partner nationality and the structure performance relationship in strategic alliances the dramatic growth of global strategic alliances between firms is fundamentally reshaping the nature of international business indeed interfirm cooperation has become a crucial component of the pursuit of global competitive advantage yet such alliances are enormously complex to manage successfully in part because of the opportunity and incentive to cheat and profit at the partner s expense that is an inescapable part of these relationships consequently strategic alliances are frequently subject to high instability poor performance and premature dissolution thus an important question arises is it possible to promote more stable cooperation and higher alliance performance through a realignment of companies incentives this question is addressed empirically in the present paper using recent work in game theory which suggests that high performance is linked to specific elements of the alliance structure further this study applies insights from international business literature suggesting th

games with espionage abstract we consider normal form games in which two players decide on their strategies before the start of play and player 1 can purchase noisy information about his opponent s decisions concerning future response policies i e spy on his opponent we give a full characterization of the set of distributions over the players payoffs that can be induced by such equilibria as well as describe their welfare and pareto properties in 2 2 games we find three equilibrium phenomena i when the game is non degenerate the information purchased is independent of its cost the cost determines only whether information is purchased or not ii the player who spies treats his information as if it were deterministic even though it is correct only probabilistically and iii in chain store models espionage is used if and only if the perfect equilibrium payoff differs from the stackelberg equilibrium payoff with player 2 being the stackelberg leader

understanding corporate coherence theory and evidence abstract multiproduct firms are perceived to be coherent in their scope yet there is no strong theoretical foundations to explain coherence in modern industrial organization theory this paper shows that as u s manufacturing firms grow more diverse they maintain a constant level of coherence between neighboring activities this finding runs counter to the idea that firms with many activities are generally more incoherent a framework is then presented which appeals to the nature of enterprise learning path dependencies and the nature of the selection environment to explain the ubiquity of coherent diversifiers

technological accumulation diversification and organisation in uk companies 1945 1983 a survey of more than 4 000 significant innovations and innovating firms in the uk from 1945 1983 shows that the scope and organisation of technological activities vary greatly as functions of firms principal activities and size 1 technological opportunities and threats are greatest in firms in chemicals and engineering opportunities in such science based and specialist supplier firms in general emerge horizontally in related product markets and downstream in user sectors in scale intensive e g steel vehicles and supplier dominated e g printing construction firms opportunities tend to be upstream in related production technologies breakthrough innovations in science based firms also induce clusters of technological opportunities upstream for suppliers horizontally for partners and downstream for users their effective exploitation requires diversity of firms technological activities greater than that strictly required for current output 2 the nature of technological opportunities and of organisation for their exploitation also varies with firm size firms with fewer than 1 000 employees have major opportunities with specialised strategies in mechanical engineering and instruments the prevalence of broad front technological strategies and of divisionalisation increases sharply with firm size together with dependence on formal r and d activities the size of innovating divisions has diminished sharply over the period divisionalisation improves the goodness of fit between the core business of innovating divisions and the innovations themselves but 40 have remained consistently outside the core business of divisions 3 these findings help identify the key tasks of technological strategy in firms in different industries and of different sizes thus in large firms divisionalisation can create the small size of unit conducive to effective implementation but it cannot absolve central management from the continuous task of matching technological opportunities with organisational forms and boundaries

using electoral cycles in police hiring to estimate the effect of police on crime comment previous empirical studies have uncovered little evidence that police reduce crime possibly due to simultaneity problems this paper uses the timing of mayoral and gubernatorial elections as an instrumental variable to identify a causal effect of police on crime increases in the size of police forces are shown to be disproportionately concentrated in mayoral and gubernatorial election years increases in police are shown to substantially reduce violent crime but have a smaller impact on property crime the null hypothesis that the marginal social benefit of reduced crime equals the costs of hiring additional police cannot be rejected

the effect of police intelligence on group violence evidence from reassignments in sweden this paper isolates the causal effect of policing on group violence using unique panel data on self reported crime by soccer and ice hockey hooligans the problem of reverse causality from violence to policing is solved by two drastic reallocations of the stockholm sport intelligence and tactical unit to other activities following the 9 11 terrorist attack in september 2001 and the tsunami catastrophe in december 2004 difference in difference analysis reveals that stockholm related hooligan violence increased dramatically during these periods

termination outcomes of research alliances abstract we draw upon evolutionary economics and transaction cost economics to examine how alliance experience accumulation at the parent firm level and alliance features at the transaction level jointly and interactively shape the favorability of research alliances termination outcomes fifteen percent of the terminated alliances we examined were successful 34 were failures and 51 experienced an intermediate outcome in the form of contract expiration or unilateral withdrawal by a partner we find that the effect of partner specific experience on the favorability of termination outcomes is greater for non equity alliances than for equity structures affording stronger formal governance mechanisms other forms of experience such as general alliance experience or prior alliances in the same technological area as the focal agreement have no such favorable consequences for alliance termination the findings also indicate that alliance complexity adversely influences firms termination outcomes in alliances we therefore find evidence in partial support of both evolutionary and transaction cost based arguments for the explanation of termination outcomes in research alliances

interorganizational alliances and the performance of firms a study of growth and innovation rates in a high technology industry this paper investigates the relationship between intercorporate technology alliances and firm performance it argues that alliances are access relationships and therefore that the advantages which a focal firm derives from a portfolio of strategic coalitions depend upon the resource profiles of its alliance partners in particular large firms and those that possess leading edge technological resources are posited to be the most valuable associates the paper also argues that alliances are both pathways for the exchange of resources and signals that convey social status and recognition particularly when one of the firms in an alliance is a young or small organization or more generally an organization of equivocal quality alliances can act as endorsements they build public confidence in the value of an organization s products and services and thereby facilitate the firm s efforts to attract customers and other corporate partners the findings from models of sales growth and innovation rates in a large sample of semiconductor producers confirm that organizations with large and innovative alliance partners perform better than otherwise comparable firms that lack such partners consistent with the status transfer arguments the findings also demonstrate that young and small firms benefit more from large and innovative strategic alliance partners than do old and large organizations copyright 2000 john wiley sons ltd

agglomeration city size and crime this paper analyzes the relationship between crime and agglomeration where the land labor product and crime markets are endogenously determined our main theoretical findings are the following i better accessibility to jobs decreases crime in the short run but may increase crime in the long run ii the per capita crime rate increases with city size iii when allowing for endogenous policing lower commuting costs make the impact of police on crime more efficient

measuring innovative performance is there an advantage in using multiple indicators abstract the innovative performance of companies has been studied quite extensively and for a long period of time however the results of many studies have not yet led to a generally accepted indicator of innovative performance or a common set of indicators so far the variety in terms of constructs measurements samples industries and countries has been substantial this paper studies the innovative performance of a large international sample of nearly 1200 companies in four high tech industries using a variety of indicators these indicators range from r d inputs patent counts and patent citations to new product announcements the study establishes that a composite construct based on these four indicators clearly catches a latent variable innovative performance however our findings also suggest that the statistical overlap between these indicators is that strong that future research might also consider using any of these indicators to measure the innovative performance of companies in high tech industries

performance effects of added cultural distance in the path of international expansion the case of german multinational enterprises this paper contributes to the debate on the performance impact of added cultural distance in the multinational enterprise s mne s expansion path our research focuses on the ability of mnes to handle complexity associated with added cultural distance in international expansion and on the effect this may have on profitability we hypothesise that firms that make expansion moves involving a high level of added cultural distance per unit of time and those that expand in culturally distant countries in an irregular fashion that is with a higher variability will be less profitable we test these hypothesised relationships using detailed data on 2404 expansion moves undertaken by our panel of 91 german mnes whose expansion paths we tracked during periods ranging between 5 and 20 years

r d cooperation and failures in innovation projects empirical evidence from french cis data the second french community innovation survey cis indicates that 14 of rd collaborating firms had to abandon or delay their innovation projects due to difficulties in their partnerships an outcome which we term cooperation failures controlling for sample selection on the cooperation decision our estimates show that firms collaborating with competitors and public research organizations pros especially when they are foreign are more likely to delay or stop an innovation project because of difficulties encountered in their rd partnerships more surprisingly firms collaborating with their suppliers also face a higher risk of cooperation failures at least for pros firms can reduce the risk of cooperation failures through previous experiences in partnerships larger firms and group subsidiaries are less likely to face cooperation failures and so do firms in industries with a strong appropriability regime

the stability of joint ventures reciprocity and competitive rivalry the focus of the following empirical analysis is the influence of reciprocity and long term relationships on the stability of joint ventures these cooperative incentives are offset by industry structural conditions which may promote competitive rivalry among the partners to separate these effects on joint venture survival the hypothesized relationships are proxied by variables drawn from industry and questionnaire data and estimated under a hazard model specification a theoretical implication of the findings is to suggest a shift of attention from the transaction to the economic relationship as the unit of analysis copyright 1989 by blackwell publishing ltd

inward technology transfer and competitiveness the role of national innovation systems this paper examines the role of national innovation systems in the inward transfer of technology that has underpinned the transformation of japan and other east asian economies since 1945 the economies that have benefited most from inward technology transfer have national innovation systems that have strengthened their national absorptive capacity this capacity relies primarily on investments in scientific and technical training and on economic policies that enforce competition among domestic firms the particular channels for inward technology transfer the identity of any strategic industries targeted for public intervention and the overall level of a nation s trade restrictions are ail of secondary importance a central theme of global economic change during the postwar period has been the application in less developed countries of technologies developed within economically advanced regions this phenomenon underpinned the post 1945 transformation of japan and other east asian economies and influenced the reconstruction of western european economies after world war ii the application of externally developed technologies within latecomer economies is hardly unique to the postwar period however samuel slater s introduction of british textile manufacturing is but one example of inward technology transfer in the nineteenth century us economy and david 1992 traces the origins of patent monopolies to efforts by medieval european city states and nations to attract experts in industrial arts to practice their craft within these jurisdictions both international technology flows and government efforts to influence them for national competitive advantage thus have ample historical precedent several characteristics nevertheless distinguish the post 1945 era from earlier historical periods the influence of international technology transfer on national economic development has increased as the postwar development of such economies as taiwan and south korea has relied much less on natural resource endowments than nineteenth

entry into emergent and uncertain product markets the role of associative rhetoric we analyze how firms use media associative rhetoric in their decisions to enter emergent and uncertain product markets in the context of our study this type of rhetoric associates the logics of firms existing markets with the not yet legitimated logics of a newly emerging market our panel study shows that firms enter such markets faster when the associative rhetoric has higher versus lower volume positive versus negative tenor firms versus journalists analysts as the source of information and generalizations versus specific cases as the focus we discuss the implications of our findings for institutional theory and market entry

instabilities of strategic alliances an internal tensions perspective the instabilities of strategic alliances have been examined in the literature through a number of theoretical approaches alliance instabilities refer to major changes or dissolutions of alliances that are unplanned from the perspective of one or more partners although the literature identifies certain characteristics of strategic alliances that may lead to their unplanned dissolution the extent of our understanding of this subject appears to be fragmented and incomplete in this article we propose a comprehensive framework for adequately understanding alliance instabilities based on the notion of internal tensions we suggest that strategic alliances are sites in which conflicting forces develop and which can be viewed as being constituted by three key pairs of competing forces namely cooperation versus competition rigidity versus flexibility and short term versus long term orientation this tensions framework helps us in explaining the intrinsic vulnerability of alliances in terms of a wide range of internal contradictions and enables us to examine in an integrated manner the incidence dynamics and eventual dissipation of the inherent instabilities we discuss the interrelationships among the different internal tensions and their impacts on different types of strategic alliances we also examine the termination of alliances through mergers acquisitions and dissolution finally we suggest ways to empirically test the various ideas and propositions developed here and indicate directions for further research

gibrat s law and diversification this article presents an analysis of the growth patterns of the worldwide top 200 firms in the pharmaceutical industry a test of the gibrat s law of proportionate effect is performed and we find in line with previous literature a violation concerning the variance of growth using disaggregated data on sub markets we are however able to show that this violation can be completely accounted for by a diversification effect namely a scale relation between the number of sub markets in which a firm is active and its size to interpret these findings we propose a stochastic branching model of firm diversification consistent with a notion of cumulative corporate competences

selective intervention and internal hybrids interpreting and learning from the rise and decline of the oticon spaghetti organization infusing hierarchies with elements of market control has become a much used way of simultaneously increasing entrepreneurialism and motivation in firms however this paper argues that such internal hybrids particularly in their radical forms are inherently hard to successfully design and implement because of a fundamental incentive problem of establishing credible managerial commitments to not intervene in delegated decision making this theme is developed and illustrated using the case of the world leading hearing aids producer oticon in the beginning of the 1990s oticon became famous for its radical internal hybrid the spaghetti organization recent work has interpreted the spaghetti organization as a radical attempt to foster dynamic capabilities by organizational means neglecting however that about a decade later the spaghetti organization has given way to a more traditional matrix organization in contrast an organizational economics interpretation of oticon organizational changes is developed this lens suggests that a strong liability of the spaghetti organization was the above incentive problem frequent managerial meddling with delegated rights led to a severe loss of motivation and arguably caused the change to a more structured organization refutable implications are developed and the discussion is broadened to more general issues of economic organization

noncooperative versus cooperative r d with endogenous spillover rates this paper deals with a general version of a two stage model of r d and product market competition we provide a thorough generalization of previous results on the comparative performance of noncooperative and cooperative r d dispensing in particular with ex post firm symmetry and linear demand assumptions we also characterize the structure of profit maximizing r d cartels where firms competing in a product market jointly decide r d expenditure as well as internal spillover levels we establish the firms would essentially always prefer extremal spillovers and within the context of a standard specification derive conditions for the optimality of minimal spillover

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

organizational learning and diversification employing concepts of lateral and longitudinal learning we examined the dissolution of 462 expansions of dutch firms both acquisitions and new ventures we interpreted the endurance of an expansi

the bumpy road of technology partnerships understanding causes and consequences of partnership mal functioning abstract research on technological partnerships has traditionally sought explanation of their high failure rates in partner characteristics and relationship features this study introduces the notion of a bumpy road in technology partnerships which refers to undesired outcomes such as partnership mal functioning and instability to the degree to which innovation activities are hampered we explain how firm level strategies can reduce the probability of a bumpy road in partnerships we also assess the impact of this bumpy road on innovative performance we find that firms that excel in diversification of external activities in terms of different types of partners perform best moreover a persistent product oriented innovation strategy geared at developing new products new markets or higher product quality will yield more stable partnership outcomes our results confirm that engagement in partnerships is beneficial for innovative performance however firms that experienced a bumpy road in their technological partnerships have to pay a price in terms of a negative effect on their innovative performance

when competition eclipses cooperation an event history analysis of joint venture failure why do so many joint ventures fail despite the fact that their success is the exception rather than the rule the literature on why joint venture performance has been so poor remains fragmentary we address this issue adopting a transaction cost economics perspective and modeling joint ventures as governance structures that blend the advantages and drawbacks of both markets and hierarchies using a data base on electronics industry ventures and event history analysis we identify several predictors of joint venture failure and test for their influences a key finding is that the presence of competition between joint venture partners outside of the agreement significantly impairs chances for the operation s chance of survival we also find clear evidence that the failure rate of joint ventures is nonmonotonic rising to a peak in the middle term and then declining finally we compare and contrast predictors of terminations due to failure to those due to acquisition of the joint venture by one of its partners our overall conclusions highlight implications for strategic choice theory building and the management of joint ventures

induction and the ramsey policy abstract we examine the classic policy problem of ramsey 1927 modeled as an infinitely repeated game stokey 1991 between the government and the private sector where the private sector consists of a continuum of identical households we assume that the private sector is boundedly rational in the sense that its behavior is dictated by a forecasting scheme which is inductive instead of assigning a particular forecasting scheme to the players we let each player choose one from a class of inductive forecasting schemes by focusing on the actions dictated by forecasting schemes selected by the player we identify the ramsey policy as the unique solution of the game where players do not discount future payoffs when players discount future payoffs the ramsey policy is the only solution which is robust against small changes in the discount factor in the neighborhood of one kalai samet and stanford 1988 if we modify the model so that the private sector incurs memory costs in forecasting the action of the government we obtain that the only equilibrium outcome is to play the ramsey outcome every period

competitive pricing in markets with different overhead costs concealment or leakage of cost information this paper experimentally investigates how leaders and followers in a duopoly set prices for two product markets that have different overhead costs in a fully crossed two by two design we manipulate the participants private cost report quality as either low or high representing the extent to which these reports reveal that product markets have different overhead costs we show that when only the leader is given a high quality cost report private cost information of higher quality is better incorporated into market prices that are observable to participants both the leader and follower improve in profits and their prices better reflect the differences in overhead costs because the follower infers information from the leader s prices information leakage in contrast when only the follower receives a high quality cost report the leader s profits and prices do not improve this occurs because the follower conceals cost information when the leader has a low quality cost report

a penny for your quotes patent citations and the value of innovations the use ofpatents in economic research has been seriously hindered by the fact that patents vary enormously in their importance or value and hence simple patent counts cannot be informative about innovative output the purpose of this article is to put forward patent counts weighted by citations as indicators of the value of innovations thereby overcoming the limitations of simple counts the empirical analysis of a particular innovation computed tomography scanners indeed shows a close association between citation based patent indices and independent measures of the social value of innovations in that field moreover the weighting scheme appears to be nonlinear increasing in the number of citations implying that the informational content of citations rises at the margin as in previous studies simple patent counts are found to be highly correlated with contemporaneous rd however here the association is within afield over time rather than cross sectional

the duality of collaboration inducements and opportunities in the formation of interfirm linkages i argue that the linkage formation propensity of firms is explained by simultaneously examining both inducement and opportunity factors drawing upon resource based and social network theory literatures i identify three forms of accumulated capital technical commercial and social that can affect a firm s inducements and opportunities to form linkages firms possessing these capital stocks enjoy advantages in linkages formation however firms lacking these accumulated resources can still form linkages if they generate a radical technological breakthrough thus i identify paths to linkage formation for leading as well as peripheral firms i test these arguments with longitudinal data on technical collaborative linkages in the global chemicals industry copyright 2000 john wiley sons ltd

product innovation product market competition and persistent profitability in the u s pharmaceutical industry increasingly strategy scholars are exploring the relationships between innovation competition and the persistence of superior profits sustained high profitability may result when a firm repeatedly introduces valuable innovations that service previously unmet consumer demands while the returns to the firm from each innovation may erode over time innovation ensures that overall the firm maintains a high performance position at the same time sustained high profitability may also accrue to firms that innovate less often but effectively avoid the competition that otherwise erodes high returns this paper elaborates these relationships before presenting an empirical analysis of the effects of differential innovative propensities and differential rates of competition on pharmaceutical firms abilities to sustain profit outcomes that are above those earned by competing firms the analysis which is situated within the u s pharmaceutical industry finds support for the expected relationship between high innovative propensity and sustained superior profitability but no support for a link between persistence and the ability to avoid competition copyright 1999 john wiley sons ltd

information leakage forces cooperation abstract this paper considers a two person repeated game in which there is a small probability of espionage i e that one or both of the players will be informed of the other s supergame strategy and have a chance to revise his strategy on the basis of this information before the game begins it is shown that in such a game any subgame perfect equilibrium pair of payoffs is pareto efficient provided that the probability of espionage is sufficiently small different from preceding studies the present paper assumes neither collective deviation nor bounded rationality in deriving the result

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

towards an economic theory of the multiproduct firm this paper outlines a theory of the multiproduct firm important building blocks include excess capacity and its creation market imperfections and the peculiarities of organizational knowledge including its fungible and taut character a framework is adopted in which profit seeking firms are seen to diversify in order to avoid the high transactions costs associated with using various markets to trade the services of various specialized assets neoclassical explanations of the multiproduct firm are shown to be seriously deficient

public order and private payments evidence from the swedish soccer league abstract should organizers of events share the associated costs of maintaining public order we address this question by using unique data from the swedish soccer league where co payment for police were introduced for some clubs only the difference in differences analysis shows that co payments increased private guards by 40 and suggests a reduction of unruly behavior by 20 the results are consistent with our model where co payments alleviate under provision in efforts by organizers to combat problems such as hooliganism due to externalities and free riding on police services the model also sheds light on the critique that co payments could lead financially constrained organizers to provide less security