innovation behaviour and regional indigenous potential meyer krahmer f 1985 innovation behaviour and regional indigenous potential reg studies 19 523 534 this paper has been written in order to present empirical results about some hypotheses not yet very well clarified in innovation oriented regional research the first part relates to one of the assumptions underlying innovation oriented regional policy which is that innovating and non innovating firms have different characteristics with respect to employment product lines and markets in particular the contribution to regional growth made by innovating firms is said to be larger in the second part of the paper the results of a study are presented in which it was attempted to find out empirically the extent of regional differences in indigenous innovation potential in the federal republic of germany reference is made to the innovating firms their performance and behaviour and bottlenecks in innovation as in other recent studies it is confirmed that there exists also in rural regions a sizeab

agglomeration effects and financial performance this study empirically tests the trade off between the costs and benefits of agglomeration for a large sample of firms in line with the existing literature it is found that population and employment density benefit productivity but increase labour and real estate costs to test the trade off of benefits and drawbacks of agglomeration the analysis focuses on the relation between agglomeration and profitability for a sample of single establishment dutch firms it is found that on average the costs of settling in an area with a dense spatial distribution of employment outweigh the benefits an effect that holds for both urbanisation and localisation measures in general doubling the employment density will decrease the average return on assets by more than one percentage point

does one soros make a difference a theory of currency crises with large and small traders do large investors increase the vulnerability of a country to speculative attacks in the foreign exchange markets to address this issue we build a model of currency crises where a single large investor and a continuum of small investors independently decide whether to attack a currency based on their private information about fundamentals even abstracting from signaling the presence of the large investor does make all other traders more aggressive in their selling relative to the case in which there is no large investors small investors attach the currency when fundamentals are stronger yet the difference can be small or null depending on the relative precision of private information of the small and large investors adding signaling makes the influence of the large trader on small traders behaviour much stronger

local labour control regimes uneven development and the social regulation of production jonas a e g 1996 local labour control regimes uneven development and the social regulation of production reg studies 30 323 338 the apparent demise of fordist consensus seeking institutions of labour regulation raises questions concerning which if any forms of labour market governance will dominate localities in the future without providing the answers for these questions this paper addresses at a theoretical level the social need for capital to foster reciprocities between places of production and sites of consumption and labour reproduction in local labour markets this need emerges from a contradiction between on the one hand capital s abstract interest in the global exchange of labour power and on the other hand the concrete interest of particular capitals in the local context of that exchange a local labour control regime amounts to a stable local institutional framework for accumulation and labour regulation constructed around local labour market reciprocities different factions

marshallian factor market externalities and the dynamics of industrial localization abstract when an industry has thus chosen a locality for itself it is likely to stay there long so great are the advantages which people following the same skilled trade get from near neighborhood to one another a localized industry gains a great advantage from the fact that it offers a constant market for skill employers are apt to resort to any place where they are likely to find a good choice of workers while men seeking employment naturally go to places where there are many employers who need such skill as theirs the advantages of variety of employment are combined with those of localized industries in some of our manufacturing towns and this is a chief cause of their continued growth alfred marshall principles of economics 8th ed pp 271 272 1920

financial contagion through capital connections a model of the origin and spread of bank panics financial contagion is modeled as an equilibrium phenomenon in a dynamic setting with incomplete information and multiple banks the equilibrium probability of bank failure is uniquely determined we explore how the cross holding of deposits motivated by imperfectly correlated regional liquidity shocks can lead to contagious eects conditional on the failure of a financial institution we show that contagion is possible in the unique equilibrium of the economy and characterize exactly when it may exist at the same time we identify a direction of flow for contagious eects which provides a rationale for localized financial panics simulations identify the optimal level of interbank deposit holdings in the presence of contagion risk our results suggest that when the probability of bank failure is low maximal levels of interbank holdings are optimal when cross holding of deposits is complete we demonstrate that the intensity of contagion is increasing in the size of regionally aggregate liquidity shocks

sectoral growth patterns at the metropolitan level an evaluation of economic development incentives abstract economic development incentives are much used and expensive yet information on their effectiveness is scarce this paper reports a regression analysis of employment growth in 37 disaggregated sectors across u s metropolitan areas in the time period 1977 1984 the results indicate that variation in taxes and subsidies are not related significantly to the location of either high technology manufacturing or most services our results suggest however that enterprise zones and university research parks which may be proxies for focused economic development programs are associated with increased job growth nevertheless the strongest determinants of growth are localization and urbanization externalities along with labor costs and skill factors we hypothesize that localization economies operate through the reduction of information costs especially those associated with firms search behaviors for skilled labor forces

seizing agglomeration s potential the greater springfield massachusetts metalworking sector in transition 1986 1996 forrant r and flynn e 1998 seizing agglomeration s potential the greater springfield massachusetts metalworking sector in transition 1986 1996 reg studies 32 209 222 in the 1980s a dramatic wave of lay offs and plant closings among western massachusetts largest metalworking manufacturers led to rapid industrial decline and massive dislocation for several thousand of the region s workers today western massachusetts is home to a thriving and competitive agglomeration of over 350 small metalworking firms in an industrial sector known for cut throat competition cost driven business strategies and fierce privacy western massachusetts firms stand apart for their openness hundreds of workers and managers have participated in group training and seminars over the last several years in topics including blue print reading computer numerical control machine tool programming and repair work flow management and iso 9000 certification western massachusetts represents a successful case of the bootstra

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

contagion of self fulfilling financial crises due to diversification of investment portfolios abstract we look at two countries that have independent fundamentals but share the same group of investors each country might face a self fulfilling crisis agents withdrawing their investments fearing that others will a crisis in one country reduces agents wealth this makes them more averse to the strategic risk associated with the unknown behavior of other agents in the second country increasing their incentive to withdraw their investments consequently the probability of a crisis there increases this generates a positive correlation between the returns in the two countries since diversification affects returns in our model its welfare implications are non trivial

do polycentric urban regions promote functional spillovers and economic performance evidence from china although the literature often suggests that the economic prowess of polycentric urban regions partly results from the ability of their constituent cities to promote functional spillovers through

uneasy alliances the spatial development of computing and communication markets cooke p and wells p 1991 uneasy alliances the spatial development of computing and communication markets reg studies 25 345 354 this paper explores the role of geographical space as a dynamizing element in the economic development process it builds on the insight that space makes a significant difference to business activity by virtue of the capacity to transform products into commodities through the purchasing power of geographically dispersed commodity consumers following a discussion of the implications of the growth of international and global market opportunities in a context of deregulatory lowering of market barriers the preliminary results of research into the business dispositions of computing and communications c c firms is presented this shows that for the most part the desire to penetrate ever wider geographical markets is having transformative effects upon the internal and external organizational structures of such firms cooke p et wells p 1991 des alliances difficiles

industrial districts old wine in new bottles harrison b 1992 industrial districts old wine in new bottles reg studies 26 469 483 according to the theory of industrial districts a new wave of economic growth is being led in a number of regions in europe north america and east asia by spatially concentrated networks of mostly small and medium sized enterprises often using flexible production technology and characterized by extensive local interfirm linkages does this amount to a re emergence of the dominance of what urban and regional economists call agglomeration economies over the well known pressures on business to spatially disperse its operations neoclassical economic theorizing from marshall to perroux provides one perspective on the contemporary industrial district phenomenon another is afforded by granovetter s more recent elaboration of the ideas of embedding under and over socialization confronting each of these theoretical approaches with the other leads me to conclude that the industrial district prototypes involv

stretching the concept of borrowed size borrowed size is an emerging policy concept in several european countries presenting theoretical potential to explain contemporary urban dynamics unaddressed through conventional urban growth theories that emphasise the role of agglomeration economies in its original conceptualisation by alonso the concept describes and explains the situation that especially smaller cities that are located in a larger megapolitan complex do perform better because they have access to agglomeration benefits of larger neighbouring cities this paper scrutinises the concept of borrowed size thereby focusing on its conceptualisation and reviewing its empirical justification thus far our empirical analyses show that the concept must be stretched in terms of scale and scope to enhance its policy value borrowed size occurs when a city possesses urban functions and or performance levels normally associated with larger cities this is enabled through interactions in networks of cities across multiple spatial scales these networks serve as a substitute for the benefits of agglomeration theoretically the borrowed size concept demands a recasting of the geographical foundations of agglomeration theory

industrial reallocation across us cities 1977 1997 abstract between 1977 and 1997 us employment shifted dramatically in favor of industries that used skilled labor intensively during this same period some cities withered while others prospered this paper examines employment growth in 39 industries across 316 cities to evaluate the importance of learning by doing industry specific location fundamentals human capital externalities and hiring cost explanations in these geographic shifts growth in industries that used skill intensively was particularly sensitive to the presence of local human capital that growth was almost always negatively related to the initial size of the industry within the city implies a limited role for learning by doing and industry specific location fundamentals stories

clusters dispersion and the spaces in between for an economic geography of the banal while the geographical clustering of economic activities remains an enduring feature of the industrial landscape and a perennial source of theoretical and empirical interest the geographical scale at which external economies and agglomerative effects are now claimed to operate is on the increase such changes in the spatial form and potential causes of agglomeration over time pose important questions how should we analyse changes in the spatial extent of external economies and agglomerative effects ought we to pay more attention to the sorts of banal economic spaces thrown up as part of increasingly diffuse forms of agglomeration to answer the first of these questions it is noted how economists and geographers have explained agglomerations often in the rather singular and invariant categories of pecuniary and marshallian externalities respectively this paper considers the relevance of neo marshallian analysis and the concept of borrowed size as variations on these classical principles to an analysis of the mobility and fixity of external economies and contemporary diffuse forms of agglomeration whilst reflecting important changes in the spatial extent of industrial agglomerations they are insufficiently sensitive to the interaction of different types of external economies with different scale dependencies in answering the second question it is noted that part of the value of analysing the economic basis of largely overlooked banal intermediate places lies in what they may reveal about the functioning of diffuse forms of agglomeration

is tourism firm competitiveness driven by different internal or external specific factors new empirical evidence from spain abstract the quest to understand the multilevel antecedents of competitiveness has led to a separation of approaches on one side of the question are the environment theories that analyze the structural characteristics of the general and competitive environment on the other side are the resource based view and its extensions that highlight firm specific resources and capabilities as the main basis of firms competitiveness however in recent years the nature of competition and shifting economic conditions have given rise to new theoretical approaches that complement the assumptions underlying both environmental and firm theories specifically this study contributes by examining the regional environment effect the district effect and the strategic group effect through a study of 364 spanish tourism firms this research explores the relative importance of distinct external forces such as the general environment or country effect the regional effect the competitive environment or industry effect the district effect and internal factors such as the firm s tangible resources capabilities and strategy selection the results demonstrate that firms capabilities are more important than environment effects and tangible resources

who matters in coordination problems we consider a common investment project that is vulnerable to a self fullling coordination failure and hence is strategically risky based on their private information agents who have heterogeneous investment incentives form expectations or sentiments about the project s outcome we nd that the sum of these sentiments is constant across dierent strategy proles and it is independent of the distribution of incentives as a result we can think of sentiment as a scarce resource divided up among the dierent payo types applying this nding we show that agents who benet little from the project s success have a large impact on the coordination process the agents with small benets invest only if their sentiment towards the project is large per unit investment cost as the average sentiment is constant a subsidy decreasing the investment costs of these agents will free up a large amount of sentiment provoking a large impact on the whole economy intuitively these agents insensitive to the project s outcome and hence to the actions of others are inuential because they modify their

industrial districts and regional economic development a regulation approach digiovanna s 1996 industrial districts and regional economic developoment a regulation approach reg studies 30 373 386 this paper examines the regulatory underpinnings of industrial districts as many regional governments have been forced to accept greater responsibility for their own economic futures the industrial district model has been presented as an attractive path to economic development the underlying assumption among many policy makers is that all industrial districts are based on similar models of production organization and labour relations nevertheless the comparative approach illustrates that districts which appear similar on the surface are often quite distinct particularly when the experience of workers is considered by applying the concepts of regulation theory to the experiences of emilia romagna baden wurttemberg and silicon valley this paper illustrates that flexibly specialized districts can result in a variety of social outcomes this paper concludes that the success o

does manufacturing extension matter an evaluation of the industrial technology extension service in new york abstract building on pioneering state programs in the 1980s new federal initiatives call for a significant expansion in the scale and scope of manufacturing extension efforts in the united states this article presents an evaluation of one effort to spur industrial modernization the industrial technology extension service ites in new york state based on both qualitative and quantitative analysis the evaluation suggests that the ites program has had a favorable impact on many companies with respect to cost reductions and increased productivity the article discusses some of the difficult methodological issues in evaluating these types of programs and includes a series of recommendations on strengthening future evaluations to yield more definitive results

strategic complementarities and the twin crises the economic literature has emphasized the role of strategic complementarities in generating banking crises and currency crises motivated by evidence from recent financial crises we study a model where strategic complementarities exist not only within a group of creditors or within a group of currency speculators but also between the two groups the additional type of strategic complementarities generates a vicious cycle between banking crises and currency crises this vicious cycle magnifies the correlation between the two crises and destabilizes the economy we discuss some empirical implications and policy implications and in particular show that due to the interaction between the banking sector and the currency market a lender of last resort might not be able to prevent bank runs

growth oriented smes in unfavourable regional environments vaessen p and keeble d 1995 growth oriented smes in unfavourable regional environments reg studies 29 489 505 in this paper the research focus is on counterfactual cases of growth oriented smes in peripheral regions of britain scotland northern england wales and merseyside these firms are systematically compared to three control groups made up of growth oriented smes in the south east slow growth firms in the periphery and slow growth firms in the south east apart from some performance measures such as profits and exports three key characteristics of the firms are analysed these are the extent of competition in the markets served levels of innovation and r d and work force and labour market characteristics the analysis is conducted for manufacturing firms and professional and business services separately firms of the research group stand out against the other firms in the sample as businesses with a very favourable r d input output ratio and greater propensity for providing a

fear of miscoordination and the robustness of cooperation in dynamic global games with exit this paper develops a framework to assess how fear of miscoordination affects the sustainability of cooperation building on theoretical insights from carlsson and van damme 1993 it explores the effect of small amounts of private information on a class of dynamic cooperation games with exit lack of common knowledge leads players to second guess each other s behavior and makes coordination difficult this restricts the range of equilibria and highlights the role of miscoordination payoffs in determining whether cooperation is sustainable or not the paper characterizes the range of perfect bayesian equilibria as the players information becomes arbitrarily precise unlike in one shot two by two games the global games information structure does not yield equilibrium uniqueness

the impact of polycentric development on regional gap of energy efficiency a chinese provincial perspective abstract a reasonable distribution of urban systems is essential for optimizing spatial energy allocation and the quality of economic growth for china this study discusses the impact of the polycentric development on the regional gap of energy efficiency rgee i e difference in energy efficiency levels among cities in the same region in the chinese provincial context by employing a novel method using nighttime lighting data from defense meteorological satellite program s operational linescan system dmsp ols to measure the spatial structure of provinces and stochastic frontier approach sfa to evaluate the total factor energy efficiency our results firstly show that the polycentric development has a narrowing effect on the rgee second they show that the more government intervention can narrow the rgee of a province but being more open having more foreign direct investment fdi and using more coal can widen the rgee of that province meanwhile the level of regional urbanization is shown to have no influence on rgee third they show that the polycentric development has a negative effect on the energy efficiency of large cities but a positive effect on that of small and medium size cities which accordingly narrows the rgee the conclusions of this study not only reveal insights for policies that aim to reduce the rgee but also provide an empirical basis for future urban development strategies in the chinese provincial context

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

regional social capital why it matters malecki e j regional social capital why it matters regional studies social capital refers to a culture of interaction among people with productive economic outcomes social capital promotes regional learning both within a region and beyond as it reinforces openness to the ideas of others regional cultures vary in the degree to which people individually and within their organizations trust and interact with one another which is why regional outcomes vary innovation learning and entrepreneurship key processes of regional development take place largely within and among people as members of companies and territorial organizations innovative milieus industrial districts and knowledge economies are among the regions with extraordinary pools of social capital malecki e j

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

market crashes and informational avalanches this paper analyses a security market with transaction costs and a sequential trading structure transaction costs may prevent many traders from revealing their private information if they trade in a sequential fashion due to the information aggregation failure hidden information gets accumulated in the market which may be revealed by a small trigger yielding a high volatility in the absence of an accompanying event the paper first characterizes the optimal trading strategy of the agent which constitute the unique equilibrium further properties of the price sequence are obtained using the concepts of informational cascade and informational avalanche the results are applied to the explanation of market crashes in particular the dynamics of market crashes are illustrated as evolving through the following four phases 1 boom 2 euphoria 3 trigger and 4 panic where the euphoria corresponds to the informational cascade and the panic corresponds to the informational avalanche

growth pole strategies in regional economic planning a retrospective view part 2 implementation and outcome the paper continues from part 1 which appeared in the previous issue of the journal the primary concern is with neglected aspects of the growth pole strategy particularly as these relate to its i

market knowledge diversification and export expansion the research focuses on the export expansion process of small and middle sized manufacturing firms and some of its correlates diversification and geographical market distribution means of acquiring information and modes of international distribution the study reveals the overwhelming influence on export expansion of information acquired from business transactions as opposed to reliance on private or public information services the impact of market diversification and its nature is confirmed policy implications are suggested

innovation and industrial districts a first approach to the measurement and determinants of the i district effect boix r and galletto v innovation and industrial districts a first approach to the measurement and determinants of the i district effect regional studies the paper analyses an exhaustive database of patents granted in spain between 2001 and 2006 aggregated in a panel of 806 local labour markets classified by seven typologies of local production systems the analysis shows that marshallian industrial districts generate 30 of spanish patents and an innovative output per capita that is 47 above the national average and 31 larger than the manufacturing production systems of large firms the econometric estimates of a fixed effects model confirm the existence of an innovation district i district effect and its size the i district effect is mainly related to the presence of marshallian localization economies boix r et galletto v innovation et districts industriels une premiere approche de la mesure et des determinants des effets des districts d innovation regional studies nous analysons une base

a macroprudential approach to financial regulation many observers have argued that the regulatory framework in place prior to the global financial crisis was deficient because it was largely microprudential in nature a microprudential approach is one in which regulation is partial equilibrium in its conception and aimed at preventing the costly failure of individual financial institutions by contrast a macroprudential approach recognizes the importance of general equilibrium effects and seeks to safeguard the financial system as a whole in the aftermath of the crisis there seems to be agreement among both academics and policymakers that financial regulation needs to move in a macroprudential direction in this paper we offer a detailed vision for how a macroprudential regime might be designed our prescriptions follow from a specific theory of how modern financial crises unfold and why both an unregulated financial system as well as one based on capital rules that only apply to traditional banks is likely to be fragile we begin by identifying the key market failures at work why individual financial firms acting in their own interests deviate from what a social planner would have them do next we discuss a number of concrete steps to remedy these market failures we conclude the paper by comparing our proposals to recent regulatory reforms in the united states and to proposed global banking reforms

does state economic development spending increase manufacturing employment abstract recent studies which have attempted to determine what causes an industrial sector in a state to grow have ignored the general role of the state s economic development agency we extend the analysis to include its effect and determine that economic development expenditure by the state is significantly correlated with manufacturing growth in the state our result is robust to a variety of specification tests

how much difference is there between industrial district firms a net value creation approach abstract we argue that industrial district firms possess a number of shared resources that explain the competitive superiority of these firms these factors include common reputation intensity of exchange and combination of resources and participation of the local institutions using these shared resources we aim to address an unsolved question in the industrial district literature namely the internal heterogeneity of the clustered firms our empirical research drew upon a sample of 288 spanish manufacturing firms belonging to industrial districts findings suggest that even assuming a certain degree of homogeneity among internal district firms they develop their own particular relationships and networks and as a result exploitation of the shared resources is irregular these differences can therefore be used to explain the differences in value creation among firms

collective efficiency growth path for small scale industry this study is concerned with the growth of small local industry in developing countries and explores one particular route for understanding and fostering such growth it focuses on the clustering of firms and the competitive advantage which they derive from local external economies and joint action captured in the concept of collective efficiency following a conceptual discussion the article explores the economic and institutional conditions which enhance or hinder collective efficiency this includes a case study which suggests that responding to opportunity and crisis requires shifting from mere reliance on external economies to joint action and from ascribed to earned trust

demystifying the role of culture in innovative regional economies james a 2005 demystifying the role of culture in innovative regional economies regional studies 39 1197 1216 within the regional learning and innovation literature the precise impact of regional culture on firms competitive performance remains unspecified in response this paper draws on research on utah s high tech industrial agglomeration embedded in a highly visible regional culture mormonism focusing specifically on computer software firms the paper first shows how the cultural embeddedness of firms in the region is best understood as a series of sustained tensions between 1 self identified regional cultural traits imported into the firm versus 2 key elements of corporate cultures known to underpin innovation second the paper measures the material impact of that regional cultural embedding on firms innovative capacities and hence abilities to compete finally it outlines the wider relevance of the author s work with regard to the spatial limits imposed on high tech cluster po

coordinated bubbles and crashes abstract in a market with information friction investors strategically consider the actions of others and evolutionarily switch between fundamental and technical strategies to maximize their payoffs the collective actions of all investors exert feedback on asset price which affects investors subsequent actions we find that investors have the incentive to adopt fundamental strategy to restore market efficiency only if the mispricing is sufficiently large when investors fail to coordinate on the fundamental strategy market inefficiency increases which blows the bubble as market inefficiency grows the coordination on fundamental strategy strengthens which eventually bursts the bubble

contagious bank failures in a free banking system this paper develops a model of an unregulated banking system based around a private clearing house arrangement whilst such a system may dominate one with a public safety net in reducing moral hazard in lending and therefore the scope for individual bank insolvency it also increases the likelihood of contagious bank failures following a systemic shock or an aggregate liquidity shortage

financial fragility liquidity and asset prices we define a financial system to be fragile if small shocks have disproportionately large effects in a model of financial intermediation we show that small shocks to the demand for liquidity cause either high asset price volatility or bank defaults or both furthermore as the liquidity shocks become vanishingly small the asset price volatility is bounded away from zero in the limit economy with no shocks there are many equilibria however the only equilibria that are robust to the introduction of small liquidity shocks are those with non trivial sunspot activity

strategic merger waves a theory of musical chairs this paper proposes an explanation of merger waves based on the interaction between competitive pressure and irreversibility of mergers in an uncertain environment a set of acquirers compete over time for scarce targets at each point in time an acquirer can either postpone a takeover attempt or raid immediately by postponing the takeover attempt an acquirer may gain from more favorable future market conditions but runs the risk of being preempted by rivals first a complete information model is considered and it is shown that the above tradeoff leads to a continuum of subgame perfect equilibria in monotone strategies that are strictly pareto ranked all these equilibria share the feature that all acquirers rush simultaneously in merger waves the model is then extended to a dynamic global game by introducing slightly noisy private information about merger profitability this game is shown to have a unique markov perfect bayesian equilibrium in monotone strategies and the timing of the merger wave can thus be predicted last the comparative dynamics predictions of the model are related to stylized facts

employment decentralisation polycentricity or scatteration the case of barcelona at the present time most large cities in the world are polycentric and at the same time they are undergoing processes of employment decentralisation and deconcentration it has been argued that polycentricity is just an intermediate stage between monocentricity and a more unstructured chaotic and amorphous location model scatteration for the case of the polycentric barcelona the aims of this study are to test whether its employment is moving from polycentricity to scatteration and whether its employment location model is increasingly random and unstructured the results show that in spite of the decentralisation and deconcentration processes employment concentrated in centres still represents a significant percentage of total employment and new sub centres have emerged in the periphery what is more the results also show an increasing influence of employment sub centres on employment location and density conditions as a result polycentricity has been reinforced

heterogeneous fragility systematic panic and optimal transparency abstract in this study we provide a model of systematic panic among financial institutions with heterogeneous fragility during a systematic panic institutions characterized by a higher degree of fragility are more aggressive to withdrawals and such aggressiveness increases linearly with their fragility we derive an analytical solution for this linear relationship using a global game framework and demonstrate that transparency does not always endanger the regime when the outside option is large transparency increases the strength of the regime

dynamic interventions and informational linkages abstract we model a dynamic economy with strategic complementarity among investors and study how endogenous government interventions mitigate coordination failures we establish equilibrium existence and uniqueness and we show that one intervention can affect another through altering the public information structure a stronger initial intervention helps subsequent interventions through increasing the likelihood of positive news but also leads to negative conditional updates our results suggest optimal policy should emphasize initial interventions when coordination outcomes tend to correlate neglecting informational externalities of initial interventions results in over or under interventions moreover saving smaller funds disproportionally more can generate greater informational benefits at smaller costs

the role of large producers in industrial districts a case study of high technology systems houses in southern california scott a j 1992 the role of large producers in industrial districts a case study of high technology systems houses in southern california reg studies 26 265 275 a generalized concept of industrial districts is proposed the concept hinges on the intertwined notions of the social division of labour external economies and locational agglomeration it is argued that large production units often play an important part in sustaining the growth and development of industrial districts and that such districts need not be composed solely of small production units the argument is illustrated by means of a case study of the role of large systems houses within the high technology industrial districts of southern california it is concluded that neither large establishments nor the internationalization of the economy necessarily threaten the continued viability of industrial districts it is also suggested that industrial districts represent a very widely developed phenomenon in time and space scott a j

economic and environmental benefits of eliminating log export bans the case of costa rica an increasing number of tropical timber producing nations have enacted bans on export of logs arguing that this will reduce deforestation expand downstream wood processing and improve the scale efficiency of domestic processing create jobs and retain more value added nationally the theoretical literature is clear that trade restrictions are generally welfare reducing except in special cases such as when there is a potential for an optimal export tax at best a log export ban is a second best policy tool for reducing deforestation and addressing the associated environmental externalities in overall terms the suggestion that log export bans can achieve the objectives expected of them is dubious however very little quantitative evidence exists to demonstrate this claim and the paper attempts to address this gap by looking at the economic and environmental impacts of eliminating a log export ban in costa rica the authors argue that eliminating the export ban is pareto improving and could generate economic gains as high as 14 million per annum with the possibility of relatively modest environmental benefits

establishment size and local employment growth in a sample of more than 2000 u s counties smaller average establishment size is generally associated with faster subsequent growth rates of sectoral employment both within and across sectors the estimated effects are large in magnitude and thus economically important and are consistent with several theories previously developed these findings contribute toward a more precise understanding of the role of small businesses in economic growth and labor markets

episodic liquidity crises cooperative and predatory trading we describe how episodic illiquidity arises from a breakdown in cooperation between market participants we first solve a one period trading game in continuous time using an asset pricing equation that accounts for the price impact of trading then in a multi period framework we describe an equilibrium in which traders cooperate most of the time through repeated interaction providing apparent liquidity to one another cooperation breaks down when the stakes are high leading to predatory trading and episodic illiquidity equilibrium strategies that involve cooperation across markets lead to less frequent episodic illiquidity but cause contagion when cooperation breaks down why is illiquidity rare and episodic pastor stambaugh 2003 detect only 14 aggregate low liquidity months over the time period 1962 to 1999 despite being of significant magnitude most of the episodes were short lived and were followed by long periods of liquidity 1 the origin of this empirical observation still remains a puzzle in this paper we attempt to shed light on this puzzle by developing a theoretical model in which a breakdown in cooperation between traders in the market manifests itself in predatory trading this mechanism leads to sudden and short lived illiquidity we develop a dynamic model of trading based on liquidity needs during each period a liquidity event may occur in which a trader is required to liquidate a large block of an asset in a relatively short time period this need for liquidity is observed by a tight oligopoly whose members may choose to predate or cooperate predation involves racing and fading the distressed trader to the market

international and domestic collateral constraints in a model of emerging market crises abstract we build a model of emerging markets crises which features two types of collateral constraints firms in a domestic economy have limited borrowing capacity from international investors they also have limited borrowing capacity with respect to each other we study how the presence and changes in these collateral constraints affect financial and real variables a binding international constraint in the aggregate leads to a sharp rise in interest rates and fire sales of domestic assets while limited domestic collateral can lead to wasted international collateral these two collateral constraints can interact in important ways the first is disintermediation a fire sale of domestic assets causes banks to fail in their function of reallocating resources across the economy leading to wasted international collateral the second is a dynamic effect we show that firms in an economy with limited domestic collateral and a binding international collateral constraint will not adequately precaution against adverse shocks increasing the severity of these shocks

small firms borrowed size and the urban rural shift in this paper we suggest that some elements of the observed urban rural shift in firm formation and growth may centre on the phenomenon of borrowed size in doing so we make a link between literature on the geography of small firm formation and growth the theory of agglomeration and the relations among settlements within urban systems spatial externality fields have expanded over time so that small firms can locate in smaller settlements and yet access specialized labour and informational external economies of nearby larger urban areas we examine the relevance of aspects of borrowed size in the relationship of small firms in leighton linslade and lichfield to the local economy and nearby larger urban centres in particular we question the contribution of local institutional support to the growth of rural enterprise stressed in recent analysis we conclude by briefly noting the implications of borrowed size for conceptions of the local economy and local economic policy cet article cherche a avancer

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

critical survey the new geographical turn in economics some critical reflections over the past few years a new geographical economics has emerged focused on the spatial agglomeration of industry and the long run convergence of regional incomes several leading names are associated with this geographical turn including paul krugman michael porter robert barro and w brian arthur this new economic geography it is argued here is neither that new nor is it geography instead it is a reworking or re invention using recent developments in formal mathematical mainstream economics of traditional location theory and regional science as such it is quite opposed to and difficult to reconcile with the work on regional development and industrial agglomeration being carried out in economic geography proper

effects of an export embargo on related goods logs and lumber this paper extends and applies the marshallian derived demand model in the context of international trade the model is utilized to derive estimates of the market equilibrium net welfare and welfare incidence effects of a hypothetical embargo of softwood log exports from the pacific coast region of the united states the approach is potentially applicable to the analysis of various restrictions on primary products exports which may be instituted to maintain the viability of domestic processing industries

heterogeneity and stability bolster the strong not the weak we first study a stylized model of self fulfilling panic among agents with differing fragilities to strategic risk and show that depending on the severity of coordination problems the panic trigger threshold can depend only on one type s fragility we then present a model of systemic panic among financial institutions with heterogeneous fragilities to financial spillovers concerns about potential spillovers generate strategic interaction triggering a pre emption game in which one tries to exit the market before others to avoid spillovers although financial contagion originates in weaker institutions systemic risk can critically depend on financial health of stronger in the contagion chain in this case bolstering the strong rather than the weak more effectively enhances systemic stability

revisiting marshall s agglomeration economies technological relatedness and the evolution of the sheffield metals cluster potter a and watts h d revisiting marshall s agglomeration economies technological relatedness and the evolution of the sheffield metals cluster regional studies according to alfred marshall firms receive increasing returns from a trinity of agglomeration economies a local pool of skilled labour local supplier linkages and local knowledge spillovers this article re examines the mechanisms underlying marshall s agglomeration economies in the sheffield metals cluster wherein marshall discovered them despite the cluster s decline empirical evidence is found that the mechanisms underlying marshallian agglomeration economies continue to occur within the surviving metals industry however upon closer examination marshallian agglomeration economies have evolved to become more prevalent amongst plants that use related metals technology the results highlight the importance of technological relatedness to cluster survival

the textile and clothing industries under the fifth kondratieff wave some insights from the case of hong kong abstract this paper proposes that the world s textile and clothing industries have become increasing vertically disintegrated with a few flexible production regions the cream portion engaging in creative innovative dynamic and high value added activities and an expanding number and spatial extent of regions the cake portion taking part in low value added activities in between is an artificial layer protected by the international regulatory framework this layer has characteristics of both the cream and cake layers on the one hand the labor force in this layer suffers from low job mobility and low paid blue collar work of the cake portion and is dominated by female semi skilled workers on the other hand industrialists and governments in this layer enjoy the profits and high export values of the cream portion under the fifth kondratieff wave the textile and clothing industries have become increasingly coordinated and controlled by a thinner cream layer over time regions in the cake portion will find it increasingly difficult to transform themselves into cream because of deep seated structural and geographic differences

banking structure and employment growth recent studies have documented an association between financial structure and per capita income growth the relationship between financial structure and job growth by contrast is an unexplored issue of independent interest here we find that us nonmetropolitan employment grew faster in 1973 1996 where there were fewer locally owned bank offices and a more concentrated initial banking market structure these linkages were less stable in metropolitan areas in addition controlling for employment growth does not undermine the empirical linkage between initial bank structure and subsequent per capita income growth

effects of economic incentives in the american film industry an ecological approach abstractus states have offered billions of dollars in film industry incentives but despite the popularity of these incentives the effects of these investments are unclear this study adopts an ecological framework and tests the hypothesis that film incentives are effective when they produce changes in the composition of organizational communities the results of longitudinal linear mixed effects models centred around incentive introduction in each state show that above the impact of their dollar value the simple presence of economic incentives organizational diversity and the presence of dominant organizational populations are associated with increases in filming employment and new establishments theoretical and policy implications are discussed

the internationalization of new and small firms a resource based view abstract this paper seeks to enhance understanding of the internationalization of small and medium sized enterprises smes the study focuses upon the following issues can the characteristics of principal founders businesses and the external environment at one point in time be used to explain at a later date whether a firm is still an exporter or a nonexporter whether exporting firms are larger in size than nonexporting firms whether exporting firms report superior performance than nonexporting firms and whether exporting firms are more likely to survive than nonexporting firms to address these questions this study draws upon a sample of 621 manufacturing construction and services businesses located in twelve contrasting environments in great britain surveyed first in 1990 91 and then re interviewed in 1997 a resource based view is reviewed to identify the range of factors encouraging some owner managed smes to enter export markets four categories of human and financial capital are examined general human capital resources the principal founder s management know how the principal founder s specific industry know how and a principal founder s ability to obtain financial resources that can act as a buffer against random shocks variables relating to resource availability in the external environment were also collected and considered control variables previous studies have highlighted substantial industry differences in the propensity for businesses to enter export markets as well as to survive the principal industrial activity of each business in 1990 91 was therefore considered a control variable variables collected during the 1990 91 survey were selected to explain variations in the propensity to export reported by surviving independent firms in 1997 after elimination of missing values the working sample was reduced to 116 independent firms for this study 86 nonexporters and 30 exporters in 1997 in addition the 21 variables were selected to explain variations in business size in 1997 profit performance relative to competitors reported in 1997 changes in employment over the 1990 91 to 1997 period and business survival over the 1990 91 to 1997 period 213 survivors and 395 nonsurvivors multivariate statistical analysis confirmed that previous experience of selling goods or services abroad is a key influence encouraging firms to export businesses with older principal founders with more resources denser information and contact networks and considerable management know how are significantly more likely to be exporters further businesses with principal founders that had considerable industry specific knowledge are markedly more likely to be exporters businesses principally engaged in the service sectors and those located in urban areas are significantly less likely to be exporters a key finding of this study is that the explanatory variables significantly associated with the propensity to export sales abroad are not the same as those significantly associated with selected size and performance measures the resource based explanatory variables selected fail to significantly detect employment growing firms over the 1990 91 to 1997 period they also fail to significantly distinguish surviving independent firms from nonsurviving firms results from this study will provide policy makers and practitioners with additional insights into the key resource based factors associated with the decision by new and small independent firms to export sales abroad practitioners and policy makers can focus upon the characteristics of principal founders businesses and the external environment to predict the subsequent propensity of an independent firm to be an exporter policy makers and practitioners who want more new and small firms to export outside their local areas may prefer to target their resources and assistance to the relatively smaller proportion of firms that have the business and principal founder profiles that are significantly associated with a firm being an exporter

coordination failures and the lender of last resort was bagehot right after all the classical doctrine of the lender of last resort lolr elaborated by bagehot 1873 asserts that the central bank should lend to illiquid but solvent banks under certain conditions several authors have argued that this view is now obsolete in modern interbank markets a solvent bank cannot be illiquid this paper provides a possible theoretical foundation for rescuing bagehot s view our theory does not rely on the multiplicity of equilibria that arises in classical models of bank runs we built a model of banks liquidity crises that possesses a unique bayesian equilibrium in this equilibrium there is a positive probability that a solvent bank cannot find liquidity assistance in the market we derive policy implications about banking regulation solvency and liquidity ratios and interventions of the lender of last resort furthermore we find that public bailout and private bail in involvement are complementary in implementing the incentive efficient solution and that bagehot s lender of last resort facility must work together with institutions providing prompt corrective action and orderly failure resolution finally we derive similar implications for an international lender of last resort ilolr jel g21 g28

wage polarisation in the us and the flexibility debate the proportion of workers earning low wages in the american economy declined from 1963 through 1979 since 1979 both the low wage and the high wage shares of employment have increased leading to wage polarization analysis of current population survey data indicates that this occurred for both men and women for men this condition has been exacerbated by a secular stagnation in real median wages these empirical developments in the distribution of labor income are analyzed in detail and discussed in light of theoretical debates about employers attempts to increase labor flexibility under the pressure of declining profits copyright 1990 by oxford university press

tighter bonds customer supplier linkages in semiconductors angel d p 1994 tighter bonds customer supplier linkages in semiconductors reg studies 28 187 200 this paper examines changing linkage relations between high technology firms and their semiconductor suppliers in an effort to improve manufacturing performance and accelerate the pace of technology development high technology firms are establishing closer ties with semiconductor suppliers to date the restructuring of supplier relations has focused primarily upon increasing the flow of information among firms stronger forms of collaboration such as the co development of manufacturing and technological capability are less common the locational effects of tight supplier linkages are weaker than anticipated differing markedly from the intensified regionalization of manufacturing associated with just in time production in the automobile industry angel d p 1994 s agit il des liens plus etroits les relations client fournisseur dans l industrie des semi conducteurs reg studies 28 187 200 c

finished product inventories and price expectations in the softwood lumber industry a monthly model is presented of the u s softwood lumber sector price expectations and beginning period inventories have important roles in producers production sales and inventory decisions cross price effects among domestic producing regions are minimal however there is substantial competition between u s and canadian producers our model produces supply elasticities demand elasticities and inventory response parameters that are different from and more comprehensive than those obtained in previous work

recent evolutionary theorizing about economic change this famous passage from marshall s principles of economics it first appeared in the fifth edition which came out in 1907 nicely brings out two issues which are as germane to economics today as they were when marshall wrote the first is the heavy reliance by economists in their formal theorizing on the notion of equilibrium the other is the appeal that biological conceptions3x201d have for many economists particularly when their focus is on economic change

institutional conditions and innovation systems on the impact of regional policy on firms in different sectors moodysson j and zukauskaite e institutional conditions and innovation systems on the impact of regional policy on firms in different sectors regional studies this paper deals with institutional conditions in regional innovation systems how institutions affect the organization of innovation activities among firms and in what ways regional policy initiatives can be supportive the analysis draws on data on innovation networks activities and regional policies targeting the life science media and food industries in scania sweden the study takes account of the ways in which regional policies can impact individuals and organizations action in relation to each other by being internalized it is argued that such ability is decisive for the success or failure of the policy initiative

liquidity shortages and banking crises we show in this article that bank failures can be contagious unlike earlier work where contagion stems from depositor panics or contractual links between banks we argue that bank failures can shrink the common pool of liquidity creating or exacerbating aggregate liquidity shortages this could lead to a contagion of failures and a total meltdown of the system given the costs of a meltdown there is a possible role for government intervention unfortunately liquidity and solvency problems interact and can cause each other making it hard to determine the cause of a crisis we propose a robust sequence of intervention banks are often found at the center of systemic financial crises the causes of these crises have long been debated do they stem from depositor panics or do they arise because bank balance sheets are exposed to common factors if it is the latter then is there any sense in which bank failures can be contagious can anything be done to prevent these crises or stop them from propagating once they begin our purpose in this paper is to reexamine whether bank failures can start and propagate systemic crises even if we assume that depositors do not panic that is even if depositors actions are coordinated and they do not run simply because they fear others will run our focus is not because we think that panics are empirically unimportant the jury is still out on that instead we show that contagion can stem from an underlying real general equilibrium problem rather than just from lack of coordination among depositors from a policy perspective attempts to reassure investors through confidence building measures will not work if panic and lack of coordination are not the reasons for a crisis we begin in this paper with a model of a bank that we developed in diamond and rajan 2001 assets in this model are illiquid they cannot be borrowed against or sold for the full value of resources they will generate in their best use because the human capital necessary to generate that full value cannot

are there efficiency gains from the removal of natural resource export restrictions evidence from british columbia log export bans lebs are a popular development tool utilised by developing nations with sizable endowments of timber however the actual impact of these policies is debatable british columbia has a developed forestry sector and still maintains a leb this trade restriction continually creates conflicts with canada s international trade partners including the united states this paper examines the efficiency implications of a hypothetical removal of roundwood export restrictions in british columbia using roundwood price and quantity data from 1995 to 2008 a time series econometric approach is utilised to determine supply and demand elasticities for british columbia s roundwood empirical results from a vector error correction model suggest that a removal of export restrictions will generate an overall increase of approximately 347 91 million us dollars per year to british columbia s forest economy

interbank lending and systemic risk systemic risk refers to the propagation of a bank s economic distress to other economic agents linked to that bank through financial transactions banking authorities often prevent systemic risk through an implicit insurance of interbank claims or by reducing interbank transactions and centralizing banks liquidity management this paper investigates whether the flexability afforded by decentralized bank interactions can be preserved while protecting the central banks from the necessity of conducting undesired rescue operations it develops a model in which decentralized interbank leading is motivated by peer monitoring in this context the paper derives the optimal prudential rules and in particular looks at the impact of interbank monitoring on the solvency and liquidity ratios of borrowing and lending banks last it provides conditions which a too big to fail policy is or is not justified and studies the possibility of propagation of a bank s liquidity shock throughout the financial system copyright 1996 by ohio state university press

beggar thy neighbor the in state out of state and aggregate effects of r d tax credits abstract the proliferation of r d tax incentives among u s states in recent decades raises two questions i are these tax incentives effective in increasing in state r d ii how much of any increase is due to r d being drawn away from other states this paper answers i yes and ii nearly all the paper estimates an augmented r d factor demand model using state panel data from 1981 to 2004 i estimate that the long run elasticity of in state r d with respect to the in state user cost is about 2 5 while its elasticity with respect to out of state user costs is about 2 5 suggesting a zero sum game among states

spatial proximity and firm survival in a declining industrial district the case of knitwear firms in baden wu rttemberg the literature on small firm networks in industrial districts postulates the importance of territorial proximity for business innovation and regional development but empirical research to test this proposition is sparse while there is some research on the extent of interfirm co operation little is known about the performance outcomes of co operation i develop competing hypotheses from institutional ecological and random action theories concerning the survival chances of firms located in geographic proximity and test them with data on the complete population of knitwear firms in baden wurttemberg germany for the period from 1960 to 1998 proportional hazard estimates show that location in clusters of firms in the same industry increased business failure rates and location in diversified clusters of firms operating in complementary industries reduced failure rates the empirical results are most consistent with the ecological model of localized competition in resource environments la documentation

reasons for the development of islands of innovation evidence from hertfordshire this paper analyses why innovations often cluster in a few metropolitan islands of innovation the reason for this interest is that a growing body of neo schumpeterian economic theory argues that economic recovery after periods of economic recession and depression such as we have seen during the 1980s and early 1990s is driven by innovations these do not spring up all over the country but are spatially concentrated in a small number of metropolitan regions it is therefore important to know why this is so in order to evaluate the effectiveness of various uk and eu public policies whose specific objectives are to stimulate local and regional economic development agglomeration theory is used in order to understand the driving forces behind the spatial clustering of new innovations this leads to four explanatory hypotheses these are that innovation is facilitated by agglomeration in order to reduce distance transaction costs between firms in different spaces or by local factor conditions which provide

firm level knowledge accumulation and regional dynamics two bodies of literature have contributed significantly to our insight into the forces driving competitiveness and economic growth regional agglomeration studies emphasise the favourable impact of geographical proximity on regional economic performance particularly through knowledge spillovers however the firms that constitute those agglomerations largely remain black boxes in contrast studies dealing with technological learning explain economic performance at firm level without systematically taking account of the effects of geographical proximity the aim of the paper is to propose a possible way to bridge this gap this contributes to our understanding of the determinants of economic growth in industrial clusters an empirical illustration of a capital goods cluster is elaborated

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

default and renegotiation a dynamic model of debt we analyze the role of debt in persuading an entrepreneur to pay out cash e ows rather than to divertthem in the e rstpartof the paper we study the optimal debt contract specie cally the trade off between the size of the loan and the repayment under the assumption that some debt contract is optimal in the second part we consider a more general class of nondebt contracts and derive sufficient conditions for debt to be optimal among these

coordination risk and the price of debt abstract creditors of a distressed borrower face a coordination problem even if the fundamentals are sound fear of premature foreclosure by others may lead to pre emptive action undermining the project recognition of this problem lies behind corporate bankruptcy provisions across the world and it has been identified as a culprit in international financial crises but has received scant attention from the literature on debt pricing without common knowledge of fundamentals the incidence of failure is uniquely determined provided that private information is precise enough this affords a way to price the coordination failure comparative statics on the unique equilibrium provides several insights on the role of information and the incidence of inefficient liquidation

developing indicators to inform local economic development in england based on a conceptual framework of 11 factors that are widely perceived to be the major determinants of local economic development led 29 indicators were identified to measure these factors pri

crises and prices information aggregation multiplicity and volatility crises are volatile times when endogenous sources of information are closely monitored we study the role of information in crises by introducing a financial market in a coordination game with imperfect information the asset price aggregates dispersed private information acting as a public noisy signal in contrast to the case with exogenous information our main result is that uniqueness may not obtain as a perturbation from perfect information multiplicity is ensured with small noise in addition we show that a multiplicity may emerge in the financial price itself b less noise may contribute toward nonfundamental volatility even when the equilibrium is unique and c similar results obtain for a model where individuals observe one another s actions highlighting the importance of endogenous information more generally