the automobile technological systems an empirical analysis of four european countries the aim of this paper is to study the automobile industry of the most important european countries france germany great britain and italy from a sectoral system perspective the main relationships within and between the building blocks constituting the automobile technological system are mapped and evaluated both in cross sectional and in temporal terms the importance of the sectoral ts as the unit of our analysis appears evident at both levels some general sectoral properties emerge which however hold in the four countries to a different extent thus suggesting how the institutional set up works as a differentiating element a sustained process of change in the various elements of the automobile ts is detected nevertheless resulting in a relatively stable path of development the countries considered reveal different patterns of motor vehicles trade specialisation in different geographical areas with changes over time also foreign direct investments show the existence of very different trajectories and outward inward balances

a model of product line design and introduction sequence with reservation utility abstract cannibalization is a major concern for a firm when designing a product line in addition external options from outside the firm s product line may also play a significant role in this paper we investigate the impact of external options represented by reservation utility on product line design and introduction sequence we find that a heterogeneous reservation utility defines the relative attractiveness of segments and corresponding product line b reservation utility makes it more favorable to introduce products sequentially rather than simultaneously c aggregating segments is an effective way to mitigate cannibalization when it becomes too difficult to manage with different values of reservation utility across multiple segments and d introducing products in a non monotone order of quality can improve profit from simultaneous introduction when the value of reservation utility of a middle segment is particularly high

the new institutional economics this outstanding book presents new original contributions from some of the world s leading economists including ronald coase douglass c north masahiko aoki oliver e williamson and harold demsetz it demonstrates the extent and depth of the new institutional economics research programme which is having a worldwide impact on the economics profession

commonality in product design cost saving valuation change and cannibalization abstract offering a variety of products is important for a firm to attract different consumer segments however high product variety increases production and distribution costs modular product design and parts commonality are approaches used to counter this trend in cost and still offer a variety of products this paper develops a model to examine when modular products should be introduced and how much modularity to offer the model looks at a market consisting of a high segment and a low segment customers choose the product that maximizes their surplus which is defined as the product s utility minus its price presence of commonality affects the utility of a product greater commonality decreases production cost but makes the products more indistinguishable from one another this makes the product more desirable for the low segment but less desirable for the high segment the firm s objective is to design the products and set the prices so as to maximize its profit

trade finance specialization and synchronization i investigate the determinants of business cycle synchronization across regions the linkages between trade in goods financial openness specialization and business cycle synchronization are evaluated in the context of a system of simultaneous equations the main results are as follows i specialization patterns have a sizable effect on business cycles most of this effect is independent of trade or financial policy but directly reflects differences in gdp per capita ii a variety of measures of financial integration suggest that economic regions with strong financial links are significantly more synchronized even though they also tend to be more specialized iii the estimated role of trade is closer to that implied by existing models once intra industry trade is held constant the results obtain in a variety of data sets measurement strategies and specifications they relate to a recent strand of international business cycle models with incomplete markets and transport costs and on the empir

international business cycle spillovers since the 1870s this article considers the evolution of international business cycle interdependencies among 27 developed and developing countries since the beginning of 1870s utilizing the generalized vector autoregressive var based spillover index of diebold and yilmaz 2012 which allows the construction of a time varying measure of business cycle spillovers we find that on average 65 of the forecast error variance of the 27 countries business cycle shocks is due to international spillovers however the magnitude of international business cycle spillovers varies considerably over time there is a clear increasing trend since the end of world war ii and until the mid 1980s after that international business cycle interdependencies declined during the period that was dubbed the great moderation and stabilized around the beginning of the twenty first century during the great recession of 2008 2009 international business cycle spillovers increased to unprecedented levels finally developed countries are cons

intersectoral innovation flows and national technological systems network analysis for comparing italy and germany abstract the paper compares the innovative structure and performance of italy and germany by using the concept of the technological system which is defined as the result of the interaction of four different components the industrial the innovative the commercial domestic and foreign markets and the institutional sub systems the analysis of the intersectoral innovation flows within the two national technological systems is based on an input output database rearranged in vertically integrated sectors specific hypotheses have been formulated and valid proxies for the variables studied have been used the final results have been obtained by using network analysis methodology and indicators this called for a dicotornisation of the original matrices these results take into account separately the existing differences between italy and germany in both absolute terms dimension effect and relative terms proportion effect the paper shows that germany is characterised by a higher level of systemic connection both in absolute and generally in relative terms the italian technological system seems to be segmented in a dualistic structure where few high tech sectors co exist along with a pool of traditional ones rather peripheral in the innovation flow network the german system on the contrary appears to be homogeneous with a more evenly distributed structure of intersectoral innovation flows the paper concludes by considering the effects of the introduction of other sub systems namely foreign market and public intervention while the former introduces further elements of differentiation between italy and germany the latter seems to perform a similar role in both systems

global business cycles convergence or decoupling we analyze the evolution of the degree of global cyclical interdependence over the period 1960 2008 using a dynamic factor model we decompose macroeconomic fluctuations in output consumption and investment into a global factor factors specific to country groups and country specific factors we find that during 1985 2008 there is some convergence of business cycle fluctuations among industrial economies and among emerging market economies surprisingly there is a concomitant decline in the relative importance of the global factor we conclude that there is evidence of business cycle convergence within each of these two groups of countries but divergence or decoupling between them

volatility transmission in emerging european foreign exchange markets abstract this paper studies the dynamics of volatility transmission between central european ce currencies and the eur usd foreign exchange using model free estimates of daily exchange rate volatility based on intraday data we formulate a flexible yet parsimonious parametric model in which the daily realized volatility of a given exchange rate depends both on its own lags as well as on the lagged realized volatilities of the other exchange rates we find evidence of statistically significant intra regional volatility spillovers among the ce foreign exchange markets with the exception of the czech and prior to the recent turbulent economic events polish currencies we find no significant spillovers running from the eur usd to the ce foreign exchange markets to measure the overall magnitude and evolution of volatility transmission over time we construct a dynamic version of the diebold yilmaz volatility spillover index and show that volatility spillovers tend to increase in periods characterized by market uncertainty

business cycle transmission from the us to germany a structural factor approach abstract this paper investigates the transmission of us macroeconomic shocks to germany using a large dimensional structural dynamic factor model this framework allows us to investigate many transmission channels simultaneously including new channels such as stock markets foreign direct investment bank lending and the confidence channel we find that us shocks affect the us and germany largely symmetrically trade seems to be the most relevant transmission channel monetary policy reactions to strong price movements seem to play a role as well no clear conclusion can be drawn yet on the role of financial markets and the confidence channel negative domestic influences apparently more than offset positive us influences in the german economy between 1995 and 2000 but the us recession in 2001 appeared to be the main culprit in the german slump

market segmentation self selection and product line design the purpose of this paper is to develop a theory of market segmentation based on consumer self selection the extant theory is based on the third degree price discrimination model of pigou central assumptions of which are that the firm can directly address individual segments and isolate them by using consumer self selection i am relaxing these assumptions in the context of a monopolist designing a product line i show that this relaxation has significant implications for how the products and prices are chosen and what they look like in particular segments may be aggregated even though there are no economies of scale furthermore consumer self selection enables us to model cannibalization and competition among firms

the german r d system in transition empirical results and prospects of future development abstract this paper deals with the effects of german unity on the st the rd the importance of industrial research and development and their major adjustment problems and innovation dynamics and policy solutions usually innovation is an evolutionary process the actual german case is a revolutionary one innovation research has shown that crises and external shocks stimulate not only innovation but also structural change this is the main topic of the paper because of lack of an appropriate theory this paper mainly describes this process against the background of an incomplete and qualitatively unsatisfactory empirical basis as from the end of 1990 and analyses some of its driving forces and restricting conditions

the nature of long run technological change innovation evolution and technological systems abstract the aim of this paper is to define the concept of technological system as a useful tool for analysing the technological performance of an economy in order to deal with system openness and related concepts the main methodological issues are presented paying particular attention to the evolutionary methodological foundations of the process of technological change then the main building blocks of a technological system and its dynamics are analyzed in order to highlight the relevant features of this approach an empirical comparison between german and italian technological systems is then performed

accounting for core and extra core relationships in technological systems a methodological proposal abstract the paper proposes a new intersectoral methodology to measure the core relationships of a technological system that is the relationships of its private business core pbc and to integrate them with a consistent analysis of its extra core relationships that is between the pbc and the public and the foreign sub system although more demanding in terms of data referring to sectoral r d financing rather than to sectoral r d expenditure and differentiating the diffusion channels which approximate these relationships accordingly turns out to be more accurate in methodological terms and more powerful in terms of applications in particular as far as network analysis indicators are concerned an illustrative application for 5 ts is provided with respect to 1985 and important insights are obtained about how to compare the structure of the different ts sub systems although to be further explored in more extended and updated applications these insights have to be considered as pros along with the cons the methodology we propose inevitably entails

durable goods monopolists rational consumers and improving products we consider the case of a monopolist supplying an improving durable product to a population that is heterogeneous in its valuation of product quality in a two period framework we show that if consumers expect the product to improve in present value terms then intertemporal discrimination might result in the first period marginal consumer being left with zero surplus and some higher end consumers postponing purchase the resulting trajectories for quality and price do not constitute a subgame perfect equilibrium one of our conclusions is that the logic of profit maximization in the context of rational consumer choice imposes a demand side constraint on the rate of product improvement we also emphasize the disequilibrium consequences of improving a product so rapidly that high end consumers are tempted to wait for a future new and improved version finally the formulation adopted in the paper may be useful to understand observed differences in product improvement rates in different markets

exporting recessions international links and the business cycle abstract empirical evidence of decoupling typically focuses on declining business cycle correlations at low frequencies at higher frequencies business cycles strongly co move during recessions but are largely independent during non recessionary periods

business cycle synchronization during us recessions since the beginning of the 1870s this paper examines the synchronization of business cycles across the g7 countries during us recessions since the 1870 s using a dynamic measure of business cycle synchronization results depend on the globalisation period under consideration on average us recessions have significantly positive effects on business cycle co movements only in the period following the breakdown of the bretton woods system of fixed exchange rates while strongly decoupling effects among the g7 economies are documented during recessions that occurred under the classical gold standard during the 2007 2009 recession business cycles co movements increased to unprecedented levels

how does globalization affect the synchronization of business cycles this paper examines the impact of rising trade and financial integration on international business cycle comovement among a large group of industrial and developing countries the results provide at best limited support for the conventional wisdom that globalization has increased the degree of synchronization of business cycles the evidence that trade and financial integration enhance global spillovers of macroeconomic fluctuations is mostly limited to industrial countries one striking result is that on average cross country consumption correlations have not increased in the 1990s precisely when financial integration would have been expected to result in better risk sharing opportunities especially for developing countries this abstract was borrowed from another version of this item

measuring financial asset return and volatility spillovers with application to global equity markets we provide a simple and intuitive measure of interdependence of asset returns and or volatilities in particular we formulate and examine precise and separate measures of return spillovers and volatility spillovers our framework facilitates study of both non crisis and crisis episodes including trends and bursts in spillovers and both turn out to be empirically important in particular in an analysis of sixteen global equity markets from the early 1990s to the present we find striking evidence of divergent behavior in the dynamics of return spillovers vs volatility spillovers return spillovers display a gently increasing trend but no bursts whereas volatility spillovers display no trend but clear bursts

operationalizing technology improvements in product development decision making abstract achieving competitive advantage and price premiums in many technology based markets requires the incorporation of current technology in new products to do so firms in hyper competitive environments increasingly plan and design their products concurrent with the independent development and validation of underlying technologies simultaneous validation of a core technology has important implications for a company s product positioning and launch sequence decisions making these traditional marketing decisions relevant to operations managers prior research has shown that to minimize cannibalization in the absence of such improvements in technology a firm should not launch low end products before high end products however concurrent evolution of technology can make it desirable and even necessary to introduce low end products before high end products this is because in technology based industries improvements in technology delay the introduction of a high end product and a firm must trade off the benefit of launching the low end product earlier greater discounted profits against the cost of cannibalization of high end product sales high end product cannibalization can be further reduced by offering the customer an option to upgrade from the low end to high end product with important implications for the firm s product positioning and introduction sequence decisions based on our study in the high technology industry we model the product positioning and introduction sequence decisions under the simultaneous evolution of technology our analysis indicates that it may be optimal in a variety of circumstances for a firm to launch products in an increasing order of performance even in the absence of network externalities besides presenting analytical results for product positioning and profit from different introduction sequences the paper also makes a contribution to managerial practice by providing insights in the form of a conceptual framework

the optimal pace of product updates some firms e g intel and medtronics use a time pacing strategy for product development pd introducing new generations at regular intervals if the firm adopts a fast pace introducing frequently it prematurely cannibalizes its old generation incurring high development costs while if it has a slow pace it fails to capitalize on customer willingness to pay for improved technology we develop a model to gain insight into which factors drive the pace we consider pd cost the diffusion rate coefficients of innovation and imitation the rate of margin decline and the degree to which a new generation stimulates market growth we find that a faster pace is generally associated with faster diffusion a higher market growth rate and faster margin decay not so intuitively we find that relatively minor differences in the development cost function can significantly impact the pace

optimal price skimming by a monopolist facing rational consumers this paper considers the intertemporal pricing problem for a monopolist marketing a new product the key feature differentiating this paper from the extant management science literature on intertemporal pricing is the assumption that consumers are intertemporal utility maximizers a subgame perfect nash equilibrium pricing policy is characterized and shown to involve intertemporal price discrimination we compare this policy to the optimal policy for a monopolist facing myopic consumers and find that for any given state prices are always lower with rational consumers than with myopic consumers for plausible parameter values the assumption of consumer rationality can be shown to lead to large differences in optimal prices moreover if a monopolist facing rational consumers implements the optimal myopic consumer pricing policy profits can be significantly less than if the monopolist follows the equilibrium pricing policy for rational consumers

measuring the world economy this paper provides an empirical assessment of whether the world economy has become smaller in terms of economic distance over the last decades we adopt a cross sectional spatial econometric approach relating domestic output volatility to distance weighted averages of other countries output volatility using a sample of 135 countries and rolling 10 year time windows over the period 1955 to 2006 using descriptive measures test statistics and spatial econometric estimates we find that cross country interdependence was virtually insignificant in the early post war period but has increased strongly from the mid 1960s to the mid 1980s and remained at a high level since then results for the most recent period suggest that common shocks to output volatility have a magnified impact and roughly quadruplicate through international spillover effects which are transmitted through both trade and financial openness

trade interdependence and the international business cycle a stochastic general equilibrium model of the world economy is developed to analyze the contribution of trade interdependence to international business cycles we test some of the implications of the model using data from ten major industrial countries and a variety of detrending techniques to calculate the cyclical component of output we find that the significance of trade in the transmission of economic disturbances across countries is not robust to the choice of the detrending method in general the role of trade interdependence is moderate and seem to have been stronger in the period before 1973

sources and propagation of international output cycles common shocks or transmission abstract this paper studies the generation and transmission of international cycles in a multi country model with production and consumption interdependencies two sources of disturbance are considered and three channels of propagation are compared technology disturbances which are mildly correlated across countries are more successful than government expenditure disturbances in reproducing actual data the presence of a common component to the shocks and of production interdependencies appear to be crucial in quantitatively matching the properties of the data