knowledge spillovers and patent citations evidence from a survey of inventors it is well understood that the non rival nature of knowledge as a productive asset creates the possibility of knowledge spillovers whereby investments in knowledge creation by one party produce external benefits by facilitating innovation by other parties at least since zvi griliches s 1979 seminal paper on measuring the contributions of r d to economic growth economists have been attempting to quantify the extent and impact of knowledge spillovers one line of research of this type has utilized patent citations to identify a paper trail that may be associated with knowledge flows between firms very little of this research has attempted to determine the modes or mechanisms of communication that actually permit knowledge to flow further most of the work has simply assumed that citations or other proxies are sufficiently correlated with knowledge flows to allow statistical analysis of the proxies to be informative regarding the underlying phenomenon of interest this paper reports on a preliminary attempt to improve this situation the idea for this survey came from r d managers whom we were interviewing to test whether the picture of knowledge flows produced by patent citations was consistent with the managers impressions one of these managers commented that he could not let us talk to the scientists who worked for him but that he could not stop uls from contacting them via the postal address that appears on their issued patents the survey results suggest that communication between inventors is reasonably irnportant and that patent citations do provide an indication of communication albeit one that also carries a fair amount of noise

what makes basic research economically useful abstract economic analysis has helped us understand the strong economic dimension in the explosive growth of science and more recently the reasons for continuing public subsidies however the growing domination of the market failure approach has led to the analytical neglect of two major questions for policy makers how does science contribute to technology are the technological benefits from science increasingly becoming international on the former too much attention has been devoted to the relatively narrow range of scientific fields producing knowledge with direct technological applications and too little to the much broader range of fields the skills of which contribute to most technologies on the latter national systems of science and of technology remain closely coupled in most major countries in spite of the technological activities of large multinational firms empirical research is needed on concentration scale and efficiency in the performance of basic research where techniques and insights from the applied economics of industrial r d are of considerable relevance there is no convincing evidence so far of unexploited economies of scale in basic research this evidence shows that many policies for greater selectivity and concentration in basic research have been misconceived economists and other social scientists could help by formulating more persuasive justifications for public subsidy for basic research and by making more realistic assumptions about the nature of science and technology

an analysis of policy initiatives to promote strategic research partnerships strategic research partnerships srps have become a salient feature of the us national innovation system we provide an overview of srps and examine the antecedents and consequences of centerpiece legislation designed to stimulate the formation of srps the national cooperative research act ncra of 1984 ncra allows firms to disclose their research joint ventures rjvs to the department of justice which enabled them to significantly reduce their exposure to antitrust litigation we estimate an econometric model of trends in rjv filings and find that as intended by the legislation the propensity of firms to engage in rjvs is sensitive to changes in the global competitiveness of us high technology industries more importantly our results suggest that the establishment of the commerce department s advanced technology program which provides financial support to firms that engage in collaborative research projects induced firms to engage in additional privately financed rjvs this is a spillover mechanism that warrants further attention as national innovation systems evolve

lone inventors as sources of breakthroughs myth or reality are lone inventors more or less likely to invent breakthroughs recent research has attempted to resolve this question by considering the variance of creative outcome distributions it has implicitly assumed a symmetric thickening or thinning of both tails i e that a greater probability of breakthroughs comes at the cost of a greater probability of failures in contrast we propose that collaboration can have opposite effects at the two extremes it reduces the probability of very poor outcomes because of more rigorous selection processes while simultaneously increasing the probability of extremely successful outcomes because of greater recombinant opportunity in creative search analysis of over half a million patented inventions supports these arguments individuals working alone especially those without affiliation to organizations are less likely to achieve breakthroughs and more likely to invent particularly poor outcomes quantile regressions demonstrate that the effect is more than an upward mean shift we find partial mediation of the effect of collaboration on extreme outcomes by the diversity of technical experience of team members and by the size of team members external collaboration networks supporting our meta argument for the importance of examining each tail of the distribution separately experience diversity helps trim poor outcomes significantly more than it helps create breakthroughs relative to the effect of external networks

acquisition or greenfield start up institutional cultural and transaction cost influences in this paper we develop and test a model of diversification mode choice how firms decide between acquisitions and greenfield start up ventures which includes institutional cultural and transaction cost variables using a sample of japanese firms entering western europe our results show the model correctly predicts over eighty seven percent of the mode choices thus we provide strong initial evidence to support using institutional cultural and transaction cost variables to predict firms choices between acquisitions and greenfield start ups in international expansion our findings also suggest that organizations which have developed strong intangible capabilities may be able to more readily leverage these capabilities through greenfield start ups copyright 2000 john wiley sons ltd

ownership based entry mode strategies and international performance this study examines the relationship between ownership entry modes and performance the ownership entry modes examined are the wholly owned modes of acquisition and new venture entry and the non wholly owned mode of joint venture entry a theoretical relationship is developed for international entry modes that is based on the contingency characteristics of resource requirements and organizational control factors this model suggests that different entry modes have different performance outcomes based upon their resource and organizational control demands the theoretical model although developed using the eclectic theoretical approach is based largely on concepts and relationships previously delineated in contingency theory our hypotheses suggest that new ventures should outperform joint ventures and joint ventures should outperform acquisitions an empirical test using a sample of 321 japanese firms entering the north american market provides supporting evidence

the role of collateral in credit markets with imperfect information abstract the paper analyzes the structure of credit market equilibrium under imperfect information collateralization and credit rationing are compared as alternative means to cope with problems of adverse selection and moral hazard it is shown that lenders may use collateral as a self selection and incentive mechanism rationing occurs only if the borrowers collaterizable wealth is too small to allow perfect sorting or to create sufficiently strong incentives whenever there is rationing in an equilibrium some borrowers are charged the maximum amount of collateral

reinventing public r d patent policy and the commercialization of national laboratory technologies when innovations are heterogeneous it may be advantageous to provide a variety of patents by trading off patent breadth for length it is possible that fees are not needed in the optimal policy we present two examples the first is a quality ladder model in which innovations benefit society directly as well as through their use as building blocks to future inventions and the rate of arrival for the future innovation is unobserved more fertile innovations get more breadth for a shorter time menus may also be useful in the case of horizontal product differentiation copyright 2001 by the rand corporation

the empirical performance of the ecb s repo auctions evidence from aggregated and individual bidding data abstract we analyze the empirical performance of the ecb s fixed rate tenders by estimating bid functions using aggregated and individual bidding data the intention of the study is twofold first in view of the ecb s emphasis on the principle of equal treatment we employ the aggregated data to compare the bidding behavior of german and non german banks specifically we investigate banks overbidding and its response to opportunity cost and interest rate expectations second we use the individual bidding data of german banks and estimate panel data models to investigate the impact of a bank s type on its bidding the results indicate that large banks bid more informed or sophisticated than smaller banks with regard to interest rate expectations however there is no evidence for a size effect in banks overbidding behavior

cost value and foreign market entry mode the transaction and the firm this paper compares and contrasts the mode of foreign market entry decision from the transaction cost internalization and organizational capability perspectives each of these perspectives operates at a different level of analysis respectively the transaction and the firm and consequently differs in the primary arena of attention namely transaction characteristics and the capabilities of firms in making the comparison a key distinction is made between the cost and the value aspects in the management of know how based on which issues pertaining to the transfer of knowledge within and across firm boundaries and the exploitation and enhancement of competitive advantage are closely examined the main purpose of this paper is to demonstrate the implications of a shift in frame from cost to value in the analysis of decisions related to firm boundaries entry into foreign markets is used primarily as a vehicle for the accomplishment of this purpose the paper shows how the value based framework of the organizational capability perspective radically and fundamentally shifts the approach towards the governance of firm boundaries and argues that even though tc internalization theory raises some valid concerns the organizational capability framework may be more in tune with today s business context some of the assumptions of the tc internalization perspective both direct opportunism exploitation of existing advantage and indirect preservation of the value of know how across locational contexts asymmetry between bounded rationality for transaction and production purposes are critically examined and questioned implications of a shift from a cost to a value based framework are discussed and the need for a shift in research focus is emphasized

the repo auctions of the european central bank and the vanishing quota puzzle until june 2000 the european central bank ecb used fixed rate tenders for its weekly repo auctions a switch to variable rate tenders became necessary due to massive overbidding by banks in this paper we introduce a stylized game among banks to investigate this overbidding phenomenon our results confirm the weakness of the fixed rate tender format and indicate that the ecb s liquidity management has significantly improved since the switch to the variable rate system yet recent episodes of rate cut expectations suggest that the ecb s practice of setting a minimum bid rate should be abandoned in favor of a more symmetric interest rate target

patents versus ex post rewards a new look abstract economic studies that aim at comparing the patent system social efficiency versus an ex post reward system rest on an outdated view of patents they assume that firms use the patent system only in order to be granted a short term commercial monopoly rent this assumption is convenient because it allows straightforward comparisons between patents and rewards but it is not confirmed by empirical studies which stress that in many industries most firms use patents as strategic devices to trade technologies and to ease r d collaborations this change leads to rethinking the framework of the patent reward debate

repo auctions and the market for liquidity what is the nature of imperfections in the market for liquidity studying bidder level data from european central bank ecb repo auctions we find that this market appears to be informationally efficient in the sense that participants do not have private information about future short term rates however auction allocations affect banks subsequent behavior in a way that is consistent with a degree of allocational and operational inefficiency also large bidders appear to have better access to the interbank market than small ones finally the evidence suggests that the ecb uses collateral haircuts that do not equilibrate opportunity costs

r d co practice and reverse knowledge integration in multinational firms this paper contributes to the developing literature on the management of distributed innovation in multinational firms we focus on a specific organizational mechanism r d co practice which we believe is an important facilitator of knowledge integration in multinationals with global innovation strategies in our formulation r d co practice joint technical activities between units increases levels of absorptive capacity and social capital among participating units thus increasing the likelihood that they will share knowledge at future time periods we find strong support for this hypothesis through an empirical analysis of reverse subsidiary to headquarters knowledge integration in two sectors automotive and pharmaceuticals over a 21 year period

reprint of central bank collateral frameworks abstract this paper seeks to inform about a feature of monetary policy that is largely overlooked yet occupies a central role in modern monetary and financial systems namely central bank collateral frameworks their importance can be understood by the observation that the money at the core of these systems central bank money is injected into the economy on terms not defined in a market but by the collateral frameworks and interest rate policies of central banks using the collateral framework of the eurosystem as a basis of illustration and case study the paper brings to light the functioning reach and impact of collateral frameworks a theme that emerges is that collateral frameworks may have distortive effects on financial markets and the wider economy they can for example bias the private provision of real liquidity and thereby also the allocation of resources in the economy as well as contribute to financial instability evidence is presented that the collateral framework in the euro area promotes risky and illiquid collateral and more generally impairs market forces and discipline the paper also emphasizes the important role of ratings and government guarantees in the eurosystem s collateral framework

a role based ecology of technological change this article considers what factors determine whether an innovation becomes a foundation for future technological developments rather than a dea end the authors introduce the concept of the technological niche which includes a focal innovation the innovations on which the focal innovations builds the innovations that build upon the focal innovation and the technological ties among the innovations within the niche using patents and patent citations to measure characteristics of innovation niches within the semiconductor industry the authors show that the size of the niche and the status of the actors within the niche have a positive effect on the likelihood that subsequent innovations will build upon the focal innovation competitive intensity within the niche has a negative effect on this likelihood

schumpeterian competition in experimental markets abstract we report on a series of laboratory experiments that capture key elements of research and development r d rivalry the experimental environment has a small number of sellers who compete in terms of pricing and production decisions and in terms of cost reducing r d rewards for innovation depend on the profitability of product market competition the experiments capture a kind of dynamic schumpeterian competition there is a sharp contrast in experimental results between monopolies and four seller competitive markets aggregate r d is higher under competition than under monopoly and prices follow marginal cost reductions much more quickly under competition than under monopoly the paper examines market performance in the experiments and the sources of market performance problems

choice of foreign market entry mode impact of ownership location and internalization factors firms interested in servicing foreign markets face a difficult decision with regards to the choice of an entry mode the options available to a firm include exporting licensing joint venture and sole venture several factors that determine the choice of a specific foreign market entry mode have been identified in previous literature these factors can be classified into three categories ownership advantages of a firm location advantages of a market and internalization advantages of integrating transactions this study examines the independent and joint influences of these factors on the choice of an entry mode multinomial logistic regression model is employed to test the hypothesized effects

market manipulation price bubbles and a model of the u s treasury securities auction market this paper models the u s treasury securities auction market and demonstrates that mar ket manipulation can occur in a rational equilibrium it is a dynamic model with traders participating in a when issued market a treasury auction and a resale market manipu lations occur when dealers in the when issued market use their knowledge of the net order flow in order to corner the auction and squeeze the shorts from the when issued market this manipulation equilibrium generates bubbles in treasury security prices and specials in repo rates we also compare discriminatory and uniform price auction rules with respect to manipulation our analysis shows that manipulations can occur in long run equilibrium under discriminatory price auctions but not under uniform price auctions

trips trade and technology transfer a north south model of unintentional technology transfer is developed where the stringency of southern patent protection provides the institutional backdrop for a strategic game in a high tech goods market the appropriability regime is set endogenously and combines elements of imperfect southern patent protection with the protection afforded by market made northern technology masking less stringent protection of northern intellectual property can work much like other strategic trade policies therefore developed countries appear to be right in demanding discussion of intellectual property rights in gatt

is public r d a complement or substitute for private r d a review of the econometric evidence is public r d spending complementary and thus additional to private r d spending or does it substitute for and tend to crowd out private r d conflicting answers are given to this question we survey the body of available econometric evidence accumulated over the past 35 years a framework for analysis of the problem is developed to help organize and summarize the findings of econometric studies based on time series and cross section data from various levels of aggregation laboratory firm industry country the findings overall are ambivalent and the existing literature as a whole is subject to the criticism that the nature of the experiment s that the investigators envisage is not adequately specified we conclude by offering suggestions for improving future empirical research on this issue

many roads lead to rome implications of geographic scope as a source of isolating mechanisms studies examining the competitive implications of geographic scope have largely focused on creating competitive advantage in an attempt to investigate a less illuminated role of geographic scope that of sustaining competitive advantage this paper investigates the sources of and relationships among the causal factors leading to creation of isolating mechanisms or barriers to imitation this paper first distinguishes two sources of causal factors linked to the creation of isolating mechanisms intrinsic characteristics of knowledge and geographic scope of knowledge acquisition and then investigates the relationships among the causal factors from the two sources employing the fuzzy set qualitative comparative analysis method this paper examines equifinality and functional equivalence of causal factors from the two sources empirical analyses with united states patent and trademark office patent data of the semiconductor industry corroborate the main thesis of the paper that multiple paths can lead to the creation of isolating mechanisms and in these paths causal factors from the two sources of isolating mechanisms can be functionally equivalent the results also provide managerial implications that firms with different sets of resources and capabilities can implement different types of isolating strategies to sustain their competitive advantage

dynamic capabilities and internationalization of authentic firms role of heritage assets administrative heritage and signature processes we study mnes that tie their long lasting competitiveness and internationalization to the deployment of their heritage assets administrative heritage and signature processes built in their home markets when faced with changes these authentic firms scan for and buffer against threats to their signature processes use their heritage endowment to focus on their capacity to maintain and defend their niches and preserve their capacity for stability we complement the traditional dynamic capabilities perspective by redefining its boundary conditions furthermore authentic firms resist and limit local adaptation of process and products and internationalize only if opportune by deploying preservation capabilities

patent citations an analysis of quality differences and citing practices in hybrid corn a growing empirical literature uses patent citations as a quality adjusted measure for innovation despite concerns about the validity of this measure this paper links patents with objective measures of improvements in the quality of patented inventions measured through performance in field trials for hybrid corn to examine three potential factors that influence citations 1 improvements in performance 2 citing practices of patent attorneys and 3 citing practices of patent examiners this analysis reveals that citations are robustly correlated with performance which confirms that citations are a useful quality adjusted measure for innovation the citing practices of patent attorneys and examiners however also influence citations patent attorneys cite early patents which help establish the patentability of an invention this practice may inflate citation counts for early patents particularly for inventions that have only recently become patentable attorneys also add self citations our anal

innovation in multinational subsidiaries the role of knowledge assimilation and subsidiary capabilities subsidiaries of multinational firms play an important role in the globalization of innovation yet we have an incomplete idea of the influences on their innovative activity drawing on prior research in international business and strategy we identify two sets of factors that influence the absorption and utilization of knowledge in multinational corporation subsidiaries a the range of external and internal knowledge sources available and b the subsidiary capabilities associated with knowledge absorption and utilization we find that knowledge absorbed from the host country is useful to subsidiary innovation we also find support for the role of subsidiary capabilities both sourcing capability and combinative capability have a significant influence on the scale and quality of innovation

managerial cognition and internationalization how do the senior decision makers within a multinational enterprise mne think through and determine an internationalization decision despite the cognitive foundations of several key constructs standard internationalization models do not explicitly incorporate managerial cognition we argue that the boundedly rational decision maker is underspecified in international business models and this oversight contributes to weak empirical findings on experience learning internationalization strategy and mne performance drawing on these extant models we identify seven knowledge domains and interdependencies that may make up decision makers mental models granted rare access to senior executives and board members engaged in a foreign direct investment decision we find substantial heterogeneity in the mental models these individuals used to make sense of the opportunity this variance aligns with differences in individuals experience along four dimensions international breadth depth diversity and prior strategic decision making we argue these cognitive processes how individuals exercise judgment about information search parameters assessment and decision integration and how decision teams coalesce in their thinking are crucial microfoundations for modeling heterogeneity in firm level internationalization strategies and performance

federal funding and the rate and direction of inventive activity abstract leveraging a new measure of patent citation trees corredoira and banerjee 2015 we demonstrate that research funded by the federal government is associated with more active and diverse technological trajectories our findings tie government funding to breakthrough inventions the differences are especially evident at the upper percentiles of the distribution of long term patent influence and stem primarily from research conducted outside the federal government and sponsored by the dod hhs and nsf government funded patents are inputs into a broader range of technologies additional analyses indicate that federal programs invest in some technological areas that private corporations eschew and federally funded university patents are in different technological classes than non federally funded university patents in this sense the government may play an irreplaceable role in the rate and direction of inventive activity generally speaking the scientific agencies of government are not so concerned with immediate practical objectives as are the laboratories of industry nor on the other hand are they as free to explore any natural phenomena without regard to possible economic applications as are the educational and private research institutions vannevar bush science the endless frontier 1945

a dynamic capabilities based entrepreneurial theory of the multinational enterprise this paper develops a dynamic capabilities based theory of the multinational enterprise mne it first reviews scholarship on the mne with a focus on what has come to be known as internalization theory one prong of this theory develops contractual transaction cost informed governance perspectives and another develops technology transfer and capabilities perspectives in this paper it is suggested that the latter has been somewhat neglected however if fully integrated as part of a more complete approach it can buttress transaction cost governance issues and expand the range of phenomena that can be explained in this more integrated framework dynamic capabilities coupled with good strategy are seen as necessary to sustain superior enterprise performance especially in fast moving global environments entrepreneurial management and transformational leadership are incorporated into a capabilities theory of the mne the framework is then used to explain how strategy and dynamic capabilities together determine firm level sustained competitive advantage in global environments it is suggested that this framework complements contract based perspectives on the mne and can help integrate international management and international business perspectives

the role of international assignees social capital in creating inter unit intellectual capital a cross level model we conceptualize international assignees as informational boundary spanners between multinational enterprise units and develop a cross level model that explores how assignees social capital translates into inter unit intellectual capital first as knowledge brokers assignees create inter unit intellectual capital by linking their home and host unit social capital thereby enabling cross unit access to previously unconnected knowledge resources second as knowledge transmitters assignees host unit social capital facilitates their creation of individual intellectual capital which in turn translates into inter unit intellectual capital we conclude that individual social capital needs to be explicitly transferred to the organizational level to have a sustained effect on inter unit intellectual capital

inter firm reverse technology transfer the home country effect of r d internationalization one consequence of the internationalization of rd these results are robust to the exclusion of examiner citations we find that this technology transfer process is explained by the degree of home country embeddedness of the multinational firm the us subsidiaries engagement in asset augmenting activities and the presence of a technology gap between the united states and the home country these results point to an alternative understanding of foreign direct r d investment and its implications for the home country s technological activity and general competitive performance copyright 2009 the author 2009 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

the effect of national culture on the choice of entry mode characteristics of national cultures have frequently been claimed to influence the selection of entry modes this article investigates this claim by developing a theoretical argument for why culture should influence the choice of entry two hypotheses are derived which relate culture to entry mode choice one focusing on the cultural distance between countries the other on attitudes towards uncertainty avoidance using a multinomial logit model and controlling for other effects the hypotheses are tested by analysing data on 228 entries into the united states market by acquisition wholly owned greenfield and joint venture empirical support for the effect of national culture on entry choice is found

industry effects and appropriability measures in the stock market s valuation of r d and patents this paper examines the stock market s valuation of a firm s innovative activity we estimate the market s relative valuation of firms tangible and intangible assets focusing on knowledge capital in the form of accumulated stocks of r d and patents we tried to improve upon our estimates of the stock market s valuation of knowledge capital embodied in such stocks by bringing in measures of the appropriability environment facing a firm from the yale survey on industrial research and development the responses to survey questions about the effectiveness of patents as a mechanism for protecting the returns from innovation turn out to be of some use there is evidence of an interaction between industry level measures of the effectiveness of patents and the market s valuation of a firm s past r d and patenting performance as well as its current r d moves we find no evidence however that other appropriability mechanisms differ enough across industries to leave measurable traces in our data the structure of the yale survey makes it possible to estimate the sampling error in the appropriability measures derived from it this information was used by us in an errors in variables context but with little success in the absence of r d variables our estimates imply that a two standard deviation increase in our index of patent effectiveness would raise the value of a patent held by our average firm from 0 4 million to 1 0 million when r d variables are introduced into the equations the patents variables become insignificant r d expenditures are a better measure of input to the innovative function of firms than patents are of its output but we estimate that the same experiment would induce changes in q of between 10 and 27 percent for the average firm approximately doubling the market s valuation of this kind of capital this abstract was borrowed from another version of this item

strategic trading behavior and price distortion in a manipulated market anatomy of a squeeze abstract this paper investigates an attempted delivery squeeze in a bond futures contract traded in london using cash and futures trades of dealers and customers we analyze their strategic trading behavior price distortion and learning in a market manipulation setting we argue that marked differences in settlement failure penalties in the cash and futures markets create conditions that favor squeezes we recommend that regulators require special flagging of forward term repurchase agreements on the key deliverables that span futures contract maturity dates and that exchanges mark to market their contract specifications more frequently or consider a cash settled contract on a basket of bonds

overbidding in fixed rate tenders the role of exposure risk abstract the fixed rate tender is one of the main procedures used by central banks in the implementation of their monetary policies while academic research has largely dismissed the procedure owing to its tendency to encourage overbidding central banks such as the ecb and the bank of england have continued using it we investigate this apparent conflict by considering an auction theoretic setting with private information about declining marginal valuations since overbidding entails exposure risk an equilibrium may exist even if bids are costless and the intended volume is pre announced in fact the allotment quota may be strictly below one with certainty also with adaptive expectations overbidding need not escalate however the resulting allocation is typically inefficient empirical proxies of exposure risk are significant in both euro and sterling operations our findings have implications in particular for the potential reintroduction of pro rata allotment in the main refinancing operations of the eurosystem

the role of global dynamic managerial capability in the pursuit of international strategy and superior performance we develop the construct of global dynamic managerial capability gdmc and identify its underlying sources 1 international human capital 2 international social capital and 3 international managerial cognitions consistent with dynamic capabilities view and upper echelons theory we suggest that gdmc leads to global asset orchestration which in turn results in superior company performance in a two stage process first gdmc leads companies to adopt global strategies that spread the risk of internationalizations across different entry modes and geographic regions second the re configuration of global assets positively influences subsequent firm performance and thus mediates the relationship between gdmc and performance recognizing the triad of factors that form global dynamic managerial capability is crucial when selecting future managers of multinational corporations hence firms with increasing international exposure both domestically via foreign competition and internationally via foreign market presence may seek to compose their upper echelons with a suitable combination of international human and social capital as well as internationally diverse cognitions in the pursuit of sustained competitive advantage

central bank collateral frameworks abstract this paper seeks to inform about a feature of monetary policy that is largely overlooked yet occupies a central role in modern monetary and financial systems namely central bank collateral frameworks their importance can be understood by the observation that the money at the core of these systems central bank money is injected into the economy on terms not defined in a market but by the collateral frameworks and interest rate policies of central banks using the collateral framework of the eurosystem as a basis of illustration and case study the paper brings to light the functioning reach and impact of collateral frameworks a theme that emerges is that collateral frameworks may have distortive effects on financial markets and the wider economy they can for example bias the private provision of real liquidity and thereby also the allocation of resources in the economy as well as contribute to financial instability evidence is presented that the collateral framework in the euro area promotes risky and illiquid collateral and more generally impairs market forces and discipline the paper also emphasizes the important role of ratings and government guarantees in the eurosystem s collateral framework

induced innovation and energy prices this paper uses u s patent data from 1970 to 1994 to study the impact of energy prices on energy efficient innovations theories of technological change have focused both on demand side factors which spur innovative activity by increasing the value of new innovations and supply side factors such as scientific advancements that make new innovations possible data on demand side factors are easily obtained but data on supply side factors that influence innovation are not readily available this paper uses patent citations as a measure of the usefulness of the existing base of scientific knowledge citations to previous patents are used to construct productivity estimates which measure the usefulness of the existing stock of knowledge to inventors in a given energy field for any given year these estimates are then combined with data on demand side factors to estimate a model of induced innovation in energy technologies the results indicate that both energy prices and the supply of knowledge have strongly significant positive effects on innovation the paper concludes with a discussion of the implication of this work for environmental policy

science and the diffusion of knowledge abstract scientists social scientists and politicians frequently credit basic science with stimulating technological innovation and with it economic growth despite a substantial body of research investigating this general relationship relatively little empirical attention has been given to understanding the mechanisms that might generate this linkage this paper considers whether more rapid diffusion of knowledge brought about by the norm of publication might account for part of this effect we identify the importance of publication by comparing the patterns of citations from future patents to three groups of focal patents i those that reference scientific peer reviewed publications ii those that reference commercial non scientific publications and iii those that reference neither our analyses strongly implicate publication as an important mechanism for accelerating the rate of technological innovation patents that reference published material whether peer reviewed or not receive more citations primarily because their influence diffuses faster in time and space

dynamic capabilities what are they this paper focuses on dynamic capabilities and more generally the resource based view of the firm we argue that dynamic capabilities are a set of specific and identifiable processes such as product development strategic decision making and alliancing they are neither vague nor tautological although dynamic capabilities are idiosyncratic in their details and path dependent in their emergence they have significant commonalities across firms popularly termed best practice this suggests that they are more homogeneous fungible equifinal and substitutable than is usually assumed in moderately dynamic markets dynamic capabilities resemble the traditional conception of routines they are detailed analytic stable processes with predictable outcomes in contrast in high velocity markets they are simple highly experiential and fragile processes with unpredictable outcomes finally well known learning mechanisms guide the evolution of dynamic capabilities in moderately dynamic markets the evolutionary emphasis is on variation in high velocity markets it is on selection at the level of rbv we conclude that traditional rbv misidentifies the locus of long term competitive advantage in dynamic markets overemphasizes the strategic logic of leverage and reaches a boundary condition in high velocity markets copyright 2000 john wiley sons ltd

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

antitrust policy towards co operative r d ventures this paper surveys the theoretical literature on r d cartels and the empirical literature on problems of appropriability in order to evaluate the case for encouraging antitrust authorities to treat r d cooperative ventures leniently the case for r d cooperative ventures trades potential gains from internalizing technological spillovers off against a possible reduction in output market competition but the empirical evidence suggests that r d spillovers can easily be exaggerated this suggests that the design of antitrust policy towards r d cooperative ventures is likely to be of major importance if they are to yield net social gains and the paper concludes with a critical examination of the ncra introduced in u s and block exemption introduced in europe in the 1980s copyright 1993 by oxford university press

overbidding in fixed rate tenders an empirical assessment of alternative explanations abstract this paper investigates various theories explaining banks overbidding in the fixed rate tenders of the european central bank ecb using auction data from both the bundesbank and the ecb we show that none of the theories can on its own explain the observed overbidding this implies that the proposed new rules by the ecb aimed at neutralizing interest rate expectations would not eliminate overbidding if the rationing rule in the fixed rate tenders remains unchanged

the on the run liquidity phenomenon abstract we test the implications of a model of multi asset speculative trading in which liquidity differentials between on the run and off the run u s treasury bonds ensue from endowment shocks in the presence of two realistic market frictions information heterogeneity and imperfect competition among informed traders and a public signal our evidence suggests that i off on the run liquidity differentials are economically and statistically significant even after controlling for several of the bonds intrinsic characteristics such as duration convexity repo rates or term premiums and ii off on the run liquidity differentials are smaller immediately following bond auction dates and larger when the uncertainty surrounding the ensuing auction allocations is high when the dispersion of beliefs across informed traders is high and when macroeconomic announcements are noisy consistent with our model

externalities in recruiting external recruiting at least weakly improves the quality of the pool of applicants but the incentive implications are less clear using a contest model this paper investigates the pure incentive effects of external recruiting our results show that if workers are heterogeneous opening up a firm s career system may lead to a homogenization of the pool of contestants and thus encourage the firm s high ability workers to exert more effort if this positive effect outweighs the discouragement of low ability workers the firm will benefit from external recruiting if however the discouragement effect dominates the homogenization effect the firm should disregard external recruiting in addition product market competition may mean that opening up the career system becomes less attractive for a firm since it increases the incentives of its competitors workers and hence strengthens the competitors

a penny for your quotes patent citations and the value of innovations the use ofpatents in economic research has been seriously hindered by the fact that patents vary enormously in their importance or value and hence simple patent counts cannot be informative about innovative output the purpose of this article is to put forward patent counts weighted by citations as indicators of the value of innovations thereby overcoming the limitations of simple counts the empirical analysis of a particular innovation computed tomography scanners indeed shows a close association between citation based patent indices and independent measures of the social value of innovations in that field moreover the weighting scheme appears to be nonlinear increasing in the number of citations implying that the informational content of citations rises at the margin as in previous studies simple patent counts are found to be highly correlated with contemporaneous rd however here the association is within afield over time rather than cross sectional

evidence from patents and patent citations on the impact of nasa and other federal labs on commercial innovation federal lab commercialization is explored 1 by analyzing us government patents and 2 in a qualitative analysis of one nasa lab s patents tests apply to three distinct sets of patents 1963 94 nasa all other us government and a random sample of all us inventors patents the federal patenting rate plummeted in the 1970s consistent with increasing commercialization both nasa s and other federal agencies rates recovered in the 1980s the case study finds citations to be a valid but noisy measure of technology spillovers excluding spurious cites two thirds of cites to patents of nasa lewis electro physics branch were evaluated as involving spillovers

towards a renaissance in international business research big questions grand challenges and the future of ib scholarship in this article we review critiques of international business ib research with a focus on whether ib scholarship tackles big questions we identify three major areas where ib scholars have addressed important global phenomena but find that they have had little influence outside of ib and only limited effects on business or government policy we propose a redirection of ib research towards grand challenges in global business and the use of interdisciplinary research methods multilevel approaches and phenomena driven perspectives to address those questions we argue that ib can play a more constructive and vital role by tackling expansive topics at the business societal interface

collateral and short squeezing of liquidity in fixed rate tenders abstract the paper models fixed rate tenders where a central bank offers to lend central bank funds to financial institutions bidders are constrained by the amount of collateral they have we focus on the strategic interaction between bidding in the tender and trading in the interbank market after the tender where short squeezes could occur we examine how the design of the tender affects equilibrium bidding behavior and the incidence of short squeezes important elements in the analysis include the type of policy implemented by the central bank as well as bidders initial endowments of liquidity and collateral three instruments for softening short squeezes are identified the tender rate the tender size and admissible collateral increasing the tender rate or size tends to decrease the probability and severity of a short squeeze the possibility of a short squeeze may induce bidders to oversubscribe even if the tender rate is higher than the competitive rate

the technological origins of radical inventions this paper aims to trace down the origins of radical inventions in spite of many theoretical discussions on the effect of radical inventions the specific nature of radical inventions has received much less attention in the theoretical and empirical literature we try to fill that void by an empirical investigation into the specific origins of radical inventions we explore this issue by a close examination of 157 individual patents which are selected from a pool of more than 300 000 patents in contrast to the conventional wisdom that radical inventions are based less on existing knowledge we find that they are to a higher degree based on existing knowledge than non radical inventions a further result that follows from our analysis is that radical inventions are induced by the recombination over more knowledge domains the combination of knowledge from domains that might usually not be connected seems to deliver more radical inventions

the value of u s patents by owner and patent characteristics abstract this paper uses renewal data to estimate the value of u s patents controlling for patent and owner characteristics estimates of u s patent value are substantially larger than estimates for european patents however the ratio of u s patent value to r d for firms is only about 3 contrary to a common assertion patents issued to small patentees are much less valuable than those issued to large corporations litigated patents are more valuable as are highly cited patents however patent citations explain little variance in value suggesting limits to their use as a measure of patent quality

a strategic analysis of corners and squeezes we develop a dynamic game theoretic model of a futures market in which prices can be manipulated by corner and squeeze we investigate equilibrium trading strategies and the price dynamics these strategies produce price paths produced by our model can mimic observed prices for potentially comerable commodities and explain the volatility of certain prices even when no manipulations occur our model also generates occasional apparent price bubbles and accounts for the existence of normal backwardation in futures markets even when players are risk neutral

how firms innovate through r d internationalization an s curve hypothesis abstract this article examines the effects of r d internationalization and organizational slack on innovation performance we suggest that there is an s shaped relationship between r d internationalization and innovation performance innovation performance increases in the decentralization stage decreases in the transition stage and increases again in the recentralization stage in addition organizational slack is hypothesized to have a negative moderating effect on the s shaped relationship longitudinal data on 210 taiwanese firms in the information technology sector during a 10 year period is collected to test the hypotheses the findings support our prediction managerial implications and future research directions are discussed

the role of collateral in a model of debt renegotiation this paper studies the effect of debt renegotiation on the design of optimal loan arrangements in a model of borrowing and lending with asymmetric information renegotiation may occur because bankruptcy involves costly asset liquidation which is ex post inefficient the author shows that the extent of the entrepreneur s liabilities in the optimal loan contract depends upon the creditor s commitment to impose bankruptcy should default ever occur a limited liability arrangement is optimal whenever the creditor is precommited not to forgive any portion of the outstanding debt otherwise debt may efficiently be secured by outside collateral copyright 1994 by ohio state university press

auctioning vs grandfathering in cap and trade systems with market power and incomplete information we compare auctioning and grandfathering as allocation mechanisms of emission permits when there is a secondary market with market power and firms have private information on their own abatement technologies based on real life cases such as the eu ets we consider a multi unit multi bid uniform auction at the auction each firm anticipates its role in the secondary market either as a leader or a follower this role affects each firms valuation of the permits which are not common across firms as well as their bidding strategies and it precludes the auction from generating a cost effective allocation of permits as it occurs in simpler auction models auctioning tends to be more cost effective than grandfathering when the firms abatement cost functions are sufficiently different from one another especially if the follower has lower abatement costs than the leader and the dispersion of the marginal costs is large enough

human capital in multinational enterprises does strategic alignment matter this research proposes a strategic human capital alignment framework to examine whether the alignment between subsidiary strategy i e export oriented vs local market oriented strategy and human capital i e parent firm vs local specific human capital is positively related to subsidiary performance in multinational enterprises mnes we further explore two important exogenous i e foreign exchange rate change and endogenous i e mne international experience boundary conditions since they may adjust the positive effect of strategic human capital alignment on performance the analysis based on 5604 subsidiary observations of 423 mnes from 1990 to 2012 confirms the positive synergic effect of aligning subsidiary strategy and human capital and shows the moderating effects of foreign exchange rate change and mne international experience by presenting the importance of subsidiary strategy global staffing alignment and the roles of external economic environments and internal organizational capabilities as boundary conditions the strategic human capital alignment framework suggests that what makes human capital valuable for the firm is its alignment with strategic orientation thus managers should carefully deploy the appropriate type of human capital to fulfill the requisite organizational strategy and take into account changing external and internal contextual conditions in applying the framework

measuring patent s influence on technological evolution a study of knowledge spanning and subsequent inventive activity we introduce technological influence as a variable to measure an invention s direct and indirect impact on the evolution of technology this provides a novel means to study the short and long run effect of invention antecedents on technological evolution invention activity and economic growth a comparison between models of technological influence and direct technological impact is presented model estimations are based on data from semiconductor patents granted over a 5 year period results from quantile regression estimations show significant differences in the relationships between antecedents of technological influence and impact for example pioneering the spanning of knowledge boundaries has a positive relationship with the patent s influence while no relationship is found with direct citations these results have important implications for public policy and the management of technology they suggest the need for deeper understanding of the micro foundations of the technological evolution process and raise the question of whether inventors under current ip protection receive adequate economic incentives to promote actions driving economic growth

when is inter firm coordination beneficial the case of innovation abstract we are used to the idea that collusion among firms is legitimately presumed to be damaging to the public interest and that the antitrust authorities are fully justified in taking coordination of prices to merit prohibition per se as inexcusable in any circumstances one reaches that conclusion when one thinks about price as the matter being decided upon and when the coordinating parties are horizontal competitors but as those who have studied the issue know joint decisions can in some general cases materially promote the public interest if those decisions deal with matters other than price even coordination of prices can be desirable if the firms involved are vertically rather than horizontally related indeed this is widely recognized by antitrust authorities who for example take a more favorable view of vertical coordination than of horizontal coordination and have frequently avoided interference in research joint ventures the central point of this paper is that with important exceptions coordination on innovation and on the supply of proprietary technical information to competitors can be highly beneficial to the economy enhancing both its static efficiency and its growth the policy implication is that regulatory agencies and the courts should exercise extreme restraint in interfering with such joint decision making though they should maintain some degree of vigilance to ensure that it does not transform itself into anti competitive behavior that profits at the consumer s expense

institutional cultural and transaction cost influences on entry mode choice and performance in this study we examine foreign market entry mode choice and firm performance for a sample of european union firms examining both financial and non financial performance measures we attempt to determine if firms that select their entry mode based on transaction cost institutional context and cultural context variables perform better than firms that make other mode choices we found that mode choice did matter firms whose mode choice could be predicted by the extended transaction cost model performed significantly better on both financial and non financial measures than did firms whose mode choice could not be predicted by the extended transaction cost model implications for future research are discussed

the international economics of intellectual property right protection a welfare theoretic trade policy analysis abstract this paper provides an analytical construct for examining the trade policy effects of greater intellectual property protection in technology importing countries it is shown that two types of conflict are likely to arise between net technology importers and exporters the first relates to the level of protection with importers preferring a low level and exporters a high one the second conflict hitherto unexplored relates to the manner of protection with importers likely to prefer discriminatory regimes favoring local r d creation whereas exporters would prefer nondiscriminatory protection in importing countries

the influence of the management team s international experience on the internationalization behaviors of smes why are some small and medium sized enterprises smes more successful in selling outside their domestic markets than are other smes in the same industry although the traditional explanation is that firms can gain valuable knowledge and resources as they become older and larger small and young firms are not necessarily disadvantaged if they develop other mechanisms to acquire the requisite knowledge and resources we examine the role of the management team s international experience as such a mechanism for the internationalization of canadian software product firms we show that internationally experienced management teams have a greater propensity to develop foreign strategic partners and to delay less in obtaining foreign sales after start up and that these behaviors are associated with a higher degree of internationalization

changes in university patent quality after the bayh dole act a re examination abstract the bayh dole act of 1980 facilitated the retention by universities of patent rights resulting from government funded academic research thus encouraging university entry into patenting and licensing though the act is widely recognized to be a major change in federal policy towards academic research surprisingly little empirical analysis has been directed at assessing its impacts on the academy and on university industry research relationships an important exception is the work of henderson et al rev econ stat 80 1998 119 127 which examined the impact of bayh dole on the quality of university patents as measured by the number of times they are cited in subsequent patents the authors found that the quality of academic patents declined dramatically after bayh dole a finding that has potentially important policy implications in this paper we revisit this influential finding by using a longer stream of patent citations data we show that the results of the henderson et al study reflect changes in the intertemporal distribution of citations to university patents rather than a significant change in the total number of citations these patents eventually receive this has important implications not only for the evaluation of bayh dole but also for future research using patent citations as economic indicators

uncertainty spillovers and cooperative r d abstract this paper extends the literature on cooperative r d in an oligopoly with spillovers the model has three new features it introduces uncertainty focuses on spillover of innovation instead of effort spillover and offers a new definition of the research joint venture rjv the rjv is an arrangement to coordinate r d efforts and also to share the innovation firms form an rjv only if the innovation raises flow industry profit but independently of the speed of spillovers and the degree of uncertainty the model is robust when we allow for licensing the single lab endogenous spillovers and r d effort spillovers

demand pull and technology push public support for eco innovation the case of the biofuels sector the purpose of this paper is to explore the differentiated impact of demand pull and technology push policies in shaping technological patterns in the biofuels sector the empirical analysis is based on a novel and original database biopat containing patents in the field of biofuels selected using appropriate keywords and classified according to the technological content of the invention our results generally show that technological capabilities and environmental regulation spur innovative activities in the biofuels sector both demand pull and technology push factors are found to be important drivers of innovation in the biofuels sector however technology exploitation activities in first generation technologies are found to be mainly driven by quantity and price based demand pull policies on the contrary the pace of technology exploration efforts in advanced generation biofuels is shown to react positively to price based demand pull incentives but also to technology push policy the clear diversity in the impact of different public support instruments provides new insights which fuel discussion on the optimal policy mix debate and offers new elements for the design of future policy strategies