prove conducive to reaching political consensus

corporate cross ownership and market aggregates oslo stock exchange 1980 1990 abstract corporate cross ownership results in double counting of assets in the market s valuation of total equity this paper is the first to use firm specific data to measure the resulting bias in market capitalization market portfolio return capital structure and the p e ratio based on the population of firms on the oslo stock exchange we found substantial distortions of market aggregates the average size of the equity market was overstated by 20 financial leverage was underestimated by 7 and the market portfolio return was underestimated by 31 double counted earnings offset the bias in market capitalization leaving the p e almost undistorted

measuring the knowledge base of an economy in terms of triple helix relations among technology organization and territory can the knowledge base of an economy be measured in this study we combine the perspective of regional economics on the interrelationships among technology organization and territory with the triple helix model and offer the mutual information in three dimensions as an indicator of the configuration when this probabilistic entropy is negative the configuration reduces the uncertainty that prevails at the systems level data about more than a million dutch companies are used for testing the indicator the data contain postal codes geography sector codes proxy for technology and firm sizes in terms of number of employees proxy for organization the configurations are mapped at three levels national nuts 1 provincial nuts 2 and regional nuts 3 the levels are cross tabled with the knowledge intensive sectors and services the results suggest that medium tech sectors contribute to the knowledge base of an economy more than high tech ones knowledge intensive services have an uncoupling effect but less so at the high tech end of these services

sovereign debt restructuring messy or messier ever since the mexican asian and russian crises of the mid 1990 s efforts have been underway to find means for more effective prevention and resolution of currency financial crises much has been done with respect to crisis prevention exchange rate flexibility is much greater than it was there is increased transparency and improved oversight of the financial system and greater attention is paid to unsustainable policy stances work continues to strengthen economies immunity to crises however no matter how much is done there will inevitably be a crisis or crises much has already been learned with respect to crisis resolution and the international financial community is better equipped to cope with crises than was the case earlier but as with prevention more can be done one item on the agenda which should contribute both to prevention and to resolution is dealing with unsustainable debt burdens of sovereign nations two of the hallmarks of most of the 1990 s crises were first the importance of private capital flows and their reversals in triggering the crises and in intensifying their severity and second the involvement of the financial systems in them the countries afflicted by these crises were ones that had succeeded in raising per capita incomes and rates of economic growth that success hinged in significant part on their having put in place economic policies that are conducive to economic growth including a predictable legal framework respect for property rights openness to the international economy and much more the fact that the policy framework was generally appropriate implied among other things that there were relatively high real returns to investment in these economies that is of course the main reason why private investors were interested in them at the same time capital inflows permitted more rapid development than would otherwise be possible these associations of high real returns growth and appropriate policy stances continue for these reasons there is typically a strong stake for emerging markets to maintain international creditworthiness and policymakers go to great lengths to maintain their international reputations and market standings an efficient private international capital market benefits both developing countries which are thereby able to invest more than domestic savings at high real rates of return and investors in high income countries who can realize higher real returns and greater portfolio diversification than they could achieve without these investment opportunities because countries are sovereign their high stakes in maintaining creditworthiness are crucial for attracting international capital flows this is because foreign creditors do not have the rights they do in domestic courts and hence must have other protections against default on the part of borrowers this is especially true for sovereign borrowers international lenders to private entities in emerging markets normally have the same protection as is afforded to domestic lenders for sovereign borrowing however the chief protection foreign creditors have is the losses that would accrue to the sovereign debtor both directly through the future reduction in access to international credit markets and through the effects on private economic activity of a sovereign default in the event of discussants guillermo calvo interamerican development bank and university of maryland morris goldstein institute for international economics michael mussa institute for international economics ann harrison university of california berkeley

business groups in a market economy abstract the purpose of this paper is to examine the nature and significance of the interfirm relationship called the business group first the nature of the japanese business group is discussed it is then pointed out that the business group is not a phenomenon unique to japan and an effort is made to explain the significance of the business group in the context of a market economy using the williamsonian approach to questions of internal organization and the market finally the relationship between the input output relationship of the firms and their group affiliation is tested

knowledge and urban economic development an evolutionary perspective knowledge is considered as a main source of economic growth for nations and regions it is the basis for technological development and for increasing the productivity of capital and labour this pa

effect of partial cross ownership on supply chain performance abstract partial cross ownership pco in a dyad supply chain refers to a situation where each firm holds a portion of its partner s shares we study this topic in push and pull supply chains and prove that neither the supply chain s nor any member s profit changes with the percentage of the leader s shares the follower holds however while the profits of the chain and the leader increase with the percentage of the follower s shares held by the leader the follower s profit does not necessarily increase or decrease as a result both partners can always achieve a win win by setting a proper price for transferring the follower s shares to the leader moreover the equilibrium wholesale price may be greater than the retail price in the push chain but less than the marginal production cost in the pull chain contradicting the usual results found in the literature we also derive a necessary and sufficient condition on the structure of pco allowing a pull chain to perform better than a push one this extends cachon 2004 s result that a pull chain always performs better than a push one without pco finally pco can coordinate a chain if and only if each one holds half of the other s shares

risk capital financing and the separation of ownership and control in business groups abstract this paper analyses business groups composed of legally independent firms connected through a network of cross shareholdings a model which allows to calculate the value of the firms of a group and the integrated ownership shares held by an outside stockholder is described a taxonomy for the collection of risk capital generalizing the one which applies for a single firm is proposed the connection between the process of raising risk capital and the separation of ownership from control in business groups is demonstrated and given a formal mathematical description empirical evidence relating to the amount of risk capital collected by italian business groups in the 80s and to the extent of the divorce between ownership and control is also provided

cross holdings estimation issues biases and distortions cross holding occurs when listed corporations own securities issued by other corporations we analyze the effect of cross holdings on market capitalization and return measures as well as implications for econometric testing of asset pricing theories we show that cross holdings generally distort standard market return and risk measures the magnitudes of such distortions are calculated for simulated economies by using a variety of crossholding patterns in addition cross holdings are shown to induce nonstationarity in the covariance matrix of security returns we examine the effect of this nonstationarity for estimating efficient frontiers and factor structures we also discuss the implications for risk return estimates in equilibrium asset pricing models article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

a complexity approach to innovation networks the case of the aircraft industry 1909 1997 successful innovation depends on complementary competencies in networks of producers users and governmental bodies the effects of complementarities within innovation networks are modeled using kauffman s nk model from the model the hypothesis is derived that producers users and governments self organize in specialized innovation networks producers of particular technologies increasingly focus on particular user markets in particular countries data on 863 aircraft models 1909 1997 show these strong specialization patterns in the post war period policy implications are indicated emphasizing the recent rise in transnational collaborations which can be understood as a means of escaping historical specialization patterns

quantifying the coordinated effects of partial horizontal acquisitions abstract recent years have witnessed an increased interest by competition agencies in assessing the competitive effects of partial acquisitions we propose an empirical structural methodology which can deal with settings involving all types of owners and ownership rights to quantify the coordinated effects of partial horizontal acquisitions on differentiated products industries by evaluating the impact of such acquisitions on the minimum discount factors for which coordination can be sustained we also provide an empirical application of the methodology to several acquisitions in the wet shaving industry that give rise to cross and common ownership structures the results are as follows i the incentives to coordinate of the firms that the acquiring party is pre acquisition able to influence are non decreasing with any acquisition ii the incentives to coordinate of the acquired firm are non decreasing with acquisitions involving full or partial both financial and corporate control rights but non increasing with acquisitions involving full or partial solely financial rights and iii the incentives to coordinate of the remaining firms in the industry are non increasing with any acquisition this implies that the coordinated effects of partial horizontal acquisitions are in general ambiguous which illustrates the importance of an empirical structural methodology

optimal diversity increasing returns versus recombinant innovation abstract choices regarding diversity play an important role in economics and innovation management but often remain implicit once made explicit the objectives of efficiency and diversity are usually posed as in conflict as efficiency relates positively and diversity negatively to various increasing returns to scale in markets such a perspective however neglects the benefits of diversity in terms of realizing system improvements through recombinant innovation or spillovers the latter implies a contribution of diversity to long term efficiency dominant economic approaches that address diversity such as option value and real options theories regard benefits of diversity as exogenous this paper proposes a simple model of variable endogenous diversity to analyse the optimal balance between increasing returns to scale and recombinant innovation it is discussed under which conditions one of four solutions is optimal complete specialization regardless of which option complete specialization in one specific option symmetric diversity perfect balance and asymmetric diversity the results give rise to a number of policy insights

ownership concentration and the theory of the firm a simple game theoretic approach a model of the shareholder constraint is described in terms of the relationship between shareholding concentration and corporate control a unified perspective including takeovers as a special case is developed whereby leading coalitions are costly to form and possess power in a shareholder voting game control is defined in terms of power indices for simple games a static theory of the firm is developed in terms of the optimal formation of controlling coalitions a dynamic theory of an owner controlled firm is described which explains increasing shareholding dispersion accompanying growth i introduction capital market constraints on managerial discretion are usually described in terms of two mechanisms i the ability of large shareholders to organise their voting power to enforce wealth maximisation and ii the threat of takeover following a fall in the share price most writers have tended to emphasise the takeover mechanism on the assumption that the capacity of shareholders to organise voting coalitions is weak however as aoki 1983 has recently argued the trend towards greater shareholding concentration with the growing importance of institutional shareholders gives a greater role to the first mechanism large shareholders cannot easily sell their holdings without adversely affecting the share price and therefore become locked in to dealing directly with management despite its central role the treatment of share concentration has usually been ad hoc most writers have taken low concentration as implying a loose constraint or management control by making it difficult for shareholders to organise by contrast a tight constraint ownership control prevails where there is at least a sizeable minority holding however little attention has been this paper and leech 1987 are based on warwick economic research paper no 262 ownership concentration and the theory of the firm a simple game theoretic approach applied to us corporations in the 1930s july 1985 i wish to thank peter law for helpful discussions of the ideas contained in them i am also grateful for comments to john cable keith cowling paul geroski donald hay two anonymous referees and participants in a staff seminar at warwick university aoki concludes that the tendency toward a managerial revolution in the sense of wider dispersal of shareholders control is now definitely reversed he suggests that the takeover mechanism is losing its role in disciplining management which fails to maximise share values rather it is becoming a means for large acquisition minded corporations to take over well managed small and medium firms

market potential and the rise of us productivity leadership abstract today s globalization driven by lower barriers to trade has increased market potential for many nations and led to gains in gdp per capita we test whether this was true in the first wave of globalization by constructing market potential measures for a sample of 27 countries in 1900 and 1910 based on a general equilibrium model of production and trade cross sectional estimates suggest that market potential was an economically significant determinant of gdp per capita at this time to assess welfare effects we then study the general equilibrium impact of raising market potential by eliminating international borders in a quantitative counterfactual calculation for 1900 there are significant gains in real income per capita for all nations we use us per capita output as a benchmark since it attained leadership in this variable from the late 19th century and the literature frequently attributes this to its relatively large domestic market a market unconstrained by trade costs associated with international borders because market potential was already near that of the us the largest european countries do not entirely close their per capita income gaps with the us after removing all border barriers to trade within europe or even globally on the other hand many small european countries could have done so

financial networks and contagion we study cascades of failures in a network of interdependent financial organizations how discontinuous changes in asset values e g defaults and shutdowns trigger further failures and how this depends on network structure integration greater dependence on counterparties and diversification more counterparties per organization have different nonmonotonic effects on the extent of cascades diversification connects the network initially permitting cascades to travel but as it increases further organizations are better insured against one another s failures integration also faces trade offs increased dependence on other organizations versus less sensitivity to own investments finally we illustrate the model with data on european debt cross holdings jel d85 f15 f34 f36 f65 g15 g32 g33 g38 globalization brings with it increased financial interdependencies among many kinds of organizations governments central banks investment banks firms etc that hold each other s shares debts and other obligations such interdependencies can lead to cascading defaults and failures which are often avoided through massive bailouts of institutions deemed too big to fail recent examples include the us government s interventions in aig fannie mae freddie mac and general motors and the european commission s interventions in greece and spain although such bailouts circumvent the widespread failures that were more prevalent in the nineteenth and early twentieth centuries they emphasize the need to study the risks created by a network of interdependencies understanding these risks is crucial to designing incentives and regulatory responses which defuse cascades before they are imminent in this paper we develop a general model that produces new insights regarding financial contagions and cascades of failures among organizations linked through a network of financial interdependencies organizations values depend on each other e g through cross holdings of shares debt or other liabilities if an

knowledge and competitive advantage the coevolution of firms technology and national institutions this issue of jibs offers reviews of two books that analyse the dynamic interaction between the business environments and business strategies in very different ways the institutional underpinnings for business strategies are a major research topic for comparative management aiming to explain why in different contexts firms pursue different strategies and with different implications for performance j peter murman in knowledge and competitive advantage takes a historical perspective focusing on the co evolutionary processes between national innovation systems business strategies and performance this books thus adds to the industry level longitudinal research reviewed in jibs no 4 2003 tom murtha et al s managing new industry creation and david mckendrick et al s from silicon valley to singapore

the dynamics of innovation from national systems and mode 2 to a triple helix of university industry government relations abstract the triple helix of university industry government relations is compared with alternative models for explaining the current research system in its social contexts communications and negotiations between institutional partners generate an overlay that increasingly reorganizes the underlying arrangements the institutional layer can be considered as the retention mechanism of a developing system for example the national organization of the system of innovation has historically been important in determining competition reorganizations across industrial sectors and nation states however are induced by new technologies biotechnology ict the consequent transformations can be analyzed in terms of neo evolutionary mechanisms university research may function increasingly as a locus in the laboratory of such knowledge intensive network transitions

corporate groups dual class shares and the value of voting rights abstract it is known that deviating from the one share one vote principle through the issue of non voting stock increases the value of outsiders voting rights we argue that the creation of a business group is another way to deviate from one share one vote and we show that it produces a larger voting share premium in holding companies as a consequence having both subsidiaries and non voting stock produces a multiplier effect on the voting premium the puzzling size of the premium in italy was never related to the interaction of pyramiding and non voting stock our empirical study confirms that the premium is larger for holding companies issuing non voting stock than for similar operating companies without non voting equity

the direct and relative effects of preferential market access abstract the proliferation of preferential trade agreements has resulted in a complex system of preferences in which market access conditions are often discriminatory in this paper we investigate how market access conditions have evolved between 2000 and 2009 and how this has affected international trade our results show that the proliferation of preferential access has increased bilateral trade not only due to lower tariffs but also because preferential access often resulted in higher preferential margins vis a vis foreign competitors the results also indicate that the evolution of the system of preferences has been disadvantageous for countries that did not actively engage in forming new trade agreements