water pricing policies public decision making and farmers response implications for water policy abstract the problems caused by water scarcity demand important changes in the criteria and objectives of water policies the agricultural sector in spain consumes up to 80 of all available hydric resources and the need to increase the efficiency of current uses of water in the agricultural sector is at the core of the country s national water policy one alternative would be to resort to water pricing policies with the aim of providing incentives to save water consumption although it would inflict a certain degree of income losses to the farmers and raise the revenue collected by the water authorities the objective of this research is to analyze the effect caused by the application of different water pricing policies on water demand farmers income and the revenue collected by the government agency to undertake this analysis a dynamic mathematical programming model has been built that simulates farmers behavior and their response to different water pricing scenarios empirical application of the model has been carried out in several irrigation districts in spain covering varied farm regions and river basins results show that the effects of alternative pricing policies for irrigation water are strongly dependent on regional structural and institutional conditions and that changing policies produce distinct consequences within the same region and water district thus equivalent water charges would create widespread effects on water savings farm income and collected government revenue across regions and districts

the effect of using consumption taxes on foods to promote climate friendly diets the case of denmark abstract agriculture is responsible for 17 35 of global anthropogenic greenhouse gas emissions with livestock production contributing by approximately 18 22 of global emissions due to high monitoring costs and low technical potential for emission reductions a tax on consumption may be a more efficient policy instrument to decrease emissions from agriculture than a tax based directly on emissions from production in this study we look at the effect of internalising the social costs of greenhouse gas emissions through a tax based on co 2 equivalents for 23 different foods furthermore we compare the loss in consumer surplus and the changed dietary composition for different taxation scenarios in the most efficient scenario we find a decrease in the carbon footprint from foods for an average household of 2 3 8 8 at a cost of 0 15 1 73 dkk per kg co 2 equivalent whereas the most effective scenario led to a decrease in the carbon footprint of 10 4 19 4 but at a cost of 3 53 6 90 dkk per kg co 2 equivalent the derived consequences for health show that scenarios where consumers are not compensated for the increase in taxation level lead to a decrease in the total daily amount of kj consumed whereas scenarios where the consumers are compensated lead to an increase most scenarios lead to a decrease in the consumption of saturated fat compensated scenarios leads to an increase in the consumption of added sugar whereas uncompensated scenarios lead to almost no change or a decrease generally the results show a low cost potential for using consumption taxes to promote climate friendly diets

seasonal poverty in madagascar magnitude and solutions abstract seasonal reductions in food consumption pull about one million malagasy below the poverty line during the lean season there they join the nine million more who remain chronically undernourished throughout the year because the seasonality of food shortages coincides with the increased prevalence of diarrhea and other diseases during the rainy season the resulting lean season exacts a heavy toll in the form of increased rates of malnutrition and child mortality combining the results of recent field studies with a seasonal multi market model this paper measures the probable impacts of three common interventions aimed at combatting seasonal food insecurity we find the most promising interventions to be those that increase agricultural productivity of the secondary food crops such as cassava other roots and tubers and maize

food preferences and nutrition in rural bangladesh t he dietary choice of households near subsistence levels of nutrient intake is one of obvious policy importance in many countries such as bangladesh national goals are set in terms of nutritional intake and there is heavy intervention in the markets for foods however little is known about the manner in which food preferences vary with food expenditure and nutrient intake the design of efficient programs to aid nutritionally deficient households in attaining minimal levels of nutrient intake requires information on all ownand cross price elasticities for both target and non target groups the net effect of a food price subsidy on the consumption of food nutrients cannot be predicted without knowledge of the complete elasticity matrix results presented below demonstrate that substitution effects can be so strong that the subsidization of certain foods quite often reduces nutrient consumption in this study demand equations for nine foods which allow for extremely flexible consumer price response are estimated from the individual budgets of 5 750 rural bangladeshi households estimation at the household level is preferred because it more readily permits the incorporation of household composition variables into the demand analysis such as household size occupation and employment status that are typically lost in aggregation there is also a greater range and variation in expenditure levels than found in grouped data this is of particular importance in the study of nutritional well being as it is the poorest households which are of special interest moreover the household sample provides sufficient degrees of freedom to estimate a simple varying parameter model which requires the estimation of 270 parameters previous econometric analysis of income class specific dietary choice has been limited and not altogether satisfactory pinstrup anderson de londono and hoover 1976 estimated complete sets of price elasticities for different income strata using frisch s scheme in order to study the impact of changes in relative prices on nutrient consumption their results are suspect because of the assumption of want independence necessary for this methodology to be valid alderman and timmer 1980 who were also concerned with studying the relationship between food price policy and nutrient intake by income classes econometrically estimated separate price coefficients for each income group by including slope dummy variables in their demand equations for rice and cassava in indonesia the inclusion of these dummy variables revealed surprisingly large differences in compensated price response across income groups although their results support the notion that poorer households respond differently to prices than the rich the limitations of their data constrained them to consider only two foods and to specify changes in price response which are discontinuous with respect to income i the formulation and estimation of the food demand equations is discussed in section ii below section iii presents the results of the estimation and discusses the nutritional implications of movements in relative food prices and other exogenous variables section iv summarizes our findings

zero expenditures and the estimation of engel curves over the brief interview periods typical of budget surveys such as the u k family expenditure survey households recorded expenditures are liable to be misleading indicators of their underlying consumption most starkly a household may not be observed to purchase commodities that it nevertheless consumes this paper considers the implications of such measurement errors for the estimation of demand systems and derives a consistent estimator for the special case of linear engel curves

the global supply and demand for agricultural land in 2050 a perfect storm in the making the number of people which the world must feed is expected to increase by another 2 billion people by 2050 when coupled with significant nutritional improvements for the 2 1 billion people currently living on less than 2 day this translates into a very substantial rise in the demand for agricultural production most past growth in the demand for food has been met by improvements in productivity but there is evidence of declining growth rates for agricultural yields climate change is likely to have important impacts on productivity through changes in temperature and precipitation land based climate mitigation policies are also projected to lead to increasing pressure on agricultural lands meanwhile supplies of water for irrigation are under pressure urban land use is on the rise and demands for setting aside land for environmental purposes continue to increase clearly an enormous amount of additional research on ways to deal with this potential perfect storm is needed this paper highlights the explores the roles of biophysical and economic uncertainty in these projections of long run land use change using this to suggest a future research agenda

the use and abuse of meta analysis in environmental and natural resource economics an assessment motivated by the 2006 report of a work group appointed by the environmental protection agency epa this paper examines the present state of meta analysis in environmental economics and offers recommendations for its future use to this end we summarize and assess 140 meta analyses from 125 published and unpublished studies covering 17 topical categories in environmental and resource economics first we provide several generic meta analysis models as reference points and discuss major estimation issues five econometric issues are identified as part of a complete analysis 1 sample selection criteria 2 basic data summary 3 primary data heterogeneity 4 heteroskedasticity and 5 non independence of multiple observations from primary studies second a tabular summary is presented for the 140 meta analyses with respect to estimation methods third a narrative summary is presented for 19 meta analyses including the three value of statistical life studies examined by the epa work group and one analysis from each of 16 other categories fourth we offer a set of best practice guidelines for future meta analyses in this and other areas of economics last the paper comments on the use of meta analytic methods for benefit transfers of environmental values

the changing technology of technological change general and abstract knowledge and the division of innovative labour abstract in the past most innovations have resulted from empiricist procedures the outcome of each trial yielding knowledge that could not be readily extended to other contexts while trial and error may remain the primary engine of innovation developments in many scientific disciplines along with progress in computational capabilities and instrumentation are encouraging a new approach to industrial research instead of relying purely on trial and error the attempt is also to understand the principles governing the behaviour of objects and structures the result is that relevant information whatever its source can now be cast in frameworks and categories that are more universal the greater universality makes it possible for the innovation process to be organised in new ways firms can specialise and focus upon producing new knowledge and the locus of innovation may be spread across both users and producers more generally the use of general and abstract knowledge in innovation opens up the possibility for a division of labour in inventive activity the division of innovative labour the implications for public policy especially that on intellectual property rights are discussed

who gets the goods a general equilibrium perspective on food aid in mozambique abstract we employ a computable general equilibrium approach to examine the effects of alternative food aid distribution schemes for drought response food aid to mozambique alternative schemes have very distinct impacts on household welfare and prices compared with monetization of food aid by government direct distribution to households by population shares strongly benefits rural households even assuming that government cannot target food aid strictly at drought stricken rural people our results indicate that when improving household welfare is the primary goal of the food aid direct distribution of food aid to households is preferred

estimating consumption from expenditure data abstract most studies of distributional issues have focused on the distribution of income but the income information usually available suffers from well known deficiencies this paper explores an alternative approach to distributional analysis based instead on expenditure data in many countries including the united kingdom available household budget data provides information on expenditures only over a short period the problems that consequently arise in interpreting data of this sort are emphasised a general specification for the stochastic structure of expenditure data is presented and a procedure for estimating participant households underlying consumption from their observed expenditures developed and discussed

demand systems estimation with microdata a censored regression approach demand systems estimation increasingly makes use of household level microdata mainly to measure the effects of demographic variables data based on these household expenditure surveys present a major estimation problem for any given household many of the goods have zero consumption implying a censored dependent variable techniques which do not take this censored dependent variable into account will yield biased results we utilize a censored regression approach that is computationally simple consistent and asymptotically efficient the results are then presented and compared with those obtained using an uncensored technique

the monetization of project and emergency food aid project level efficiency first abstract the level of food aid monetization has increased sharply particularly in africa and especially to cover the transport and non food costs of food aid projects monetization to raise cash is not wrong in principle and increases the efficiency of cash starved projects however the focus on generating counterpart funds has obscured a more important debate about whether and when food is more appropriate than cash at the project level there can be no general predisposition to use either food or cash but guidelines must be applied in each case

changes in the structure of global food demand may 1998 purdue agec staff paper 98 5 a newly developed demand system is used to estimate the response of food and food product demand to per capita expenditure changes the resulting engel elasticities are then used to project food and food product demand in 2020 assuming per capita expenditure and population changes results suggest that while food expenditure is projected to grow it accounts for a smaller proportion of total expenditure further analysis indicates change in the composition of food demand away from a grain and towards livestock is projected to occur in lower income countries in 2020

formal and informal interests of donors to allocate aid spending patterns of usaid giz and eu forest development policy in bangladesh summary whether aid serves the development needs of a recipient country rather than the interests of donors has been a topic of much debate and research in the field of development studies donor agencies have interests as does any political actor and bureaucratic politics theory states that any bureaucracy has a dual interest consisting of delivering on its formal mandate as well as informally increasing its power by maximizing budgets staff and fields for political responsibility this study aims to conceptualize the formal and informal interests of bilateral foreign donor bureaucracies in allocating aid using bangladesh forest development aid by usaid giz and the eu as a case study quantitative analysis of documents on actual spending in the context of forest development projects and qualitative analysis from detailed interviews with development aid experts are employed important informal interests of donor agencies were observed as follows 1 drawing on consultants as well as products and services from the donor s country 2 expanding favorable markets for the donor s economy 3 increasing the donor s geopolitical as well as policy influence in recipient countries 4 obtaining information that is independent from the recipient government and 5 shaping good governance as a prerequisite for investment from donor countries of the three donor organizations usaid was found to have allocated extensive aid to two activities consultancy and collaboration and networking that advance usaid s informal economic and political interests giz allocated major aid to recipient developmental interventions it also advanced its informal economic and political interests albeit to a smaller extent the eu allocated the largest amount of aid to developmental interventions though its informal economic and political interests were also served even if only to a limited extent this study concludes with key points regarding informal interests of donor bureaucracies as well as on future research fields

what experimental protocol influence disparities between actual and hypothetical stated values preferences elicited in hypothetical settings have recently come underscrutiny causing estimates from the contingent valuation method to bechallenged due to perceived hypothetical bias given that the receivedliterature derives value estimates using heterogeneous experimentaltechniques understanding the effects of important design parameters onthe magnitude of hypothetical bias is invaluable in this paper we addressthis issue statistically by using a meta analysis to examine data from 29experimental studies our empirical findings suggest that on averagesubjects overstate their preferences by a factor of about 3 in hypotheticalsettings and that the degree of over revelation is influenced by thedistinction between willingness to pay and willingness to accept publicversus private goods and several elicitation methods

innovation in complex products and system over the past 5 to 10 years empirical study has provided a much improved understanding of how innovation occurs in complex high value capital goods research has began to illustrate the specific ways in which so called complex products and systems cops are produced by firms often working together in projects and how innovation processes in cops differ from those commonly found in mass produced goods this is an important research endeavour for at least three reasons first cops play a vital part in the modern economy and wider society as the major capital goods which underpin manufacturing services trade and distribution cops play a critical role in modern industrial and economic progress as rosenberg n 1976 technological change in the machine tool industry 1840 1910 in perspectives on technology cambridge univ press cambridge rosenberg 1976 has argued capital goods are a key point of entry of new technology into the economic system second because much conventional innovation wisdom is derived from research on high volume consumer products new evidence models and concepts are needed to properly understand innovation processes in cops third at the practical levels of firm strategy and government policy a robust understanding of innovation in cops is needed to enable firms to improve their performance and to guide the policy and regulatory agencies directly involved in decision making in cops drawing from recent research the purpose of this special issue is to provide substantial new insights into the innovation dynamics of cops dealing with firm strategy capability building management practices organisational form product life cycles government policy measurements and conceptual frameworks in this introduction we argue not only that cops underpin the production of modern goods and services but that much conventional innovation wisdom derived from studies of mass produced goods e g the automobile and the semiconductor either does not apply or applies with substantial qualification to cops the aim of the issue is to put innovation in cops centre stage in the analysis of innovation part 1 of the introduction provides a definition of cops highlighting the innovation and production contrasts with mass produced commodity goods part 2 outlines key innovation issues raised by cops showing the importance of systems integration software and project management as core capabilities in the production of modern systems part 3 briefly summarises some of the key unanswered questions posed by cops while part 4 shows how each of the papers in this special issue attempt to answer some of these questions finally part 5 maps out future research directions stressing the importance of building a deeper historical perspective on cops as a key transmission mechanism for new technology within the industrial and wider economic system

hierarchic demand and the engel curve for variety ahstract the usual treatment of consumer demand theory assumes a solution to the demand equations with positive quantities of all commodities this paper characterises a class called hierarchic demand systems for which only a subset of commodities are in the purchased set the hierarchic linear expenditure svstem is used to illustrate interesting properties of such systems the empirical section shows how the number of commodities purchased expands with total expenditure both in aggregate and for commodity groups the data clearly establish the empirical importance of corner solutions and of the purchase decision in demand studies

what is behind the recent surge in patenting abstract we investigate the cause of an unprecedented surge of us patenting over the past decade conventional wisdom points to the establishment of the court of appeals of the federal circuit by congress in 1982 we examine whether this institutional change which has benefited patent holders explains the burst in us patenting using both international and domestic data on patent applications and awards we conclude that the evidence is not favorable to the conventional view instead it appears that the jump in patenting reflects an increase in us innovation spurred by changes in the management of research

the technological competencies of the world s largest firms complex and path dependent but not much variety firm specific technological competencies help explain why firms are different how they change over time and whether or not they are capable of remaining competitive data on more than 400 of the world s largest firms show that their technological competencies have the following characteristics 1 1 they are typically multi field and becoming more so over time with competencies ranging beyond their product range in technical fields outside their distinctive core 2 2 they are highly stable and differentiated with both the technology profile and the directions of localised search strongly influenced by firms principal products 3 3 the rate of search is influenced by both the firm s principal products and the conditions in its home country however considerable unexplained variance suggests scope for managerial choice these findings confirm the importance of complexity and path dependency in the accumulation of firm specific technological competencies and show that managers are heavily constrained in the directions of their technological search they also show the limits of the notion of competition through variety given that the same specific field of technological competence is often essential to the development of a range of possible product configurations technological imperatives still exist

cash versus direct food relief abstract the usual method of providing relief to a famine region is to import food and distribute it to the needy direct food relief if there are markets for food in the region however a relief agency could just as easily distribute money to the needy and let them purchase food in the market cash relief this alternative has been much discussed in the famine literature recently the purpose of this paper is to clarify the conditions under which cash relief will be more or less effective than direct food relief by analyzing the relative effectiveness of the two policies in a formal model

statistical models for zero expenditures in household budgets household budget surveys are an important source of data on consumer s expenditure not just for individual consumers but also for estimating national aggregates however it is a widespread finding that for certain commodities most notably tobacco and alcohol the estimate from the household survey falls short of the known consumption total calculated with some confidence from data on production imports exports and excise duties for example in the british family expenditure survey with which we shall largely be concerned total tobacco expenditure was underestimated in 1976 by 21 percent see kemsley redpath and holmes 1980 p 51 much of this understatement together with that on alcohol is thought to occur because of the design of the survey which excludes many persons amongst whom consumption of such items is thought to be atypically high e g prisoners hoteliers and their residents merchant seamen even so the possibility remains that some of the understatement is due to various types of misreporting by households included in the survey in this paper we consider a model in which the standard tobit specification tobin 1958 is supplemented by the operation of a simple binary censor the tobit model is essentially a linear regression model in which non positive observations of the dependent variable are replaced by zero we take this specification as our starting point but add a second censoring process that randomly replaces a fraction of the observations generated by the tobit model bv zeroes the combined model can serve as a representation of several types of

can consumers willingness to pay incentivize adoption of environmental impact reducing technologies in meat animal production abstract this study develops a model estimating consumer willingness to pay wtp for environmental meat attributes and uses a multi objective nutritional optimizer to explore the extent to which wtp can offset on farm costs of reducing water use data for the wtp model are sourced from a literature survey of the agricola and google scholar databases yielding 46 studies estimating wtp for pure and impure organic grass fed natural environmental meat attributes bayesian analysis is used to estimate 3 models varying in independent variables models are evaluated by the correlation coefficient r2 root mean squared error of prediction rmspe and posterior model probability the most probable model is then used to estimate a confidence range of wtp for pure environmental beef impure environmental labels result in higher wtp than pure labels non hypothetical wtp for pure environmental labeling for north american consumers ranges from 6 7 to 32 6 a case study is conducted to identify the expected reduction in water use that can be funded from capturing wtp through labeling a multi objective nutritional optimizer is used to identify ideal management of beef cattle to reduce whole system water use in three regions of the united states cost increases from management are varied over the predicted range in wtp and combined with the probability of a consumer purchasing beef at each wtp value to identify the theoretical effect on expected environmental impact reduction a 10 premium is the ideal wtp resulting in water use reductions between 24 4 l and 41 4 l

regional trade government policy and food security recent evidence from zambia given heavy dependence on rainfed maize production countries in east and southern africa must routinely cope with pronounced production and consumption volatility in their primary food staple typical policy responses include increased food aid flows government commercial imports and stock releases and tight controls on private sector trade this paper examines recent evidence from zambia using a simple economic model to assess the likely impact of maize production shocks on the domestic maize price and on staple food consumption under alternative policy regimes in addition to an array of public policy instruments the analysis evaluates the impact of two key private sector responses in moderating food consumption volatility private cross border maize trade and consumer substitution of an alternate food staple cassava for maize the analysis suggests that given a favorable policy environment private imports and increased cassava consumption together could fill roughly two thirds of the maize consumption shortfall facing vulnerable households during drought years

shifting sands the changing case for monetizing project food aid in bangladesh abstract monetization involves local sale of food aid commodities and using the cash to finance other programs to explore the likely consequences of monetization this paper combines a stockpile of recent microeconomic evidence from food and cash for work projects in bangladesh together with a multimarket simulation model results suggest that a switch from food for work s ffw in kind deliveries of wheat to an identical wheat financed cash for work cfw program would unambiguously improve welfare of the poor

design complexity vertical disintegration and knowledge organization in the semiconductor industry this article examines the advantages and drawbacks of internal knowledge integration versus collaborative outsourcing as two polar modes of governance in the design of application specific integrated circuits asics increasing technological complexity miniaturization and the generalization of markets for technology have induced higher integration constraints for designers the pace of innovation and frequent changes in design rules require a tightly controlled design process as a consequence knowledge integrators must develop expertise beyond the scope of their domain of activity if they are to ascertain the overall efficiency of systems we find that although internalization of knowledge integration reduces coordination and agency related costs the involvement of partner firms in upstream design phases facilitates knowledge sharing and improves the coordination of innovation in modules the analysis of the evolution of the asics industry shows that while large system integrators remain the dominant players specialist firms are gaining market shares and do not hesitate to embark on the design of leading edge systems this result may simply reveal the increasing value of component knowledge in a disaggregated value chain however relying on a comparative case study of two similar development processes one with each of the knowledge integration approaches we confirm the strength of decentralized modes of governance on the condition that partner firms engage in a long term relationship copyright 2007 oxford university press

agricultural technologies for climate change in developing countries policy options for innovation and technology diffusion climate has obvious direct effects on agricultural production the reverse is more apparent than ever as greenhouse gas emissions from agriculture are tallied the development and effective diffusion of new agricultural practices and technologies will largely shape how and how well farmers mitigate and adapt to climate change this adaptation and mitigation potential is nowhere more pronounced than in developing countries where agricultural productivity remains low poverty vulnerability and food insecurity remain high and the direct effects of climate change are expected to be especially harsh creating the necessary agricultural technologies and harnessing them to enable developing countries to adapt their agricultural systems to changing climate will require innovations in policy and institutions as well potential constraints to innovation involve both the private and public sectors in both developing and developed countries the process of transferring agricultural innovations across agroecological and climatic zones is often subject to agronomic constraints often the most binding constraints occur at the adoption stage with several factors that potentially impede poor farmers access to and use of new technologies based on discussions of these constraints we derive six policy principles and use these principles to suggest several specific investments and policy priorities

decomposing local a conjoint analysis of locally produced foods increasingly foods are marketed as locally grown we use stated preference data from a choice based conjoint instrument to address two issues surrounding consumer demand for locally produced goods 1 what is the geographical extent of local and 2 is the value consumers place on local production distinct from other factors that are often confounded with locally produced foods such as farm size and product freshness we find our subjects place similar value on products produced in state and nearby and that consumers willingness to pay for local production is independent from values associated with product freshness and farm size copyright 2008 oxford university press

the contractual nature of the firm for their helpful comments i am grateful to armen a alchian yoram barzel keith leffler john s mcgee and dean worcester 1 ronald h coase the nature of the firm 4 economica 386 1937 the paper however was written several years earlier see note 3 infra 2 the social sciences citation index provides the following information breaking down the period of 1966 80 into three five year periods the total citations of coase s firm paper for each subperiod are 1966 70 17 citations 1971 75 47 citations and 1976 80 105 citations

firm organization industrial structure and technological innovation abstract the formal and informal structures of firms and their external linkages have an important bearing on the rate and direction of innovation this paper explores the properties of different types of firms with respect to the generation of new technology various archetypes are recognized and an effort is made to match organization structure to the type of innovation the framework is relevant to technology and competition policy as it broadens the framework economists use to identify environments that assist innovation

transaction cost economics in real time this paper attempts to place the theq of the boundaries of thejirm within the context of the passage of time more precisely it resurrects and places in a modem frame some of the insights of the chsical and marshallian theories of organization the modem reinterpretation of those theories centers around the capabilities view of the jirm taken together with governance costs the capabilities ofjirm and market determine the boundaries of the jirm in the short run ovw time capabilities change as firms and markets learn which implies a kind of information or knowledge cost the cost of trandewing the firm s capability to the market w vice versa these dynamic governance costs are the costs of persuading negotiating and coordinating with and teaching others they arise in the face of change notably txchnological and organizational innovation in fit they are the costs of not having the capabilities you need when you need them dynamic transaction costs provide an explanation for vertical integration that is arguably more general than those dominant in the literature in the face of uncertainty and divwgent views ofthe future common ownership of multiple stages of production is a supwior institutional arrangement for coordinating systemic change asset specrfity is neither necessary nor suffient for this to be true dynamic governance costs may also affit internal organization it may sometimes be costly in 3 terms of persuasion negotiation and teaching to create within the firm capabilities readily available on the market indeed in cases in which systemic coordination is not 4 the issue the market may turn out to be the superior institution of coordination in e 2 genwal the capabilities view of the jirm suggests that we look atfim2 and market as alternative and sometimes overlapping institutions of learning 1 transaction costs in the long rzln and the short 9 x classical and neoclassical perspectives

gmo standards endogenous policy and the market for information the paper develops a composite index of gmo standards restrictiveness for 60 countries assigning objective scores to six different regulatory dimensions using this index and its components we empirically investigate the political and economic determinants of gmo regulations for 55 countries controlling for spatial autocorrelation results show that many of the determinants highlighted in the theoretical literature such as the structure of the agricultural sector and the institutional environment are important determinants of the restrictiveness of the gmo regulation as a key result there emerges a prominent role of the market for information showing that the structure of domestic mass media public vs private is an important driver of gmo standards

networks and innovation in a modular system lessons from the microcomputer and stereo component industries in this paper we examine theoretically and through case studies the phenomenon of the modular system which we distinguish from a product conceived of as a prepackaged entity or appliance we argue that such systems offer benefits on both the demand side and the supply side supply side benefits include the potential for autonomous innovation which is driven by the division of labor and provides the opportunity for rapid trial and error learning demand side benefits include the ability to fine tune the product to consumer needs and therefore blanket the product space more completely both of our case studies suggest that innovation in a modular system can lead to vertical and horizontal disintegration as firms can often best appropriate the rents of innovation by opening their technology to an outside network of competing and cooperating firms we conclude by speculating on the increased importance of modular systems in the future since flexible manufacturing and rising incomes are likely to increase the driving requisites of modular systems low economies of scale in assembly and sophisticated consumer tastes

capabilities structure agency and evolution this paper examines conceptual issues and reviews empirical results bearing on the relationship between research approaches emphasizing organizational capabilities and those based in transaction cost economics tce or in organizational economics more generally following a review of conceptual fundamentals what capability is and why organizations differ in capability it assesses recent progress toward an integration of the capabilities and transaction cost approaches primarily in the context of the analysis of vertical structure and related phenomena this review suggests that progress has been substantial and that the key elements of a promising dynamic synthesis have been identified the paper then considers issues that call for attention if further progress is to be achieved the first of these is the role of agency which must be seen in expansive terms relative to standard economic rationality if its evolutionary significance is to be fully appreciated the second is the role of structure or more specifically industry architecture which affects capability development by way of its effect on the feedback that firms receive after drawing on the recent financial crisis for an illustration of these ideas this paper considers the rise of interest in business models as a useful field of application and it concludes with a discussion of the role of organizational economics beyond tce we argue that whatever the theoretical perspective at the level of the firm analyses must reach beyond that level to grasp the important causal forces affecting capability development firm boundaries and structural features more generally

the vanishing hand the changing dynamics of industrial capitalism alfred chandler s portrayal of the managerial revolution of the late nineteenth and early twentieth centuries does not extend well into the late twentieth century when widespread vertical disintegration began replacing the classical multi unit managerial enterprise this paper attempts to explain the new economy in a manner consistent with chandler by providing an enlarged theoretical account of industrial evolution in this account clusters of chandlerian firms appeared as a temporary episode within a larger smithian process of the division of labor

technologies products and organization in the innovating firm what adam smith tells us and joseph schumpeter doesn t adam smith s insights into the increasingly specialized nature of knowledge production are crucially important in understanding the contemporary problems of managing innovating firms products and firms are based on an increasing range of fields of specialized technological understanding competition is not based on technological diversity but on diversity and experimentation in products etc firms rarely fail because of an inability to master a new field of technology but because they do not succeed in matching the firm s systems of coordination and control to the nature of the available technological opportunities copyright 1998 by oxford university press

the impact of food stamps on food expenditures rejection of the traditional model for food stamp recipients whose normal food purchases exceed their coupon allotment the traditional economic model predicts that the impact of food stamps on food spending will be the same as for an equal cash transfer the tobit analysis in this study indicates that for these recipients food stamps have a substantially greater impact on at home food expenditures than an equal amount of cash income these results reject the traditional model several possible explanations of this behavior are discussed

technology strategy governance structure and interdivisional coordination abstract this paper studies how various organizational forms compare in their capacities to solve coordination problems created by technological interdependence between firms divisions i contrast the organizational mechanisms used by two firms ibm and general motors to address these problems while it is widely recognized that centralization distorts incentives facing division managers this paper highlights its benefits when there are large potential gains from agreement on technological standards the examples show how a centralized governance structure supported by lower powered incentives facilitates interdivisional coordination this suggests a refinement of the theory of organizational form based on how firms resolve the tensions between strategic planning and the measurement of organizational units performances