the birth of a new industry entry by start ups and the drivers of firm growth the case of encryption software the paper analyses the birth of the encryption software industry esi a new niche in the software industry using a chandlerian perspective this work reports the main facts about fir entry and growth with a particular focus on start up strategies and actions since scale economies do not play a major role in esi the paper investigates the different sources of fir competitive advantages this work shows that innovation and product differentiation along with investments in co specialised assets are variables strongly correlated to young fir probability to survive and grow in doing so we have collected highly detailed information on product introduction us patents granted worldwide alliances and biographical data of fir founders 2004 elsevier b v all rights reserved jel classificatio m13 l86 o32

internal rent capture and the profit concentration relation if labor is able to capture a portion of the economic rents in profitable industries industry profitability and the relation between market structure and profitability may both be mismeasured this paper estimates a simultaneous equation system in which both the price cost margin and compensation per worker including fringe benefits are endogenous variables the authors sample consists of eighty five well defined producer goods industries they find that labor compensation does include some capture of economic rents further when they correct for this rent capture the relation between market concentration and the price cost margin is strengthened significantly copyright 1991 by mit press

general technological capabilities product market fragmentation and markets for technology abstract the combination of a firm capability i e ability to generate general purpose technologies and a market structure condition i e fragmentation of downstream submarkets may encourage licensing in an industry that is the probability of licensing should increase when product markets are fragmented and technologies support general purposes evidence consistent with these predictions emerges from a 1993 to 2001 panel of 87 firms that owned at least one u s software security patent between 1976 and 2001 the analysis uncovers some fundamental characteristics of how external knowledge exploitation functions in particular technology markets thrive when product markets are fragmented and firms have the capability to produce general technologies

industrial evolution through complementary convergence the case of it security the article addresses the dynamics through which product markets become derailed from early product life cycle plc tracks and engaged in complementary convergence with other product markets or industries we compare and contrast the theories that can explain respectively the plc and the derailing of this cycle into a process of complementary convergence the article challenges the standard industry conception and proposes a distinction between the emergent industrial sector the emergent product market or niche and the industry as a more well established entity based on empirical evidence from the it security sector two trajectories of complementary convergence are identified lower order integration the integration of different product markets in a sectoral context and higher end integration the integration of product markets into the offerings of established industries while young ventures dominate lower order integration incumbents in established industries dominate higher order integration for both trajectories mergers and acquisitions represent a central means for realizing convergence copyright 2011 the author 2011 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

the industrial dynamics of open innovation evidence from the transformation of consumer electronics abstract this paper addresses how the open innovation concept as recently coined by henry chesbrough can be analyzed from an industrial dynamics perspective the main proposition of the paper is that the specific modes in which different companies manage open innovation in regard to an emerging technology reflect their differential position within the innovation system in question the nature and stage of maturity of the technological regime and the particular value proposition pursued by companies the proposition is analyzed through an in depth study of the current transformation of sound amplification from linear solid state technology to switched or digital technology within the consumer electronics system of innovation the analysis especially addresses the complex interplay between technology entrepreneurs and incumbents and demonstrates that open innovation sometimes has to be conducted under conditions of high transaction costs

assets and actions firm specific factors in the internationalization of u s internet firms by providing a nearly instant connection among parties at opposite corners of the world and enabling a variety of commercial exchanges the internet emerged as the technology expected to create a truly global market space internet firms faced the challenge of capitalizing on this development in this paper we examine what firm specific factors are associated with the propensity of pure u s based internet firms to enhance their international presence on the internet by developing country specific websites despite the assertion that all internet firms are born global our findings show that the pursuit of internationalization by internet firms is related to the levels of their intangible assets and strategic activity two types of intangible assets reputation and website traffic are positively related to the degree of internationalization so are the levels of competitive and cooperative activity and the interaction effects between reputation and competitive and cooperative activity these findings suggest that ideas from both resource based theory and research on competitive dynamics can contribute to understanding the internationalization of internet firms

how and when should companies retain their human capital contracts incentives and human resource implications the increasing competition in the labor market for human capital pushes firms to create better incentives to manage talented individuals in this article we model the optimal employment contract when two features of human capital are present i private information of the employee about his skills and ii the inability to contract on the output of the employment activity our model shows how firms can use delegation i e the employee s job autonomy to provide the incentives to a privately informed employee the model novelty resides in turning a classic source of potential inefficiency like asymmetric information into a factor that firms can use to design incentives our model provides a new explanation of why in technologically dynamic environments one observes more intense formations of start ups and a greater inter firm mobility of human capital our setting also suggests how established companies can use their complementary assets to provide better incentives to their skilled employees copyright 2010 the author 2009 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

the multinational firm direct investment is incorporated into a simple general equilibrium model of international trade the analysis focuses on an attempt to endogenize the internalization decision it is argued that a reasonable approach assumes that arm s length contracts must be simple so that complex arrangements require internalization the model relates direct investment to the degree of underlying uncertainty and to fundamental trade determinants such as relative factor endowments the behavior of the model contrasts sharply with that of the markusen helpman model which takes internalization for granted

the equivalence of core and cost share equilibria in an economy with a public good abstract the central result of this paper is a refinement of an equivalence theorem in mas collell quart j econ 94 1980 625 641 for the core of a finite economy with a public good it is shown that an allocation belongs to the core if and only if it is a cost share equilibrium i e is supported by a monotonic cost share system we also characterize the set of core allocations which can be supported by a linear cost share system it turns out that the set of linear cost share equilibria which are in one to one correspondence with the lindahl foley equilibria is determined by uniform upper and lower bounds on the relative marginal rate of substitution for the public good

are there non linearities between sme growth and its determinants a quantile approach this article uses quantile regressions to study the relationship between the growth of portuguese small and medium enterprises smes and its determinants to control a sample selection bias we use a two step estimation in the first stage we verified that past growth size age rd ii debt and rd iii age is a restrictive factor of portuguese sme growth only when there is an increase in size and iv cash flow although a determinant promoting portuguese sme growth regardless of the level of growth takes on greater importance when there is a reduction in size copyright 2010 the author 2010 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

the boundaries of multinational enterprises and the theory of international trade this paper begins with a review of empirical evidence on multinational firms conceptual underpinnings of a theory are developed relying in particular on the notion of knowledge capital as a mobile joint input into geographically separated production facilities this idea is embedded in a simple two country general equilibrium model that supports multinational production in equilibrium under conditions consistent with the empirical evidence the final section examines internalization and shows why certain properties of knowledge capital also imply a preference for transferring technologies internally within the firm rather than through arm s length markets

do firms learn to create value the case of alliances we investigate whether firms learn to manage interfirm alliances as experience accumulates we use contract specific experience measures in a data set of over 2000 joint ventures and licensing agreements and value creation measures derived from the abnormal stock returns surrounding alliance announcements learning effects are identified from the effects of unobserved heterogeneity in alliance capabilities we find evidence of large learning effects in managing joint ventures but no such evidence for licensing contracts the effects of learning on value creation are strongest for research joint ventures and weakest for marketing joint ventures these results are consistent with the view that learning effects are more important in situations characterized by greater contractual ambiguity copyright 2000 john wiley sons ltd

ideas for rent an overview of markets for technology this article surveys some of the recent literature on technology markets and summarizes its main issues and insights we structure our analysis in three parts the supply and demand of technology the factors that condition the formation and growth of technology markets industry structure and dynamic issues in addition we summarize some of the studies that have tried to document the size and growth of these markets we find that the literature has focused mainly on the supply of technology but several other aspects of these markets remain under studied including the demand for external technology the role of uncertainty in technology markets and the dynamic interaction between industry structure and the market for technology understanding these will illuminate whether markets for technology will continue to grow or remained confined to pockets of the economy copyright 2010 the author 2010 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

entry and patenting in the software industry to what extent are firms kept out of a market by patents covering related technologies do patents held by potential entrants make it easier to enter markets we estimate the empirical relationship between market entry and patents for 27 narrowly defined categories of software products during the period 1990 2004 controlling for demand market structure average patent quality and other factors we find that a 10 increase in the number of patents relevant to market reduces the rate of entry by 3 8 and this relationship intensified following expansions in the patentability of software in the mid 1990s however potential entrants with patent applications relevant to a market are more likely to enter it finally patents appear to substitute for complementary assets in the entry process because patents have both greater entry deterring and entry promoting effects for firms without prior experience in other markets this paper was accepted by bruno cassiman business strategy

broader product line a necessity to achieve success strategic product line breadth decisions evoke differential responses from the manufacturing and the marketing areas manufacturing prefers keeping process disruptions to a minimum and as a result discourages product proliferation however marketing in its attempt to match products to heterogeneous consumer needs and gain market share emphasizes a broader product line we systematically investigate the market benefits and cost disadvantages of broader product lines on a large sample of over 1 400 business units our results indicate significant market share benefits and increases in firms profitability with broader product lines moreover widely held beliefs of increases in production costs are not empirically supported american manufacturing firms may indeed be flexible enough to accommodate product variety without significant detrimental effects on costs

internalization an event study test abstract the internalization theory of multinational firms proposes that direct international investment occurs when a firm has information related intangible assets with public good properties we find that firms with characteristics suggesting the presence of information based assets experience a significantly positive stock price reaction upon announcing a foreign acquisition on the other hand firms apparently lacking such assets experience at best zero abnormal returns upon announcing overseas acquisitions

relation of dominant problems to stages of growth in technology based new ventures two studies investigating the growth patterns of new ventures are presented in the first study a stage of growth model theorized to apply specifically to technology based new ventures was develop

the economics of product variety a survey demand for variety may arise from a taste for diversity in individual consumption and or from diversity in tastes even when each consumer chooses a single variant the full degree of variety potentially demanded will not in general be supplied because scale economies even to a small degree mean that the potential welfare or revenue gain from greater variety must be balanced against the lower unit production costs with fewer variants the economics of product variety consists essentially in analysing the effect of this balance in different situations and comparing the degree of product variety for different market structures with each other and with the optimum the survey commences with the work on market structures with single product firms generalized monopolistic competition tracing modern developments in both the chamberlinian and hotelling traditions the latter has been particularly fruitful due to the expansion of the original locational ideas into virtual spaces in product characteristics the emphasis in recent work on product variety has been on multiproduct firms in both monopolistic and oligopolistic structures including strategic market preemption although most work has been in a full information context there have been advances in product variety under imperfect information either by consumers to properties of the firms products or firms as to consumers demands

the post entry performance of new small firms in german manufacturing industries while recent years have witnessed a growing interest in research on market entry by new firms evidence regarding their postentry performance is scarce this paper uses longitudinal data for small firms that entered german manufacturing industries between 1979 and 1982 and monitors their performance until 1990 entrants face a high risk of failure hazard rates tend to increase during the first years and to decrease afterwards decline of employment in a cohort due to exits and shrinking firms is compensated by growing survivors no clear cut nexus between start up size and probability of survival shows up copyright 1994 by blackwell publishing ltd

letting the market work for you an evolutionary perspective on product strategy managers must choose to allocate scarce resources either to the maintenance of a range of products tailored to heterogeneous consumer preferences or to the efficient production of a small number of products in addition managers must choose the degree to which they periodically cull the product line vigorous selection removes poor performers from the product line but this action simultaneously impairs the firm s ability to monitor changes in consumer preferences empirical evidence from the computer workstation industry reveals that the ideal choice of product variety depends on the competitive ecology of the industry product variety becomes less valuable as the total number of products on the market increases but it increases in value as uncertainty makes the accurate prediction of demand difficult copyright 2000 john wiley sons ltd

striving for a large market evidence from a general purpose technology in action several scholars have tried to focus on growth accounting of specific examples of general purpose technologies gpts but what are the factors that might make a general purpose technology succeed or fail once the invention has been triggered this paper is a preliminary answer to this question and attempts to study gpts from an ex ante perspective trying to understand what is the behaviour and performance of the producer firms and what the factors are that can favour or hamper their diffusion in the application sectors the paper follows a historical perspective on a control technology introduced in the last few decades by a silicon valley start up company