innovation behaviour and regional indigenous potential meyer krahmer f 1985 innovation behaviour and regional indigenous potential reg studies 19 523 534 this paper has been written in order to present empirical results about some hypotheses not yet very well clarified in innovation oriented regional research the first part relates to one of the assumptions underlying innovation oriented regional policy which is that innovating and non innovating firms have different characteristics with respect to employment product lines and markets in particular the contribution to regional growth made by innovating firms is said to be larger in the second part of the paper the results of a study are presented in which it was attempted to find out empirically the extent of regional differences in indigenous innovation potential in the federal republic of germany reference is made to the innovating firms their performance and behaviour and bottlenecks in innovation as in other recent studies it is confirmed that there exists also in rural regions a sizeab

public research and industrial innovations in germany this paper deals with the effects of publicly funded research at universities polytechnics and federal research labs on industrial innovations in germany we discuss the characteristics of companies that benefit from the findings of public research institutions in questioning 2 300 companies we found that less than one tenth of product or process innovating firms introduced innovations between 1993 and 1995 that would not have been developed without public research these new products amount to approximately 5 percent of all new product sales regressions show that firms own r d support the ability to absorb the findings of public research and turn them into innovations contrary to the widely held opinion that proximity to public research institutions does promote collaboration between firms and public research and increase the amount of received knowledge spillovers we found no higher probability of publicly supported innovations for firms in germany that are located near universities or polytechnics

innovation and regional growth in small high technology firms evidence from britain and the usa oakey r p 1984 innovation and regional growth in small high technology firms evidence from britain and the usa reg studies 18 237 251 this paper examines the varying impact of regional resources on innovation in small high technology firms evidence is drawn from diverse local economies ranging from the development region of scotland through the south east of england to the bay area of california measurement focuses on the key inputs to innovation of research and development and investment capital surprisingly the findings indicate encouraging small firm innovation and growth in scotland an anticipated higher incidence of venture capital funding in the usa is confirmed and quantified with concluding comments on the policy implications resulting from this discrepancy

the demand for parimutuel horse race wagering and attendance there has been a long history of patron participation in parimutuel horse race wagering and attendance which are major recreational products in consumer budgets in this paper the demand for parimutuel horse race wagering and attendance has been specified and estimated for both thoroughbred and standardbred racetracks in a multistate market area the data are annual over the period 1960 1987 it is found that demand is price elastic in every case racing quality personal income the number of racing days competition from a state lottery and from professional sports baseball basketball football are all significant determinants of these demands both attendance and wagering are found to increase with an increase in racing quality however it seems that the new patrons attracted by quality racing tend to wager less than those who attend regularly the presence of a state lottery is found to have resulted in a substantial loss in attendance as well as in wagering at each of the racetracks this i

closing the regional equity capital gap the role of informal venture capital there is evidence from a number of countries that small firms encounter a shortage of long term investment finance particularly at start up and initial growth expansion of the institutional venture capital industry has done little to fill this equity gap on account of its preference for making large investments in established companies and management leveraged buyouts moreover the supply of venture capital exhibits a high level of spatial concentration initiatives by state provincial and local governments most notably in economically lagging regions to increase the supply of risk capital for start ups and early stage businesses have at best provided a very partial and often costly solution a more appropriate approach to increasing the supply of start up and early stage finance is to facilitate the more efficient operation of theinformal venture capital market informal investors or business angels are private investors who provide risk capital directly to new and growing businesses in which they have no family connection most business angels are unable to find sufficient investment opportunities and so have substantial uncommitted funds available there is also considerable scope for expanding the population of business angels the most cost effective means of closing the equity gap is therefore for the public sector to underwrite the operating costs of business introduction services whose objective is to overcome the two main sources of inefficiency in the informal venture capital market namely the invisibility of business angels and the high search costs of angels seeking investment opportunities and entrepreneurs seeking investors by the provision of a channel of communication between informal investors and entrepreneurs seeking finance

the influence of location upon profitability and employment change in small companies this paper examines the hypothesis that firms located in large urban areas suffer from location diseconomies which significantly reduce their profitability and propensity to create employment this hypothesis is tested on a sample of companies located within a single region the north of england over the period 1974 81 the empirical results suggest that neither trading profits nor employment change are significantly influenced by location however the amount taken out of the business in the form of directors remuneration which on average swallowed up 61 5 per cent of trading profits is significantly negatively related to employment change this suggests that with respect to employment creation public policy should focus on influencing the size of directors remuneration rather than on directly increasing trading profits fiscal policies may not be effective in this context however with the result that significantly influencing the behaviour of small firm directors may be a policy role best fitte

fragmentation versus consolidation of securities trading evidence from the operation of rule 19c 3 stock exchanges defend their rules requiring members to trade listed stocks on an exchange floor as a means of achieving consolidation of trading which it is argued minimizes trading costs to investors by virtue of the securities and exchange commission s rule 19c 3 however these exchange rules cannot apply to stocks newly listed after april 26 1979 the objective of the securities and exchange commission rule was to end what was viewed as restraint of desirable competition that would more than compensate for any cost saving resulting from consolidation by comparing the cost of trading measured by bid ask spreads and returns variance for the two distinct groups of stocks those listed before april 26 1979 and those listed after we test these competing views we find that rule 19c 3 has not caused any reduction in spreads but may have caused an increase and has had no effect on returns variance

price discovery and the effects of fragmentation on market quality evidence from cypriot cross listed stocks using a novel high frequency data set we examine the contribution of greek trading to the price discovery process of a pair of cypriot blue chip cross listed stocks during overlapping trading hours additionally we investigate the effects of market fragmentation on the home market s quality as measured by microstructure based liquidity measures contrary to earlier studies from other markets our findings show that foreign stock exchanges can act as the leading contributors to price discovery and can concentrate the majority of trading activity and produce the lowest transaction costs our results also show that market fragmentation can lead to negative effects on market liquidity

interurban variation in venture capital investment characteristics this paper describes interurban variations in venture capital investment characteristics regional funding and industrial sector preferences are characterised for ten of the most active venture capital centres investment data document the importance of these centres as importers and exporters of venture capital and shows interurban market linkages an attempt is made to describe these linkages by a traditional gravity model poor fits result in the adoption of an alternative technique the median polish that provides a more detailed description of venture capital spatial investment behaviour

does the specialist matter differential execution costs and intersecurity subsidization on the new york stock exchange this article tests for differences in execution costs among specialist firms for new york stock exchange listed securities execution cost differences provide a measure of the relative performance of specialist firms we find a substantial difference in effective spreads and order processing costs across specialist firms controlling for stock characteristics while economically significant the differences in execution costs between specialist firms are much smaller than the cross market differences reported by huang and stoll 1996 within a specialist firm there is a positive relation between order processing costs and trading activity that is consistent with the hypothesis that active stocks subsidize inactive stocks this article investigates whether differential execution costs exist across new york stock exchange nyse specialist firms and among stocks traded by the same specialist firm execution costs are paid by investors when completing a trade and are separate from the commission costs paid to a broker execution costs arise from the bid ask spread and the price impact of an investor s order on the future bid ask quote stoll 1985 shows that a transactionally efficient financial market which minimizes execution costs also minimizes the deviation in transaction prices from the true price of the underlying security evidence of differential execution costs for similar securities can be used to identify high cost and low cost liquidity providers on the nyse furthermore differential execution costs among stocks traded by the same specialist firm provide evidence consistent with a subsidy from actively traded to inactively traded stocks

the entrepreneur s search for capital abstract the popular media have been inundated with stories of the spectacular success of start up companies whose very existence let alone their meteoric growth would not have been possible without the infusion of venture capital by comparison there is a dearth of scientific research on the topic of venture capital in this article we take a systematic look at entrepreneurs in search of risk capital this inquiry is based upon five data bases including surveys of venture capitalists and entrepreneurs we have tracked 193 ventures which were denied venture capital surveyed 179 new high technology companies in northern california and reviewed the dun bradstreet credit reports of 145 new ventures in california in sic codes related to the high tech sector with follow up interviews of 86 of these 145 start ups

do competing specialists and preferencing dealers affect market quality we empirically demonstrate that the opportunities the boston stock exchange and the cincinnati stock exchange offer members to take the other side of their customers orders through affiliated market makers to internalize orders have little short run effect on posted or effective bid ask spreads this is true despite substantial movement of order flow away from the new york stock exchange when trading under one of these regional stock exchange programs begins these results contrast with the adverse effects of market fragmentation and internalization predicted by some theoretical market microstructure analyses and the popular financial press article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

employment change in independent owner managed high technology firms in great britain there is a growing volume of literature that points to the potential for small technology based firms to achieve substantial employment growth as a direct consequence of such work this sector of any economy has attracted increasing attention from national and local governments concerned with finding ways of revitalising economically deprived localities and creating employment opportunities this paper provides up to date empirical evidence surrounding the ability of small high technology firms to create additional jobs in great britain in addition key founder and business characteristics are isolated which are significantly associated with employment change in growing high technology firms over the 1986 to 1992 period with respect to factors influencing these high levels of employment growth a high firm size in 1986 was found to act positively on employment growth as was a graduate level education for the key founder on the finance side firms which had access to and used a multiplicity of sources of start up finance tended to grow faster futher on the basis of our results we would suggest and recommend a government policy which at the firm level actively encourages high technology firm start ups who record higher rates of survival than firms in more conventional sectors as well as providing support for existing high technology firms who have already demonstrated the inclination and ability to grow in employment size

government r d expenditure and space empirical evidence from five industrialized countries abstract in all industrialized countries several ministries pursue technology policies but only in germany and france are there special ministries for research and technology carrying out explicit technology policy in the usa great britain and france in particular public spending on defense is most relevant technologically in this study this kind of unintended technology policy will be referred to as implicit only a minor part of national r d activity is initiated with regional goals in mind the major part by far aims for national competitiveness the central hypothesis of this paper is that government r d spending generates unintended spatial effects which are far more consequential than the intended ones this study attempts to explain the phenomenon the technology policies of the five major industrialized countries usa germany japan france and great britain will be analyzed and the general tendency of governments to spatially cluster their r d assistance will be discussed the empirical section of this paper focuses on the relationship between government r d spending and employment in the high technology sector

employment changes and input output linkages in key technology industries a comparative analysis bathelt h 1991 employment changes and input output linkages in key technology industries a comparative analysis reg studies 25 31 43 in order to achieve a better understanding of employment changes and input output linkages of key technology firms it was considered necessary to undertake a survey among key technology firms identified by three digit sic codes from five key technology regions in north america the regions of boston massachusetts research triangle north carolina atlanta georgia ottawa ontario and canada s technology triangle around kitchener waterloo ontario were included a total of 160 interviews was conducted among key technology firm executives managers with a rejection rate of only 10 overall significant growth activities were identified in each of the regions resulting in a total of about 40 000 new jobs during the 1980s within the firms surveyed employment in key technology industries was found to be extremely concentrated in large firms and specific secto

a critical exploration of sponsorship infrastructure and new organizations this research focuses on the effects of public sponsorship and regional infrastructure on the emergence and survival of new organizations propositions are tested regarding the joint effects of sponsorship and infrastructure on industrial development in a randomly selected sample of fourteen regions the data include six measures of infrastructure sponsorship as measured by the total dollars spent for economic development and their individual and joint effects on the number of firms and employees in high technology industries for the years 1965 1970 1975 1980 and 1984 this preliminary analysis suggests that variation in the infrastructure and level of sponsorship within a region is related to the birth and survival of new organizations

competition among markets the repeal of rule 390 abstract the new york stock exchange repealed its rule 390 on may 8 2000 the rule disallowed exchange members from trading stocks listed prior to april 26 1979 outside of an exchange we examine the implications of the rule s repeal on the competition for order flow as well as on measures of market quality such as spreads depth and price improvement for stocks impacted by the rule we use a second sample of stocks not subject to rule 390 rule 19c 3 stocks to control for market wide trends we have three important findings 1 quoted spreads decrease by about 18 for rule 390 stocks three times more than the reduction for rule 19c 3 stocks 2 effective spreads do not change and 3 the nyse lost little market share even in smaller trades that were supposed to migrate following the repeal our results indicate a paradigm shift in the way the nyse specialists make a market prior to the repeal the specialists set wider quotes but provided extensive price improvement following the repeal the specialists set tighter quotes with lesser price improvement possibilities we believe that this shift is a strategic response by the specialists to retain market share not by improving market quality but by making order flow internalization and payment for order flow less profitable as a result competition improves market quality but not in the way we would generally expect

exotic betting opportunities pricing policies and the demand for parimutuel horse race wagering parimutuel horse race wagering has been declining steadily for the past several decades this has resulted in lower revenues to state governments recetracks adn horseman to retard or reverse this trend attempts have been made to implement a number of pricing and marketing strategies among these has been the introduction of a variety of exotic wagering opportunities over the years the number and type of exotic wagers offered has been increased furthermore the prices of both straight and exotic wagers have been increased and in addition the price of exotic wagers has generally been set at a higher rate than that for straight wagers the paper examines the effectiveness of these policies

staying in business abstract the paper analyses factors which help a small entrepreneurial firm to stay in business the time scale for the analysis is three years 1985 1988 the main issue that the paper is concerned with is the role of market and financial variables primary source data are used an estimated probit model indicates that for this sample product range and gearing are the key maket and financial variables respectively the greater the product range and the lower the gearing ceteris paribus the better the chances of staying in business

the relationship between firm growth size and age estimates for 100 manufacturing industries this study uses a sample of all firms operating in 100 manufacturing industries to examine some aspects of firm dynamics it finds that firm growth the variability of firm growth and the probability that a firm will fail decrease with firm age it also finds that firm growth decreases at a diminishing rate with firm size even after controlling for the exit of slow growing firms from the sample gibrat s law therefore fails although the severity of the failure decreases with firm size copyright 1987 by blackwell publishing ltd

growth oriented smes in unfavourable regional environments vaessen p and keeble d 1995 growth oriented smes in unfavourable regional environments reg studies 29 489 505 in this paper the research focus is on counterfactual cases of growth oriented smes in peripheral regions of britain scotland northern england wales and merseyside these firms are systematically compared to three control groups made up of growth oriented smes in the south east slow growth firms in the periphery and slow growth firms in the south east apart from some performance measures such as profits and exports three key characteristics of the firms are analysed these are the extent of competition in the markets served levels of innovation and r d and work force and labour market characteristics the analysis is conducted for manufacturing firms and professional and business services separately firms of the research group stand out against the other firms in the sample as businesses with a very favourable r d input output ratio and greater propensity for providing a

why has the investment performance of technology specialist european venture capital funds been so poor abstract this paper seeks to identify and model the key parameters which impact on the commercial performance of a specialist technology focused early stage venture capital fund using both input costs and output expected values data provided by a number of specialist independent venture capital firms a spreadsheet model of a 10 year term fund is developed these figures are used to generate internal rate of return irr and net present value npv performance calculations for the investment commitments of both the institutional limited partners and venture capitalist general partner the generically defined model allows the user to address both conceptual and pragmatic questions regarding the relationship between fund structure and performance the model is further developed to determine the effect on fund performance of two venture capital related indirect state support schemes guarantee and leverage options iterative interrogations of the model demonstrate the sensitivity of economic returns to the scale of the investment activity state supported schemes mitigate but do not remove the negative performance consequences of small fund size a fund with under 15 million us 25 million or ecu21 million under management is of increasing economic vulnerability

transportation costs and product demand wagering on parimutuel horse racing parimutuel horse race wagering is in many respects like any other economic good but it differs in one important way from a vast majority of them given the present market arrangement this good cannot be transported to the consumer instead the consumer must travel to the production site where the good is consumed as it is produced thus transportation costs must play a crucial role in the demand decision for horse race wagering the consumers incur not only out of pocket expenses for travelling but also the cost of the time required to travel to and to consume the product moreover consumers incur differential costs in obtaining the same product because of their locational differences wagering demands are theorized to be the consequence of the choice of utility maximizing consumers which incorporates this special characteristic of the product models for parimutuel horse race wagering are then estimated both for thoroughbred and for harness horse racing in the state of new jersey it is found that bot

new ventures and employment growth abstract the research studied the extent to which the employment size of a new firm is set the start how many subsequently grow and whether those that survive and grow have any identifiable characteristics answers to these questions would help to determine whether future assistance programs aimed at improving the performance of new firms should concentrate on the actual start up process or on the first few years of trading the study was pan of a series conducted in st joseph county indiana a county that had experienced the same economic decline as the rest of the midwest rust belt of the united states it formed part of a community effort named project future to develop a strategy for industrial regeneration the series first examined the characteristics of the new firm population during the years 1976 1982 birley 1985 1986 and two results emerged that were pertinent to this study first 92 of the firms that ceased trading in the first two years were the smaller ones employing less than 20 people second the entrepreneur in the county tended to use only the informal networks of family and friends when gathering the resources of the firm rather than the formal networks of accountants lawyers realtors and banks the question that remained therefore and which formed the basis of this article was the extent to which it was possible to identify and thus focus the strategy upon those firms or industrial sectors that exhibited growth characteristics three research questions were posed how many tended to grow during the first few formative years what was the rate of growth and on what dimensions did it occur and when did growth occur were there differences in the growth of firms of different ages the primary measure of growth used was that of employment for both the start of the firm and at the time the questionnaire was administered 1983 data were collected on the number of owners part time and full time and on the number of employees both part time and full time and on their level of skill financial data included sales level profits level and forecast sales trend indicators of possible change were either an altered legal structure or a move of premises control variables included incubator characteristics industry and supplier and customer geographic base the results of the study show that for the majority of the firms employment size was set at the start no aggregate growth occurred in either full time or part time jobs nor was there any apparent age effect during the six years studied firms that had increased the number of employees were of all ages those firms that grew sales during the early years did so by increasing the customer base and without generating further jobs analyzing growth by industry only one significant result emerged entrepreneurs from smaller companies tended to set up in competition with their incubator firm while those from larger firms tended to start firms with no apparent relationship to their previous employment the major inference from this study is that growth would appear not to be a primary objective of the entrepreneur further research to test these results is clearly necessary should they be replicated elsewhere however future strategies to improve the job generation capabilities of new firms would be most fruitful if directed at building a solid foundation for all firms rather than trying the impossible task of picking winners such assistance can only be provided at the time that the resources necessary for the successful launch of the firm premises equipment orders employees money are being assembled since almost all of these firms are local in nature strategies that devise specific schemes tailored to meet local needs and using local people are most appropriate by contrast the small number of high growth firms should be easily identifiable in the community and assisted individually

quote based competition and trade execution costs in nyse listed stocks abstract this study examines quotations order routing and trade execution costs for seven markets that compete for orders in large capitalization nyse listed stocks the competitiveness of quote updates from each market varies with measures of the profitability of attracting additional order and with volatility and inventory measures the probability of a trade executing on each market increases when the market posts competitive quotes execution costs for non nyse trades when the local market posts competitive non competitive quotes are virtually the same substantially exceed costs for matched nyse trades collectively these results imply a significant degree of quote based competition for order flow and are consistent with off nyse liquidity providers using competitive quotations to signal when they are prepared to give better than normal trade executions

high frequency trading competition we analyze trading dynamics as successive high frequency trading hft firms begin to trade stocks in an equity market entrants compete with incumbents for volume and there is crowding out

competition and collusion in dealer markets this article develops a game theoretic model to analyze market makers intertemporal pricing strategies we show that dealers who adopt noncooperative pricing strategies may set bid ask spreads above competitive levels this form of implicit collusion differs from explicit collusion where dealers cooperate to fix prices price discreteness or asymmetric information are not required for collusion to occur rather institutional arrangements that restrict access to the order flow are important determinants of the ability to collude because they reduce dealers incentives to compete on price public policy efforts to increase interdealer competition should focus on such restrictions

competing with the new york stock exchange research on information economics and securities markets dating back to stigler journal of political economy 69 1961 213 225 journal of business 37 1964 117 142 argues that trading will tend to centralize in major market centers such as the new york stock exchange nyse the nyse s recent mergers with archipelago and euronext bring questions about the viability and effects of competition between stock exchanges to the policy forefront we examine the largely forgotten but unparalleled episode of competition between the nyse and the consolidated stock exchange of new york consolidated from 1885 to 1926 the consolidated averaged 23 of nyse volume for approximately forty years by operating a second market for the most liquid securities that traded on the big board our results suggest that nyse bid ask spreads fell by more than 10 when the consolidated began to trade nyse stocks and subsequently increased when the consolidated ceased operations the empirical analysis suggests that this historical episode of stock market competition improved consumer welfare by an amount equivalent to us 9 6 billion today

does order preferencing matter 1we would like to thank david easley eugene kandel the referee g william schwert the editor participants at the dealer markets conference at ohio state university and an anonymous referee for helpful comments we gratefully acknowledge financial support from the johnson graduate school of management and the national science foundation 1 abstract this study examines how order preferencing affects the competitiveness and efficiency of laboratory financial markets we operationalize preferencing by allowing some dealers to execute a portion of the order flow by matching the most favorable quotes available increasing the proportion of order flow that is preferenced can increase bid ask spreads reduce the informational efficiency of prices and benefit dealers at the expense of liquidity traders preferencing has none of these effects however when two or more dealers are not receiving preferencing orders preferencing may significantly degrade market performance if preferencing arrangements affect all or virtually all dealers

firm size small business presence and sales of innovative products a micro econometric analysis in our generalized tobit analysis we identify a number of variables which have an impact on a firm s innovation output among others we find that larger firms generally have a higher probability of selling some innovative products although this probability increases less than proportionately with firm size given that a firm has some sales of innovative products the share of such products in a firm s total sales tends to be higher in smaller firms moreover a strong small business presence in a sector seems to enhance imitative innovation but has no influence on true innovations whereas market concentration has no influence on innovation output in whatever definition we also find evidence of regional knowledge spill overs furthermore our results are consistent with schmookler s hypothesis that the growth of demand enhances innovation the outcomes about the impact of r d collaboration and technology transfer on innovation remain ambiguous

quotes order flow and price discovery the goal of this article is to examine the impact of 1975 congressional mandate to integrate the trading of nyse listed stocks the conclusions are most of the time the new york stock exchange nyse quote matches or determines the best displayed quote and the nyse is the most frequent initiator of quote changes non nyse markets attract a significant portion of their volume when they are posting inferior bids or offers indicating they obtain order flow for other reasons such as payment for order flow yet when a non nyse market does post a better bid or offer it does attract additional order flow

the demand for casino gaming in this study an econometric model is developed to examine the determinants of the demand for casino gaming specifically the demand for slot machine wagering at riverboats and racinos in addition to examining the effects of traditional demand variables the effect on wagering of variables such as location of a wagering facility and of government restrictions is examined a unique measure of accessibility of market area customers to a facility and to competing facilities was developed the demand for wagering at a facility was found to increase as access by customers in its market area increases and to decrease as access by its customers to competing riverboats racinos or indian casinos increases government restrictions were found to have an adverse effect on wagering at a riverboat on the other hand wagering at a riverboat was found to increase when such restrictions were imposed on competing riverboats the presence of total loss limits and restrictions on boarding times at a riverboat were found

breeding incentive programmes and demand for california thoroughbred racing is there a quality quantity tradeoff both quantity of horses and quality stimulate demand for horse race gambling this paper addresses the potential for a quantity quality tradeoff due to breeding incentives for california thoroughbreds econometric analysis is used to assess the demand for quality and quantity of horses and results suggest the likely net benefit of breeding incentives on the industry at large

third market broker dealers cost competitors or cream skimmers this article compares the bid ask spread for new york stock exchange nyse listed securities before and after a major third market broker dealer bernard l madoff investment securities madoff begins to selectively purchase and execute orders in those securities tests reveal the quoted bid ask spread tightens when madoff enters the market furthermore trading costs as measured by the difference between the transaction price and the midpoint of the contemporaneous bid ask spread do not increase together these results suggest that the adverse selection problem associated with allowing agents to selectively execute orders in exchange listed securities may be economically insignificant

government restrictions and the demand for casino and parimutuel wagering growth in casino wagering in the united states from the mid 1980s forward has been extraordinary over the same period however parimutuel wagering has declined concern for this decline has prompted a number of states to allow parimutuel racetracks to offer casino type gaming devices at their facilities such operations are commonly referred to as racinos if the gaming devices at a racino are under the auspices of a state lottery they are referred to as video lottery terminals vlts separate parimutuel and vlt wagering demand models were estimated for a racino facility a number of restrictions were imposed on the vlt s at the beginning of the study period including number of vlt s type of game and machine maximum bet per play and vlt location the effect of these restrictions on vlt and parimutuel handles was a major focus of this article also of importance was an examination of the relationship between the vlt and parimutuel products relaxation of government restrictions on the vlt s was fo

a catalytic and evolutionary approach to horizontal technology policies htps abstract this paper presents an evolutionary framework for horizontal technology policies htps especially market friendly ones involving project based incentives e g rd and they complement the more specific and well known selective and vertical policies aimed at individual sectors and technologies the analysis is conducted within a learning to innovate framework with emphasis on collective organizational learning search and market building the outcome is a technology policy cycle with distinct infant growth and mature phases proactive generation of a critical mass of projects for efficient learning and diffusion of innovation routines becomes the aim of the infant phase while the mature phase of the policy should focus on policy restructuring including drastic reductions in the support of routi projects and enhanced support of more complex types of innovation the paper also emphasizes the importance of a neutrality component in incentives in the infant phase of increasing selectivity and of building policy capabilities for efficient policy design and implementation

the elasticity of demand for wagering in an unregulated market the literature estimating the take out rate price elasticity of horse race wagering has consistently found values far above one the persistence of these apparently inefficiently high prices can be attributed to institutional factors of the us market where federal taxes are imposed on the total amount wagered and not on the bookmakers revenue by investigating all horse races in new zealand from august 1993 to april 2009 our article is the first one to consider price setting for wagering in an unregulated market where taxes for a monopolistic betting agency are based on revenues in such a setting one would expect elasticities close to one but in all econometric specifications we find values well below one we identify two reasons why higher prices could nevertheless reduce profits cross price elasticities are negative and due to the specific features of parimutuel betting international competitors may only be attracted when take out rates are above a critical threshold

the present status and problems of impact research in technology policy a case study on the federal program for funding research and development personnel in germany abstract the paper illustrates the present status and the problems of impact research through an impact research study of the program of funding research and development personnel in small and meduim sized firms launched by the german federal government this impact analysis study is one of the first of its kind to be conducted in technology policy in the federal republic of germany it is mainly devoted to the following problems acceptance by the firms involved of the funding program relevance of the program to internal decision making processes quantitative and qualitative effects on rd impact on the innovation activities of firms efficient implementation and management of the program impact analyses need to go beyond the framework of a shallow technocratic incidence analysis studying only effects the funding program is assumed to have such solidly based impact analysis is possible only if also the basic aspects underlying the funding programs can be reviewed critically and verified empirically the practical implementation of this criterion is demonstrated by studying the effects of the funding measure on the innovative activities of firms typical problems associated with impact anayses are insufficient access to the data required shortcomings in the evolution of theories and the development of methods weaknesses inherent in the formation of indicators on a sound theoretical basis and with a sufficient degree of operationalization it is shown how far these problems make themselves felt and are partly overcome in this impact analysis in particular the early inclusion of evaluation aspects in the conceptual phase of the funding program has established comparatively favorable conditions for this impact analysis

does the limit order routing decision matter we examine the impact deciding to route limit orders away from the new york stock exchange nyse has on three dimensions of execution quality with methodologies controlling for market conditions and order submission strategies overall differences in limit order execution quality between regional stock exchanges and the nyse are small suggesting that the order routing decision may not affect retail limit order traders substantively conditioning on the distance between the limit order s price and prevailing quotes however reveals systematic differences in execution quality this implies that brokers can strategically route limit orders to improve retail limit order execution quality copyright 2002 oxford university press

space time patterns of entrepreneurial expectations and performance nijkamp p rouwendal j and van der ede m 1993 space time patterns of entrepreneurial expectations and performance reg studies 27 1 11 economic research in the past decade has paid much attention to the motives of entrepreneurial behaviour in a neo schumpeterian spirit entrepreneurial decisions are by definition characterized by uncertainty regarding future events rational expectations theories have become a major new line of thought in dealing with future uncertainty in the literature we find mainly attempts to estimate indirectly relationships on observable behaviour and strategies which are derived from postulated expectations of decision makers normally such expectations are not directly observed in our paper we have analysed a set of empirical regional micro data on entrepreneurial expectations regarding their future decisions whilst for the same period the observed and realized data are also available this allows for a test between expectations and realizations the paper develops

preferencing internalization of order flow and tacit collusion evidence from experiments this paper examines preferencing arrangements and tacit collusion in laboratory asset markets in the experiments dealers may internalize by matching the best quote or by passing orders to the dealer posting the best quote although some markets were highly competitive several markets reached a collusive equilibrium with wide spreads and near complete intemalization of order flow the paper further examines the role of market transparency and passed order flow on quote setting behavior and suggests that these affect the mechanism leading to tacitly collusive equilibria

regularities in the growth of high technology industries in regions abstract this paper aims to identify regularities in the growth of high technology industries in regions or synonymously regional high technology abbreviated as rht hereafter re viewing past studies a number of hypotheses as to what affects the growth of rht are presented and examined by various statistical methods a hypothesis on the self reproductive effect is supported most strongly the relationship of the self reproductive effect with the cumulative advantage effect is discussed as policy implications of the analyses it is advised for local governments 1 to base short term rht policies on the present state of rht or more specifically to expand currently forte fields of ht toward the specialisatin among regions instead of the current trend that every region follows the same rht policy and 2 to maintain or improve intellectual potential in the regions for long term rht policies or more specifically to improve middle education and to form a regional cultural policy rather than costly investment for science technical universities or public r d institutes

an empirical study of the effect of rule 19c 3 the extent to which all orders for common stocks should be consolidated that is sent to a single marketplace and the effect of consolidation on competition in the securities markets have been the subject of much debate in the past quarter century this debate has focused on offboard trading restrictions for member firms for example new york stock exchange nyse rule 390 and american stock exchange amex rule 5 and on the institution of appropriate intermarket linkages for example the consolidated transactions tape the consolidated quotations system and the intermarket trading system while the securities and exchange commission sec has attempted to promote competition in the securities markets the results of its efforts are uncertain consequently the consolidation fragmentation debate continues in this article we examine a very specific case in which the sec tried to increase the degree of competition in market making rule 19c 3 allowed off board trading of nyse listed stocks by exchange members as we will show this rule had both beneficial and adverse effects section i describes rule 19c 3 the environment which led to its introduction and the controversy surrounding it in section ii we examine the effect of rule 19c 3 on over the counter otc market making activity we find that for about 34 percent of the eligible stocks the introduction of exchange member market makers increased the total level and also the continuity of otc market making activity in section iii we find that rule 19c 3 has had a statistically significant effect in reducing percentage bidask spreads which ceteris paribus is desirable in section iv our analysis shows that rule 19c 3 has led to an increase in returns variance which ceteris paribus is undesirable finally our summary and conclusion are presented in section v

parimutuel wagering and video gaming a racetrack portfolio parimutuel wagering has been declining for several decades due in part to increased competition from state lotteries and casino gaming in recent years an attempt has been made to integrate video lottery terminal vlt gaming into a parimutuel racetrack s product portfolio daily data are used to develop product demand equations for parimutuel horse race wagering and video lottery gaming at a throughbred racetrack it is found that introduction of vlts into the product mix results in decreased parimutuel wagering and revenues however the additional revenue generated from the vlts is found to more than offset the decline in parimutuel revenue and the increased expense associated with the vlts given that a sufficient number of terminals are made available when revenue from the combined parimutuel and vlt gaming product increases if the respective shares of the vlt revenue distributed to the racetrack to the horsemen who race horses at the racetrack and to the government are the same as their distri

characteristics distinguishing high growth ventures abstract the purpose of this study is to define characteristics that distinguish high growth from low growth companies in this examination particular emphasis is focused on characteristics that lend themselves to objective evalnation in previous studies great emphasis has been placed upon characteristics related to the personal capabilities of entrepreneurs although such characteristics are widely accepted as being of great importance they are subjective and evaluated only with great difficulty two pools of companies were examined in the course of this study each company responded to a comprehensive questionnaire and provided longitudinal data related to a wide variety of operating characteristics the first pool of companies the reynolds data base consisted of relatively young small companies the second pool price waterhouse clients included companies that were generally larger and more mature than those in the reynolds data base the distinction between the samples permitted us to consider how the set of growth characteristics varies at different stages in a company s development discriminant analysis of both samples yielded the following insights 1 in both pools it was important that management have substantial industry experience no other characteristic related to the experience or capability of the entrepreneur or entrepreneurial team was identified as distinguishing between high and low growth 2 an interesting strategic profile became apparent based upon the examination of the two groups in the reynolds sample the high growth companies were more focused than their low growth counterparts with more revenue being generated by a single product conversely in the price waterhouse sample the high growth companies displayed a greater propensity for market and product diversification than did the slow growth companies in that pool these results seem logical in that smaller companies have fewer resources and therefore may perform better by focusing their effort conversely more mature companies need to expand growth prospects and hedge against overreliance on any particular opportunity 3 growth companies in the reynolds data base ran leaner than the low growth companies in that sample with fewer managers slimmer payrolls as a percentage of sales and more productive uses of assets growth companies in the price waterhouse sample were more likely to have balanced management teams than the price waterhouse slow growers leanness was not a discriminating variable in this group as one might expect more mature companies would require a broader array of talents and would be better able to afford balanced teams 4 rapid market growth and the ability to develop close customer contacts were identified as discriminating characteristics in the price waterhouse sample neither were identified in the reynolds data base companies in the reynolds data base were not asked to report on market growth and were probably too young to have established much in the way of customer relationships these companies did however report a greater utilization of advanced technology

an analysis of exotic wagers in a parimutuel setting in us horse racing there is increasing emphasis placed on the creation of exotic wagers those bets beyond the standard win place and show bets on multiple races that typically do not result in a winner for several days are of particular interest to the industry the growing carryover pool helps attract people to the racetrack in a way similar to a growing carryover in the lottery attracts more people to participate this article examines several multiple race bets and provides a framework for their comparative analysis the results of the analysis will help racetrack management decide if a proposed bet is appropriate for their particular track this analysis shows a tradeoff between the difficulty of winning the bet versus the amount of the ultimate payoff if a bet is too easy to win then the carryover pool will never reach an attractive level if the bet is too difficult to win then the bettors will lose interest before the carryover pool is able to grow sufficiently large the amount of money wa

continued entrepreneurship ability need and opportunity as determinants of small firm growth the purpose of this research was to enhance our understanding of the growth or non growth of individual small businesses growth here being regarded as an indication of continued entrepreneurship taken together earlier studies have suggested a very large number of determinants of entrepreneurship and growth yet no very strong explanatory factors emerge it is argued here that all of the specific lowlevel explanatory variables that have previously been used can be regarded as aspects of either of three major determinants ability need and opportunity a model based on these three major factors is developed and the results of previous studies are reviewed in the light of this more abstract model in the model objective factors are separated from their subjective counterparts and it is suggested that subjective factors or reality as perceived influence growth motivation and direct behavior although objective factors only partly determine subjective perceptions they can have important direct effects on outcomes i e actual growth using survey data from more than 400 swedish small firms and applying partial least squares analysis which is a technique for analyzing structural relations among indirectly measured concepts the parameters of the model are empirically estimated the results largely lend support for the usefulness of the model more specifically the analyses suggest that 1 objective measures of ability need and opportunity can explain a substantial share of the variation in actual historical growth rates 2 objective and subjective measures of these three factors can explain a substantial share of the variation in growth motivation 3 in both cases need related issues appear more important than ability and opportunity which would mean that satiation is the major reason why small firms stop growing 4 subjective factors contain growth relevant information that is not captured by objective measures 5 direct effects of objective variables on actual growth can be traced 6 some relations are consistent whereas others seem to vary considerably across industries and 7 while the model largely gains support the analyses also suggest some additional relations that are theoretically reasonable and may deserve consideration in future studies finally it is argued that for the advancement of entrepreneurship research conceptual models at a higher level of abstraction like the one developed in this article are needed such models can add meaning to empirical facts and have the virtue of reducing complexity without assuming away too many potential contingencies it is also suggested that entrepreneurship is a matter of degree and can show itself in different ways such as start up growth innovation etc in practice the sole measure of entrepreneurship has often been a person s current status as being or not being the founder or owner manager of a small firm in future studies the use of a composite measure of the degree of entrepreneurship may prove more fruitful than the comparison of characteristics approach has been

strategies of high performing new and small firms a reexamination of the niche concept abstract entrepreneurs seeking to position new or small firms in industries populated by well established competitors are frequently advised to seek the protection of a market niche there shielded by market characteristics which render the niche uninteresting to larger rivals small firms are urged to compete at the fringe of the market this article challenges this conventional wisdom citing industry and firm characteristics which under certain conditions create opportunities for successful direct competition by some small or new firms against much larger and established competitors however the authors caution that the conditions which created the opportunity may erode in time rendering the successful challenger vulnerable either to retaliation by the larger firm or challenge from subsequent entrants examples of successful direct confrontation by relatively small competitors are drawn from mature low tech industries a rapidly growing high tech industry and the service sector

make take structure and market quality evidence from the u s options markets we examine the make take structure which compensates liquidity suppliers and charges liquidity demanders in the options markets where it competes with a traditional structure that uses payments for order flow using the introduction of the make take structure as an event we find that execution costs including fees for liquidity demanders decline after the event for the affected options that the make take structure encourages market makers to improve quoted prices and that brokers change their routing behavior to include fees in the routing decision the decline in execution costs is consistent with the benefits of the increased quote competition from the make take structure prevailing over the fees the structure charges to liquidity demanders this paper was accepted by wei jiang finance

the geography of innovation in small and medium sized firms in west germany since the 1980s a more micro economic oriented view has settled the dispute between macro economic theories over the causes of regional development differentiated studies revealed an unequal spatial distribution of r d laboratories and innovating firms and furthermore it was discovered that the innovation behaviour of firms differs between types of regions however these studies still left several questions unanswered

recent results in measuring innovation output abstract the fraunhofer institut fur systemtechnik und innovationsforschung isi is at present engaged in evaluating a number of technology policy programs designed to promote research development and innovation in small and medium sized firms these studies try to determine the extent to which these programmes have an impact upon the innovative activities of firms in this connection it was also attempted to measure the innovation output the level of innovation of a firm is innovation ouput the level of innovation of a firm is procedure involves a number of problems self assessment of firms in view of insufficient market transparency distortion due to self portraits reflecting the firms own interests we tried to mitigate such distortions by two approaches firstly firms were asked for their technologically new products the term new being applied a to the firm and b to the areas of product application as a result of this two tier procedure firms supplied rather realistic answers secondly supplementary questions were asked about sales figures the competitive technological situation nationally and internationally expenditure on r d patents stages of innovation aims of innovation etc the paper presents the results obtained to date on the innovation output of firms within the framework of an evaluation of the largest programme at present devoted to promoting r d and innovation in small and medium sized firms the results are based on a representative sample of approximately 4 500 small and medium sized firms up to 1 00 employees with r d activities in the federal republic of germany

payments for order flow on nasdaq we present a model of nasdaq that includes the two ways in which marketmakers compete for order f low quotes and direct payments brokers in our model can execute small trades through a computerized system preferencing arrangements with marketmakers or vertical integration into market making the comparative statics in our model differ from those of the traditional model of dealer markets which does not capture important institutional features of nasdaq we also show that the empirical evidence is inconsistent with the traditional model which suggests that preferencing and vertical integration are important components in understanding nasdaq

impacts of government incentives towards industrial innovation an analysis of the federal programme funding r d personnel in the federal republic of germany abstract against a background of deteriorating national and international economic conditions increasing importance is being attached by political administrations to the innovative capacities of small and medium sized firms with respect to the employment situation and to international competitiveness consequently government support of research development and innovation in these companies has taken a marked upward turn since the late seventies both in the federal republic of germany and in other industrialized western countries the actual impacts of some of these programmes are at present under study by the fraunhofer institut fur systemtechnik und innovationsforschung isi this paper is an outline of the results of a study of the largest current programme funding r d and innovation in small and medium sized firms by offering grants towards the costs of r d personnel the impact analysis is being conducted in two rounds the first round of studies which is the subject of this report took place in 1980 1981 and was designed to examine the discernible short term effects and characteristics of the programme the second round is planned for 1983 1984 as a summary of the impacts of the programme over the first five years of its term of effect the subjects of investigation are the quantitative and qualitative changes in r d activities caused by the programme in the firms under study and the contribution the programme can make to strengthen innovative and competitive capabilities the conditions underlying the programme are reviewed critically especially in order to see whether the barriers to innovation and the weak spots assumed did in fact exist in the firms examined the administrative management free rider effects and factors restricting impacts are investigated along with such questions as whether firms located in peripheral regions were reached by the programme to the same extent as firms in conurbation areas furthermore the reasons for non participation of firms are analyzed the example of the federal programme funding r d personnel thus is used in this impact analysis in an attempt to provide empirical data on the significance the range and the limits of such a government instrument promoting r d and innovation in small and medium sized firms

the evolution of new technology ventures over 20 years patterns of failure merger and survival abstract relatively few studies of entrepreneurs have examined the evolution of business ventures over a long period of time this paper summarizes the fate of 250 technology based companies founded in northern california during the 1960s the three outcomes studied are failure merger and continued operation in addition interviews with a dozen founders of firms that survived the entire 20 year period shed light on the founders own interpretations of why they succeeded by 1988 50 of the firms in the sample had failed 32 had merged or been acquired and 18 had survived as independent businesses there was a steady and occasionally sharp erosion in the number of survivors throughout the period a striking finding was that fully 78 of the surviving firms in 1988 still had one or more of the original founders in place among the factors predicting failure were product market problems such as product timing difficulties problems of product design or inappropriate distribution channels financial difficulties such as initial undercapitalization or problems with the venture capital relationship and managerial key employee problems such as imbalance in the management team or succumbing to the trappings of success the firms in the data base which were subsequently merged or acquired exhibited a number of macro and micro characteristics from a macro point of view the merger acquisition rates seem to have been lower than the national rate in the late 1960s higher in the later 1970s and similar in the 1980s from a micro point of view discernible patterns existed among acquired firms such as size and year since founding interviews with surviving founders suggested that relations between founders banking and credit problems attempted takeovers and international expansion were among the key crises that had to be overcome by the surviving firms of particular interest was the diversity of motives for founding the business reported by the survivors in addition to the desire to achieve wealth or to be independent we heard mentioned loyalty to a product or technology which would otherwise disappear and commitment to satisfying a customer group also noted were founders who indicated that their career as an entrepreneur came about primarily by accident five themes emerging from the interviews were characterized by the surviving founders as business lessons learned 1 know yourself 2 love your product 3 honor your customer 4 treat your people well and 5 keep your integrity the interviews in conjunction with the data on surviving firms are useful in expanding our understanding of the type of person that starts a business and why some start ups succeed over the long term particularly noteworthy is the number affirms who survived without ever growing larger theories of long term entrepreneurial success may need to take risk aversion into account