evaluation and optimization of feed in tariffs abstract feed in tariff program is an incentive plan that provides investors with a set payment for electricity generated from renewable energy sources that is fed into the power grid as of today fit is being used by over 75 jurisdictions around the world and offers a number of design options to achieve policy goals the objective of this paper is to propose a quantitative model by which a specific fit program can be evaluated and hence optimized we focus on payoff structure which has a direct impact on the net present value of the investment and other parameters relevant to investor reaction and electricity prices we combine cost modeling option valuation and consumer choice so as to simulate the performance of a fit program of interest in various scenarios the model is used to define an optimization problem from a policy maker s perspective who wants to increase the contribution of renewable energy to the overall energy supply while keeping the total burden on ratepayers under control numerical studies shed light on the interactions among design options program parameters and the performance of a fit program

recruitment based competition between industries a community ecology because entrepreneurs often must recruit labor in order to launch their ventures the labor market is a potential source of constraint in the entrepreneurial process moreover competition in the labor market likely does not end at the boundaries of the product market as industries overlap in their needs for labor i use an organizational ecology framework to examine how founding rates in an industry vary with the degree of competition with other industries for labor and thereby provides evidence of recruitment based competition between industries in a community ecology the extent of recruitment based overlap between industries is inferred from data on flows of employees within and between industries analyses of founding rates in eighty four industries in denmark over the period 1980 1991 suggest that new firms are less likely to appear in industries that occupy crowded regions of the labor market copyright 2004 oxford university press

the legacy of steven klepper industry evolution entrepreneurship and geography this introductory essay of the special issue honoring steven klepper provides a synthesis of his work and places the articles of the special issue within the context of his scholarship steven klepper s pioneering work linked life cycle patterns in industry evolution to underlying micro level firm innovation dynamics and employee entrepreneurship and to the macro level implications regarding geographical agglomeration and the growth of economies taken together the lifetime of klepper s research provides an integrated account of the key industrial mechanisms at work and also sets the stage for future research as is elaborated in individual contributions to the special issue

technological expectations and adoption of improved technology abstract attention is focused upon the adoption demand rather than the creation supply of new technology which improves from time to time based on the expected flow of technological progress over which the firm demander has no control it must decide either to adopt the current best available technology or to postpone adoption the distinguishing features of the model are that more than one technological innovation is anticipated and expectations about the likelihood of such innovations are revised as time passes since the last innovation our analysis shows that the firm will adopt the current best practice if its technological lag exceeds a certain threshold moreover as time passes without new technological advances it may become profitable to purchase a technology that has been available even though it was not profitable to do so in the past

sequential investment in renewable energy technologies under policy uncertainty although innovation and support schemes are among the main forces that drive investment in renewable energy re technologies both involve considerable uncertainty we develop a real options framework to analyse the impact of technological policy and electricity price uncertainty on the decision to invest sequentially in successively improved versions of a re technology technological uncertainty is reflected in the random arrival of innovations and policy uncertainty in the likely provision or retraction of a subsidy that takes the form of a fixed premium on top of the electricity price we show that greater likelihood of subsidy retraction provision lowers raises the incentive to invest and by comparing a stepwise to a lumpy investment strategy we show how an embedded option to adopt an improved technology version mitigates the impact of subsidy retraction on investment timing specifically we show how stepwise investment facilitates earlier technology adoption compared to lumpy investment and that under stepwise investment technological uncertainty accelerates technology adoption thus further offsetting the incentive to delay investment in the light of subsidy retraction

investment in technological innovations an option pricing approach abstract this paper develops a model of the optimal investment strategy for a firm confronted with a sequence of technological innovations we incorporate many of the most important characteristics of real world technology markets for example we permit innovations to be stochastic in their arrival times and their profitability we also incorporate learning so that firms adopting current innovations become better able to benefit from future innovations the model yields four distinct investment strategies the model is then used to predict actual firm policy these implications are discussed and compared with observed firm behavior

when do spinouts enhance parent firm performance evidence from the u s automobile industry 1890 1986 spinouts entrepreneurial ventures founded by ex employees of incumbent firms within the same industry have emerged in numerous industries some existing literature argues that they typically have a negative association with their parents performance because of the loss of human capital the disruption of organizational routines and subsequent adverse competitive effects more recent work however suggests that such negative effects may have been overstated and argues that there are conditions under which spinouts may be linked to enhanced performance of the parent i contribute to this literature by theorizing about and empirically testing for such conditions in particular using data from the u s automobile industry spanning 1890 to 1986 i find evidence that spinouts are associated with enhanced parent performance when they increase the parent s corporate coherence either through a the core competencies and capabilities domain by refocusing the parent s resources on the core or b the cognitive path by resolving a conflict at the top level of the parent s hierarchy i discuss implications for both research and practice

inertia and change in the early years employment relations in young high technology firms this paper considers processes of organizational imprinting in a sample of 100 young high technology companies it examines the effects of a pair of initial conditions the founders models of the employment relation and their business strategies our analyses indicate that these two features were well aligned when the firms were founded however the alignment has deteriorated over time due to changes in the distribution of employment models in particular the star model and commitment model are less stable than the engineering model and the factory model despite their instability these two blueprints for the employment relation have strong effects in shaping the early evolution of these firms in particular firms that embark with these models have significantly higher rates of replacing the founder chief executive with a non founder as well as higher rates of completing an initial public stock offering some implications of these findings for future studies of imprinting and inertia in organizations are discussed

a time to grow and a time to die growth and mortality of credit unions in new york city 1914 1990 one vision of organizational evolution suggests that old and large organizations become increasingly dominant over their environment a second suggests that as organizations age they become less able to respond to new challenges in this article the authors investigate which of these visions best characterizes the evolution of state chartered credit unions in new york city from 1914 through 1990 by analyzing the effects of organizational age size and population density on rates of organizational failure and growth the authors find evidence that old and small institutions are more likely to fail while young and small organizations have the highest growth rates

microeconomic issues in the transition to a market economy evidence from developing countries suggests that a one sided preoccupation with macroeconomic issues may be unfortunate as macro stabilization programs tend to unravel in the presence of an inadequate micro adjustment for example kiguel and liviatan 1990 this finding is important because the socialist system introduced microeconomic distortions that probably transcend those observed in the third world the recent developments in poland yugoslavia and the soviet union also support the hypothesis that macro stabilization will be difficult to achieve in the transforming socialist economies in the absence of adequate micro adjustments in this paper i address what i consider to be the most important micro issues related to the transition from socialist to market economies i first summarize the initial microeconomic conditions and then describe the main changes that have taken place in the early stages of the transition finally i discuss the micro policy agenda that needs to be addressed if the transition is to be successful

the net present value method versus the option value of waiting a note on farzin huisman and kort 1998 abstract using the tools of real options theory farzin huisman and kort 1998 investigate the optimal timing of technology adoption in a model in which there is ongoing technological progress and the firm s investment decision is irreversible when the firm can switch technologies n farzin et al 1998 obtain the surprising result that the criterion for adopting a new technology derived from real options theory coincides with the net present value criterion for all but the last switch this note points out a mistake in farzin et al s 1998 derivations that leads to the above result we show that compared to the net present value approach the firm will defer the adoption of a new technology when it takes the option value of waiting into account

the evolution of intracorporate domains divisional charter losses in high technology multidivisional corporations modern corporations have become synonymous with the multidivisional form of organization variously interdependent divisions are chartered to look after one or more business areas in effect defining the turf of the division and its purpose within the corporation and collectively defining the corporate domain however once created these divisional charters should not be regarded as rigid they are susceptible to change particularly in fast paced environments such as in high technology industries divisional charters are liable to change as divisions add or subtract businesses to their charter responsibilities these charter changes are seen as an adaptive device for large multidivisional corporations in fast paced environments this paper presents a process model of how divisions change their domains in hypercompetitive contexts focusing on the specific question of how divisions lose all or portions of their business charters the paper is based on a larger inductive study of charter changes in

property rights and stratification in socialist redistributive economies in socialist economies work organizations differ widely in the compensation they provide employees despite the absence of key product and labor market processes thought to ex plain such inequalities in market economies existing theories of stratification in socialist economies focus on the power and privilege of elites but inequalities among organizations are not created by political particularism or elite power in this paper i sketch elements of an institutional theory of stratification anchored in a conception of property rights the right to derive income from productive assets two aspects of property rights guide the analysis 1 the dispersion of property rights across a hierarchy of governmentjurisdictions and 2 the exercise of these rights by government jurisdictions as they extract revenues primarily through taxation extraction of revenues from a work organization varies with the budgetary resources of a government jurisdiction and the dependence of that jurisdiction on the out puts of the organization variation in revenue extraction in turn creates inequalities among work organizations in their abilities to provide benefits to employees an analysis of survey data on the provision of housing and benefits by work organizations in the large industrial city of tianjin china provides provisional support for these ideas s tudents of communist states have had little reason to dispute lenski s 1966 claim that the distribution of rewards in a society is a func tion of the distribution of power p 63 as ex emplified in szelenyi s wedding of elite theory to institutional economics this idea has been de veloped primarily in terms of the power of class es or occupational groups szelenyi 1978 be gan with the observation that planned economies operate according to redistributive rather than market principles however the process of re

renewable energy investments under different support schemes a real options approach abstract this paper adopts a real options approach to analyze investment timing and capacity choice for renewable energy projects under different support schemes the main purpose is to examine investment behavior under the most extensively employed support schemes namely feed in tariffs and renewable energy certificate trading we consider both multiple sources of uncertainty under each support scheme and uncertainty with respect to any change of support scheme and we obtain both analytical when possible and numerical solutions in a nordic case study based on wind power we find that the feed in tariff encourages earlier investment nevertheless as investment has been undertaken renewable energy certificate trading creates incentives for larger projects in our baseline scenario and taking the fixed feed in tariff as a base the revenue required to trigger investments is 61 higher with renewable certificates at the same time investment capacity is 61 higher

the merit order effect a detailed analysis of the price effect of renewable electricity generation on spot market prices in germany the german feed in support of electricity generation from renewable energy sources has led to high growth rates of the supported technologies critics state that the costs for consumers are too high an important aspect to be considered in the discussion is the price effect created by renewable electricity generation this paper seeks to analyse the impact of privileged renewable electricity generation on the electricity market in germany the central aspect to be analysed is the impact of renewable electricity generation on spot market prices the results generated by an agent based simulation platform indicate that the financial volume of the price reduction is considerable in the short run this gives rise to a distributional effect which creates savings for the demand side by reducing generator profits in the case of the year 2006 the volume of the merit order effect exceeds the volume of the net support payments for renewable electricity generation which have to be paid by consumers

entrepreneurship and the initial size of firms abstract it is clear that entrepreneurs and their firms can vary widely nevertheless most of the research to date on entrepreneurship has examined central tendencies with relatively little attention devoted to entrepreneurial diversity this study examines one of the most distinguishing characteristics of young firms initial size the focus is whether smaller start ups differ from larger ones in the backgrounds of the entrepreneurs their processes of starting or the subsequent patterns of development in this longitudinal study an initial sample of 1903 young firms was examined to determine differences in characteristics of the entrepreneurs and in their processes of starting one year later data were obtained from 742 of these firms permitting analysis of how initial firm size was related to subsequent difficulties encountered and changes made as well as to performance as expected along almost every dimension these starting larger firms had the backgrounds that would seem to be necessary for the assembly of substantial resources they tended to have more education more management experience and goals that were more managerial in nature they also were more likely to have partners women were associated more often with smaller ventures but for this sample there were no differences in the representation of minorities between the smaller and larger start ups those starting larger ventures tended to rely more upon external investors and to start ventures more closely linked to their previous jobs both groups of entrepreneurs sought information from a number of sources but those founding larger ventures utilized professional advisors more whereas those starting smaller ventures utilized informal sources in the year after the first questionnaire differences between the two groups were less marked than expected both groups of surviving firms reported low levels of serious problems with the smaller ventures somewhat surprisingly reporting serious problems less often there were not many differences in changes made except that smaller ventures were more likely to lose partners and larger ventures were more likely to add branches or locations both groups reported high rates of mean growth in sales the smaller ventures with their small initial bases showed larger percentage increases smaller ventures also showed higher percentage increases in employment and surprisingly a greater increase in the absolute number of employees somewhat more of the smaller ventures had discontinued both groups included many firms that grew substantially and others that scaled back demonstrating the fluidity and experimentation characteristic of young firms for entrepreneurs and their advisors for public policy makers and for researchers any progress in understanding entrepreneurial processes should in the long run enhance venture performance the patterns observed here indicate that firms of different initial size tend to be associated with particular entrepreneurial characteristics processes of formation and subsequent patterns of development this diversity should be recognized in the development of assistance programs and university courses as well as in the interpretation of previous research for public policy makers the growth of these firms both small and large indicates the potential of economic contributions from entrepreneur ship further the growth of the smaller start ups suggests that even those ventures that appear to have few resources and modest potential can in the aggregate contribute substantially to the economy

a good riddance spin offs and the technological performance of parent firms how do spin offs new ventures created by former employees of an incumbent firm affect the technological performance of their parents conventional wisdom holds that spin offs hurt parent firms the parent loses key staff routines are disrupted and performance declines although having some basis in fact we think the negative effects are overstated we argue that spin offs can enable parent firms to realign with their environment thereby avoiding the oncoming obsolescence arising from the combination of organizational inertia and environmental drift using data from the hard disk drive industry we find evidence that although the main effect of having a spin off on a parent firm s technological performance is positive the overall impact of a spin off depends upon the technological sophistication of the spin off and the time since the spin off occurred indeed parent firms of technologically sophisticated successful spin offs initially suffer poorer technological performance but over time they outperform firms that had no spin offs both effects are amplified to the extent that the spin off is more successful which we attribute to both increased environmental realignment and the positive signal that successful spin offs transmit to the broader labor market about the parent organization s reputation as an incubator of entrepreneurs and a desirable place to work

the capabilities of new firms and the evolution of the us automobile industry firms that diversify into new and existing industries typically outperform de novo entrants but in some new industries diversifying firms are displaced by later entering de novo firms little is known about when and how new firms can overcome the advantages of diversifying firms this is investigated for one industry automobiles where new firms had considerable success all the entrants into the industry from its inception in 1895 through 1966 are identified the heritage of every entrant into the industry is traced including the founders of de novo entrants to explore how time of entry and pre entry experience affected firm survival while diversifying firms on average outperformed de novo entrants de novo entrants founded by individuals that worked for the leading automobile firms outperformed all firms and dominated the industry this is attributed to the novel organizational challenges faced by automobile firms which made the leading firms ideal training grounds for new entrants the implications of these findings for firm capabilities industry competition and regional economic development are discussed copyright 2002 oxford university press

optimal timing of technology adoption abstract in a dynamic programming framework this paper investigates the optimal timing of technology adoption by a competitive firm when technology choice is irreversible and the firm faces a stochastic innovation process with uncertainties about both the speed of the arrival and the degree of improvement of new technologies a numerical example illustrates how the optimal timing decision is affected by changes in parameter values reflecting market conditions the firm s initial technological attributes and the characteristics of the stochastic innovation process some of these effects turn out to be in sharp contrast to common intuition contrasting the optimal decision rule derived here with the rule obtained under the net present value shows that the former implies a slower pace of adoption than implied by the latter the optimal decision rule is generalized for the case of multiple technology switches and it is shown that for all the switching decisions except the last one the optimal rule satisfies the net present value criterion

employing identities in organizational ecology this paper argues for greater attention to employment based organizational identities in ecological theory and research i define and explore three dimensions of particular relevance to labor market identities sharpness resonance focus and authenticity the paper offers some speculations regarding i when labor market identities are most decisive for organizations ii how product market and labor market identities interact iii how employment based organizational identities might be operationalized and iv how greater attention to such identities would illuminate key issues in organizational ecology copyright 2004 oxford university press

evaluating the power investment options with uncertainty in climate policy abstract this paper uses a real options approach roa for analysing the effects of government climate policy uncertainty on private investors decision making in the power sector it presents an analysis undertaken by the international energy agency iea that implements roa within a dynamic programming approach for technology investment choice case studies for gas coal and nuclear power investment are undertaken with the model illustrative results from the model indicate four broad conclusions i climate change policy risks can become large if there is only a short time between a future climate policy event such as post 2012 and the time when the investment decision is being made ii the way in which co 2 and fuel price variations feed through to electricity price variations is an important determinant of the overall investment risk that companies will face iii investment risks vary according to the technology being considered with nuclear power appearing to be particularly exposed to fuel and co 2 price risks under various assumptions and iv the government will be able to reduce investors risks by implementing long term say 10 years rather than short term say 5 years climate change policy frameworks contributions of this study include 1 having created a step function with stochastic volume of jump at a particular time to simulate carbon price shock under a particular climate policy event 2 quantifying the implicit risk premium of carbon price uncertainty to investors in new capacity 3 evaluating carbon price risk alongside energy price risk in investment decision making and 4 demonstrating roa to be a useful tool to quantify the impacts of climate change policy uncertainty on power investment

early employment expansion and long run survival examining employee turnover as a context factor abstract we investigate under which circumstances early employment growth translates into greater long run survival drawing on penrose s growth theory we suggest that the relationship between early employment growth and long run survival is conditional on employee turnover we argue that higher employee turnover reduces joint experience in the firm and disrupts the development and eventual exploitation of the firm s productive opportunity set thereby reducing long term utilization of early employment expansion these arguments suggest that the firm s ability to realize long term benefits of early employment growth is contingent upon low employee turnover following this initial expansion using the danish integrated database for labor market research we show that only when employee turnover is low will early employment growth lead to higher survival in the long run

the rejuvenation of inventors through corporate spinouts this article focuses on corporate spinouts as a strategy that can rejuvenate the inventive efforts of inventors with a long tenure in the same company we rely on an unbalanced panel of 5 604 inventor year observations to study a matched sample of 431 inventors employed by the xerox corporation and find evidence in support of three predictions first inventors who join a spinout increase the extent of exploration in their inventive activities second they decrease the extent to which they rely on the parent organization s knowledge third because long tenured employees through socialization tend to progressively adopt more exploitative behavior than short tenured members they benefit relatively more from the spinout experience these results are robust to several econometric specifications that try to account for the endogeneity of the inventors decision to join the spinout for the fact that spinouts inventive activity may be intrinsically different from that of the parent company and for the possible presence of novel external stimuli for those who join spinouts the data provide large sample evidence consistent with the idea that socialization reduces opportunities for organizational learning we discuss the implications for theory and practice

choice of nuclear power investments under price uncertainty valuing modularity this work aims at examining how to compare two investment projects in the electricity market the first project is a flexible sequence of small nuclear power plants whereas the second is a nuclear power plant of large capacity we measure the option value generated by the modularity of the first project given the uncertain future competitive price of electricity using a realistic calibration of the model we show that the option value of modularity has a sizeable effect on the optimal dynamic strategy of the producer in particular in terms of the optimal timing of the decision to invest in the first module