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

endogenous skill biased technical change testing for demand pull effect in this article we use the unification of germany in 1990 to test the hypothesis that an increase in the supply of a production factor generates skill biased technical change we test for this mechanism in the context of the model presented by acemoglu and autor 2011 skills tasks and technologies implications for employment and earnings in o ashenfelter and d card eds handbook of labor economics vol 4b amsterdam north holland that allows endogenous assignment of skills to tasks in the economy we use cohorts of workers from comparable countries as a control group after discussing the possible confounding factors we conclude that this effect is absent the differential pattern among the countries seems to be determined by labor market flexibilization and tax reform

sustainability in light of competitiveness abstract there is cause for concern that many current practices in the strategic use of advanced manufacturing technologies are unsustainable since they lead to increased resource consumption in the aggregate this article examines the ways the current generation of production technologies structure the formation and growth of product markets and explains why firms driven to stay competitive are adopting manufacturing strategies based on reducing the time it takes to develop and manufacture new products as experience in the use of advanced manufacturing technologies has accumulated distinctive patterns in market organization have emerged which in turn cause more firms to adopt these technologies in effect the markets and productions systems have co evolved faster product cycles presage new product variants and faster product obsolescence linked to intensified customers needs this interdependency of market needs and the strategic use of manufacturing technologies has significance for drafting sustainable consumption policy

mergers acquisitions and innovation performance in the telecommunications equipment industry the worldwide telecommunications equipment industry has experienced an enormous number of mergers and acquisitions m a this article examines the innovation determinants of m a activity a

trade facilitation and manufactured exports is africa different summary trade facilitation defined as reducing the transaction costs associated with the enforcement regulation and administration of trade policies has been at the forefront of discussions on policy measures for reducing the costs of exporting and importing in developing countries this study uses a new panel dataset for 124 developed and developing countries available for the period 2003 04 to assess the impact of trade facilitation and other trade related institutional constraints on manufacturing export performance with particular reference to africa we estimate a standard gravity model augmented with trade facilitation regulatory quality and infrastructure indicators our results show that trade facilitation reforms could contribute to improve export performance in africa but other reforms including the quality of the regulatory environment and the quality of the basic transport and communications infrastructure are also needed furthermore improvements in on the border and behind the border policies yield a higher return in terms of increasing manufacturing export performance in african countries than in the rest of the world

the relationships between science technologies and their industrial exploitation an illustration through the myths and realities of the so called european paradox abstract this paper discusses first the properties of scientific and technological knowledge and the institutions supporting its generation and its economic applications the evidence supports the broad interpretation that we call the stanford yale sussex synthesis second such patterns yield important implications with respect to the so called european paradox i e the conjecture that eu countries play a leading global role in terms of top level scientific output but lag behind in the ability of converting this strength into wealth generating innovations some descriptive evidence shows that contrary to the paradox conjecture europe s weaknesses reside both in its system of scientific research and in a relatively weak industry the final part of the paper identifies a few normative implications much less emphasis should be put on various types of networking and much more on policy measures aimed at strengthening both frontier research and european corporate actors

trade facilitation and economic development new approach to quantifying the impact this article analyzes the relationship between trade facilitation and trade flows in the asia pacific region country specific data for port efficiency customs environment regulatory environment and e business usage are used to construct indicators for measuring trade facilitation the relationship between these indicators and trade flows is estimated using a gravity model that includes tariffs and other standard variables enhanced port efficiency has a large and positive effect on trade flows regulatory barriers deter trade improvements in customs and greater e business use significantly expand trade but to a lesser degree than improvements in ports or regulations the benefits of specific trade facilitation efforts are estimated by quantifying differential improvements in these four areas among members of the asia pacific economic cooperation apec a scenario in which apec members with below average indicators improve capacity halfway to the average forall members shows that intra apec trade could increase by dollar 254 billion or 21 percent of intra apec trade flows

agreements between firms and the technological life cycle model evidence from information technologies abstract contrarily to most previous contributions which have addressed the issue of cooperative agreements essentially in a perspective of comparative statics in this paper a model is proposed that relies on the technological trajectory notion suggested by evolutionary theories and emphasizes the relevance of the technological and market dynamics in explaining why and to what extent firms have recourse to agreements in particular it is claimed that the propensity of firms towards collaborative ventures and the characteristics of the cooperation depend upon the phase of the technological life cycle of the industry branch in which the cooperation takes place based on a cross sectional analysis of 45 industry branches in the information technology industrial system the paper also provides empirical evidence supporting the argument that the propensity towards agreements and the nature of the agreements concluded do change during the technological life cycle to this end it takes advantage of the arpa database developed at the polytechnic of milan and containing detailed information on over 2 000 agreements concluded in the 1980 1986 period all over the world in the semiconductor data processing and telecommunications industries

market access conditions and sub saharan africa s exports diversification summary despite some progress in the last decade sub saharan africa s participation in the global economy remains generally limited and poorly diversified among the various reasons behind the lack of competitiveness of sub saharan africa exports this paper analyzes whether changes in market access conditions affect export diversification the findings of this paper indicate that market access conditions remain important and that the presence of trade relationships depends not only on favorable market access conditions but also on how these compare relative to foreign competitors these results imply that freer trade within sub saharan african countries could provide significant incentive to intra regional trade

sources procedures and microeconomic effects of innovation fabio arcangeli paul david frank engelman christopher freeman massimo moggi richard nelson luigi orsenigo nathan rosenberg michele salvati g n von tunzelman two anonymous referees and the participants at the meeting of the committee on distribution growth and technical progress of the italian national research council cnr rome november 16 1985 have helped with various redraftings a particularly grateful acknowledgment is for the insightful and patient help of moses abramovitz this work has been undertaken at the science policy research unit spru university of sussex as part of the research program of the designated research centre sponsored by the economic and social research council esrc earlier support to the research that led to this paper by the italian national research council cnr is also gratefully acknowledged the statistical research has been undertaken with the assistance of stephano brioschi ilaria fornari and giovannu prennushi

second order sustainability conditions for the development of sustainable innovations in a dynamic environment abstract in particular radical innovations can be important means to achieving improved sustainability due to the existence of path dependency and lock in however the transition from one technological trajectory to another more sustainable one is often impeded by significant barriers fortunately these barriers are by their nature subject to substantial changes in time so it makes sense to carefully distinguish between periods of stability showing high barriers in which the given trajectory can hardly be left and periods of instability characterized by low barriers where a new trajectory can be reached more easily the latter distinction matters since sustainable innovations often rely on governmental regulation and the economic burden arising from this regulation will be much lower in periods of instability moreover due to the complexity and dynamics of change in their respective environments innovations are generally associated with fundamental uncertainty such that it becomes impossible to predict the degree of sustainability yielded by specific innovations in the longer run under these circumstances it is essential to facilitate the change between trajectories and to allow for the possibility to select between a variety of alternative trajectories within a process of trial and error sustainability as viewed from this evolutionary perspective is therefore better understood as the general capability to adapt that is to readily change from less to more sustainable technological trajectories since the latter kind of sustainability determines the conditions under which the former kind i e sustainability related to a specific technology can be achieved the two kinds are respectively called second order and first order sustainability finally a series of determinants and corresponding indicators from the techno economic political and socio cultural sphere is identified which after proper measurement and weighting allow for making an assessment whether and when the incumbent industry is sufficiently destabilized and the political system rendered sufficiently favorable to the new more sustainable technology such that a transition to the preferred trajectory is possible without too much effort

are innovations relevant for consumers in the hospitality industry a hedonic approach for cuban hotels abstract this paper evaluates the impact of innovative activity in the hotel industry on the willingness to pay by consumers to this end we estimate a hedonic price function where innovation is identified indirectly through certain attributes that previous literature has linked with hotel innovativeness the test is performed on a representative sample of cuban hotels considering a large number of attributes of hotels and rooms to solve the usual problems of collinearity a million alternative models are estimated by choosing the variables included in a random manner and obtaining the final coefficients by means of an internal meta analysis the results are completed with a variance decomposition analysis the results highlight the importance of the attributes linked to innovation and internationalization on the determination of room prices in cuban hotels membership of international hotel chains high quality offers diversified rooms and adaptability to specific needs of each client

staunching emigration from east germany age and the determinants of migration following the unification of germany in 1990 eastern wages and unemployment both rose rapidly i demonstrate that rising wages reduced eastern emigration greatly while rising unemployment had little effect this reflects the behavior of the young who are very sensitive to source region wages and relatively insensitive to source unemployment i show that most of the effect of source unemployment comes from the contemporaneous effect on those laid off who are more likely to be older i find that compared to stayers young emigrants are much more skilled older emigrants are slightly more skilled and commuters are not more skilled as measured by education and pre move wages my conclusions are based on a comparison of results from aggregate inter state migration data and individual data from the eastern sample of the german socio economic panel for 1990 2000 jel j61 p23

innovation diversity and diffusion a self organisation model a number of features of innovation diffusion are identified appropriability diversity expectations selection learning and spillover externalities a dynamic model is formul ated to embed the diffusion question into a more general framework of disequilibrium competition the model incorporates distinct vintage structures reflecting a change in technological trajectory learning by using a nd expectations driven investment rules of thumb simulation studies reveal robust quasi logistic curves but a complicated pattern of net market share gains and losses uncertainty regarding the rationality of early or late adoption it is argued ensures that the requisite behavioral variety is present to generate these diffusion patterns copyright 1988 by royal economic society

aggregate fluctuations and international migration this paper studies the role of short run factors such as business cycles or changes in employment rates in explaining international migration flows we first derive a model of optimal migration choice predicting that short run economic fluctuations may trigger migration flows on top of the impact exerted by long run factors second we empirically test the magnitude of the effect of these short run factors on migration flows our results indicate that aggregate fluctuations and employment rates both affect migration flows third we provide evidence that the schengen agreement and the euro significantly raised the international mobility of workers between the member countries this article is protected by copyright all rights reserved

comparing the robustness of trading systems to higher order uncertainty this paper compares the performance of a decentralized market with that of a dealership market when traders have differential information trade occurs as a result of equilibrium actions in a bayesian game where uncertainty is captured by a finite state space and information is represented by partitions on this space in the benchmark case of trade with common knowledge of endowments the two mechanisms deliver virtually identical outcomes however with differential information the dealership market has strictly higher trading volume and yields an efficient posttrade allocation in most states in contrast the decentralized market suffers from suboptimal trading volume the reason for this poor performance is the vulnerability of the decentralized market to higher order uncertainty concerning the fundamentals of the market traders may know that mutually beneficial trade is feasible and perhaps know that they know and yet a failure of common knowledge that this is so precludes efficient trade the dealership market is robust to this type of uncertainty

export performance and trade facilitation reform hard and soft infrastructure summary we estimate the impact of aggregate indicators of soft and hard infrastructure on the export performance of developing countries we derive four new indicators for more than 100 countries over the period 2004 07 estimates show that trade facilitation reforms do improve the export performance of developing countries this is particularly true with investment in physical infrastructure and regulatory reform to improve the business environment the findings provide evidence that the marginal effect of the transport efficiency and business environment improvement on exports appears to be decreasing in per capita income in contrast the impact of physical infrastructure and information and communications technology on exports appears increasingly important the richer a country becomes we also find statistical evidence on the complementarity between hard infrastructure and soft infrastructure as captured by our indicators finally drawing on estimates we compute illustrative ad valorem equivalents of improving each indicator halfway to the level of the top performer in the region

is western europe losing the technological race abstract using a variety of indicators this paper compares technological levels in japan the usa and w europe there is no justification for assuming general european technological backwardness whilst it lags in electronics and since 1975 has had a relatively slow rate of growth of innovative activities it also has sectors of strength chemicals machinery production engineering and countries whose relative commitments of resources to innovative activities are at least equal and sometimes superior to those of japan and the usa frg sweden switzerland its main policy challenges are to increase the rate of growth of innovative activities in lagging countries and to ensure pervasive applications of information technology similarly there is no convincing evidence that w europe is relatively backward in converting technology into economically efficient innovations some policy problems are significant in all three regions skill shortages whilst others are in the usa and w europe short term planning horizons of top management particular european problems are the effects of social legislation on worker flexibility and mobility of national regulations on intra european competition and of slow rates of growth of output on the growth of innovative activities japan and the usa have their problems with the latter continuously under challenge from the former and increasingly specialised in defence and raw materials related technologies

can the regional comprehensive economic partnership minimise the harm from the united states china trade war using ex post tariff schedules for the first time it was found that the global gains provided by the regional comprehensive economic partnership rcep are not enough to overcome the negative impacts of the united states china trade dispute while trade tensions cause china s welfare loss to be more than twice as large as the united states they provide some trade diversion to rcep members but of concern is if india successfully delays the conclusion of the rcep even by a year there will be a global loss of us 17 7 billion the rcep is also beneficial for the emerging economy of vietnam and the high tariff imposing korean economy the results obtained here are however conservative as reduction in non tariff barriers and other positive spillover effects of trade liberalisation related to investment and productivity improvements due to competition or increased intra industry trade could not be accounted for

the corporation competition and the invisible hand few would disagree that adam smith s invisible hand theorem is the heart of the economist s weltanschauung ask whether trade barriers should be lowered the spread of multinational corporations restrained oil prices deregulated cartels dissolved or more fundamentally whether a market based capitalist system is economically superior to a state run socialist system and economists almost certainly will begin to answer the question by trying to apply the theorem every student knows that the theorem depends on the assumption of atomistic competition which in turn assumes that the system is decentralized and that no competitor is large relatively to others there is another crucial assumption however that is often ignored and usually underemphasized namely that all competition is price competition in reality one of the most distinctive features of capitalism one that is most often raised in lay discussions of its merits and demerits is the prevalence of other forms of competition such as competition in research development and advertising competition to obtain and hold monopoly and competition for corporate growth these various forms of non price competition we shall aim to show are not clearly analogous with the theory of price competition more non price competition rather than less is not necessarily pareto optimal self evidently the production side of a market economy is decentralized only to a limited degree i e to the level of a decision making unit composed of more than one human such a unit playing neuron to the invisible hand is typically called a firm it is in fact a team rather than remaining small firms are in practice composed of any number of individuals from a handful on to half a million some

clusters entrepreneurial ecosystem co creation and appropriability a conceptual framework extant literature on clusters underplays the role of entrepreneurs and entrepreneurial management in creating and co creating organizations markets and supporting ecosystems we employ transaction costs resource knowledge capabilities and power control based theories to provide a comparative static governance based perspective on clusters we embed this into a more general co evolutionary entrepreneurial theory of the emergence evolution and co evolution of markets ecosystems and clusters we suggest that clusters can involve advantages that help engender superior appropriation of co created value as compared to alternatives entrepreneurial managers faced with a degree of choice will help co create clusters and be part of them for as long as they can appropriate more value in this way than through alternatives

adoption and diffusion of an innovation of uncertain profitability the argument has frequently been made that the pattern of diffusion associated with most new innovations will typically have certain characteristics a diffusion curve for an innovation is usually defined as the proportion of its potential users who have already adopted as a function of time measured from the first adoption many empirical studies by both economists and other social scientists have shown that diffusion curves nearly always have two distinct characteristics i they are s shaped the proportion adopted is an increasing function of time which is initially convex but eventually becomes concave and ii they tend to be right hand skewed the inflection point occurs at a time corresponding to a proportion adopted which is less than one half so that the function is concave over the greatest amount of time in fact this skewing is occasionally severe enough to make the diffusion curve appear concave everywhere the focus of most empirical studies of innovation diffusion has centered on identification of either the major determinants of the speed of diffusion or the characteristics of firms which determine how long they delay adoption the seminal contributions are griliches 6 study of hybrid corn and mansfield s 121 study of 12 industrial innovations these studies and most of the similar ones following conclude that diffusion is faster for innovations with higher profitability and that large firms tend to be the earliest adopters some studies e g mansfield 121 herregat 71 have attempted to ascertain

r d appropriability opportunity and market structure new evidence on some schumpeterian hypotheses one of the largest bodies of literature in the field of industrial organization is devoted to the interpretation and testing of several hypotheses advanced by joseph schumpeter 1950 concerning innovation and industrial market structure one set of hypotheses focuses on the role of firm size as a determinant of r d spending and the rate of technological advance another set focuses on the effect of market concentration on r d and technological advance in this paper we reexamine the latter set of hypotheses at the industry level using new data on r d appropriability and technological opportunity collected by levin et al 1984 in a survey of r d executives in 130 industries

impacts of tangible and intangible elements of aid for trade on the globalisation of developing countries the aid for trade initiative was launched by the wto in 2005 to help developing countries build their supply side capacity and trade related infrastructure to improve their capacity in the global market this study investigates the impacts of both the tangible and intangible elements of this initiative on the economic social and political globalisation of recipient countries intangible elements of aid for trade aid for trade policy and regulation may be considered as the software of aid for trade while tangible elements aid for economic infrastructure and building productive capacity are the hardware countries that receive aid for trade can use both types of elements to succeed in globalisation this research hypothesises that the tangible elements of aid for trade have a singular effect on the overall level of globalisation since they are expected to only increase the level of economic globalisation moreover we expect that the intangible elements of aid for trade will have multiple effects on the overall level of globalisation as they have an impact on not only economic aspects but also social and political aspects of it using the dataset of aid for trade from 2002 to 2015 we find that the intangible elements of aid for trade have increased the recipients level of overall globalisation

dividing online and offline a case study every new method of trade offers an opportunity for economic agents to compare its costs and benefits relative to the status quo such comparison motivates sorting across market segments and reshapes the whole marketplace the internet provides an excellent example it introduces substantial search cost savings over brick and mortar retail stores but imposes new obstacles for sellers to convey quality using sports card trading as a case study we provide empirical evidence on 1 the sorting of product quality between the online and offline segments 2 the changes for retail outlets after the internet came into place and 3 how supporting industries such as professional grading and card manufacturing adapted to take advantage of the new market copyright 2007 wiley blackwell

the reeded edge and the phillips curve money neutrality common knowledge and subjective beliefs abstract i present a simple two person auction model in which a seller and a buyer make bids in terms of money however the value of a unit of money is uncertain i show 1 a monetary revaluation has purely nominal effects if and only if it is common knowledge 2 if seller and buyer have identical beliefs making the value of money common knowledge maximizes total gains from trade 3 if seller and buyer are equally well informed and have identical beliefs then monetary revaluations have no net effect 4 when the seller knows the value of money but the buyer does not the expected utilities of both seller and buyer are proportional to 1 1 2 where is the standard deviation of the value of money expressed as a fraction of the mean and 5 when beliefs are subjective monetary policy can improve total gains from trade as in friedman s explanation of the phillips curve and an optimal level of inflation can be determined journal of economic literature classification numbers c78 e52

innovation waves self organized criticality and technological convergence abstract the purpose of this paper is to investigate the evolutionary process of imitation and innovation as a process of searching in a given neighbourhood of firms the spreading of information through neighbourhoods allows firms to acquire knowledge leading to innovation waves followed by imitation as firms attempt to glean information on best practise techniques whilst innovators are temporarily allowed to reap quasi rents the imitative band wagon effect drives the profit rate down to its normal level productivity growth lowers the prices of sectors involved in the process of technological advance causing obsolescence and creative destruction in a schumpeterian sense

china s one belt one road initiative the impact of trade facilitation versus physical infrastructure on exports the one belt one road obor project is perhaps china s most significant international relations initiative in recent times it is based on openness harmony inclusivity mutual benefit and market operations and aims to connect the economically vibrant east asia and the developed europe by land and by sea and in the process it brings growth and development to tens of countries along the modern silk routes in this paper we compare the impact of the main initiatives of obor namely enhancements in physical infrastructure and improvements in border administration on the trade of countries that have signed on to this project especially countries along the six economic corridors we find overwhelming evidence that shows improvements in border administration has the greatest impact on exports of corridor countries although physical infrastructure is important for trade the chinese government should place equal attention to improvements in trade facilitation to ensure trade routes operate seamlessly across the various corridors

the influence of market demand upon innovation a critical review of some recent empirical studies abstract a number of recent empirical studies of technical change at the level of the individual firm have concluded that market demand is the dominant influence upon the innovation process calling forth innovations in market economies the pace of innovation in the private sector heavily influences the growth of national output and productivity and these studies and their conclusions have therefore received much attention having been extensively quoted in discussions of appropriate government policy for the encouragement of innovation this paper reviews a number of these studies and concludes that their findings and the interpretations of their findings in the secondary literature are seriously flawed and in many cases invalid the proposition that market demand governs the innovation process is by no means conclusively demonstrated in these studies and they are therefore inadequate and inappropriate guides for the formulation of policy most of the studies examined employ a working definition of demand factors which is so broad as to embrace a range of possible influences upon innovation which should more properly be classified elsewhere the concept of demand utilized in these studies bears little resemblance to the more restrictive and precise definition of market demand found in economics in addition the phenomena analyzed in these studies are a very heterogeneous lot the studies do not address identical empirical questions and their findings are as a result neither uniform nor unambiguous both demand and supply side influences are crucial to understanding the innovation process and it is the exclusive preoccupation with only one set of these forces which is criticized in this paper some implications of the criticism for government policy toward innovation are discussed in the conclusion

the generic existence of rational expectations equilibrium in the higher dimensional case abstract the study of the generic existence of rational expectations equilibrium has concentrated on three cases according to whether the space of states of private information has dimension less than equal to or greater than the price space previous results have shown that in the first case fully revealing equilibria exist generically and in the second case there are open sets of environments with no equilibrium this paper shows that in the third case there is a residual set of environments which permits equilibria which are arbitrarily close to fully revealing

in defence of the linear model an essay this essay discusses the strength and weaknesses of the so called linear model lm of innovation it is a reaction to the habit of criticising it as over simplistic mechanistic or simply blatantly wrong we argue that while some criticisms are of course well grounded many others are instead based on loose interpretations and unwarranted assumptions in order to separate the wheat from the chaff this essay first presents a comprehensive description of the linear model and differentiates it from the caricature many refer to second we discuss the main criticisms put forward and argue that many of them are not at all destructive but can be easily accepted within a refined version of the lm third we discuss the policy implications often derived or said to derive from the lm to argue that the lm itself is distinctively policy neutral other assumptions have to be added to justify alternative policy implications

least developed countries in a world of global value chains are wto trade negotiations helping summary nimble trade and industrial policy is essential for least developed countries ldcs to thrive in a world of global value chains gvcs adaptive states in ldcs need to create and exploit policy space in national decision making build specific production capabilities to participate and meaningfully capture value in gvcs and handle policy stretches arising from factors and actors they cannot control in this article we show that the outcomes of recent multilateral trade negotiations will facilitate these processes only partially the world trade organization s wto bali and nairobi ministerial declarations have been commonly portrayed as relative victories for developing countries but they have not provided sufficient steps forward for ldcs while the wto trade facilitation agreement can help integration into gvcs by enabling freer imports and exports supportive industrial policies are also needed to guide investment in the direction that allows for flexible specialization and domestic value addition these options are severely limited in the current wto regime the legally binding commitments made in nairobi on rules of origin are also a positive step but must be linked to the yet unmet duty free and quota free commitments we conclude by arguing that a future agenda for ldcs should focus on supply side constraints as well as on allowing nimble industrial and trade policies that can facilitate meaningful participation in some gvcs and non participation in others that are more detrimental to broad based development

aid for trade effectiveness complementarities with economic integration developing countries are increasingly using regional integration as a main policy lever when pursuing a trade led growth strategy and today deep preferential trade agreements go beyond trade policy negotiations and cover trade facilitation issues since aid for trade aft has been recognised as a powerful instrument for increasing developing countries trade capacity by targeting internal trade costs this article tests whether complementarities exist between this type of aid and economic integration using a gravity model on panel data for the period 1995 2005 results indicate that aft when combined with economic integration has been effective in increasing trade flows both south south and north south trade flows have benefited and the combination of the two instruments has been particularly effective in expanding the south s exports to the north finally when breaking down aft into categories assistance to trade related institutions seems to generate the strongest complementarities with economic integration

firm technological trajectory as a driver of eco innovation in young small and medium sized enterprises abstract few studies have focused on green innovation in young small and medium sized enterprises instead research tends to focus on large companies with formal research and development departments studying the influence of the firm s current technological strategy as well as the regulatory framework as a key driver of eco innovation this paper proposes that the combination of a firm s technological trajectory and its current research and development strategy are key determinants of eco innovation the authors investigate these relationships with panel data on 212 young firms in spain analysing their innovation strategy and behaviour during their first 10 years of activity the results show that the firms cluster into four technological trajectories but only market oriented innovators engage significantly more in eco innovation these firms are characterized by a high use of formal appropriability mechanisms market opportunity recognition arising from cooperation and high knowledge cumulativeness this paper sheds light on whether and the extent to which a firm s technological trajectory is a driver of eco innovation it confirms that firms that search for opportunities and have a continuous collaboration with market players are more prone to develop eco innovations additionally it shows that path dependence occurs in the development of eco innovations in that a highly developed innovation capacity leads to additional green innovation in the future the findings indicate that young small firms need to develop innovation capabilities that also enable them to adopt advanced technology before striving to become greener the paper concludes that policies designed to stimulate cooperative networking with other market players an upgrading of technological capabilities and the adoption of new technologies are all desirable because they contribute to improving the environmental impact of firms innovations

a review of innovation research in tourism abstract over the past two decades there has been increasing focus on the topic of innovation in tourism this article reviews the research contributions various categories of innovation product process managerial marketing and institutional are addressed important determinants of innovation are acknowledged including the role of entrepreneurship technology push and the existence of territorial industry clusters representation of knowledge is also identified as a critical factor for both the occurrence and nature of innovations the review reveals that there is still only limited systematic and comparable empirical evidence of the level of innovative activities and their impacts and wider implications for destinations and national economies an agenda for future research is emerging suggesting that there is quest for both formal quantification and for qualitative studies of the foundations processes implications and policies of innovation in tourism

innovation firm size and growth in a centralized organization the optimal innovation firm size and growth are derived for a centrally controlled firm in which only the entrepreneur evaluates and restores current projects or evaluates and adopts new projects current projects are subject to failure due to entry and possible obsolescence while new projects may not be successful the optimal allocation of attention implies bounds on firm size and that the rate of innovation depends not only on monopoly profits firm size and technological opportunity but also on the probability of obsolescence the effects of monopoly power and firm size on innovation also depend on the degree of obsolescence

information and economic analysis a perspective ten years ago i delivered a paper before this group with the title information and economic analysis i chose the title deliberately i did not call the subject on which i was speaking the economics of information because to do so would have been to suggest that my topic like the economics of agriculture or the economics of industry or the economics of labour represented another branch of specialisation within economics i wanted to suggest that informational considerations were in fact central to the analysis of a wide variety of phenomena that they constituted a central part of the foundations of economic analysis at the time though economists had long paid lip service to the importance of information there was little formal literature the last decade has seen a burgeoning of the literature it has become to the late 7o s and early 8o s what growth theory was to the early 6o s and it has been greeted with some of the same scepticism there seems to be a myriad ofspecial cases and few general principles the little examples are often contrasted unfavourably with the generality of general equilibrium theory what have we learned have diminishing returns set in are there fruitful directions for future research and if so what are they these are the questions which i wish to address here the work of the past decade has made i think a fundamental and lasting contribution to economic analysis the contributions have been both negative and positive we have learned that much of what we believed before is of only limited validity that the traditional competitive equilibrium analysis though having the superficial appearance of generality in terms of superscripts and subscripts is indeed not very general the theory is not robust to slight alterations in the informational assumptions it is but a special and not very plausible example among the possible set of informational assumptions which can be employed to characterise an economy at the same time the theory has been able to provide insights into phenomena about which the traditional model had nothing to say or which seemed inconsistent or inexplicable within the competitive paradigm it has provided some of the micro foundations for macro economics it has provided the basis of a new theory of the firm of a new new welfare economics and of a theory of economic organisation including a comparison of economic

is demand pulled innovation equally important in different groups of firms previous empirical literature has tested the demand pull hypothesis and found that innovation may be driven by output using a balanced panel of 216 italian manufacturing firms 1995 2000 and checking for the path dependent nature of r d we find a role of sales in inducing r d however the demand pull effect plays a varying role for different sub samples of firms exporting firms liquidity constrained firms not subsidised firms and those not heading a group seem to be sensitive to sales in deciding r d these results have been obtained using a least squares dummy variable corrected estimator a recent panel data technique suitable for small samples

generic existence of completely revealing equilibria for economies with uncertainty when prices convey information conditions which imply the existence of strict rational expectations equilibria for most static pure exchange economies where prices convey information about the state of the world are analyzed information is aggregated and transmitted by prices because agents have different initial information and maximize the conditional expectation of state dependent utility functions major results state that if with probability one agents characteristics do not vary too much as the state of the world varies then generically there exist equilibrium price functions which reveal all initial information more precisely if the support of the image measure is contained in a compact c1 manifold satisfying some technical conditions which is of sufficiently low dimension relative to the number of commodities then existence of completely revealing equilibria is generic any economy satisfying these assumptions can be approximated by a sequence of economies which also obey these assumptions and have completely revealing equilibrium price functions slight perturbations do not destroy the existence property

assessing the benefits of trade facilitation a global perspective this paper estimates the relationship between trade facilitation and trade flows using a panel of disaggregated manufactured goods for the 2000 2001 period for 75 countries four categories of trade facilitation are defined measured and assessed for their impact on bilateral trade flows using a gravity model the four measures of trade facilitation are port infrastructure air and maritime customs environment regulatory environments and e business infrastructure the results suggest that raising global capacity halfway to the world average in the four areas would increase trade by 377 billion most regions of the world increase exports more than imports in large part this result stems from increased exports to oecd markets that is obtained through a country s own effort to improve ports customs regulations and services infrastructures in addition the results suggest that reform and capacity building in trade facilitation in areas related to gatt articles v viii and x that are under discussion at the world trade organisation could expand trade and exports significantly many of the reform measures necessary to achieve this goal need not necessarily require large scale investment projects but rather action in legal and administrative reform to facilitate trade

household specific food price differentials and high value crop production in rural ghana using panel data from ghana we have examined the relationship between household specific producer consumer price differentials and rural household cropland allocation between food and high value crops we test the hypothesis that cereal price bands induce a shift of resources away from high value crop production making smallholders appear unresponsive to price incentives our results lend support to this hypothesis implying that a policy aiming at increasing farmers income through high value crop production may fail if hard and soft infrastructure does not improve in rural areas and if staple crop productivity does not increase significantly

public policies and the art of catching up matching the historical evidence with a multicountry agent based model in this paper we study the effects of industrial policies on international convergence using a multi country agent based model which builds upon dosi et al 2019b the model features a group of microfounded economies with evolving industries populated by heterogeneous firms that compete in international markets in each country technological change is driven by firms activities of search and innovation while aggregate demand formation and distribution follows keynesian dynamics interactions among countries take place via trade flows and international technological imitation we employ the model to assess the different strategies that laggard countries can adopt to catch up with leaders market friendly policies industrial policies targeting the development of firms capabilities and rd protectionist policies focusing on tariffs only we find that markets cannot do the magic in absence of government interventions laggards will continue to fall behind on the contrary industrial policies can successfully drive international convergence among leaders and laggards while protectionism alone is not necessary to support catching up and countries get stuck in a sort of middle income trap finally in a global trade war where developed economies impose retaliatory tariffs both laggards and leaders are worse off and world productivity growth slows down

industrial policy changes and firm level technological capability development evidence from northern brazil summary much has been written about the impacts of the policy changes of the 1990s on industrial performance particularly in latin america most of the studies are based on aggregated analyses that argue for or against such reforms in the policy regime this study offers an alternative view to this debate based on a longitudinal empirical scrutiny of technological capability development in 46 local and foreign firms from three sectors in northern brazil there were inter sector and inter firm variations in terms of the manner and rate of capability development for specific technical functions overall the patterns of firm level capability development exhibited a positive response to the structural reforms but such responses were not a mere consequence of trade openness a combination of government policy foreign competition and intra firm capability building efforts proved essential for speeding up capability development in some of the sampled firms thus policies for accelerating industrial technological capability development in a developing area such as the one examined here would involve not only macro level incentives and competition but very importantly measures that facilitate intra firm capability building efforts

imitation costs and patents an empirical study it has long been recognised that the costs of imitating new products have an important effect on the incentives for innovation in a market economy as arrow i962 and others have pointed out if firms can imitate an innovation at a cost that is substantially below the cost to the innovator of developing the innovation there may be little or no incentive for the innovator to carry out the innovation in their discussions of the innovation process economists frequently have called attention to the major role played by the costs of imitation but there has been little or no attempt to measure these costs to test various hypotheses concerning the factors influencing them or to estimate their effects in this paper we report some findings of what seems to be the first study of this topic in addition we present data regarding the effects of patents on imitation costs and on the rate of innovation

the electronic mail game strategic behavior under almost common knowledge the paper addresses a paradoxical game theoretic example which is closely related to the coordinated attack problem two players have to play one of two possible coordination games only one of them receives information about the coordination game to be played it is shown that the situation with almost common knowledge is very different from when the coordination game played is common knowledge

the role of borders languages and currencies as obstacles to labor market integration abstract based on a modified spatiotemporal autoregressive star model we analyze whether borders still constitute significant impediments to labor market integration in the european union despite the formal law of free movement of labor using regional data from the eu 15 countries over 21 years we find that this is the case we further investigate whether the abolishment of border checks through the schengen agreement or the introduction of the euro improved our measure of labor market integration across borders and do not find evidence in favor last we investigate the role of languages and potentially cultures as obstacles to labor market integration we find that indeed language borders play a larger role than country borders in explaining the lack of labor market integration across borders

convergence to symmetry in dynamic strategic models of r d the undiscounted case abstract will r d increase or decrease the asymmetry between firms over time we examine this issue in the context of a dynamic alternate move duopoly model of non cooperative r d the asymmetry we consider is with respect to the initial stocks of technological knowledge which provides one firm a greater potential for current and future profits in the product market utilizing a value loss process constructed from the optimality equation of dynamic programming we show that for the undiscounted case the asymmetry between the firms disappears over time we obtain this convergence to symmetry result by imparting a temporal character to r d through the notion that r d investment cannot be changed instantaneously by allowing research externalities complementarity or substitutability between own and appropriated r d and either increasing decreasing or constant returns to scale in the production of technical knowledge from own and rival r d

the r d performance through time of young high technology firms methodology and an illustration abstract this paper summarizes the pilot stage of a microeconomic study of the innovation performance through time of young high technology israeli firms it reports some results for a successful firm designing producing and selling electronic instruments and systems the paper begins by surveying some of the difficulties surrounding the collection and organization of data on r d projects one of them concerns the definition of the unit for analysis the r d project three criteria are suggested for dividing the stream for innovative activities into r d projects and these are applied to group the tens of products accessories and systems included in the analysis into nine projects the paper subsequently defines a measure of direct project performance or profitability estimate discounted operating profits per unit of fixed costs and provides estimates based on r d and sales data for the products of each project the final sections analyze the variation of project profitability through time the increasing profitability observed across generations of a product class is attributed to the adaptability of the firm to changes in the environment particularly to the availability of new technology which requires the swift design and sale of more complex products the qualitative history of the various projects suggests that this adaptability is due to a large extent to the skills infrastructure and reputation of the firm accumulated from prior projects i e that the indirect profitability of the latter is high some estimates of the indirect profitability of early projects are presented a comparison of the spin off mechanisms observed in the firm analyzed with those observed in firms of other industries is also undertaken

aid to the services sector does it affect manufacturing exports this paper evaluates the impact of foreign aid to five service sectors transportation information and communications technologies energy banking financial services and business services on exports of downstream manufacturing sectors in developing countries to address the reverse causality between aid and exports the analysis relies on an original identification strategy that exploits i the variation of aid flows to service sectors and ii the variation of service intensities across industrial sectors and countries using input output data the authors find a positive effect of aid to services in general on downstream manufacturing exports of developing countries across regions and income level groups

the effect of broadband on european union trade a regional spatial approach the positive effect of information and communication technologies ict on trade between countries has been widely studied in the literature but how ict impacts regional trade is limited due to the lack of regional trade data in this paper we test whether broadband as a proxy for ict increases bilateral trade at the regional level in europe we use a novel regional trade database of european union regions and estimate an origin destination flow gravity model for 2007 and 2010 accounting for spatial dependence among trade flows our results indicate that broadband is positive and significant in explaining trade patterns between european regions during both time periods

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

small firms social capital and the enhancement of business performance through innovation programmes the paper explores the extent to which social capital is advantageous to small and medium enterprise sme growth social capital is a communal property involving civic engagement associational membership high trust reliability and reciprocity in social networks it is capable of being identified in social political and economic contexts often associated with strong communities however not all strong communities exert the effects of social capital in respect of business activities this paper assesses government programmes to promote collaboration amongst smes for improving innovation capacity by increasing social capital through networking it shows that for a sizeable proportion of programme funded firms in denmark ireland and wales u k social capital building was associated with enhanced business knowledge and innovation performance of particular importance was the opportunity afforded to firms for linkage with external innovation networks and the build up of embeddedness or the institutional basis for the enhancement of social capital as a consequence of discovering the advantages of social capital over a third of respondents planned to continue to develop it in future in many cases funding such activities privately rather than calling on the public purse

basic research inside the firm lessons from an in depth case study abstract the economic analysis of basic research in firms has been a growing concern but only a few attempts have been made to understand the realities which characterize the implementation of this activity in an in depth case study this paper considers the organisational specificities of basic research inside the firm and emphasizes the strategic role of human resources it shows that the process of innovation which was seen in the 1970s as a stock of information to be managed became during the 1980s a sequential learning process which covers a variety of different but complementary organizational designs in the basic research unit on this basis some analytical implications for technology and innovation processes are suggested as the production process is a sequential learning process an innovative firm strategy is defined as one which is able to balance short and long terms requirements with regard to profitability this appears as an out of equilibrium problem where the crucial determinant is the organizational design chosen by the firm in order to generate and implement new learning and skills

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

approximate equilibria in microeconomic rational expectations models abstract for general equilibrium models in which prices transmit information among asymmetrically informed traders strict rational expectations approximate equilibria are defined a state dependent price function is an e equilibrium if when agents use their own information and that conveyed by prices aggregate excess demand in each state of the world does not exceed e for any positive e existence requires only very mild assumptions continuity and compact support moreover there are revealing e equilibria for all smooth economies satisfying a dimensionality condition in an open neighborhood of this case existence of maximally revealing e equilibria holds

economic history and the modern economist in this book nine economists and economic historians express their concern for the present state of economics and its development in the future from a variety of different approaches these scholars reassert the importance of economic history in the training of economists and urge that this perspective should not be lost in the future

on the diffusion of new technology a game theoretic approach this paper is an attempt at a rigorous albeit not exceedingly general analysis of the diffusion of new technology in particular consider an industry composed of two firms each using the current best practice technology the firms are assumed to be operating at nash equilibrium output levels generating a market price given demand and profit allocations when a cost reducing innovation is announced each firm must determine when if ever to adopt it based in part upon the discounted cost of implementing the new technology and in part upon the behavior of the rival firm if either firm adopts before the other it can expect to make substantial profits at the expense of the other firm on the other hand the discounted sum of purchase price and adjustment costs may decline with the lengthening of the adjustment period as various quasi fixed factors become more easily variable therefore although waiting costs the firm more in terms of foregone profits it may save money on the cost of purchasing the new technology thus the firm must weigh the costs and benefits of delaying adoption as well as take account of its rival s strategic behavior

communication and coordination in social networks i model people in a coordination game who use a communication network to tell each other their willingness to participate the minimal sufficient networks for coordination can be interpreted as placing people into a hierarchy of social roles or stages initial adopters then followers and so on down to late adopters a communication network helps coordination in exactly two ways by informing each stage about earlier stages and by creating common knowledge within each stage we then consider two examples first we show that low dimensional networks can be better for coordination even though they have far fewer links than high dimensional networks second we show that wide dispersion of insurgents people predisposed toward participation can be good for coordination but too much dispersion can be bad although collective action depends on both social structure and individual incentives these integral aspects have been formalized separately in the fields of social network theory and game theory by considering them together this paper engages the classic question of which structures are conducive to coordination and shows that structure and strategy are related in a mutually interesting way here we consider a coordination game in which each person wants to participate only if others participate social structure is thought of as a communication network by which people tell each other their willingness to participate each person knows whether her neighbours in the network are willing but does not know about anyone else our model is thus a game of incomplete information in which each person given his local knowledge decides whether to participate the main result is a characterization of the minimal sufficient networks for coordination in terms of a hierarchy of social roles or stages initial adopters then followers and so on down to late adopters for example a communication network helps coordination in exactly two ways by informing each stage about earlier stages and by creating common knowledge within each stage we also consider two simple examples first we show that low dimension or strong link networks can be better for coordination even though they have far fewer links than high dimension or weak link networks second we show that wide dispersion of insurgents people predisposed toward participation can be good for coordination but too much dispersion can be bad this paper is built on the assumption that the most basic and common mechanism for coordination is the i ll go if you go mechanism individuals first communicate with each other about their preferences and then each individual chooses whether to participate or not hence a person s participation depends on what he knows about his neighbours it does not depend solely on their participation itself either through learning adaptation or social influence the physical analogies of contagion or diffusion are not

rationalizability learning and equilibrium in games with strategic complementarities we study a rich class of noncooperative games that includes models of oligopoly competition macroeconomic coordination failures arms races bank runs technology adoption and diffusion r d competition pretrial bargaining coordination in teams and many others for all these games the sets of pure strategy nash equilibria correlated equilibria and rationalizable strategies have identical bounds also for a class of models of dynamic adaptive choice behavior that encompasses both best response dynamics and bayesian learning the players choices lie eventually within the same bounds these bounds are shown to vary monotonically with certain exogenous parameters we study the class of noncooperative supermodular games introduced by topkis 1979 and further analyzed by vives 1985 1989 who also pointed out the importance of these games in industrial economics supermodular games are games in which each player s strategy set is partially ordered the marginal returns to increasing one s strategy rise with increases in the competitors strategies so that the game exhibits strategic complementarity 2 and if a player s strategies are multidimensional marginal returns to any one com ponent of the player s strategy rise with increases in the other components this class turns out to encompass many of the most important economic applications of noncooperative game theory in macroeconomics diamond s 1982 search model and bryant s 1983 1984 rational expectations models can be represented as supermodular games in each of these models more activity by some members of the economy raises the returns to increased levels of activity by others in oligopoly theory some models of bertrand oligopoly with differentiated products qualify as supermodu lar games in these games when a firm s competitors raise their prices the marginal profitability of the firm s own price increase rises a similar structure is present in games of new technology adoption such as those of dybvig and spatt 1983 farrell and saloner 1986 and katz and shapiro 1986 when more users hook into a communication system or more manufacturers adopt an interface standard the marginal return to others of doing the same often rises similarly in some specifications of the bank runs model introduced by diamond and dybvig 1983 when more depositors withdraw their funds from a bank it is more worthwhile for other depositors to do the same in the warrant exercise

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

trade policy trade costs and developing country trade this paper briefly reviews new indices of trade restrictiveness and trade facilitation that have been developed at the world bank the paper also compares the trade impact of different types of trade restrictions applied at the border with the effects of domestic policies that affect trade costs based on a gravity regression framework the analysis suggests that tariffs and non tariff measures continue to be a significant source of trade restrictiveness for low income countries despite preferential access programs this is because the value of trade preferences is quite limited a new measure of the relative preference margin developed in the paper reveals that this is very low for most country pairs most countries with very good duty free access to a market generally have competitors that have the same degree of access the empirical analysis suggests that measures to improve logistics performance and facilitate trade are likely to have the greatest positive effects in expanding developing country trade increasing the trade impacts of lowering remaining border barriers by a factor of two or more

fairness in international trade negotiations developing countries in the gatt and wto does fairness matter in the hard bargaining and horse trading that is associated with trade negotiations this paper presents a positivist analysis of the particular concepts of fairness that developing countries have appealed to in their trade negotiations within the auspices of the gatt and wto how these notions have evolved and the impact that they have had on negotiated outcomes treating the concept of fairness as my central dependent variable i argue that the notion of fairness can only be understood in terms of the institutional context it is embedded in which includes institutional structure as well as the participatory processes that underlie it i advance three hypotheses on the relationship between institutional context the fairness discourse and the influence and manoeuvre that member countries can have in shaping that discourse focusing on the role of fairness in the negotiation positions of developing countries i explain its substance and evolution through learning and adaptation by these countries within the very particular institutions of the gatt and the wto and the coalitions they form a part of and interact within

random walks and sustained competitive advantage strategy is concerned with sustained interfirm profitability differences observations of such sustained differences are often attributed to unobserved systematic a priori differences in firm characteristics this paper shows that sustained interfirm profitability differences may be very likely even if there are no a priori differences among firms as a result of the phenomenon of long leads in random walks even a random resource accumulation process is likely to produce persistent resource heterogeneity and sustained interfirm profitability differences a cournot model in which costs follow a random walk shows that such a process could produce evidence of substantial persistence of profitability the results suggest that persistent profitability does not necessarily provide strong evidence for systematic a priori differences among firms nevertheless since the phenomenon of long leads is highly unrepresentative of intuitive notions of random sequences such evidence may still be persuasive

product innovation and the decision to invest in fixed capital assets evidence from an sme survey in six european union member states abstract this work explores the relationship between product innovation and the decision to invest in fixed capital assets among a sample of smes in six european union countries located in both peripheral and more central areas we find that the presence of product innovation reduces the probability to invest a firm s size exerts a direct inverted u shape effect on the probability to invest and an indirect effect through the linear effect of size on the probability to innovate the gap in the probability to invest between innovative and non innovative firms increases with size

technological cooperative agreements and firm s r d intensity a note on causality relations abstract in this paper we apply a recently proposed model of vector autoregression for panel data to analyse the granger causality relationship between a firm s intramural r d intensity and technological cooperative agreements the analysis relies on a sample composed of 95 major us european and japanese firms in the semiconductor data processing and telecommunications industries observed during the period 1980 1986 decisions on interfirm technological collaborations are shown to cause a la granger decisions on internal r d investments and vice versa we thus suggest that in contrast with the methodological approaches followed by previous empirical works firms decisions concerning both intramural innovative effort and technological cooperation are endogenous and have to be jointly studied through a simultaneous two equation structural model

crossing the innovation threshold through mergers and acquisitions firms are resorting more and more to mergers and acquisitions m a to bridge the gap between where they are and where they would like to be in relation to innovation and performance this paper investigates whether involvement in m a triggers distinct patterns of innovative behaviour across firms and whether this effect is conditional on firm size the analysis combines data from four waves of the community innovation survey cis and the business register of dutch manufacturing firms we observe that m as influence the probability that firms will begin innovation activities or persist with them and these effects vary at different points in the firm size distribution in particular by using m a firms are able to persist with the innovation efforts and output over time and this effect is especially strong for large firms for small firms m a help them to cross the innovation threshold increasing the probability of the transition from a non innovator to an active innovator however the m a effect does not mitigate the tendency of small firms to be occasional innovators

technical change growth and trade new departures in institutional economics this article analyses the main theoretical and policy issues emerging from the literature on the evolutionary institutional economics of technical change the four distinguishing characteristics of which are that technology is often proprietary in nature only a part of knowledge is codifiable in handbooks blueprints patents and so on there are fundamental variations in the above two points across different technological fields and the evolution of knowledge is highly path dependent