nep-ino New Economics Papers
on Innovation
Issue of 2005‒03‒06
six papers chosen by
Koen Frenken
Universiteit Utrecht

  1. Agent-Based Modelling: A Methodology for Neo-Schumpeterian Economics By Andreas Pyka; Giorgio Fagiolo
  2. Outsourcing and Technological Change By Ann Bartel; Saul Lach; Nachum Sicherman
  3. The evolutionary theory of the firm: Routines, complexity and change By Werner Hölzl
  4. Turbulence, Inequality, and Cheap Steel By Peter B. Meyer
  5. Returning to the Returns to Computer Use By Sabrina Wulff Pabilonia; Cindy Zoghi
  6. The Geography of Innovation Commercialization in the United States During the 1990s By Joshua L. Rosenbloom

  1. By: Andreas Pyka (University of Augsburg, Department of Economics); Giorgio Fagiolo (Laboratory of Economics and Management, Pisa (Italy))
    Abstract: Modellers have had to wrestle with an unavoidable trade-off between the demand of a general theoretical approach and the descriptive accuracy required to model a particular phenomenon. A new class of simulation models has shown to be well adapted to this challenge, basically by shifting outwards this trade-off: So-called agent-based models (ABMs henceforth) are increasingly used for the modelling of socio-economic developments. Our paper deals with the new requirements for modelling entailed by the necessity to focus on qualitative developments, pattern formation, etc. which is generally highlighted within Neo-Schumpeterian Economics and the possibilities given by ABMs.
    Keywords: Simulation, Neo-Schumpeterian Economics, Agents
    JEL: B52 O30
    Date: 2005–02
  2. By: Ann Bartel; Saul Lach; Nachum Sicherman
    Abstract: In this paper we argue that an important source of the recent increase in outsourcing is the computer and information technology revolution, characterized by increased rates of technological change. Our model shows that an increase in the pace of technological change increases outsourcing because it allows firms to use services based on leading edge technologies without incurring the sunk costs of adopting these new technologies. In addition, firms using more IT-intensive technologies face lower outsourcing costs of IT-based services generating a positive correlation between the IT level of the user and its outsourcing share of IT-based services. This implication is verified in the data.
    JEL: M55 O33
    Date: 2005–02
  3. By: Werner Hölzl (Vienna University of Economics & B.A.)
    Abstract: This paper provides an overview on the evolutionary theory of the firm. The specific feature of the evolutionary approach is that it explains the adaptive behaviors of firms through the tension between innovation and selection. It is suggested that the evolutionary theory can provide a useful basis for a theory of the firm which is concerned with change over time and development.
    Keywords: theory of the firm, complexity, routines, change of routines
    Date: 2005–02
  4. By: Peter B. Meyer (U.S. Bureau of Labor Statistics)
    Abstract: Iron and steel production grew dramatically in the U.S. when mass production technologies for steel were adopted in the 1860s. According to new measures presented in this study, earnings inequality rose within the iron and steel industries about 1870, perhaps because technological uncertainty led to gambles and turbulence. Firms made a variety of technological choices and began formal research and development. Professional associations and journals for mechanical engineers and chemists appeared. A national market replaced local markets for iron and steel. An industrial union replaced craft unions. As new ore sources and cheap water transportation were introduced, new plants along the Great Lakes outcompeted existing plants elsewhere. Because new iron and steel plants in the 1870s were larger than any U.S. plants had ever been, cost accounting appeared in the industry and grew in importance. Uncertainty explains the rise in inequality better than a skill bias account, according to which differences among individuals generate greater differences in wages. Analogous issues of inequality come up with respect to recent information technology.
    Keywords: technological change, Bessemer steel, technological uncertainty, turbulence, inequality, innovation
    JEL: J31 N11 N10 O33
    Date: 2005–02
  5. By: Sabrina Wulff Pabilonia (U.S. Bureau of Labor Statistics); Cindy Zoghi (U.S. Bureau of Labor Statistics)
    Abstract: This paper re-examines the returns to computer use using a new matched workplace-employee data from Canada. We control for potential selection using instrumental variables. Results suggest that it is not merely the employee having a computer on his desk, but rather having complementary computer skills, that causes wages to increase.
    Keywords: computers, computer skills, human capital, technology
    JEL: J31 O30
    Date: 2005–02
  6. By: Joshua L. Rosenbloom (Department of Finance, The University of Kansas)
    Abstract: This paper analyzes the location and interrelationship of three measures of innovation commercialization across the 50 largest metropolitan areas in the United States and estimates a model of the factors explaining variations in the location of innovation commercialization. In general innovation commercialization tends to be highly geographically concentrated, suggesting the presence of substantial external economies in these functions. Beyond these scale effects, however, I find that the university science and engineering capacity and local patenting activity both help to account for intercity differences in the level of innovation commercialization activity.
    Date: 2005–01

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