nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2006‒09‒23
two papers chosen by
Bernardo Batiz-Lazo
Bristol Business School

  1. Industry Competition and Total Factor Productivity Growth By Michael D. Giandrea
  2. Contacts, Social Capital and Market Institutions - A Theory of Development By Paul Frijters; Dirk Bezemer; Uwe Dulleck

  1. By: Michael D. Giandrea (U.S. Bureau of Labor Statistics)
    Abstract: This paper analyzes the impact of changes in the competitive market structure on an industry's total factor productivity (TFP) growth. The impact of horizontal mergers on TFP growth is of particular interest. The number of proposed horizontal mergers among U.S. firms totaled 28,818 from 1996 to 2005, while the number of U.S. Department of Justice investigations of proposed mergers totaled 1,303 during the same time period. The impact of mergers upon total factor productivity growth is rightly a topic for consideration. Merger participants routinely claim that mergers will result in welfare improving efficiency gains. If true, these gains should translate into increased TFP growth. This paper estimates this effect and others after presenting a model of TFP growth as a function of changes in the competitive market structure of an industry, changes in production diversification measured at the establishment level, and changes in output per establishment and the number of establishments. Mergers are found to have a positive impact upon TFP growth, accounting for 0.36 percentage points of total factor productivity growth between census years.
    Keywords: Productivity Growth, Mergers, Competition
    JEL: D2 L1 L4
    Date: 2006–09
  2. By: Paul Frijters; Dirk Bezemer; Uwe Dulleck (School of Economics and Finance, Queensland University of Technology)
    Abstract: We propose an endogenous growth model, that incorporates both an individual and a communal aspect of Social Capital. In our model, output increases with the stock of business contacts (Relational Capital as one aspect of Social Capital). The modelling of contact creation is based on matching theory. The cost of creating contacts decreases with more Community level Social Capital and Market Institutions.
    Keywords: Social Capital, Endogenous Growth, Relational Capital, Development, Economic Systems
    Date: 2005

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