international diversification works eventually critics of international diversification observe that it does not protect investors against short term market crashes because markets become more correlated during downturns although true this observation misses the big picture over longer horizons underlying economic growth matters more than short lived panics with respect to returns and international diversification does an excellent job of protecting investors

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

mutual fund performance an analysis of quarterly portfolio holdings this article employs the 1975 84 quarterly holdings of a sample of mutual funds to construct an estimate of their gross returns this sample which is not subject to survivorship bias is used in conjunction with a sample that contains the actual net returns of the mutual funds in addition to allowing the authors to estimate the bias in measured performance that is due to the survival requirement and to estimate total transaction costs the sample is used to test for the existence of abnormal performance the tests indicate that the risk adjusted gross returns of some funds were significantly positive copyright 1989 by the university of chicago

manufacturing demand for business services in a core and peripheral region does flexible production imply vertical disintegration of business services o farrell p n moffat l a r and hitchens d m w n 1993 manufacturing demand for business services in a core and peripheral region does flexible production imply vertical disintegration of business services reg studies 27 385 400 this paper analyses the demand by manufactures in scotland and south east england for key strategic business services during the past three years the source of supply of the services used and the location of external suppliers for scottish and english manufacturers our evidence suggests that expansion of demand is the primary cause of increasing business service output and not restructuring strategies as predicted by the flexible firm model both externalization and internalization of business services are occurring simultaneously the net balance is consistent with a marginal trend towards vertical integration in manufacturing and a stronger one in business services o farrell p n moffat l a r et hitchens d m w n 1993 la demande de l industrie pour l

the use and impact of business advice by smes in britain an empirical assessment using logit and ordered logit models this study assesses the effect of differences in types of client on the use and impact of business advice by smes in britain using new survey evidence from the cambridge esrc centre for business research survey of 1997 the survey covering over 2500 respondents is the largest and most definitive assessment available in britain moreover the survey allows an assessment of the full range of providers of external advice the private sector business associations and various public sector bodies as well as the fields of advice using multivariate logit models it is found that size of firm rate of growth and innovation appear to be the main variables influencing the likelihood of firms seeking external advice both from different sources and from different fields other variables which are investigated include age profitability skill levels manufacturer services and exporter nonexporter ordered logit models of the impact of the advice demonstrate that there are significant differences between client

international asset pricing and portfolio diversification with time varying risk we test the conditional capital asset pricing model capm for the world s eight largest equity markets using a parsimonious generalized autoregressive conditional heteroskedasticity garch parameterization our methodology can be applied simultaneously to many assets and at the same time accommodate general dynamics of the conditional moments the evidence supports most of the pricing restrictions of the model but some of the variation in risk adjusted excess returns remains predictable during periods of high interest rates our estimates indicate that although severe market declines are contagious the expected gains from international diversification for a u s investor average 2 11 percent per year and have not significantly declined over the last two decades

forms of trust and conditions for their stability of the three principal approaches to trust we decided to investigate in greater detail the one in which trust is regarded as a belief that the individuals involved hold about a relationship trust was defined as a delegatory relationship based on anticipation of the delegatee s behaviour we reached four main conclusions first the solution to the problem posed by the indeterminacy of trust lies in the differentiation and hierarchisation of the various forms of trust contractual organisational and tacit on the basis of their degree of irreversibility and stability second contractual trust is unstable because it comes up against the problem of guarantees of individual intentions this leads to the third conclusion rational evaluation by individuals cannot by itself establish trust which is based on collective beliefs practices and rules fourth we identified two conditions for the stability of trust the creation of irreversibilities through adherence to a rule and the creation of a confidence interval within which different interpretations of contradictory individual strategies are tolerated thus the viability of the various forms of trust depends on the ability of institutions and organisations to create rules that are likely when applied to produce an interval in which tolerance of mutual intentions is the norm these analyses of trust hence highlight the role of time and period of time in the notion of trust

a percolation based model explaining delayed takeoff in new product diffusion a model of new product diffusion is proposed in which a site percolation dynamics represents socially driven diffusion of knowledge about the product s characteristics in a population of consumers a consumer buys the new product if her valuation of it formed after her witnessing the product in use among her friends or neighbors is not below the price of the product announced in a given period our model attributes the empirical finding of a delayed takeoff of a new product to a drift of the percolation dynamics from a nonpercolating regime to a percolating regime this drift is caused by learning effects lowering the price of the product or by network effects increasing its individual valuations by consumers both with an increasing number of buyers

the influence of location on the use by smes of external advice and collaboration this paper provides an analysis of the influence of location on the extent of use and impact of external advice and collaboration on small and medium sized enterprises smes in britain the analysis indicates that for private sector advisers accountants consultants etc and collaboration with suppliers and customers the intensity of use does not vary significantly with location in most cases only the input of business friends and relatives is strongly locationally constrained indicating the importance of personal trust processes operating in a different way from other influences eu structural fund status of an area also has few major effects on use of private sector advice however the impact of external advice and the extent of local collaboration between similar firms are influenced by location with impact generally increasing with the size of business concentration density and closeness to a business centre i e there are positive effects of urban location and agglomeration economies for public sector support agencies such as the small business service business link tecs lecs enterprise agencies and also chambers of commerce the reverse is generally true levels of use are locationally influenced but impact is not use tends to increase in eu assisted areas and in areas with lower levels of business concentration this applies to most local agents but for regional development agencies there is an additionally strong effect of highest focus of use and impact in the most rural and peripheral areas thus public agents appear generally to be most used and have greatest relevance to smes in more peripheral areas where they fill gaps in the market created by agglomeration effects

hedonic price indexes for spreadsheets and an empirical test for network externalities in this article i first estimate hedonic price equations for computer spreadsheet programs and then use the analysis to empirically test whether network externalities exist in this industry the study shows that consumers are willing to pay a significant premium for spreadsheets that are compatible with the lotus platform and for spreadsheets that offer links to external databases and a similar premium for spreadsheets that offer local area network externalities finally the quality adjusted real price of computer spreadsheets declined by approximately 15 per year from 1986 to 1991

a new approach to measuring financial contagion this article proposes a new approach to evaluate contagion in financial markets our measure of contagion captures the coincidence of extreme return shocks across countries within a region and across regions we characterize the extent of contagion its economic significance and its determinants using a multinomial logistic regression model applying our approach to daily returns of emerging markets during the 1990s we find that contagion is predictable and depends on regional interest rates exchange rate changes and conditional stock return volatility evidence that contagion is stronger for extreme negative returns than for extreme positive returns is mixed

dynamic competition with network externalities why history matters we consider dynamic competition among platforms in a market with network exter nalities a platform that dominated the market in the previous period becomes focal in the current period in that agents play the equilibrium in which they adopt the focal platform whenever such equilibrium exists yet when faced with higher quality competition can a low quality platform remain focal in the finite horizon case the unique equilibrium is efficient for patient platforms with an infinite time horizon however there are multiple equilibria where either the lowor high quality platform dominates if qualities are stochastic the platform with a better average quality wins with a higher probability even when its realized quality is lower and this probability increases as platforms become more patient hence social welfare may decline as platforms become more forward looking

privatization in eastern europe irreversibility and critical mass effects abstract this paper proposes a model to shed light on two important policy features of privatization in central and eastern europe the idea of a necessary critical mass of privatization on one hand and the great difficulties encountered in the actual privatization process on the other the model incorporates a positive externality related to the size of the private sector multiple equilibria may arise for political and economic reasons policies of free distribution are analysed with the model they may eliminate the danger of policy reversals due to excess unemployment but may at the same time increase the relative cost of restructuring leading in some cases to pareto inferior outcomes

corporate reorganization and the geography of services evidence from the motor vehicle aftermarket in the west midlands region of the uk marshall j n 1989 corporate reorganization and the geography of services evidence from the motor vehicle aftermarket in the west midlands region of the uk reg studies 23 139 150 research suggests that a corporate complex of administrative managerial and technical staff in the hinterland of capital cities underpins the spatial centralization of service activities in the economy there have been important changes in corporate structures during the last decade firms have reduced their in house provision of some services resorting to external contractors instead divisional and middle management activities have been rationalized and more autonomy delegated to lower levels in the corporate hierarchy using new technology firms have also expanded the range and quality of services provided in house this paper explores the geographical implications of these and other changes in business organization a case study of the motor vehicle aftermarket in the west midlands region of the uk suggests that sim

the crash risks of style investing can they be internationally diversified the crash risks of momentum tend to be higher than those of size and value international diversification lowers the crash risks of size and value but not momentum the authors examined the conditional correlations and return co exceedances of style portfolios across countries and found that this difference in the effect of diversification is due to the left right tails of momentum size and value portfolios being more correlated than the right left tails across countries

competing technologies the learning curve and rational expectations abstract the problem of choice between several variants of a technology subject to dynamic learning economies is examined in a rational expectations model with overlapping adopters it is shown that even with rational expectations the long term market outcome depends sensitively on the pattern of early chance events and that only one variant of the technology will come to dominate the market in the long run this variant need not be the one which is socially optimal or most promising technically

outsourcing r d and the pattern of intra metropolitan location the electronics industries of madrid the relationship between intra metropolitan location research and development r d and the outsourcing of production is analysed to determine differences in and the supportive character of intra metropolitan areas for high technology production madrid s electronics industries have shown a remarkable resilience in the face of extensive economic restructuring and the change in trade regimes that has accompanied continental integration much of the strength of the electronics sector may have been due to the metropolitan area s support for outsourcing and the creative specialisation that it facilitated the distribution of manufacturing establishments their local sourcing characteristics industrial district or agglomeration effects and the role of r d are evaluated to determine the intra metropolitan context of production extensive statistical analyses of the relationship between r d and productive performance with various indicators of capital costs revenues and scale are undertaken with estab

network externality an uncommon tragedy economists have defined network externality and have examined putative inframarginal market failures associated with it this paper distinguishes between network effects and network externalities where the latter are market failures the authors argue that while network effects are important network externalities are theoretically fragile and empirically undocumented some network externalities are merely pecuniary network ownership or transactions among network participants can internalize some network effects the type of market failure that has been associated with these externalities is a transition problem that has little to do with externality

changing use of external business advice and government supports by smes in the 1990s bennett r j and robson p j a 2003 changing use of external business advice and government supports by smes in the 1990s reg studies 37 795 811 this paper uses cross sectional surveys of 1991 and 1997 a panel survey of firms surviving between 1991 and 1997 and comparison with a further cross sectional survey in 1999 to compare the levels of use by smes of external business advice the resource based theory of the firm indicates that smes seek advice in order to increase their competitive capacity over time increasing competition between smes is expected to lead to increasing use of advice however the paper demonstrates that only modest changes over time have occurred in aggregate use of external advice by smes and these are not statistically significant this suggests that earlier growth in external business advice services may now have plateaued there are some significant changes of use by source increasing for advertising personnel and recruitment new technology and computer servic

platform selection in the lab abstract emerging literature explores experimental platform selection games these games converge rapidly on the superior platform under a wide range of conditions we replicate the remarkable results of hossain and morgan 2009 in which such a game tips almost perfectly to the superior platform next we show that platform coordination fails when seemingly innocent increases in out of equilibrium payoffs are introduced the inflated payoffs keep the best reply structure unchanged and do not influence players security levels our design allows control for the explanatory force of risk dominance we find that equilibrium selection theory is unable to account for coordination failure while observed behavior is consistent with non rational learning furthermore and contrary to the literature we find that efficiency suffers when an inferior platform is granted initial monopoly

tortoises and hares choice among technologies of unknown merit recent work in the area of competing technologies and increasing returns has largely been concerned with the effectiveness of the market in delivering optimal outcomes the existence of inefficient market outcomes suggests that there might be a place for intervention in the technology choice process this paper develops a model of sequential choice in which the choice process is subject to centralized control the model is used to show that intervention can increase the expected present value of the technology adoption process it remains however that one technology and not necessarily the best will come to dominate the market copyright 1991 by royal economic society

the competitiveness of business service firms a matched comparison between scotland and the south east of england o farrell p n hitchens d m w n and moffat l a r 1992 the competitiveness of business service firms a matched comparison between scotland and the south east of england reg studies 26 519 533 in this paper we present a comparative analysis of the competitiveness and performance of matched pairs of business service companies in scotland and south east england several dimensions of performance are investigated for five industries market research management consultancy product design graphic design and advertising value added per person is one quarter higher in the english offices and they achieved a much greater degree of export orientation one fifth of sales than the scottish firms at 4 possible demand and supply side causes of such differences are reviewed and potential policy responses considered o farrell p n hitchens d m w n et moffatt l a r 1992 la competitivite des prestataires des services aux entreprises l ecosse par comparaison avec l angleterre du sud est

the dynamo and the computer an historical perspective on the modern productivity paradox the dynamo and the computer an historical perspective on the modern productivity paradox author s paul a david source the american economic review vol 80 no 2 papers and proceedings of the hundred and second annual meeting of the american economic association may 1990 pp 355 361 published by american economic association stable url http www jstor org stable 2006600 accessed 08 12 2010 01 40

biodiversity conservation in a dynamic world may lead to inefficiencies due to lock in effects and path dependence abstract although biodiversity is generally diminishing in some areas its conservation is expanding however the exact path of this expansion is uncertain this can lead to problems of path dependence and lock in effects path dependence describes situations where history strongly influences present decisions and lock in effects refer to situations where an earlier decision provides strong incentives to follow a particular path even if more efficient alternatives are available later on we develop a conceptual ecological economic model to investigate which ecological and economic parameters favour the appearance of efficiency losses in biodiversity conservation due to path dependence and lock in effects in a dynamic two period two region model generally we find that efficiency losses occur if there are signals that guide the first period budget into a region that later turns out to be suboptimal if both time periods had been considered right from the beginning to illustrate the conservation relevance of our findings we present potential efficiency losses through path dependence in the hypothetical case of applying offsets to conserving the endangered maculinea teleius butterfly near the city of landau in germany

adaptation as information restriction the hot stove effect individuals and social systems are often portrayed as risk averse and resistant to change such propensities are characteristically attributed to individual organizational and cultural traits such as risk aversion uncertainty avoidance discounting and an unwillingness to change this paper explores an alternative interpretation of such phenomena we show how the reproduction of successful actions inherent in adaptive processes such as learning and competitive selection and reproduction results in a bias against alternatives that initially may appear to be worse than they actually are in particular learning and selection are biased against both risky and novel alternatives because the biases are products of the tendency to reproduce success that is inherent in the sequential sampling of adaptation they are reduced whenever the reproduction of success is attenuated in particular when adaptation is slowed made imprecise or recalled less reliably the propensity to engage in risky and new activities is increased these protections against the error of rejecting potentially good alternatives on inadequate experiential evidence are costly however they increase the likelihood of persisting with alternatives that are poor in the long run as well as in the short run

theorizing path dependence a review of positive feedback mechanisms in technology markets regional clusters and organizations the concept of path dependence has often been criticized as vague and only narrowly applicable although we can find some very refined definitions of the concept we also find a wide range of empirical phenomena being described as path dependent we argue that more detailed accounts of the positive feedback mechanisms that form paths can take path dependence beyond this state of being overdetermined but under specified reviewing three well described cases of path dependent dynamics in technology markets regional clustering and organizations we define a core set of positive feedback mechanisms that constitute path dependence at different analysis levels and clarify the relationship between positive feedback and increasing returns we show that path dependent processes that is processes driven by positive feedback that veer toward rigidity or lock in can be but do not have to be found under many labels including structural inertia coevolution or institutional persistence we conclude that a precise definition of path dependence does not need to be at odds with the concept s widespread use in understanding organizational and industrial development processes copyright 2013 the author 2012 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

small firms business services growth and regional development in the united kingdom some empirical findings keeble d bryson j and wood p 1991 small firms business services growth and regional development in the united kingdom some empirical findings reg studies 25 439 457 since 1980 the united kingdom has experienced very rapid growth in firms and employment in information intensive business services this paper documents the nature and extent of this growth with particular reference to small and new firms in management consultancy and market research and reviews its locational impact numbers of business service firms most of which are small independent companies have grown much faster than consumer service firms despite a significant death rate many small businesses in these sectors have grown rapidly as have very large firms business service growth has contributed powerfully to the uk s north south divide being focused on london and the outer south east possible causes of these trends and key future research issues are reviewed keeble d bryson j et wood p 1991 petites entreprise

inefficient standard adoption inertia and momentum revisited i introduction since the establishment of the theory of network effects economists have been concerned with the question of whether a market with network effects will tend to settle on the socially optimal standard it has been postulated that markets may exhibit excess inertia once a technological standard is in place a new superior standard may not displace it because of installed base effects alternatively markets may exhibit excess momentum consumers may adopt a new standard too quickly ignoring the stranding effect they are having on previous users similar issues arise in the adoption of language and social norms the literature has investigated various conditions under which one of these inefficiencies arises such inefficiencies are of particular concern for open technologies such as the qwerty and dvorak keyboards 1 the situation is somewhat different when individual firms own standards in that case a simple argument seems to indicate that there is no possibility that an inefficient standard will persist if a new standard is superior in any objective sense there are gains to be made from switching to it once the standard has been adopted the firm can appropriate these gains therefore the firm has incentive to lower the initial price enough to induce adoption of the standard the preceding argument is made in liebowitz and margolis 1999 and repeated in spulber 2002 spulber expresses a general skepticism about the likelihood of inefficiencies when property rights are defined and markets exist critics might claim that previous models that imply inefficient standard adoption are unrealistic in some way and that if such models were modified slightly the inefficiency would disappear i reconsider the issue of inefficient standard adoption using a parsimonious yet compelling model assuming only that there are successive generations of finitely lived consumers that preferences are heterogeneous and that there are network effects among users adoption decisions can be inefficient this is true even if consumers can coordinate efficiently within a generation and a firm can act as a coordinating device across generations the model presented here generates some of the same results found in other papers collectively but in a more general setting and with more robust results if there is an established standard and a superior alternative emerges no single generation of consumers will be willing to switch to the new standard if the switching cost the loss of network benefit from breaking with past users is too high it may be that the benefits to future generations of consumers are large enough that from a social standpoint it would be efficient for one generation to adopt the new standard even if it is privately optimal for that generation to retain the old standard on the other hand the current generation considers only its own switching cost and not the cost it imposes on the previous generation leading to potential overadoption of new technology even for proprietary standards it is not clear that the incentive of the firm to induce adoption matches the social incentive in particular if consumer preferences are heterogeneous the firm will not be able to price in such a way to extract all of the additional surplus gained from the new standard on the other hand the firm will be able to appropriate some of the surplus generated by the network effect itself which is present for any standard and thus does not affect the social incentive to change standards it is not possible to address this issue with a two period model as in some of the previous literature see for example choi 1994 choi and thum 1998 katz and shapiro 1986 if a new technology is introduced in the second period but then the game ends the welfare of future generations of consumers is neglected 2 this article also differs from previous infinite horizon models of technology adoption

globalization of production and innovation how outsourcing is reshaping an advanced manufacturing area cusmano l mancusi m l and morrison a globalization of production and innovation how outsourcing is reshaping an advanced manufacturing area regional studies this paper investigates the determinants and the spatial and functional dimensions of firms outsourcing based on a large survey of manufacturing firms in lombardy italy the analysis shows that outsourcing is remarkably wide across sectors and has a clear regional dimension concerning highly skilled firms at most offshoring is still a minor fraction of the deverticalization process largely related to wider strategies of internationalization by foreign group subsidiaries at intermediate stages of the value chain the evidence suggests the regional system is inserting onto global knowledge networks but also points at the risk of branch plant effects in high technology segments cusmano l mancusi m l et morrison a la mondialisation de la production et de l innovation comment l approvisionnement a l exterieur reorganise une zone ind

demand dynamics with socially evolving preferences in this work we first identify a few stylized facts concerning microconsumption acts second building on them we develop a simple model of boundedly rational consumers who endogenously evolve their preferences via both innovation and social imitation third we explore some statistical properties of the demand patterns generated by the model which despite its simplicity are surprisingly in line with the empirical evidence these results we suggest bring encouraging support to microfoundations of demand theory based on cognitive and behavioral foundations more in tune with the psychological and sociological evidence based on heterogeneous agents who are much less rational and much more social than in standard theory and who collectively discover along the way what they like within a growing universe of available commodities

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

supply chains material linkage and regional development the importance of economic linkage to regional development has been implicit in the variety of approaches that have been taken to analysing the development process despite this no mechanism exists which allows a general assessment of regional supply networks the paper provides one approach to this type of evaluation in uk regions focusing on the north west of england and taking uk input output tables as the basis of analysis sectoral linkages with supply potential are identified and their magnitude estimated the paper reveals both the scope for extending material linkages and generating employment in this region of the uk as well as confirming the important role played by manufacturing industries in intermediate supply chains

the economics of convention c onventions regulate much of economic and social life yet they have received surprisingly little attention from economists by a convention we mean a pattern of behavior that is customary expected and self enforcing everyone conforms everyone expects others to conform and everyone has good reason to conform because conforming is in each person s best interest when everyone else plans to conform lewis 1969 familiar examples include following rules of the road adhering to conventional codes of dress and using words with their conventional meanings conventions with direct economic implications include species of money and credit industrial and technological standards accounting rules and forms of economic contracts indeed it would scarcely be an exaggeration to say that almost all economic and social institutions are governed to some extent by convention the main feature of a convention is that out of a host of conceivable choices only one is actually used this fact also explains why conventions are needed they resolve problems of indeterminacy in interactions that have multiple equilibria indeed from a formal point of view we may define a convention as an equilibrium that everyone expects in interactions that have more than one equilibrium the economic significance of conventions is that they reduce transaction costs imagine the inconvenience if whenever two vehicles approached one another the important exceptions are sugden 1986 and ullman margalit 1977 the interested reader might also refer to the symposium on social norms that appeared in the fall 1989 issue of this journal with articles by sugden 1989 and elster 1989

business service specialization and regional economic change perry m 1990 business service specialization and regional economic change reg studies 24 195 209 business services are experiencing rapid employment growth but there is uncertainty over the interpretation of this trend three surveys assess changes in the demand and supply of business services in the auckland region new zealand 1983 8 the data indicate that employment growth is real in that it is not caused by a transfer of activities that were formerly retained within other industries most manufacturing firms have adopted a pragmatic purchasing policy externalizing and internalizing services on an individual basis with increased internalization dominant for data processing and accountancy services a survey of business service suppliers indicates the greater importance of service exports demand from other services and product innovation as the basis for growth perry m 1990 la specialisation des services aux entrepri ses et l evolution regionale economique reg studies 24 195 209 les

the two faces of market support how deployment policies affect technological exploration and exploitation in the solar photovoltaic industry the recent years have seen a strong rise in policies aiming to increase the diffusion of clean energy technologies while there is general agreement that such deployment policies have been very effective in bringing technologies to the market it is less understood how these policies affect technological innovation to shed more light on this important question we conducted comparative case studies with a global sample of 9 firms producing solar photovoltaic pv modules complemented by in depth interviews with 16 leading pv industry experts we propose that on the one hand policy induced market growth serves as an important catalyst for innovative activity as it raises the absolute level of firm investments in technological exploration on the other hand however deployment policies create an incentive for firms pursuing more mature technologies to shift their balance between exploitation and exploration toward exploitation firms focusing on less mature technologies cannot tap the potentials of exploitative learning to the same extent as those with more mature technologies therefore stimulating strong market growth may raise the barrier to market entry for less mature technologies we conclude that when designing deployment policies great care should be taken to avoid adverse effects on technological diversity and a premature lock in into more established technologies

the geography of technological change in the information economy hepworth m 1986 the geography of technological change in the information economy reg studies 20 407 424 innovations in information technology are transforming urban and regional systems through their impacts on production and distribution processes case studies of canadian multi locational firms are used to examine this spatio economic transformation in the context of the new information based service economy by focusing on computer networks as spatial systems of information technology it is shown that these innovations can lead to centralized and decentralized patterns of direct production and office activity new insights are also developed into the telecommunications transportation trade off and the key role of telecommunications in regional development

path dependence and the korean keyboard abstract this paper recounts the evolution of the korean keyboard as a case in which the disadvantages of the inherited standard turn into a nonissue with the advancement of auxiliary technologies the persistence of an inherited standard when a superior alternative is available is usually regarded as market failure however if the transition costs to the new standard are such that the net gains from the transition are insufficient the situation is unfortunate but not market failure the situation may change over time if the net gain from the alternative standard increases or transition costs to new alternative decrease or both the situation turns into one in which entrepreneurs can profit by making the transition where appropriate an institutional reform may lower transition costs substantially this paper suggests an additional possibility of technological changes that make the transition unnecessary in the case of the korean keyboard changes in auxiliary technologies have rendered the disadvantages of the inherited standard innocuous the case provides a cautionary tale against the temptation to drastically alter a seemingly hopelessly inferior inherited standard the lesson of the korean keyboard applies to japanese and chinese keyboards with even greater force

bad eggs learning by doing and the choice of technology we model long run economic development through technology adoption under scientific uncertainty about environmental effects there are four possible long run equilibria in a socially planned economy high growth adopt rapidly but abandon damaging technologies once revealed ddt cfcs cautious brake the introduction of new technologies to avoid mistakes genetically modified organisms no growth halt technological progress to preserve secondary knowledge and collapse adopt rapidly without ever abandoning damaging technologies in the base parameterization a short sighted social planner chooses the cautious strategy a far sighted planner chooses the high growth strategy unless damages are irreversible in which case the cautious strategy again dominates regulatory options in the market economy are investigated pollution taxes do not affect the firm s level of precaution if they can only be applied after the adopting firm has reaped the benefits however they do encourage the abandonment of damaging technologies liability rules do affect precaution but may lead to excessive caution or even a no growth trap

regional worlds from related variety in regional diversification to strategic coupling in global production networks this annual lecture paper bridges two influential but parallel literature strands on evolutionary economic geography eeg and global production networks gpn it argues that both strands are prem