nep-knm New Economics Papers
on Knowledge Management and Knowledge Economy
Issue of 2007‒04‒09
thirteen papers chosen by
Emanuele Canegrati
Catholic University of the Sacred Heart

  1. Knowledge Spillover Agents and Regional Development By Michaela Trippl; Gunther Maier
  2. Knowledge Codification and Endogenous Growth By Maik T. Schneider
  3. The Role of Virtual Design Tools on Knowledge Replication and Recombination: An Empirical Investigation. By Antonino Vaccaro; Stefano Brusoni; Francisco Veloso
  4. Multinational firms, global value chains and the organization of technology transfer By Federica Saliola; Antonello Zanfei
  5. Information technology as knowledge management enabler in product development. An empirical evidence By ELENA REVILLA
  6. The Persistence of Differences in Productivity, Wages, Skill Mixes and Profits Between Firms By Katsuya Takii
  7. Business R&D and the Interplay of R&D Subsidies and Market Uncertainty By Czarnitzki, Dirk; Toole, Andrew A.
  8. Topologies on Type By Eddie Dekel; Drew Fudenberg
  9. Opening Services Markets within Europe: Modelling Foreign Establishments in a CGE Framework By Arjan Lejour; Hugo Rojas-Romagosa; Gerard Verweij
  10. Influence of structure and ownership of lignite opencast mine and power plant bilateral monopoly on its operation By Jurdziak, Leszek
  11. Perfect Competition By M. Ali Khan
  12. Size and sophistication: the two faces of demand. By Marco Guerzoni
  13. E-learning as internationalization strategy in higher education: Lecturer’s and student’s perspective By Mihhailova, Gerda

  1. By: Michaela Trippl; Gunther Maier
    Date: 2007
  2. By: Maik T. Schneider (Center of Economic Research (CER-ETH) at ETH Zurich)
    Abstract: The usual models of endogenous growth treat knowledge codification as a byproduct of R&D and as costless. In contrast to this, one can observe great efforts of private firms for the purposeful codification of knowledge. We incorporate costly knowledge codification in an overlapping generations framework of endogenous growth and show that the steady-state growth rate of capital being higher than that of the knowledge stock is a sufficient condition for knowledge codification. With decreasing codification costs, every overlapping generations economy will be codifying in the long run if the rate at which the costs decline is higher than or equal to the steady-state growth rate of knowledge.
    Keywords: Knowledge, Human Capital, Knowledge Codification, Economic Growth
    JEL: O11 O30 O41
    Date: 2007–02
  3. By: Antonino Vaccaro (Instituto Superior Técnico of Lisbon, Portugal and Department of Engineering and Public Policy Carnegie Mellon University, USA.); Stefano Brusoni (CESPRI & CRORA, Bocconi University, Milan, Italy.); Francisco Veloso (Department of Engineering and Public Policy, Carnegie Mellon University, USA and Universidade Católica Portuguesa – FCEE, Portugual.)
    Abstract: This paper analyzes the contribution of Virtual Design Tools (VDTs) to the processes of knowledge replication and recombination in the context of product innovation. On the basis of an in depth case study of two automotive firms engaged in two comparable new product development projects, we show that knowledge replication can occur in two distinct ways, namely through simplification and deepening of existing knowledge. By knowledge simplification we mean the selection and isolation of a specific part of the body of technological knowledge associated with the architectural functions of a multi- component system. By knowledge deepening we mean the decomposition of a knowledge packet in units of smaller dimension. We argue that the processes of knowledge simplification and knowledge deepening drive to very different innovation approaches that in turn have different competitive implications for small and large firms.
    Keywords: Virtual Design Tools, Innovation, Modularity, Knowledge Replication, Knowledge Recombination.
    JEL: O32 L25 L62
    Date: 2007–02
  4. By: Federica Saliola (The World Bank); Antonello Zanfei (Department of Economics, Università di Urbino "Carlo Bo")
    Abstract: This paper combines insights from different streams of literature to develop a more comprehensive framework for the analysis of technology transfer via value chain relationships. We integrate the existing literature in three ways. First, we consider value chain relationships as a multi-facet process of interaction between buyers and suppliers, involving different degrees of knowledge transmission and development. Second, we assess whether and to what extent value chain relationships are associated with the presence of multinationals and with their embeddedness in the host economy. Third, we take into account the capabilities of local firms to handle the technology as a factor influencing knowledge transfer through value chain relationships. Using data on 1385 firms active in Thailand in 2001-2003, we apply a multinomial logit model to test how the nature and intensity of multinational presence and the competencies of local firms affect the organisation of international technology transfer. We find that knowledge intensive relationships, which are characterized by a significant transmission of technology along the value chains, are positively associated with the presence of global buyers in the local market, with the efforts of MNCs to adapt technology to local contexts, and with the technical capabilities of domestic firms. By contrast, the age of subsidiaries and the share of inputs purchased locally appear to increase the likelihood of value chain relationships with a lower technological profile. Key words: Global value chain, multinationals, technology transfer, knowledge spillovers
    Keywords: Global value chain, multinationals, technology transfer, knowledge spillovers
    JEL: F10 F23 O33
    Date: 2007–03
  5. By: ELENA REVILLA (Instituto de Empresa)
    Abstract: Product development is a knowledge intensive process. It is widely recognized as a mechanism that produces firms to learn, to enter new technological areas, and to deal more effectively with market uncertainty. Since technology management has become ingrained within the field of knowledge management, product development has been viewed and studied from a knowledge management perspective. In this context, this study focuses on a specific knowledge management initiative, information technology (IT). It empirically explores how IT influences on knowledge based capabilities of product development -specifically knowledge exploitation and exploration.
    Keywords: Information technology, Knowledge management, Product development
    Date: 2007–03
  6. By: Katsuya Takii (Osaka School of International Public Policy, Osaka University)
    Abstract: In this paper, we construct a dynamic assignment model that can provide a unified explanation of several observed features of persistent differences in productivity, wages, skill mixes and profits between firms. Large organization capital (high firm-specific knowledge) attracts skilled workers, who can create further organization capital in the future. This positive feedback brings about persistent differences in these variables. We also analyze how the real and perceived values of a firm's organization capital interactively influence persistence. We estimate parameters and simulate the model. Our results show that a positive assignment mechanism accounts for a large part of the observed persistence.
    Keywords: Organization Capital, Assignment, Persistence
    JEL: J24 L25
    Date: 2007–03
  7. By: Czarnitzki, Dirk; Toole, Andrew A.
    Abstract: The literature suggests that public research and development (R&D) subsidies may reduce market failures affecting private R&D investment caused by incomplete appropriability of knowledge and financial constraints due capital market imperfections. Drawing on the theory of investment under uncertainty, this paper argues that public R&D subsidies increase business R&D investment through an additional mechanism – mitigating the effects of market uncertainty on R&D investment in markets for new products. Using a sample of German manufacturing firms, we show that market uncertainty indeed reduces R&D investment, and that R&D subsidies mitigate the effect of uncertainty. Our findings suggest that public policies aimed at increasing business R&D investment can achieve this objective by reducing the degree of uncertainty in the demand for innovative products.
    Keywords: Real Options Theory, Uncertainty, R&D, Censored Regression
    JEL: C25 O31 O33
    Date: 2006
  8. By: Eddie Dekel; Drew Fudenberg
    Abstract: We define and analyze a "strategic topology" on types in the Harsanyi-Mertens- Zamir universal type space, where two types are close if their strategic behavior is similar in all strategic situations. For a fixed game and action define the distance be- tween a pair of types as the di¤erence between the smallest " for which the action is " interim correlated rationalizable. We define a strategic topology in which a sequence of types converges if and only if this distance tends to zero for any action and game. Thus a sequence of types converges in the strategic topology if that smallest " does not jump either up or down in the limit. As applied to sequences, the upper-semicontinuity prop- erty is equivalent to convergence in the product topology, but the lower-semicontinuity property is a strictly stronger requirement, as shown by the electronic mail game. In the strategic topology, the set of "finite types" (types describable by finite type spaces) is dense but the set of finite common-prior types is not.
    Keywords: rationalizability, incomplete informa- tion, common knowledge, universal type space, strategic topology.
    JEL: C70 C72
  9. By: Arjan Lejour; Hugo Rojas-Romagosa; Gerard Verweij
    Abstract: In services, the activities of foreign affiliates often exceed the value of cross-border trade. A complete analysis of services liberalisation therefore requires the modelling of FDI. This paper presents the treatment of FDI in our CGE model WorldScan based on the ideas of Petri (1997) and Markusen (2002). They assume that firms establishing affiliates abroad also transfer firmspecific knowledge. Consequently, capital and products differ from existing capital and products in the host country. As an illustration, we apply this model to assess the proposals of the European Commission to open up services markets. FDI in services could increase by 20% to 35%. However, the overall economic impact is limited. Our assessment suggests that GDP in the EU25 could increase up to 0.4%. These effects could be up to 0.8% higher if foreign capital also increases the overall productivity of the services sector.
    Keywords: FDI; CGE models; trade in services; economic integration
    JEL: F23 C68 F15
    Date: 2007–03
  10. By: Jurdziak, Leszek
    Abstract: Lignite mine and power plant can operate as two separate entities, two entities in one holding or joint venture and as the one vertically integrated energy producer. Each of these solutions has the influence on operation of this tandem including realization of its individual and joint objectives, price negotiation, transactional costs, irreversible investments (sunk costs), different access to information (asymmetric information), cooperation or rivalry, possibility of opportunistic behaviour and other threats, which can be used against the second side. An attempt has been made to show these problems from the point of view of economic effectiveness based on a bilateral monopoly (BM) model and game theory approach with usage of pit optimisation methods. Advantages and disadvantages of different solutions have been presented as well as rational incentives to vertical integration due to inherent conflict of individual and group rationality in BM. This conflict of interest can lead to Pareto sub optimal solution in case of lack of cooperation between both sides. Concentration on lignite price can lead to waste of potential profit and decrease of mineable reserves - excavation of smaller pit, which is optimal only to the mine but not to the whole BM.
    Keywords: bilateral monopoly; lignite mine; lignite power plant; price negotitiation; vertical structure; vertical integration; lignite price; opportunism; asymmetry of information; deposit knowledge; ownership structure; cooperative game; zero sum game; non-zero suma game; Pareto optimality; profit division; individual rationality; group rationality; long-term contract
    JEL: L22 L72 L44 Q31 L14 D43 Q41 D4 C72 L13 L24 L10 C78 L42 L0 D82 L94 D86 C71 C7 L25 Q32
    Date: 2006
  11. By: M. Ali Khan (The Johns Hopkins University, Baltimore, USA)
    Abstract: In his 1987 entry on ‘Perfect Competition’ in The New Palgrave, the author reviewed the question of the perfectness of perfect competition, and gave four alternative formalisations rooted in the so-called Arrow-Debreu-Mckenzie model. That entry is now updated for the second edition to include work done on the subject during the last twenty years. A fresh assessment of this literature is offered, one that emphasises the independence assumption whereby individual agents are not related except through the price system. And it highlights a ‘linguistic turn’ whereby Hayek’s two fundamental papers on ‘division of knowledge’ are seen to have devastating consequences for this research programme
    Keywords: Allocation of Resources, Perfect Competition, Exchange Economy
    JEL: D00
    Date: 2007
  12. By: Marco Guerzoni (DFG Doctoral Research Programm, Friedrich Schiller University, Jena, Germany.)
    Abstract: Innovation is widely acknowledged as one of the main forces driving economic growth. However, despite our significant knowledge of the technological determinants of innovation processes, an adequate understanding of demand side factors is still lacking. This paper aims to survey the literature on the influence of demand upon innovation. Although theories and empirical studies on this issue can be found at various points in economics, management theory, and marketing, in each context, the concept of demand has been understood in different ways and both different methodologies and units of analysis have been employed. This Babel of languages makes it difficult to find a common thread among the different contributions and boosts the perception of a certain disregard of the demand side. This paper reviews the most important literature on the topic with two aims: one is to give an overall picture on how innovation studies have handled the concept of demand; the other is to suggest a framework that includes the main insights from previous contributions. More than an attempt to come out with a general theory on demand, it constitutes a suggestion of a common language.
    Keywords: Innovation, Demand, Variety.
    JEL: O14 O31 N71 N72
    Date: 2007–01
  13. By: Mihhailova, Gerda
    Abstract: Purpose – Use of e-learning opens up a whole new range of business expansion and internationalization opportunities for many companies including higher education institutions. The paper seeks to explore the challenges a business college may encounter using e-learning as internationalization strategy. E-learning-related problems are analyzed from two main internal interest groups’ point of view – lecturers and students. The aim of the case study presented in the paper is to find out what are the major challenges from a student and academic personnel perspective using e-learning. This kind of analyses should be the first step introducing e-learning as a strategic tool for business expansion. Design/methodology/approach – Questionnaires, in-depth interviewing and semi-structured group interviews were used to find answers to the posed research questions. Research took place in two phases. In phase one, two types of questionnaires were distributed – Type A to lecturers (ten respondents) and Type B to students (115 respondents), Both types were constructed by the author. In phase two, two in-depth interviews and two semi-structured group interviews were conducted (ten students in one group of interview, eight lecturers in the second group of interview). Findings – The main problem areas for lecturers related to e-learning are: lack of time, lack of interest/motivation, lack of co-operation, compensation system does not take into account the specifics of e-learning and lecturers are concerned about the quality of teaching in a virtual environment. The most problematic of them appear to be lack of time and inappropriate compensation system. Students appear to have interest in e-courses, but the level of knowledge regarding specifics of web-based learning as well as about e-courses offered was unexpectedly low. This is an especially problematic case as open university students were the main target group for whom the e-courses were designed in the first place. Research limitations/implications – The research is based on one case study and thus the conclusions made may not exactly reflect the situation in all universities of Estonia. But due to the shared economic, cultural and historical background, at least to some extent the case study reflects the main problem areas of all Estonian universities using e-learning. Originality/value – The originality of the paper stems from an interdisciplinary approach to e-learning – use of e-learning as a tool for internationalization. The paper presents results of a case study research, conducted in an East-European business college and the results of the study are discussed in respect of historical, social and economic specifics of Estonia.
    Keywords: E-learning; Higher education; Students; Academic staff; Estonia
    JEL: M1 M10 M12
    Date: 2005

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