nep-knm New Economics Papers
on Knowledge Management and Knowledge Economy
Issue of 2008‒06‒21
seventeen papers chosen by
Laura Stefanescu
European Research Centre of Managerial Studies in Business Administration

  1. Leadership in online knowledge networks : challenges and coping strategies in a network of practice By Agterberg, M.; Huysman, M.; Hooff, B. van den
  2. Open and closed industry clusters: The social structure of innovation By Manuel Portugal Ferreira; Fernando A. Ribeiro Serra
  3. Knowledge, understanding and the dynamics of medical innovation By Ramlogan, Ronnie; Consoli, Davide
  4. Innovation driven sectoral shocks and aggregate city cycles By Andrea R. Lamorgese
  5. Keeping the wheels turning : multi-level dynamics in organizing networks of practice By Agterberg, M.; Hooff, B. van den; Huysman, M.
  6. The Role of Information in the Take-up of Student Loans By Adam Booij; Edwin Leuven; Hessel Oosterbeek
  7. How does University Collaboration Contribute to Successful R&D Management? By Broström, Anders; Lööf, Hans
  8. Building institutions for growth and human development: an economic perspective applied to the transitional countries of Europe and CIS By Zeghni, Sylvain; Fabry, Nathalie
  9. When Does a Developing Country Use New Technologies? By Olivier Bruno; Cuong Le Van; Benoit Masquin
  10. Cumulative Innovation, Experimentation and the Hold-Up Problem By Pollock, R.
  11. Transaction Costs, Information Technology and Development By Singh, Nirvikar
  12. International R&D Spillovers and Institutions By David T. Coe; Elhanan Helpman; Alexander W. Hoffmaister
  13. Estimating the Productivity Selection and Technology Spillover Effects of Imports By Acharya, Ram C.; Keller, Wolfgang
  14. No 'Third Way' for Economic Organizations? Networks and Quasi-Markets in Broadcasting By Simon Deakin; Ana Lourenço; Stephen Pratten
  15. Networks for change: How networks influence organizational change By Manuel Portugal Ferreira
  16. IT Outsourcing in Finnish Business By Mika Maliranta; Petri Rouvinen; Aarno Airaksinen
  17. Assessing the assignation of public subsidies: Do the experts choose the most efficient R&D projects? By Néstor Duch-Brown; José García-Quevedo; Daniel Montolio

  1. By: Agterberg, M. (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics); Huysman, M.; Hooff, B. van den
    Abstract: In this paper we explore the challenges and coping strategies for leading online intraorganizational Networks of Practice (NOPs). The research indicates that coordinating distributed knowledge in NOPs poses a leadership challenge that is not yet addressed in the literature on knowledge management in general and is unique when comparing intraorganizational NOPs to research on leadership in other types of online knowledge networks. This challenge entails creating and maintaining a balance between the interests of the formal organization and the interests of the informal network, and shows that coordinating informal knowledge sharing in a formal context involves a management dilemma thereby contributing to theory on coordinating distributed knowledge
    Keywords: distributed knowledge; knowledge coordination; leadership, management dilemma; networks of practice
    Date: 2008
  2. By: Manuel Portugal Ferreira (Instituto Politécnico de Leiria); Fernando A. Ribeiro Serra (UNISUL Business School)
    Abstract: In this paper we discuss knowledge and innovation in clusters and the benefits of clustering from a knowledge-based perspective. Knowledge-based resources and innovations are important sources of competitive advantage for firms. Aware of the importance of continuously seeking new knowledge firms increasingly seek knowledge-rich locations such as specific industry clusters across the world. These are locations characterized by the concentration of firms operating in related and supporting activities, a specialized work force and a specialized institutional environment that nurtures the industry. However, it is not likely that these clusters are always locations from which the firms will be able to draw the intended knowledge benefits. The social structure of the relationships between individuals and firms determines the extent to which knowledge will be created, will flow between co-located firms and bounds the knowledge benefits the firms may capture. We finish with a discussion of the need of further examination of the network dynamics involved in an industry cluster to obtain a clearer identification of the actual positive externalities that may accrue to co-locating firms.
    Keywords: Strategy; Industry clusters; Innovation
    JEL: M0 M1
    Date: 2008–06–10
  3. By: Ramlogan, Ronnie; Consoli, Davide
    Abstract: This paper investigates the processes by which scientific knowledge is created and legitimized. It focuses on scientific developments in a branch of medicine and explores the pathways through which the growth of knowledge enables advances in medical science and in clinical practice. This work draws conceptually on evolutionary approaches to technological change. The empirical part presents a longitudinal analysis of a database of scientific publications in the field of ophthalmology over a period of 50 years. Such an exercise allows us to identify pathways of shared understanding on a disease area, and to map out distinctive trajectories followed by the ophthalmology research community. The paper also contributes to general understanding of the innovation process by supporting the notion that knowledge coordination is a distributed process that cuts across and connects complementary areas of expertise.
    JEL: O33 D83 O31
    Date: 2008–04–01
  4. By: Andrea R. Lamorgese (Bank of Italy, Department for Structural Economic Analysis)
    Abstract: This paper formalizes one mechanism through which diversification in the production of research & development across firms located in a city dampens volatility in the local labor market, improves the incentives to perform research & development and smooths the aggregate business cycle fluctuations of a city. This is done by adapting the standard multi-sector quality ladder model (Grossman and Helpman 1991) in order to allow for heterogeneity across firms, thus taking into account knowledge spillovers across heterogenous sectors, knowledge accumulation, pecuniary externalities and segmented labor markets. As a result, according to the local degree of diversification in research & development, sectoral technological shocks have an influence on the current choice of research & development and the location of production, and in turn on local business cycles and the life cycle of the city: diversification in research & development allows innovations in different sectors of the city to arrive at different points in time, thus avoiding to put pressure on the local labor markets and keeping wage discipline. This permits firms located in the city to perform enough research & development and possibly beat outside competition in discovering and manufacturing new products, thus growing -at the aggregate city level-through less volatile cycles.
    Keywords: quality ladder with heterogeneity across firms, labor pooling economies, knowledge spillovers, diversification, schumpeterian growth in the city
    JEL: I31 I32 D63 D31 E32 O31 R23
    Date: 2008–04
  5. By: Agterberg, M. (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics); Hooff, B. van den; Huysman, M.
    Abstract: This paper addresses organizing dynamics of intra-firm ‘networks of practice’ (NOPs). It unravels different dimensions that play a role in knowledge sharing within NOPs: (1) practice dimension; (2) social dimension; and (3) organizational dimension. Based on a unique interpretive case study, we ‘unpack’ each dimension and consider them as dynamic based on either positive or negative forces that influence knowledge sharing in NOPs. By introducing the metaphor of a cogwheel, we argue that maintaining continuation of a NOP involves the dynamics of three levels of embeddedness (1) embeddedness of the NOP in local practices; (2) social embeddedness of the network; and (3) organizational embeddedness of the network. This integrative framework of multi-level dynamics helps to further our understanding regarding the success and failures of organizing NOPs.
    Keywords: Distributed Organizations; Knowledge Management; Networks of Practice, Distributed Organizations; Knowledge Management; Networks of Practice;Organization; Practice-based learning; Social embeddedness
    Date: 2008
  6. By: Adam Booij (University of Amsterdam); Edwin Leuven (University of Amsterdam); Hessel Oosterbeek (University of Amsterdam)
    Abstract: Policies need not only to be well designed to effectively address market failures, but their parameters also need to be part of agents’ information sets. This is illustrated by government student loans in the Netherlands which are intended to alleviate liquidity constraints. Despite generous loan conditions, take-up rates on these loans are low. Some have argued that this is due to limited knowledge about these conditions. We examine the importance of information constraints through a randomized experiment. Half of the students who responded to an Internet questionnaire were given factual information on loan conditions, whereas the other half did not receive such information. Six months later, students who received information have better knowledge about the loan conditions. While OLS regressions reveal a large and significantly positive association between knowledge about loan conditions and borrowing, our instrumental variable estimates suggest that this is not a causal effect which would rule out that the low take-up rate is caused by information constraints.
    Keywords: Field experiment; Student debt; Student loans; Loan conditions
    JEL: I22 I28 D83
    Date: 2008–04–08
  7. By: Broström, Anders (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: The issue of through what processes R&D collaboration with universities affects a firms’ innovation performance remains under-researched. In particular, university relationships have not been fully integrated in the open innovation framework. This study explores the relationship between firms’ collaboration with universities and their capabilities for innovation, as perceived by R&D managers. Drawing on a series of interviews with R&D managers at 45 randomly selected firms collaborating with two research universities in Sweden, we explicitly recognise mechanisms through which university relationships contribute to successful R&D management.
    Keywords: University-Industry Link; Innovation; Technology transfer; R&D; Research collaboration
    JEL: I23 O31 O32
    Date: 2008–06–09
  8. By: Zeghni, Sylvain; Fabry, Nathalie
    Abstract: The aim of this paper is to analyse in a more qualitative way the role of institutions in transitional countries in the CEECs and CIS. The main question we address is: what kind of institutional arrangement leads to Human development? We propose an analytical pattern where global performance (i.e. Human development) is the final outcome of a new institutional arrangement.
    Keywords: Institution; Transition; Human Development; Growth
    JEL: P30 O17 P27
    Date: 2008–05
  9. By: Olivier Bruno (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR6227 - Université de Nice Sophia-Antipolis); Cuong Le Van (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, Ecole d'économie de Paris - Paris School of Economics - Université Panthéon-Sorbonne - Paris I); Benoit Masquin (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR6227 - Université de Nice Sophia-Antipolis)
    Abstract: We develop a model of optimal pattern of economic development that is first rooted in physical capital accumulation and then in technical progress. We study an economy where capital accumulation and innovative activity take place within a two sector model. The first sector produces a consumption good using physical capital and non skilled labor. Technological progress in the consumption sector is driven by the research activity that takes place in the second sector. Research activity which produces new technologies requires technological capital and skilled labor. New technologies induce an endogenous increase of the Total Factor Productivity of the consumption sector. Physical and technological capital are not substitutable while skilled and non skilled labor may be substitutable. We show that under conditions of the adoption process of new technologies, the optimal strategy for a developing country consists in accumulating physical capital first; postponing the importation of technological capital to the second stage of development. This result is due to a threshold effect from which new technologies begin to have an impact on the productivity of the consumption sector. However, we show that once a certain level of wealth is reached, it becomes optimal for the economy to import technological capital toproduce new technologies.
    Keywords: economic development, technical progress, skilled labor, non skilled labor, total factor productivity , new technology, developing countries
    Date: 2008–03
  10. By: Pollock, R.
    Abstract: Extending the basic model of two-stage cumulative innovation with asymmetric information to include `experimentation' by second-stage rms, we nd that the costs of a strong (versus weak) intellectual property (IP) regime may be substantially increased. In addition, these costs increase as experimentation becomes cheaper and as the differential between high and low value second-stage innovations grows, with the result that a weak IP regime is more likely to be optimal. Thus, technological change which reduces the cost of encountering and trialling new `ideas' implies a reduction in the socially optimal level of IP rights such as patent and copyright.
    Keywords: Cumulative Innovation, Hold-Up, Experimentation, Intellectual Property.
    JEL: K3 L5 O3
    Date: 2008–04
  11. By: Singh, Nirvikar
    Abstract: This paper examines the impact of transaction costs on economic welfare and development. We extend the static model of Romer (1994), in which transaction costs reduce welfare by the reducing the equilibrium number of intermediate goods, and estimate the welfare losses in the case of domestic transaction costs. The main analysis of the paper extends a dynamic model of Ciccone and Matsuyama (1996) to incorporate transaction costs. We show that high transaction costs reduce the long-run level of development, and may arrest development completely in the extreme case. We also discuss the role of information technology in reducing transaction costs, and offer some preliminary evidence from rural India to illustrate how these reductions may occur through the use of such technologies.
    Keywords: transaction costs; information technology; Internet; development; India
    JEL: P2 L31 O3 O12
    Date: 2008–06–10
  12. By: David T. Coe; Elhanan Helpman; Alexander W. Hoffmaister
    Abstract: The empirical analysis in "International R&D Spillovers" (Coe and Helpman, 1995) is first revisited by applying modern panel cointegration estimation techniques to an expanded data set that we have constructed for the purpose of this study. The new estimates confirm the key results reported in Coe and Helpman about the impact of domestic and foreign R&D capital stocks on TFP. In addition, we show that domestic and foreign R&D capital stocks have measurable impacts on TFP even after controlling for the impact of human capital. Furthermore, we extend the analysis to include institutional variables, such as legal origin and patent protection, in order to allow for parameter heterogeneity based on a country's institutional characteristics. The results suggest that institutional differences are important determinants of total factor productivity and that they impact the degree of R&D spillovers.
    Keywords: Working Paper , Productivity , Investment , Foreign investment , Capital , Economic models ,
    Date: 2008–04–28
  13. By: Acharya, Ram C.; Keller, Wolfgang
    Abstract: In the wake of falling trade costs, two central consequences in the importing economy are, first, that stronger competition through increased imports can lead to market share reallocations among domestic firms with different productivity levels (selection). Second, the increase in imports might improve domestic technologies through learning externalities (spillovers). Each of these channels may have a major impact on aggregate productivity. This paper presents comparative evidence from a sample of OECD countries. We find that the average long run effect of an increase in imports on domestic productivity is close to zero. If the scope for technological learning is limited, the selection effect dominates and imports lead to lower productivity. If, however, imports are relatively technology-intensive, imports also generate learning that can on net raise domestic productivity. Moreover, there is somewhat less selection when the typical domestic firm is large. The results support models in which trade triggers both substantial selection and technological learning.
    Keywords: market shares; R&D; Technology investments
    JEL: F1 O3 O33
    Date: 2008–06
  14. By: Simon Deakin; Ana Lourenço; Stephen Pratten
    Abstract: We present two linked, longitudinal case studies of the use of quasi markets in UK broadcasting over the past decade: one looks at the regulated outsourcing of programme making to independent producers, the other at the development of an internal market system within the BBC. New network forms are shown to have arisen from the interaction of legal regulation, contracts, and property rights. However, these organizational forms are also seen to be associated with increased transaction costs and with signs of deterioration in programme quality and innovation. We suggest that for such networks to be a viable 'third way' between markets and hierarchy, closer attention needs to be given to the issue of institutional design.
    Keywords: networks, quasi markets, television production
    JEL: K23 L14 L24 L82
    Date: 2008–03
  15. By: Manuel Portugal Ferreira (Instituto Politécnico de Leiria)
    Abstract: This paper contributes to the literature on organizational change by examining organizations as social entities embedded in inter-organizational networks. In contrast to extant research that focuses on macro environment and internal factors to explain organizational change we put forth the social network surrounding the firm as a major driver of any change process. In specific we examine organization change as driven by the organizations? positions and relations in an interorganizational network. Our conceptual framework demonstrates that inter-organizational networks are important mid-level environmental factors that complement the macro-environment and internal organizational factors for the study of organizational changes. We conclude with a discussion on normative implications for organizations and avenues for future research.
    Keywords: organizational change, social networks
    JEL: M0 M1
    Date: 2008–06–09
  16. By: Mika Maliranta; Petri Rouvinen; Aarno Airaksinen
    Abstract: ABSTRACT : This paper reviews the characteristics and magnitude of information technology (IT) outsourcing as well as studies its labor productivity effects with a representative sample of Finnish businesses. Depending on the IT task in question, on average from one-third to two-thirds of IT has been outsourced; of the ten categories considered, the development of non-Internet business-to-business applications (e.g., EDI) is the leading activity in this respect. The various dimensions of IT outsourcing are all highly positively correlated. After controlling for industry and regional effects as well as characteristics of firms and their employees, it is found that an externally-supported computer user is about 20% more productive than an otherwise similar worker without a computer, which corresponds to about 5% output elasticity of outsourced IT; the effect of internally-supported computer use is not statistically significantly different for zero, and it is also several times smaller in magnitude. While the issues of causality, timing, self-selection, and unobserved firm heterogeneity are not fully addressed, the findings nevertheless suggest that IT outsourcing may have significant economic consequences.
    Keywords: labor productivity, information technology, computers, outsourcing Finnish business
    JEL: D23 D24 L14 L24
    Date: 2008–06–10
  17. By: Néstor Duch-Brown (IEB & Universitat de Barcelona); José García-Quevedo (IEB & Universitat de Barcelona); Daniel Montolio (IEB & Universitat de Barcelona)
    Abstract: The implementation of public programs to support business R&D projects requires the establishment of a selection process. This selection process faces various difficulties, which include the measurement of the impact of the R&D projects as well as selection process optimization among projects with multiple, and sometimes incomparable, performance indicators. To this end, public agencies generally use the peer review method, which, while presenting some advantages, also demonstrates significant drawbacks. Private firms, on the other hand, tend toward more quantitative methods, such as Data Envelopment Analysis (DEA), in their pursuit of R&D investment optimization. In this paper, the performance of a public agency peer review method of project selection is compared with an alternative DEA method.
    Keywords: Subsidies, R&D, DEA, Multi Criteria Decision Analysis, “peer review”.
    JEL: O32 C61 H25
    Date: 2008

This nep-knm issue is ©2008 by Laura Stefanescu. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.