hybrid r d we develop a model of r d collaboration in which individual firms carry out in house research on core activities and undertake bilateral joint projects on non core activities with other firms we develop conditions on the profit functions of the firm under which r d investments in different projects of a firm are complementary we show that this condition is met by standard price and quantity setting oligopoly models we then study the relation between the number of joint projects and investments and profits in this context we identify a second aspect of complementarity equilibrium investments in in house as well as in each joint project are increasing in the number of projects however we find that an increase in number of joint projects of all firms lowers collective profits suggesting the presence of excessive incentives for conducting research

understanding innovation an analysis of persistence for spanish manufacturing firms abstract this study focuses on the persistence of innovation in a panel of spanish manufacturing firms for the period 1990 2008 in particular we analyse whether persistence in firms innovation activities over time is the result of previous experience the dynamic capabilities of the firm or industry market related characteristics we find that r d input and innovation output are highly persistent at the firm level after controlling for unobserved heterogeneity and initial conditions and by using a dynamic random effects probit we conclude that there are similar determinants of persistence in r d and innovative activities among external environmental factors market dynamism affects r d and innovation regarding firm specific characteristics size and outsourcing also have a positive impact on both processes past innovative behaviour is clearly more decisive in explaining the current state of r d and innovation activities than external factors or firm level heterogeneity

discretionary disclosure of proprietary information in a multisegment firm the seminal unraveling result in the disclosure literature posits that discretion inevitably leads to full disclosure even when such disclosure has detrimental consequences in this paper we revisit optimal disclosure of proprietary information when firms compete in multiple markets the analysis demonstrates that in the presence of multiple segments the unraveling result applies at the firmwide level but not necessarily segment by segment instead when the firm has an ex ante desire to withhold information and segments are sufficiently similar the ex post disclosure equilibrium entails aggregation of segment details aggregation arises because any ex post temptation to disaggregate and reveal particularly favorable news in one segment entails revealing unfavorable news in another segment a desire to balance profits across segments then leads a firm to disclose firmwide information a temptation that cannot be avoided but only in the aggregate

the effects of human resource management practices on productivity a study of steel finishing lines the authors investigate the productivity effects of innovative employment practices using data from a sample of thirty six homogeneous steel production lines owned by seventeen companies the productivity regressions demonstrate that lines using a set of innovative work practices which include incentive pay teams flexible job assignments employment security and training achieve substantially higher levels of productivity than do lines with the more traditional approach which includes narrow job definitions strict work rules and hourly pay with close supervision their results are consistent with recent theoretical models which stress the importance of complementarities among work practices

market share market value and innovation in a panel of british manufacturing firms this paper examines the empirical relationship between technological innovations market share and stock market value new developments in the estimation of dynamic count data models are used to control for unobserved firm specific heterogeneity we find a robust and positive effect of market share on observable headcounts of innovations and patents although increased product market competition in the industry tends to stimulate innovative activity furthermore the impact of innovation on market value is larger for firms with higher market shares we argue that our results are consistent with models where high market share firms have incentives to pre emptively innovate

you can t manage right what you can t measure well technological innovation efficiency abstract this paper proposes a new approach to tackle the innovation performance relationship it addresses the so far mixed and inconclusive results of studies analyzing this relationship we argue that the undifferentiated use of innovation inputs and outputs to measure firm innovativeness is not without problems and that from a productive perspective they should be simultaneously analyzed this study follows a two stage empirical analysis using a sample of spanish manufacturing firms for the period 1992 2005 by examining two inputs and two outputs of the innovation process in the first stage we estimate technological innovation efficiency by means of an intertemporal data envelopment analysis dea bootstrap and also observe the yearly efficiency changes based on a global malmquist index in the second stage we analyze the effect of technological innovation efficiency on firm performance through a generalized method of moments gmm system the results support our arguments that the best measurement of outcomes of technological innovations is through the efficiency with which they are developed in addition we test the moderating effect of technological intensity level and firm size on the efficiency performance relationship

complementarity and external linkages the strategies of the large firms in biotechnology in biotechnology large firms enter into different kinds of linkages with universities and small medium sized research intensive firms we test the hypothesis that the strategies of external linkage of the large firms with other parties are complementary to one another we show that if any two strategies are complementary i e undertaking more of one strategy raises the marginal value of the other then they are positively correlated using data for a sample large us european and japanese chemical and pharmaceutical producers we find that the strategies above are positively correlated even after controlling for firm specific characteristics

the effect of process management on different types of innovations an analytical modeling approach abstract we investigate the trade off between r d efficiency and creativity during the development of a new product a firm s ability to balance efficiency with innovation positively affects its capacity to maintain its competitiveness although the trade off between efficiency and creativity has long been discussed in terms of practical application little analytical research has been performed to enhance theoretical understanding to redress this gap in the literature we present an extreme value model that accounts for innovation type and competition intensity and offer a set of theoretical and practical insights to demonstrate that the effects of process management depend on the nature of the innovation employed we show that the inverse relationship between efficiency and creativity is more pronounced if r d projects represent paradigm shifting innovations rather than incremental innovations we then demonstrate how competition drives firms to decrease investment in innovation activities and improve process efficiency to maximize profit our results suggest that process management activities are less recommended for firms that pursue radical innovation and the acceleration of growth

testing for complementarity glyphosate tolerant soybeans and conservation tillage many decisions in agriculture are made over combinations of inputs and or practices that may be complements the presence of complementarity among producer decisions can have deep implications for market outcomes and for the effectiveness of policies intended to influence them identifying complementarity relations however is a challenging pursuit drawing on recent methodological advances in this paper we propose a new test for complementarity between glyphosate tolerant soybeans and conservation tillage that overcomes limitations of previous studies specifically we develop a structural discrete choice framework of joint soybean tillage adoption that explicitly models both complementarity and unobserved heterogeneity the model is estimated with a large dataset of farm level choices that spans the 1998 2011 period and contains repeated observations for many of the sampled individuals we find that glyphosate tolerant soybeans and conservation tillage are indeed complementary practices a conclusion supported by several robustness checks in addition our estimation shows that farm operation scale promotes the adoption of both conservation tillage and glyphosate tolerant seed and that all of higher fuel prices more droughty conditions and soil erodibility increase use of conservation tillage we also apply our results to simulate annual adoption rates for conservation tillage in a scenario without glyphosate tolerant soybeans available as a choice we find that the adoption of conservation tillage has been about ten percent higher due to the advent of glyphosate tolerant soybeans

installed base and compatibility innovation product preannouncements and predation a good is often more valuable to any user the more others use compatible goods the authors show that this effect may inhibit innovation if an installed base exists and transition to a new standard must be gradual early adopters bear a disproportionate share of transient incompatibility costs this can produce excess inertia the installed base however is stranded if the new standard is adopted this may create excess momentum these dynamic effects have strategic implications temporary price cutting can permanently prevent entry and product preannouncements can be critical in innovation these strategic actions have ambiguous welfare effects

the role of exclusive territories in producers competition reprinted in cartels stephen salant ed the international library of critical writings in economics edward elgar reference collections

firm size and the nature of innovation within industries the case of process and product r d the effect of firm size on the allocation of r d effort between process and product innovation is examined it is hypothesized that relative to product innovations process innovations are less saleable in disembodied form and spawn less growth this implies that the returns to process r d will depend more on the firm s output at the time it conducts its r d than the returns to product r d incorporating this distinction in a simple model the authors derive and test predictions about how the fraction of r d devoted to process innovation varies with firm size within industries

innovation complementarity and scale of production we present an econometrically feasible model that uses the information contained in the innovation profile of each firm to test for the existence of complementarity among production and innovation strategies our approach is able to distinguish between complementarity and correlation induced by unobserved heterogeneity we apply the model to analyze the spanish ceramic tile industry where the adoption of the single firing furnace in the 1980 s facilitated the introduction of new product designs as well as opening new ways of organizing production our econometric results show that there is significant complementarity between product and process innovation small firms tend to be more innovative overall

research and development with asymmetric firm sizes this article presents a theoretical model of research and development r d competition among firms the goal of the model is to simultaneously explain two empirical observations pertaining to the persistence of dominantfirms small firms make a disproportionate share of major innovations while largefirms tend to spend more in absolute terms on r d than smallfirms do in the model here firms choose investment levels and r d project riskiness in equilibrium a large firm invests more than a smaller firm but by choosing safer r d projects makes fewer major innovations

a policy approach to the environmental impacts of technological lock in abstract the broadening spectrum of environmental problems the uncertainty regarding their scale and duration and their possible irreversibility in the context of the growing social preference for environmental quality make it necessary to undertake an ex ante approach to the link between productive activity and environmental quality this link lies in technology and the right approach is to understand how the process of technological change can lead towards sustainability the added value of evolutionary economics in the context of environmental policy resides mainly in the fact that it warns that certain inferior environmental technologies may be locked in to the economic system the results of our model show that it would be advisable to undertake policies expressly aimed at the process of sustainable technological change applying an ex ante precautionary approach in a way that is complementary to the conventional equilibrium oriented environmental policies the nature of these policies and how they might be implemented are questions we will address from this novel approach to the concept of sustainable development in short the main objectives of this paper are to understand more fully the dynamics of the process of technological change its role in sustainable development and to assess the implications of this dynamic approach to techno environmental policy to achieve these goals we have developed an agent based model abm using distributed artificial intelligence dai concepts drawn from the general methodology of social simulation

the size distribution of innovating firms in the uk 1945 1983 a survey of 4 378 significant innovations shows that firms with fewer than 1 000 employees commercialized a much larger share than is indicated by their share of r and d expenditures innovations per employee have been consistently above average in firms with more than 10 000 employees and have become so in firms with fewer than 1 000 intersectoral variation in the size distribution of innovating firms can be explained as a function of r and d based technological opportunities and of technological ease of entry by user firms with principal activities outside the sector copyright 1987 by blackwell publishing ltd

technology revolutions and the gestation of new technologies we formalize an explanation for technology revolutions and growth cycles in a model where consumers and firms benefit from periodic changes in technology which result in the development and marketi

the impact of order and mode of market entry on profitability and market share market share performance and profitability of overseas business activities has long been an important issue in international business in this study we explore the impact of order and mode of market entry into an overseas market we find that early entrants have significantly higher market shares and profitability than late followers we also find that equity joint ventures have a higher profitability than either wholly owned operations or contractual joint ventures a significant interaction exists between order and mode of market entry as expected firm efficiency and size affect the performance of firms these results are based on the business activities of a sample of 14 466 foreign firms in china in 1995

on the optimal relation between the properties of managerial and financial reporting systems we develop a theoretical model of the firm that links properties stewardship vs valuation focus of financial reporting regimes with the informational properties of optimal managerial accounting systems we show that contrary to the standard textbook proposition properties of management and financial accounting systems are not independent significantly we provide an explicit connection between exogenous and observable properties of a firm s financial reporting system and the quality of the managerial accounting system on which manager s base real economic decisions as the quality of those economic decisions can also be inferred from publicly available data our theory generates new opportunities for empirical managerial accounting research on large nonproprietary samples further by being able to identify enhanced performance due to improved managerial accounting information our theory provides opportunities to gain a better understanding of the link between particular managerial accounting practices and the quality of the information produced

antitrust in innovative industries we study the effects of antitrust policy in industries with continual innovation antitrust policies that restrict incumbent behavior toward new entrants may have conflicting effects on innovation incentives raising the profits of new entrants but lowering those of continuing incumbents we show that the direction of the net effect can be determined by analyzing shifts in innovation benefit and supply holding the innovation rate fixed we apply this framework to analyze several specific antitrust policies we also show that in some cases the tension does not arise and policies that protect entrants necessarily raise the rate of innovation

selective disclosures in the presence of uncertainty about information endowment abstract this paper analyzes a setting where firms could have private information from various sources and disclose a selective subset of that information investors have uncertainty about how much information firms have using a stylized model where there are two signals about a firm s future value and the firm may be privately informed of none one or all of those signals this paper establishes an equilibrium link between the cutoff value characterizing the partially informed firm s disclosure strategy and the partition of the signal space characterizing the fully informed firm s disclosure strategy the paper also discusses potential extensions of the model

distance to the frontier and the perception of innovation barriers across european countries abstract barriers to innovation have mainly been studied in a single country context this paper studies differences in the perception of innovation barriers between innovative and non innovative firms for 18 eu countries the countries are grouped by their distance to the technological frontier using community innovation surveys for the years 2002 2004 and 2004 2006 the results show that knowledge barriers related to the availability of skilled labour innovation partners and technological knowledge are more important for firms located in countries close to the frontier while the opposite is true regarding the availability of external finance moreover while the share of innovators decreases with the distance to the technological frontier the share of firms not interested or in no need of innovation increases this is consistent with the idea that as firms approach the technological frontier they increasingly need to focus on the creation of own knowledge and the adoption of innovation based growth strategies to stay competitive

pro market institutions and global strategy the pendulum of pro market reforms and reversals we review the literature analyzing the impact of pro market institutions on firms global strategy we propose that the ideological tension between whether the government or the market should drive economic development results in a pendulum of pro market reforms and reversals that drive changes in firm strategy and performance much progress has been made in the analyses of pro market reforms and their impact on firms international strategies and performance however there is a need to further learn about four areas 1 the concept of pro market institutions in particular the variety of institutional dimensions the measures and the influence of informal institutions on firm strategies 2 the drivers of changes in pro market institutions especially firms influences and the co evolution of firm strategies and institutional changes 3 the implications of changes in pro market reforms for the interactions among integration diversification and internationalization strategies the causality chains connecting institutions and strategies and the reconfiguration of activities globally and 4 the non traditional moderators that alter the impact of pro market institutional dynamics on firms strategies such as country level political systems industry level competitor reactions and individual level managerial capabilities and perceptions

incumbent innovation and domestic entry this paper analyzes the escape entry incentive for innovation by incumbent firms the threat posed by the possibility of leading edge firms entering the market influences incumbent innovation to overcome problems of endogeneity we apply an instrumental variable approach to analyze a rich firm level dataset 1987 2000 for germany we find evidence that domestic entry has a negative effect on incumbent product innovation which is a strong indication of new entrants comparative advantage in commercializing new ideas in contrast domestic entry has a positive effect on incumbent process innovations an effect also known as the escape entry effect

estimation of a model of entry in the airline industry this paper considers the effect of an airline s scale of operation at an airport on the profitability of routes flown out of that airport the empirical methodology uses the entry decisions of airlines as indicators of underlying profitability the results extend the empirical literature on airport presence by providing a new set of estimates of the determinants of city pair profitability these estimates imply that city pair profits increase in airport presence and decrease rapidly in the number of entering firms the literature on empirical models of oligopoly entry is also extended via a focus on the role of differences between firms

rational incompatibility with international product standards abstract international product standardization enables traditional price based competition but the existence of redesign costs or network effects creates market frictions that diminish the incentive to standardize if there already exists a different technology in an established market this leads to multi attribute competition between products and will generally reduce trade flows not only do incumbent firms using a different technology have an incentive to deviate from an international standard but a host country government concerned for its consumers welfare has no incentive to enforce the international standard and may even value deviation from the international standard through technical barriers to trade

the evolution of price dispersion in the european car market car prices in europe are characterized by large and persistent differences across countries the purpose of this paper is to document and explain this price dispersion using a panel data set extending from 1980 to 1993 we first demonstrate two main facts concerning car prices in europe i the existence of significant differences in quality adjusted prices across countries with italy and the u k systematically representing the most expensive markets 2 substantial year to year volatility that is to a large extent accounted for by exchange rate fluctuations and the incomplete response of local currency prices to these fluctuations these facts are analysed within the framework of a multiproduct oligopoly model with product differentiation the model identifies three potential sources for the international price differences price elasticities generating differences in markups costs and import quota constraints local currency price stability can be attributed either to the presence of a local component in marginal costs or to markup adjustment that is correlated with exchange rate volatility the latter requires that the perceived elasticity of demand is increasing in price we find that the primary reason for the higher prices in italy is the existence of a strong bias for domestic brancs that generates high markups for the domestic firm fiat in the u k higher prices are mainly attributed to better equipped cars and or differences in the dealer discount practices the import quota constraints are found to have a significant impact on japanese car prices in italy france and the u k with respect to local currency price stability a large percentage of the documented price inertia can be attributed to local costs and a smaller fraction to markup adjustment that is indicative of price discrimination based on these results we conjecture that the emu will substantially reduce the year to year volatility observed in the car price data but without further measures to increase european integration it will not completely eliminate existing cross country price differences

technology revolutions in the presence of network externalities abstract the purpose of this paper is to investigate the effect of varying consumer preferences over technology advance and network size on the timing and frequency of new technology adoption in the presence of installed bases resulting from network externalities the paper shows that the duration of each adopted technology and the frequency of technology adoptions depend on a whether in consumers perspectives the network size effect is a substitute for or a complement to the quality of the technologies b the degree of compatibility of new technologies with the old technology and c the technology growth rate and consumer population size

the making of an oligopoly firm survival and technological change in the evolution of the u s tire industry the number of producers in the u s tire industry grew for 25 years and then declined sharply and the industry evolved to be an oligopoly the role of technological change in shaping the industry s market structure is explored a model of industry evolution featuring technological change is used to derive predictions that are tested using a novel data set on firm entry exit size location distribution networks and technological choices prior to the shakeout of producers consistent with the model earlier entering and larger firms survived longer principally because of the influence of age and size on technological change

a matter of location the role of regional social capital in overcoming the liability of newness in r d acquisition activities laursen k masciarelli f and reichstein t a matter of location the role of regional social capital in overcoming the liability of newness in r d acquisition activities regional studies external knowledge acquisition is a precondition for firms competitive advantage however young firms exhibit a lower propensity to acquire external research and development r d than their older counterparts the paper explores the role of regional social capital in moderating this aspect of the liability of newness the results show that young firms operating in regions with low levels of social capital are less likely to acquire r d externally however this is not the case in regions with high levels of social capital suggesting that the liability of newness in terms of acquisition of external r d does not play a role in these regions

an evolutionary analysis of low carbon strategies based on the government enterprise game in the complex network context abstract low carbon development patterns have gradually attracted more attention because of strong shocks to society and the economy from environmental problems developing a low carbon economy is essential for every country to improve sustainable economic development and doing so is at the forefront of low carbon research policy and government intervention play a key role in the development of a low carbon economy using game based learning theory for reference this paper builds an evolutionary model of low carbon strategies based on the game between the government and enterprises in the context of a complex network it then studies the effects of government incentives on enterprises regarding the diffusion of low carbon policies and how enterprises compete and transform in the newman watts small world network we introduce government policy encouragement as a factor in the decision making process of companies adoption of a low carbon strategy thus enriching the literature on the diffusion of low carbon strategies the model proposed in this paper can be used as a tool to evaluate the diffusion and application of low carbon strategies among companies the findings suggest that enterprises expectation of government incentives including subsidy and regulation determines whether low carbon strategies can be diffused and the diffusion speed the more quick enterprises adjust their expectations in the government enterprise game the more enterprises will learn and follow to adopt effective low carbon strategy when enterprises attach great importance to the expected earnings from government incentives the less effective low carbon strategy adopted initially can be replaced by another more effective one

product and process innovation as a response to increasing imports and foreign direct investment the paper analyses the hypotheses that imports and inward foreign direct investment fdi have positive effects on the innovative activity of domestic firms because competition on the domestic market is thereby increased and domestic firms have to perform more efficiently to maintain their market position chamberlain s random effects probit approach which may account for individual heterogeneity depending on exogenous variables is used to analyse a panel data set containing 1270 firms of the german manufacturing industry from 1984 to 1988 it turns out that both import share and fdi share have positive and significant effects on product and process innovations

competitive pressure and the adoption of complementary innovations liberalization of the european automobile distribution system in 2002 limits the ability of manufacturers to impose vertical restraints leading to a substantial increase in competitive pressure among dealers we estimate an equilibrium model of profit maximization to evaluate how dealers change their innovation adoption strategies following the elimination of exclusive territories using french data we evaluate the existence of complementarities between the adoption of software applications and the scale of production firms view these innovations as substitutes and concentrate their effort in one type of software as they expand their scale of production results are robust to the existence of unobserved heterogeneity

in search of complementarity in innovation strategy internal r d and external knowledge acquisition empirical research on complementarity between organizational design decisions has traditionally focused on the question of existence of complementarity in this paper we take a broader approach to the issue combining a productivity and an adoption approach while including a search for contextual variables in the firms strategy that affects complementarity analysis of contextual variables is not only interesting per se but also improves the productivity test for the existence of complementarity we use our empirical methodology to analyze complementarity between innovation activities internal research and development r d and external knowledge acquisition our results suggest that internal r d and external knowledge acquisition are complementary innovation activities but that the degree of complementarity is sensitive to other elements of the firms strategic environment we identify reliance on basic r dthe importance of universities and research centers as an information source for the innovation processas an important contextual variable affecting complementarity between internal and external innovation activities

cross firm real earnings management cross firm real earnings management our analysis is rooted in the notion that stockholders can learn about the fundamental value of any firm from observing the earnings reports of its rivals we argue that such intra industry information transfers which have been broadly documented in the empirical literature may motivate managers to alter stockholders beliefs about the value of their firm not only by manipulating their own earnings report but also by influencing the earnings reports of rival firms managers obviously do not have access to the accounting system of peer firms but they can nevertheless influence the earnings reports of rival firms by distorting real transactions that relate to the product market competition we demonstrate such managerial behavior which we refer to as cross firm real earnings management and explore its potential consequences and interrelation with the practice of accounting based earnings management within an industry setting with imperfect non proprietary accounting information this article is protected by copyright all rights reserved

network composition collaborative ties and upgrading in emerging market firms lessons from the argentine autoparts sector what types of relational and institutional mechanisms shape knowledge flows and the upgrading capabilities of emerging market firms in the face of economic liberalization we analyze the argentine autoparts sector to distinguish the relative impact of different types of network relationships on a firm s process and product upgrading a few social ties to international assemblers appear to be most beneficial for local suppliers although they may be insufficient to compensate fully for the negative effect of being located in a lower tier supplier customer relationships that are part of regular disciplined discussions for product and process improvements appear to be especially beneficial for upgrading

inefficient standard adoption inertia and momentum revisited i introduction since the establishment of the theory of network effects economists have been concerned with the question of whether a market with network effects will tend to settle on the socially optimal standard it has been postulated that markets may exhibit excess inertia once a technological standard is in place a new superior standard may not displace it because of installed base effects alternatively markets may exhibit excess momentum consumers may adopt a new standard too quickly ignoring the stranding effect they are having on previous users similar issues arise in the adoption of language and social norms the literature has investigated various conditions under which one of these inefficiencies arises such inefficiencies are of particular concern for open technologies such as the qwerty and dvorak keyboards 1 the situation is somewhat different when individual firms own standards in that case a simple argument seems to indicate that there is no possibility that an inefficient standard will persist if a new standard is superior in any objective sense there are gains to be made from switching to it once the standard has been adopted the firm can appropriate these gains therefore the firm has incentive to lower the initial price enough to induce adoption of the standard the preceding argument is made in liebowitz and margolis 1999 and repeated in spulber 2002 spulber expresses a general skepticism about the likelihood of inefficiencies when property rights are defined and markets exist critics might claim that previous models that imply inefficient standard adoption are unrealistic in some way and that if such models were modified slightly the inefficiency would disappear i reconsider the issue of inefficient standard adoption using a parsimonious yet compelling model assuming only that there are successive generations of finitely lived consumers that preferences are heterogeneous and that there are network effects among users adoption decisions can be inefficient this is true even if consumers can coordinate efficiently within a generation and a firm can act as a coordinating device across generations the model presented here generates some of the same results found in other papers collectively but in a more general setting and with more robust results if there is an established standard and a superior alternative emerges no single generation of consumers will be willing to switch to the new standard if the switching cost the loss of network benefit from breaking with past users is too high it may be that the benefits to future generations of consumers are large enough that from a social standpoint it would be efficient for one generation to adopt the new standard even if it is privately optimal for that generation to retain the old standard on the other hand the current generation considers only its own switching cost and not the cost it imposes on the previous generation leading to potential overadoption of new technology even for proprietary standards it is not clear that the incentive of the firm to induce adoption matches the social incentive in particular if consumer preferences are heterogeneous the firm will not be able to price in such a way to extract all of the additional surplus gained from the new standard on the other hand the firm will be able to appropriate some of the surplus generated by the network effect itself which is present for any standard and thus does not affect the social incentive to change standards it is not possible to address this issue with a two period model as in some of the previous literature see for example choi 1994 choi and thum 1998 katz and shapiro 1986 if a new technology is introduced in the second period but then the game ends the welfare of future generations of consumers is neglected 2 this article also differs from previous infinite horizon models of technology adoption

estimating firm size elasticities of product and process r d this paper provides an empirical test of the particular product life cycle hypothesis which postulates that the firm size elasticity of process r d exceeds the firm size elasticity of product r d panel data on german manufacturing firms is used which is affected by attrition and sample selection an inverse probability weighted generalized empirical likelihood gel estimator is proposed which corrects for the selectivity bias under the identifying assumption of conditionally independent selection and benefits from the superior small sample bias properties of gel compared to generalized method of moments gmm the product life cycle hypothesis is clearly rejected in all specifications

a signal jamming theory of predation we propose a new theory ofpredation based on signal jamming in our model the predator s characteristics are common knowledge while the entrant is uncertain of his own future profitability the entrant uses his current profit to decide whether to remain in the market and the predator preys to jam or interfere with this inference problem thus our model differs from those based on reputation effects in which the predator preys to signal information about himself

liberalizing a distribution system the european car market we quantify the competitive effects of liberalizing the selective and exclusive distribution system in the european car market based on a model of oligopoly pricing with differentiated products we consider two possible competitive effects from liberalization i the creation of international intrabrand competition cross border trade which will result in a reduction of international price discrimination and ii a possible cumulative effect arising from a strengthening of national intrabrand competition which would result in reduced double marginalization we find that the reduction in international price discrimination mainly redistributes consumer gains across countries it has a positive but modest effect on total welfare if liberalization also has the cumulative effect of reducing double marginalization the welfare effects are much higher finally we find that the effects of liberalization on the manufacturers profits are either small or positive this finding implies that international price discrimination and softening competition through a double marginalization mechanism should not be interpreted as main profit motives for the previous distribution system but only as unintended side effects hence the industry rationale for maintaining the previous distribution system should be sought in other areas jel f15 l42

an anatomy of cartel contracts we study cartel contracts using data on 18 contract clauses of 109 legal finnish manufacturing cartels one third of the clauses relate to raising profits the others deal with instability through incentive compatibility cartel organization or external threats cartels use three main approaches to raise profits price market allocation and specialization these appear to be substitutes choosing one has implications on how cartels deal with instability simplifying we find that large cartels agree on prices cartels in homogenous goods industries allocate markets and small cartels avoid competition through specialization

r d determinants accounting for the differences between research and development the determinants of r d are an important topic of innovation studies the classical schumpeterian hypotheses about the influence of size and market power have been complemented with the role played by industry determinants such as demand pull technological opportunity and appropriability in determining r d investments however r d has always been considered as a whole even though research and development activities differ in many aspects we take advantage of a new panel database of innovative spanish firms pitec to distinguish between research and development efforts of firms we analyze the differentiated role played by traditional r d determinants in driving research and development results show that demand pull and appropriability have a higher effect on development while technological opportunity is more influential for research differences are statistically significant important in magnitude and robust to the use of different indicators for demand pull technological opportunity and appropriability and to several robustness checks

cost reducing and demand creating r d with spillovers this article analyzes r d policies when the returns to cost reducing and demand creating r d are imperfectly appropriable and market structure is endogenous we generalize previous characterizations of appropriability to permit the possibility that own and rival r d are imperfect substitutes we also describe how equilibrium expenditures on process and product r d as well as equilibrium market structure depend on technological opportunities and spillovers in contrast to previous work diminished appropriability does not necessarily reduce r d expenditures for example under some conditions an increase in the extent of process product spillovers will lead to an increase in product process r d we estimate several variants of the model by using manufacturing line of business data and data from a survey of r d executives

multilevel approaches and the firm agglomeration ambiguity in economic growth studies empirical studies in spatial economics have shown that agglomeration economies may be a source of the uneven distribution of economic activities and economic growth across cities and regions both localization and urbanization economies are hypothesized to foster agglomeration and growth but recent meta analyses of this burgeoning body of empirical research show that the results are ambiguous recent overviews show that this ambiguity is fuelled by measurement issues and heterogeneity in terms of scale of time and space aggregation growth definitions and the functional form of the models applied alternatively in this paper we argue that ambiguity may be due to a lack of research on firm level performance in agglomerations this research is necessary because the theories that underlie agglomeration economies are microeconomic in nature hierarchical or multilevel modeling which allows micro levels and macro levels to be modeled simultaneously is becoming an increasingly common practice in the social sciences as illustrated by detailed dutch data on firm level productivity employment growth and firm survival we argue that these approaches are also suitable for reducing the ambiguity surrounding the agglomeration firm performance relationship and for addressing spatial sectoral and cross level heterogeneity

the anatomy of industry r d intensity distributions using firm data disaggregated by industry we establish a set of regularities in the distribution of firm r d intensities within manufacturing industries we show how a simple probabilistic process in which chance influences a key unobserved determinant of r d and firm size conditions the returns to r d can account for these regularities and other features of the distributions the model provides a unified noncausal explanation of a series of long observed relationships across mean r d intensity market concentration and the coefficient of variation it also offers a novel explanation for the inverse relationship between r d productivity and firm size jel 031