meta paradigm change and the theory of the firm many seemingly unrelated debates on the theory of the firm are in fact part of a single deeper transformation of the social sciences as the foundational assumptions of 20th century social science have slowly been shown by science to be false new sub paradigms have emerged which cumulatively drop i theoretical assumptions about markets to explain firms ii epistemological assumptions about knowledge to explain diversity and iii metaphysical assumptions about causality to explain technical change debates occur across each of these levels

examining structural breaks and growth rates in international health expenditures over the last decade there has been a growing interest in examining health expenditures in this paper we study the behaviour of health expenditures in the g3 countries usa the uk and japan and three european countries the uk switzerland and spain over the period 1960 2000 from a different perspective in that we examine 1 whether there is a common structural break in health expenditures across the g3 and european countries 2 whether structural breaks have slowed down health expenditure growth rates in these countries or vice versa our main findings are that 1 health expenditures share a common break in both bivariate and trivariate cases and structural breaks and break intervals suggest that either one or a combination of events second oil price shock the 1987 stock market crash and or recessions have contributed to the commonality of break in health expenditures in the g3 while the oil price shocks have been instrumental in the commonality of breaks for the european countries 2 except for the uk structural breaks have slowed down growth rates in health expenditures for the usa japan switzerland and spain

recursive non expected utility connecting ambiguity attitudes to risk preferences and the level of ambiguity abstract i study how risk preferences and the level of ambiguity influence ambiguity attitudes in uzi segal s recursive second order non expected utility model it is shown that the negative certainty independence axiom for risk preferences is equivalent to a global form of ambiguity aversion that entails ambiguity averse behavior irrespective of the state space and the decision maker s second order belief thus the second order version of the cautious expected utility model is the only subclass of segal s theory that robustly predicts ambiguity aversion moreover a mean preserving spread operation over second order beliefs which corresponds to a particular way of increasing the level of ambiguity is equivalent to increasing the relative strength of ambiguity aversion for each possible specification of risk preferences within the cautious expected utility model an application of the latter result establishes a negative relation between participation rates in an asset market and the level of ambiguity concerning the distribution of returns

sustainable innovation business models and economic performance an overview sustainable development requires radical and systemic innovations such innovations can be more effectively created and studied when building on the concept of business models this concept provides firms with a holistic framework to envision and implement sustainable innovations for researchers the concept provides an analytical tool that allows them to assess the interplay between the different aspects that firms combine to create ecological economic and social value in addition the business model concept provides a link between the individual firm and the larger production and consumption system in which it operates this paper provides an introduction to the special issue which emerged from selected papers presented at the erscp emsu 2010 conference held in delft the netherlands papers in the special issue cover a broad range from a conceptual discussion resulting in a research agenda the assessment of diffusion of specific business models such as product service systems the introduction of new management tools for business transition management to case studies on how specific business models evolved in specific communities together these papers provide insight into the promise of the business model concept for understanding and advancing sustainable innovation

the formation of cross sector development partnerships how bridging agents shape project agendas and longer term alliances cross sector development partnerships csdps are project based collaborative arrangements between business government and civil society organizations in support of international development goals such as sustainability health education and economic development focusing on public private partnerships in development cooperation we examine different constellations of bridging agents and their effects in the formation of single csdp projects and longer term alliances we conceptualize bridging agency as a collective process involving both internal partner representatives and external intermediaries in initiating and or supporting roles we find that the involvement of external intermediaries eases the formation of single projects and longer term alliances however when projects are initiated by external intermediaries they tend to be repetitive and narrow in scope whereas projects initiated by internal partner representatives often explore novel agendas and embody a greater potential for social innovation yet the longer term pursuit of these agendas beyond single projects may require external intermediaries in supporting roles findings help better understand micro processes and collective practices of brokerage and alliance formation in transnational governance contexts and beyond

the design of ambiguous mechanisms this paper considers a mechanism design framework that is standard except for the agents preferences which exhibit ambiguity aversion in the sense of gilboa and schmeidler 1989 we show that in this framework the optimal strategic form mechanism is an ambiguous mechanism an ambiguous mechanism specifies a message space and a set of outcome functions after showing that a version of the revelation principle holds in our environment we give an exact characterization of the smallest optimal ambiguous mechanism for the single agent case if the type set is composed of n finite elements then the smallest optimal ambiguous mechanism contains n 1 outcome functions we show how the extra revenue that the designer obtains by employing an ambiguous mechanism as opposed to a standard non ambiguous mechanism depends on the parameters of the model in particular we prove that the share of the surplus that the designer can extract from the agent increases as the type set becomes larger and the probability of each single type decreases in the limiting case where the agent s type is drawn from a nonatomic distribution on an interval the optimal ambiguous mechanism extracts all the rent from the agent

knowledge coordination competence creation and integrated networks in globalised firms it is argued in this article that the main problem for the modern globalised firm is not one primarily of the unequal distribution of information but rather of the difficulty of mobilising and integrating fragmented forms of localised knowledge in such a context the role of new means of telecommunication and cooperative working is investigated it is shown that networking favours a transparent mode of governance characterised by inter linked actors and their continuous stimulation thus the con ceptualisation of the globalised firm as a collection of competences offers a frame work for analysing governance mechanisms involving the issue of incentives

comparing systems approaches to innovation and technological change for sustainable and competitive economies an explorative study into conceptual commonalities differences and complementarities this paper makes a distinction between three theoretical frameworks that have been highly influential in the discourse on innovation competitiveness and sustainability sectoral systems of innovation ssi technological innovation systems tis and socio technical systems st systems these frameworks share a common systems approach to innovation but are often positioned as different bodies of literature that correspond to different epistemic communities this paper is explorative and conceptual in nature it presents a systematic comparative review of ssi tis and st systems based on the following analytical dimensions 1 system boundaries 2 actors and networks 3 institutions 4 knowledge 5 dynamics and 6 policy approach in the concluding section commonalities and differences of the three approaches are presented and suggestions for complimentarily are made c 2010 elsevier ltd all rights reserved

limited liability and incentive contracting with ex ante action choices abstract this article examines a principal agent model of financial contracting in which a risk neutral entrepreneur agent makes an unobservable ex ante effort choice while employing the investment funds of a risk neutral investor principal the key innovation is that the investment contract is subject to statutory liability limits given these liability limits two settings are considered one in which the investor payoff function is also constrained to be monotonically nondecreasing in firm profit and another in which no such monotonic contract constraint is imposed in the former case a standard debt contract is shown to emerge and a first best effort choice is not achieved in the latter setting the optimum is characterized by a live or die payoff function and a first best effort level may or may not be realized

is health care a necessity or a luxury pooled estimates of income elasticity from us state level data this paper provides new evidence on the income elasticity of health care by combining stationarity and cointegration tests of health care expenditure and incomes with estimates of the cointegrating relationship between them a recently updated dataset of health care expenditures and disposable personal income for the us states for the years 1966 1998 is used the principal findings are that health care expenditures and incomes at the state level are non stationary and cointegrated dynamic ols cointegrating regressions of the pooled state time series estimate the income elasticity of health care at 0 817 to 0 844 well below unity confirming that health care expenditure even at the aggregate level is a necessity good

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

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

the evolution of the industrial organisation of the production of knowledge this work elaborates the notion of localised technological knowledge based upon the distinction between information competence and knowledge and analyses the emergence of the new knowledge industry the evolution of the organisation of knowledge production is analysed through four stylised modes scientific entrepreneurship institutional variety vertical integration and technological cooperation the new trends towards the growth of knowledge intensive business service industries are detected and underlined they are considered as the outcome of the institutional formation of a market for knowledge based upon a process of increasing appropriability of localised knowledge based on the blending of generic scientific information and competence and growing scope of applicability via computercommunication systems deverticalisation of research activities from the boundaries of corporations the specification of a demand for technological competence and the specialising of independent firms in the production of technological competence and knowledge

driving forces and barriers in the development and implementation of coal to liquids ctl technologies in germany abstract because of a growing global energy demand and rising oil prices coal abundant nations such as china and the united states are pursuing the application of technologies which could replace crude oil imports by converting coal to synthetic hydrocarbon fuels so called coal to liquids ctl technologies the case of ctl is well suited to analyse techno economic resources related policy driven and actor related parameters which are affecting the market prospects of a technology that eases energy security constraints but is hardly compatible with a progressive climate policy this paper concentrates on germany as an example the european union eu s largest member state with considerable coal reserves it shows that in germany and the eu ctl is facing rather unfavourable market conditions as high costs and ambitious climate targets offset its energy security advantage

search profiling with partial knowledge of deterrence consider the choice of a profiling policy where decisions to search for evidence of crime may vary with observable covariates of the persons at risk of search i pose a planning problem whose objective is to minimise the social cost of crime and search the consequences of a search rule depend on the extent to which search deters crime i study the planning problem when the planner has partial knowledge of deterrence i show how the planner can eliminate dominated search rules and how he can use the minimax or minimax regret criterion to choose an undominated rule

foundations of dominant strategy mechanisms wilson 1987 criticizes applied game theory s reliance on common knowledge as sumptions in reaction to wilson s critique the recent literature of mechanism design has adopted the goal of finding detail free mechanisms in order to eliminate this re liance in practice this has meant restricting attention to simple mechanisms such as dominant strategy mechanisms however there has been little theoretical foundation for this approach in particular it is not clear the search for an optimal mechanism that does not rely on common knowledge assumption would lead to simpler mechanisms rather than more complicated ones this paper tries to fill the void in the context of an expected revenue maximizing auctioneer we investigate some foundations for using simple dominant strategy auctions

on stationarity and cointegration of international health expenditure and gdp this paper examines stationarity and cointegration of health expenditure and gdp for a sample of 21 oecd countries using data for the period 1960 1997 by applying a test battery that allows robust inference to be made on the stationarity and cointegration issue trend stationarity and no cointegration are tested using new country by country and panel tests not previously applied in this setting new results for country by country and panel tests of non stationarity and cointegration are presented our unit root and trend stationarity results indicate that both health expenditure and gdp are non stationary the no cointegration and cointegration results indicate that health expenditure and gdp are cointegrated

classifying technology policy from an evolutionary perspective abstract for the classification of technology policy in an evolutionary framework the taxonomy of mission and diffusion oriented policy design introduced by ergas ergas h 1987 the importance of technology policy in dasgupta p stoneman p eds economic policy and technological performance cambridge univ press cambridge is useful however ergas indirect method of identifying the respective policy style is only able to give a first and rough insight in the technology policy of a specific country to improve on that we developed a so called direct method aiming at a sound characterization of single policy measures and giving a more detailed picture about policy orientation to demonstrate the basic procedure of the suggested approach it is applied empirically on the german technology policy of the last 2 decades

knowledge and venture funding complementarities and financial contracts in this article i analyse venture capital finance using the tools provided by the literature on the economics of innovation in particular the notion of localised technological knowledge and the resource based theory of the firm to build a model of financial contracting this entails that instead of looking exclusively at financial indicators or monetary incentives i will deepen the knowledge connection between the venture capitalist and the financed firm as the benchmark to understand the potential of this source of finance consistent with evidence regarding venture funding the model portrays a separation between a financial and a non financial part of the venture investment which is reflected in a dichotomy among the investors in fact the model shows that the success of a venture program is strictly linked to the knowledge flow inspired and reinforced by the complementarities between the knowledge bases of entrepreneur and venture capitalist instead to a particular financing scheme as sustained by most of the literature the model can also suggest a new methodology to analyse other intermediaries always exploiting the central role of knowledge in designing financial contracts copyright 2007 oxford university press

asset stock accumulation and sustainability of competitive advantage given incomplete factor markets appropriate time paths of flow variables must be chosen to build required stocks of assets that is critical resources are accumulated rather than acquired in strategic factor markets barney barney j 1986 strategic factor markets expectations luck and business strategy management sci october 1231 1241 sustainability of a firm s asset position hinges on how easily assets can be substituted or imitated imitability is linked to the characteristics of the asset accumulation process time compression diseconomies asset mass efficiencies inter connectedness asset erosion and causal ambiguity

knightian uncertainty and moral hazard abstract this paper presents a principal agent model in which the agent has imprecise beliefs we model this situation formally by assuming the agent s preferences are incomplete as in bewley 1986 2 in this setting incentives must be robust to knightian uncertainty we study the implications of robustness for the form of the resulting optimal contracts we give conditions under which there is a unique optimal contract and show that it must have a simple flat payment plus bonus structure that is output levels are divided into two sets and the optimal contract pays the same wage for all output levels in each set we derive this result for the case in which the agent s utility function is linear and then show it also holds if this utility function has some limited curvature

exploring the dynamics of water innovation foundations for water innovation studies the urgent need for innovation to address multifaceted and intertwined water related challenges is becoming increasingly clear acknowledged and responded to with cumulating sources and amounts of funding nevertheless the water sector has been claimed to be less innovative than other sectors this special volume on the dynamics of water innovation is based on the realization that in general there is a striking absence of academic studies on the dynamics of water innovation this sv is therefore designed to lay the foundations for the field of water innovation studies in an effort to integrate the emerging insights together the contributions in this sv capture the current understanding of the dynamics of water innovation and provide insights into how the water innovation process can be fostered the purpose of this introductory article is threefold namely to frame the discussion on water innovation dynamics in order to contextualise the contributions of this sv to provide systematic guidance for studying water innovation dynamics and to suggest the way forward for water innovation studies it captures the extent of the field of water innovation studies with a review of the literature of the last three decades and frames water innovations based on five decades of innovation research and drawing on three areas management strategy and policy we provide an innovation studies taxonomy that consists of four organising dimensions type of innovation stage of innovation level of analysis and measurement this taxonomy enables researchers to study the dynamics of water innovation from different combinations of conceptual and thematic angles drawing on the field of innovation studies in a systematic fashion finally we reflect on the way forward for water innovation studies with suggestions for future research 2017 the authors

patterns of technological competence accumulation a proposition for empirical measurement this article develops a typology that describes and measures different types of technological competence accumulation the notion of accumulation comprises not only the state but also the change in competence and hence it complies with the criticism of the static approaches to competence management the typology of competence accumulation enables a comparison of firm profiles that lead to identification of four groups of firm behavior across the telecommunications industry the relationship between the firm and the industry level is established on the condition that each firm s competence level depends on the firms mutual relationships with other firms in the same industry known as red queen evolution the four groups of firm behaviour are therefore not considered as groups of independent firms that are similar by coincidence but as patterns of behavior within the telecommunications industry which allows for a discussion of more general implications for management of technology copyright 2005 oxford university press

interpenetration of organization and market japan s firm and market in comparison with the u s abstract resource allocation mechanisms used in the market and within the firm are quite often a mixture of the pure market principle and the pure organization principle market principles penetrate into the firm s resource allocation and organization principles creep into the market allocation interpenetration occurs to remedy the failure of pure principles other in the market or in the organization after presenting this new perspective we analyze resource allocation mechanisms in japan and the u s one conclusion is that interpenetration patterns are rather different between the two countries due to institutional economic and societal differences we also analyze the ways in which these differences affect japanese and american corporate behavior in such areas as diversification strategy corporate financing and innovation and venture business activity

simple menus of contracts in cost based procurement and regulation in an influential paper jean jacques laffont and jean tirole 1986 formulated a principal agent model of cost based procurement and regulation and showed that the principal can implement the optimal mechanism by offering the agent a menu consisting of a continuum of linear contracts two related problems with applying this theory in practice have been that the economic logic and the underlying mathematics involved in calculating the optimal menu are quite complex and the principal must be able to specify the agent s entire disutility of effort function in order to calculate the optimal menu as a result the model has not been widely used in practice to either calculate actual incentive contracts or even to develop useful qualitative guidance about the nature of the optimal solution and how it is affected by various economic factors the purpose of this paper is to show that dramatically simpler menus which are easy to understand and calculate and which have lower informational requirements can at least in some cases capture a substantial share of the gains achievable by the fully optimal complex menu in particular this paper considers two item menus where one item is a cost reimbursement contract and the other item is a fixed price contract such menus are called fixed price cost reimbursement fpcr menus for the case where the agent s utility is quadratic and the agent s type is distributed uniformly it is shown that the optimal fpcr menu always captures at least three quarters of the gain that the optimal complex menu achieves where the gain is measured relative to the result of using a cost reimbursement contract this paper s research was originally motivated by a policy issue in defense procurement in the united states the department of defense dod purchases almost all major weapons systems from sole source contractors using contracting methods that essentially amount to using cost reimbursement contracts the best way to understand why dod uses costreimbursement contracting methods is that they perform precisely the function identified in laffont and tirole s principal agent model they guarantee in a situation that amounts to a bilateral monopoly that dod and the firm can reach an agreement i e they guarantee that the agent will always produce the good of course the use of cost reimbursement contracting methods

the dynamic capabilities of firms an introduction an expanded paradigm is needed to explain how competitive advantage is gained and held firms resorting to resource bas ed strategy attempt to accumulate valuable technology assets and employ an aggressive intellectual property stance however winners in the global marketplace have been firms demonstrating timely responsiveness and rapid and flexible product innovation along with the management capability to effectively coordinate and redeploy internal and external competences this source of competitive advantage dynamic capabilities emphasizes two aspects first it refers to the shifting character of the environment second it emphasizes the key role of strategic management in appropriately adapting integrating and re configuring internal and external organizational skills resources and functional competences toward changing environment 3 only recently have researchers begun to focus on the specifics of developing firm specific capabilities and the manner in which competences are renewed to respond to shifts in the business environment the dynamic capabilities approach provides a coherent framework to integrate existing conceptual and empirical knowledge and facilitate prescription this paper argues that the competitive advanis tage of firms stems from dynamic capabilities rooted in high performance routines z operating inside the firm embedded in the firm s processes and conditioned by its history it offers dynamic capabilities as an emerging paradigm of the modern business j firm that draws on multiple disciplines and advances with the help of industry studies in the usa and elsewhere

robustness and linear contracts abstract we consider a moral hazard problem where the principal is uncertain as to what the agent can and cannot do she knows some actions available to the agent but other unknown actions may also exist the principal demands robustness evaluating possible contracts by their worst case performance over unknown actions the agent might potentially take the model assumes risk neutrality and limited liability and no other functional form assumptions very generally the optimal contract is linear the model thus offers a new explanation for linear contracts in practice it also introduces a flexible modeling approach for moral hazard under nonquantifiable uncertainty jel d81 d82 d86

comparing innovation systems a framework and application to china s transitional context abstract this paper proposes a generic framework for analyzing innovation systems anchored around five fundamental activities r d implementation end use education linkage and focused on the performance implications of a system s structure and dynamics rather than simply describing the role and performance of particular actors institutions and policies this approach focuses on system level characteristics including the distribution of these activities within the system the organizational boundaries around them coordination mechanisms evolutionary processes and the effectiveness of the system in introducing diffusing and exploiting technological innovations the framework is applied to a comparison of china s national innovation system under central planning and since reforms revealing the evolving structure and dynamics of this system and current inconsistencies and perverse incentives that policymakers must address to realize their development goals more generally it provides a basis for addressing the implicit assumptions of organizational types roles and convergence among innovation systems emerging in very different contexts whether national regional or industrial

boundary choice interdependency evidence from the construction industry extant research on the theory of the firm has stressed the need to consider interdependencies when analyzing firm boundary choices we study the existence of interdependencies between boundary decisions using a unique database that includes detailed organizational information on 59 of the construction projects undertaken in the chilean housing sector between the years 2005 and 2009 specifically we show that integration between design and construction activities increases the likelihood of integration between ownership development and construction activities and vice versa this result is of a large magnitude supporting the view that boundary choices need to be studied in relation to each other a careful identification strategy also allows us to shed light on the mechanisms that likely drive this interdependency a coordination effect a transaction hazard effect and a production effect the latter is shown to be the most important mechanism at work suggesting that boundary choice complementarity is primarily motivated by the need to align investment incentives for the joint development of capabilities

motivating with simple contracts abstract in practice incentive schemes are rarely tailored to the specific characteristics of contracting parties however according to economic theory optimal contracts should be highly dependent on individual conditions we reconcile these observations in the context of a principal agent model with both moral hazard and adverse selection motivating an agent could be increasingly costly to the principal because a more productive agent could also be more able to manipulate the terms of the contract as a result the principal may optimally pool some types by offering a contract with constant transfer and bonus we also explore parameterizations where the optimal contract is fully separating but simple contracts attain a significant portion of the optimal welfare

technological clusters with a knowledge based principle evidence from a delphi investigation in the french case of the life sciences abstract recent works in the theory of technical change show the effect of irreversibility and lock in on the diffusion and creation of innovation processes which are able to stop the development of a generic technology therefore industrial policies play a major role in selecting and supporting the innovative process the purpose of this paper is to prove the possibility to derive a typology of future innovations in terms of generic technology from a delphi type technology survey thus it is possible to get a better understanding of the industrial dynamics and to design an interesting tool for industrial policies or for firm strategies as far as they aim at developing stable technological trajectories this is applied to the french case of the life sciences the paper suggests interesting explanatory trajectories in order to fight against diseases such as cancer alzheimer or schizophrenia

determinants of health care expenditure in africa a cross sectional study the paper presents some quantitative evidence on the relationship between certain socioeconomic and demographic factors and per capita health care expenditure in africa first gnp per capita percentage of births attended by health staff and foreign aid received per capita together explained 78 3 of the variance in health care expenditure second per capita gnp is the most significant factor explaining differences in health care expenditure contrary to what has been found in comparisons of health care expenditure in the organization for economic cooperation and development oecd countries we found that the income elasticity is close to unity furthermore aid was consistently significant and positive in the three models estimated third variables such as crude birth rate and the population under 15 years of age as percentage of total population were not significant

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

project based firms new organizational form or variations on a theme the increasing significance of project based forms of organizing economic activities in many industries has stimulated considerable interest in project based firms pbfs as distinctive kinds of economic actors that are seen by some as heralding a new logic of organizing in particular their fluid temporary nature and membership of multiple networks alliances and partnerships have been construed as critical to the generation of radical innovations however pbfs differ considerably in a number of respects notably the singularity of their goals and outputs and the distinctiveness and stability of work roles and task organization at least four distinct ideal types of pbfs can be distinguished in these terms that can be expected to vary in their prevalence and importance across industrial sectors and in different kinds of societies because of differences in investor and employee commitment and coordination costs

robustness of simple menus of contracts in cost based procurement abstract we consider a model of cost based procurement in which the principal faces knightian uncertainty about the agent s preferences for cost reduction we show that a particularly simple incentive scheme a menu comprising a fixed price contract and a cost reimbursement contract minimizes the maximum expected payment where this maximum is taken over the set of possible agent preferences for some parameters of the problem a range of alternative incentive schemes also satisfy this criterion we show that the simple incentive scheme is not weakly dominated by any of the alternatives there does not exist an alternative mechanism for which the expected payment is no higher for all realizations of the agent s preferences and strictly lower for some realization

aggregate health care expenditure in the united states evidence from cointegration tests unlike recent studies that are based on international cross sectional series this paper attempts to quantify the role of the determinants of aggregate health care expenditure per capita using time series data for the period of 1960 87 for the united states the paper applies the relatively new procedures of unit root testing cointegration and error correction modelling the evidence supports cointegration although the results indicate that per capita income age of the population number of practising physicians and public financing of health care are important determinants the age structure of the population and number of practising physicians emerge as the major determinants of aggregate health care expenditure in the united states

environmental innovations and profitability how does it pay to be green an empirical analysis on the german innovation survey much of the empirical literature analysing the relation between environmental innovation and competitiveness has focused on the question whether it pays to be green we differentiate between different types of environmental innovations which will be disentangled in those aiming at reducing the negative externalities and those allowing for efficiency increases and cost savings what we analyze is at first the extent to which these two typologies have impacts on firms profitability with opposite signs and secondly whether the motivations driving the adoption of those innovations make the difference in terms of economic gains we find empirical evidence that both the typology of environmental innovation and the driver of their adoption affect the sign of the relationship between competitiveness and environmental performance the empirical strategy is based on a sample of german firms and makes use of a merge of two waves of the mannheim innovation panel in 2011 and 2009 that allow overcoming some endogeneity issues which may arise in a cross section setting

firm behaviour and innovative performance an empirical exploration of the selection adaptation debate innovation is a complex trade off between routinisation and change between reliability and accountability of firms and timely adaptation this innovator s dilemma confronts innovation theory with the question how to align routinisation with innovation induced organisational change and consistent performance obviously it is a complex issue dominant innovation theory neglects this subject due to its pro innovation bias while evolutionary organisation and innovation theory give opposite perspectives on this problem the adaptation perspective considers pro active behaviour as the best condition for innovative performance whereas the selection perspective advances inert firm behaviour as the best alternative to achieve successful innovations our research question focuses on the explanatory value of either the selection or the adaptation perspective for the innovative performance of industrial firms our empirical findings confirm the adaptation perspective and reject the selection perspective comparatively firm behaviour involving the highest risks and uncertainties e g high environmental dynamics and high levels of adaptive activity contributes most significant to the explanation of innovative performance inert risk averse behaviour conversely does not improve or even impedes innovative performance compared with other types of firm behaviour

robust contracting with additive noise abstract we investigate the idea that linear contracts are reliable because they give the same incentives for effort at every point along the contract we ask whether this reliability leads to a microfoundation for linear contracts when the principal is profit maximizing we consider a principal agent model with risk neutrality and limited liability in which the agent observes the realization of a mean zero shock to output before choosing how much effort to exert we show that such a model can indeed provide a foundation for reliable contracts and illustrate what elements are required in particular we must assume that the principal knows a lower bound but not an upper bound on the shocks

technological capabilities invisible infrastructure and the un social construction of predictability the overlooked fixed costs of useful research the paper explores the idea that unpredictability is a much more pervasive and important feature of technical change than is traditionally supposed it explains how economically important interactions between scientific explanations and technology require the construction of very specific artificially predictable conditions where explanations implications match technologies behaviour the iterative construction of these localised predictable conditions from unpredictable starting materials relies on generates and is made easier by reusable social and physical infrastructure the paper develops a non tautological model of technological capabilities and provides a novel explanation for a range of empirical findings theoretical and policy implications are reported

does environmental quality influence health expenditures empirical evidence from a panel of selected oecd countries in this paper we examine the role of environmental quality in determining per capita health expenditures we take a panel cointegration approach in order to explore the possibility of estimating both short run and long run impacts of environmental quality our empirical analysis is based on eight oecd countries namely austria denmark iceland ireland norway spain switzerland and the uk for the period 1980 1999 we find that per capita health expenditure per capita income carbon monoxide emissions sulphur oxide emissions and nitrogen oxide emissions are panel cointegrated while short run elasticities reveal that income and carbon monoxide emissions exert a statistically significant positive effect on health expenditures in the long run in addition to income and carbon monoxide we find that sulphur oxide emissions have a statistically significant positive impact on health expenditures

measuring innovation in tourism from the schumpeterian and the dynamic capabilities perspectives this paper offers a diagnosis of the state of the issue regarding the measurement of innovation in the tourism industry at the company level and some recommendations for overcoming identified problems the study addresses two central issues how existing secondary databases of innovative activity define the boundaries of the tourism industry and the degree to which these databases reflect the particular characteristics of this economic activity it is concluded that these analyses present serious biases and anomalies hindering the understanding of the situation at the micro level and complicating the issue of international comparability and the analyses do not capture the internal heterogeneity of innovative behavior of tourism companies from specific intra sectoral activities the problems concern inappropriate indicators and the need for survey methods to complement the development of innovation scoreboards in secondary sources the study concludes by detailing a set of proposals that should be considered in the context of a scoreboard to provide a comprehensive view of a tourism firm s technological and organizational innovations as well as its innovative capabilities combining schumpeterian theory and the dynamic capabilities based approach and also making cross national comparisons feasible

organisational capabilities and learning in complex product systems towards repeatable solutions this paper suggests that chandler s chandler a d 1990 scale and scope the dynamics of industrial capitalism belknap press of harvard univ press cambridge ma organisational capabilities framework can be modified to explain how suppliers of complex product systems cops build the capabilities necessary to expand successfully into new lines of business in addition to chandler s functional and strategic capabilities we propose the concept of project capabilities to refer to important cops activities of bid preparation and project execution an organisational learning cycle model is presented to show cops firms can move from the first bid or project of its kind in a new domain of business to achieve what we call economies of repetition by putting in place organisational changes routines and learning processes to provide a growing number of similar bids and projects more efficiently and effectively

the nature and importance of economic competence this chapter takes on three tasks 1 to survey the study of economic competence as it appears in economic literature 2 to give a meaningful and operational definition of economic competence as one of the factors contributing to macroeconomic growth and 3 to suggest a methodology pursued in greater depth elsewhere to generalize and link economic competence as defined at the micro firm individual level to macroeconomic growth through simulation on the micro based macroeconomic model of the swedish economic system moses by introducing knowledge in the micro setting of firm organizational competence we arrive at a very different interpretation measured at the macro industry level from that of standard neoclassical theory

incentive regulatory policies the case of public transit systems in france we assess the empirical relevance of the new theory of regulation using a principal agent framework to study the regulatory schemes used in the french urban transport industry taking the current regulatory schemes as given the model of supply and demand provides estimates for the firms inefficiency the effort of managers and the cost of public funds it allows us to derive the first best and second best regulatory policies for each network and compare them with the actual situation in terms of welfare loss or gain fixed price policies lie between fully informed and uninformed second best schemes cost plus contracts are dominated by any type of second best contract from these results we may conjecture that fixed price contracts call for better informed regulators

simple cost sharing contracts we extend rogerson s 2003 intriguing analysis of the performance of simple procurement contracts to consider settings where the supplier s innate production cost is not necessarily distributed uniformly although the simple contract that rogerson analyzes performs remarkably well when the smaller cost realizations are relatively likely it can perform poorly when the larger cost realizations are relatively likely we show that in all settings under consideration though a fairly simple pair of contracts one that involves linear cost sharing and one that involves full cost reimbursement can always secure more than 73 of the gain achieved with a fully optimal contract

the evolution of manufacturing technology and its impact on industrial structure an international study this paper shows that plant and firm size in manufacturing and especially in engineering industry in several western industrial countries has declined since the early 1970s two hypotheses explaining the decline are advanced one is de glomeration or specialization the divestiture of non core businesses in order to free up scarce resources particularly management time to defend and nurture core business activities the second hypothesis is that the emergence of new computer based technology has improved the quality and productivity of small and medium scale production relative to standardized mass production techniques which dominated previously

nonparametric identification of a contract model with adverse selection and moral hazard this paper studies the nonparametric identification of a contract model with adverse selection and moral hazard specifically we consider the false moral hazard model developed by laffont and tirole 1986 we first extend this model to allow for general random demand and cost functions we establish the nonparametric identification of the demand cost deterministic transfer and effort disutility functions as well as the joint distribution of the random elements of the model which are the firm s type and the demand cost and transfer shocks the cost of public funds is identified with the help of an instrument testable restrictions of the model are characterized

transactions cost economics and the multinational enterprise an assessment abstract this paper applies transactions cost principles to the multinational enterprise in order to ascertain its distinctive properties as a mode of economic organization the analysis helps identify just when and where contractual alternatives to the multinational firm are likely to be viable this turns out to depend upon the nature of the technology the regime of appropriability within which the firm operates and the characteristics of the markets in question transactions cost analysis is also extended to the multinational enterprise host country relationship implications for management and public policy are derived

using cost observation to regulate firms the paper emphasizes the use of accounting data in regulatory or procurement contracts when the supplier 1 has superior information about the cost of the project and 2 invests in cost reduction the main result states that under risk neutrality the supplier announces an expected cost and is given an incentive contract linear in cost overruns this optimal contract moves toward a fixed price contract as the announced cost decreases an investment choice is then introduced and the use of a rate of return regulation is studied

policies for the development of knowledge intensive local production systems starting from the empirical literature concerning the analysis of industrial districts this paper focuses on the importance of industrial policies in supporting the development and consolidation of local production systems here institutions and markets are envisaged as equally important for long term performance the objective is to propose a conceptual framework for the formulation of public policies that places organisational learning at the centre of interest

evidence on the determinants of canadian provincial government health expenditures 1965 1991 abstract real per capita provincial government expenditures on health care over the period 1965 1991 are examined using pooled time series cross section regression analysis key determinants of real per capita provincial government expenditures on health care over the period 1965 1991 are real provincial per capita income the proportion of the provincial population over age 65 and real provincial per capita federal transfer revenues established program financing had a negative and significant impact on real per capita provincial government health expenditures in newfoundland and quebec an income elasticity of 0 77 implies that health care is not a luxury good

a complete solution to a class of principal agent problems with an application to the control of a self managed firm this paper considers a class of principal agent problems which have the following features 1 there is adverse selection because the principal ignores the value of one parameter of the agent s true characteristics 2 leaving aside the information parameter the principal s welfare as well as the agent s welfare depend on two types of variables observable to both of them the first ones possibly multidimensional are called action variable s and the second one which is one dimensional has in general the meaning of a money transfer 3 the principal is a stackelberg leader of the two person game he can commit himself to decision rules which are admissible on informational grounds he optimizes within the adequate class taking into account besides the agent s reaction one constraint which has generally the meaning of an individual rationality constraint and sometimes of a feasibility constraint the optimization is limited to the class of non stochastic mechanisms 4 the problem can also receive an alternative interpretation the principal faces a continuum of agents of unknown characteristics the distribution being known however stylized principal agent problems of this type have often been considered in the economic literature in particular the reader will later be able to recognize that the standard income tax model a la mirrlees 1971 the quality or quantity choice model of the monopolist a la mussa and rosen 1978 or maskin and riley 1982 and the model of government regulation of the private monopolist of baron and myerson 1982 all belong to

an econometric analysis of health care expenditure a cross section study of the oecd countries this paper is an empirical examination of the determinants of aggregate health care expenditure the paper presents a systematic analysis of relationships across 19 oecd countries showing the effects of aggregate income institutional and socio demographic factors on health care expenditure the results indicate that institutional factors of the health systems in addition to per capita gross domestic product gdp contribute significantly to the explanation of the health care expenditure variation between countries for example the way physicians in outpatient care are paid and the mixture of public private funding and inpatient outpatient care

on the determination of the us aggregate health care expenditure per capita real health care expenditure is examined against three major groups of explanatory variables economic demographic and health stock and it is found that the three groups of variables have an impact on real health care spending other subcategories such as real private and government health care pharmaceutical dental home nursing ambulatory personal medical consumption and in patient expenditures have also been examined and have been found to be affected by the explanatory variables for several subcomponents there is evidence of supplier inducement of the demographic group of variables the ageing population had an impact only on the per capita real overall and private health care outlay and pharmaceutical spending also cointegrating relationships were found and consistent estimators of the elasticities found

on the robustness of laissez faire abstract this paper considers a model economy in which agents are privately informed about their type their endowments of various goods and their preferences over these goods while preference orderings over observable choices are allowed to be correlated with an agent s private type we assume that the planner government is both uncertain about the nature of this joint distribution and unable to choose among multiple equilibria of any given social mechanism we model the planner government as having a maxmin objective in the face of this uncertainty our main theorem is as follows once we allow for this kind of uncertainty and assume no wealth effects in preferences the uniquely optimal social contract is laissez faire in which agents trade in unfettered markets with no government intervention of any kind

pricing without priors we consider the problem of pricing a single object when the seller has only minimal information about the true valuation of the buyer specifically the seller only knows the support of the possible valuations and has no further distributional information the seller is solving this choice problem under uncertainty by minimizing her regret the pricing policy hedges against uncertainty by randomizing over a range of prices the support of the pricing policy is bounded away from zero buyers with low valuations cannot generate substantial regret and are priced out of the market we generalize the pricing policy without priors to encompass many buyers and many qualities

informationally robust trade and limits to contagion abstract two agents can each accept or reject a proposed deal whose value for each agent depends on an unknown state and may be positive or negative the deal takes place only if both accept each agent can be imperfectly informed in an arbitrary way about both her own value and the other agent s in such environments contagious adverse selection may prevent the deal from being reached even when it is mutually beneficial ex post we give an upper bound on the ex ante expected welfare loss in equilibrium due to such contagion valid for any information structure the welfare loss is small if negative values are unlikely ex ante and under an assumption of known aggregate gains from the deal our bound is sharp the bound has a succinct description even though the equilibrium itself in any given information structure may be hard to describe explicitly

sectoral systems of innovation and production the concept sectoral system of innovation and production provides a multidimensional integrated and dynamic view of sectors it is proposed that a sectoral system is a set of products and the set of agents carrying out market and non market interactions for the creation production and sale of those products a sectoral systems has a specific knowledge base technologies inputs and demand agents are individuals and organizations at various levels of aggregation they interact through processes of communication exchange co operation competition and command and these interactions are shaped by institutions a sectoral system undergoes change and transformation through the co evolution of its various elements 2002 elsevier science b v all rights reserved

learning and technical progress in the commuter aircraft industry an analysis of embraer s experience abstract companies in industrializing nations face major hurdles when moving into complex and highly competitive manufacturing industries this paper examines the example of such an entrant the brazilian aircraft company enbraer the paper is concerned with the technological strategy pursued by embraer and its learning experience with the brasilia commuter turboprop which achieved a 25 world market share in its seat category due in no small measure to its cost competitiveness and technological proficiency the paper presents econometric evidence of substantial learning effects as captured by the learning curve elasticities of the brasilia which conforms to frontier parameters although embraer was successful in its early product offerings aimed at a narrow niche its subsequent difficulties in moving to a broader product line and sustaining its technological development illustrate some of the problems that industrializing nations enterprises may encounter in building on a successful entry in technology intensive industries at a time of growing competition without crafting alliances to share the large associated technological and commercial risks

replication of industrial ecosystems the case of a sustainable biogas for traffic solution abstract distributed energy systems are key in building a sustainable energy economy biofuels are an example of an industry that needs to be based on a system of rather small scale local production units due to the limited transportation radius of biomass moreover the benefits of biofuels are greater if their production is based on the integration of local production activities and consumption among traditionally separate industries as implied by the notion of industrial symbiosis such an arrangement however requires the establishment of industrial ecosystems that are customised to local conditions which increases costs and uncertainty for the involved stakeholders and the integrating company in this paper we discuss replication strategy as a means of transferring not only technical knowledge but also the business format to new locations thereby achieving economies of repetition the case of a biogas for traffic solution serves as an illustrative example we analyse the establishment of a vanguard ecosystem and assess the potential of replicating the solution in six other locations based on this we propose a replication framework that builds on functional modularisation collaboration mechanisms required for cooperating with the relevant stakeholders and organisational learning the replication approach is expected to be useful for the companies attempting to build sustainable distributed energy systems based on industrial symbiosis

on and off the beaten path the evolution of four technological systems in sweden abstract this paper examines four swedish case studies of technological systems from the perspective of path dependence what are the similarities and differences in this regard between factory automation electronics and computers biotechnology and powder technology what are the distinctive features in each system which set it apart from similar systems elsewhere and what role does path dependence play in explaining these features the essential function of technological systems is to capture diffuse and magnify spillovers of technical and organizational knowledge therefore the nature of knowledge i e the characteristics of knowledge and how it can be transmitted in each system determines what types of spillovers are likely to occur as well as the mechanisms through which they occur other important influences are the initial conditions and the institutions including both organizations and rules of the game

growth dynamics in the biomedical biotechnology system this article aims to understand the dynamics of growth in the biomedical biotechnology system that consists of a variety of actors ranging from universities medical supplies firms and drug research firms to clinical service suppliers based on a comparative study made in ohio and in sweden we have analyzed three main factors technology competencies technology transfer and networking capabilities our findings show a set of differences that can be grouped into two categories viz management and agglomeration externalities differences in management appear at three points the resources allocated to technological competence development managerial skills in the technology transfer phase and the use of technology councils ohio seems to offer a better environment for starting up new firms and enabling these firms to successfully commercialize their technological assets the agglomeration externalities that make a difference between the two regions might be grouped into two categories increasing returns arising from network externalities and the advantages of networking with a variety of supporting organizations in the system

outlines of a behavioral theory of the entrepreneurial firm abstract in a behavioral theory of the firm btf cyert and march cyert r m march j g 1963 a behavioral theory of the firm prentice hall englewood cliffs nj present a clutch of ideas for explaining the behavior of established firms within an environment of well defined markets stakeholder relationships technologies and so on in this paper we outline a behavioral theory of the entrepreneurial firm that emphasizes transforming environments rather than acting within extant ones in particular we explicate three ideas that parallel key concepts in btf 1 accumulating stakeholder commitments under goal ambiguity in line with a political conception of goals 2 achieving control as opposed to managing expectations through non predictive strategies and 3 predominately exaptive rather than adaptive orientation

the determinants and effects of health expenditure in developed countries previous studies of international differences in health spending have been restricted to the use of relatively small samples of cross sectional data our objective here is to re examine the results of previous work using a sample of 560 pooled time series and cross section observations results confirm the importance of gdp as a determinant of health spending with an estimated income elasticity at or around unity but also suggest that oecd countries should not be regarded as a single homogeneous group the importance of some non income variables is also confirmed although the direct effect of these factors appears to be small

product complementarities capabilities and governance a dynamic transaction cost perspective the organization and governance of the transactions that comprise a bundling arrangement depend on the distribution of capabilities among firms and the amount of time during which the window of opportunity for earning rents is expected to remain open firms engaged in inter firm collaboration must undertake support transactions related to billing marketing customer support and product repair these support transactions differ from the core transactions that have traditionally been perceived as sufficient to provide a product bundle since support transactions create costs of their own the market may turn out to be an expensive means of governing collaborative arrangements undertaken for bundling purposes the telecommunications service sector provides an illustration copyright 1997 by oxford university press

when shakeout doesn t occur the evolution of the turboprop engine industry abstract a careful case study of the history of the turboprop engine industry 1948 1997 is offered as an example of non shakeout pattern the persistence of high concentration is not associated with the exit of smaller manufacturers but instead a stable coexistence of generalist and specialist strategies emerges in sharp contrast to the pattern observed in the otherwise similar jet engine industry this paper identifies the relevant variables of a more general theory of industry life cycle by taking into account the lack of creation of significant increasing returns in r d manufacturing or marketing all of which are commonly found in industries that produce systemic products

evolution economic competence and the market for corporate control abstract to assess the merits of the market for corporate control this paper examines two processes which standard analysis does not study the allocation of economic competence and the evolution of organizational structures economic competence is seen to be an unusual scarce resource embodied in the very ways in which individuals and organizations take economic decisions which guides the allocation of all scarce resources including itself its efficient allocation is shown to require an evolutionary trial and error process where the market for corporate control plays a crucial role

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

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