nep-net New Economics Papers
on Network Economics
Issue of 2005‒04‒09
six papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Overcoming the Coordination Problem: Dynamic Formation of Networks By Jack Ochs; In-Uck Park
  2. Density and strength of ties in innovation networks : a competence and governance view By Nooteboom,Bart; Gilsing,Victor A.
  3. Density and strength of ties in innovation networks : an analysis of multi-media and biotechnology By Gilsing,Victor A.; Nooteboom,Bart
  4. Innovation, learning and cluster dynamics By Nooteboom,Bart
  5. Does Sutton Apply to Supermarkets? By Ellickson, Paul
  6. Public-Private Partnerships and the Promotion of Collective Entrepreneurship By Mário Rui Silva; Hermano Rodrigues

  1. By: Jack Ochs; In-Uck Park
    Date: 2005–03–28
  2. By: Nooteboom,Bart; Gilsing,Victor A. (Tilburg University, Center for Economic Research)
    Abstract: Taking into account both competence and governance issues, and six dimensions of tie strength, this article argues that in networks for exploration there are good reasons, counter to the thesis of the 'strength of weak ties', for a dense structure of ties that are strong in most dimensions. By contrast, in exploitation networks there are good reasons for structures that are non-dense, with ties that are strong in other dimensions than in networks for exploration.
    JEL: L14
    Date: 2005
  3. By: Gilsing,Victor A.; Nooteboom,Bart (Tilburg University, Center for Economic Research)
    Abstract: In this article we provide an empirical illustration of hypotheses, developed in the literature, on the role of density and strength of ties in innovation networks. We study both exploration and exploitation networks in the Dutch multimedia and pharmaceutical biotechnology industry. We find support for most of our hypotheses but not all. These findings, in line with the mixed results in the literature, seem to indicate that the distinction between exploration versus exploitation, albeit useful, is still too general. There may be a stronger sectoral effect in how exploration and exploitation settle in network structural properties than anticipated thus far.
    JEL: D23 D83 L14 L63 L65
    Date: 2005
  4. By: Nooteboom,Bart (Tilburg University, Center for Economic Research)
    Abstract: This chapter offers a theory and an analytical framework for the analysis of cluster dynamics, i.e. the innovative performance and evolution of clusters. It develops three types of embedding: institutional embedding, structural embedding (network structure), and relational embedding (type and strength of ties). The analysis is conducted from a perspective of both competence (learning) arising from relations and governance of relational risk, which includes risk of lock-in and risk of spillover. A basic proposition is that innovative clusters face the challenge of combining exploration and exploitation. Hypotheses are specified concerning differences between networks for exploration and exploitation, and concerning combinations and transitions between them. Arguments are presented that in some important respects go against the thesis of the strength of weak ties . Some empirical evidence is presented from recent studies.
    JEL: L14
    Date: 2005
  5. By: Ellickson, Paul
    Abstract: This paper presents empirical evidence that endogenous sunk costs play a central role in determining the equilibrium structure of the supermarket industry. Using the endogenous sunk cost (ESC) framework developed in Sutton (1991), I construct a model of supermarket competition where escalating investment in firm level distribution systems is driven by the incentive to produce a greater variety of products in every store. Using the observed networks of store and warehouse locations, I identify 51 distinct geographic markets covering nearly the entire United States and empirically verify their relative independence. Employing a dataset consisting of every supermarket operating in these markets, I establish the existence of a lower bound to concentration that remains strictly positive as market size expands. Furthermore, I am able to verify that this non-fragmentation result applies only to firms that have built their own distribution networks, as the model predicts.
    Keywords: endogenous sunk costs, vertical product differentiation, oligopoly, retail, supermarkets, market concentration
    JEL: L13 L22 L81
    Date: 2005
  6. By: Mário Rui Silva (CEDRES, Faculdade de Economia do Porto); Hermano Rodrigues (Faculdade de Economia do Porto)
    Abstract: Public-private partnerships (PPP) are a recent instrument for social and economic development policies. Within the framework of competitiveness policy, PPP are an adequate instrument to promote collective entrepreneurship. Through this instrument, some market failures can be overcome and a better provision of strategic services can be afforded to firms. Also, PPP can be able to promote co-ordination between public and private partners and lead to specific innovative networks. PPP correspond to a more decentralised policy and they are supposed to increase focus and effectiveness and to involve agencies that are closer to firms and that have a more narrow range of objectives. In this contribution, we analyse the pattern of the so-called partnerships projects, approved between 2000 and the 30th june of 2003 in the framework of the Portuguese Operational Program for the Economy. By using HOMALS and K-means cluster analysis, we were able to characterise PPP and to identify typical clusters for the PPP projects. On one hand, the results show that policy decentralization brought by partnerships has promoted or reinforced a more specialized institutional framework (mainly national, sectoral or regional entrepreneurial associations). But, on the other hand, PPP had a small impact in the promotion of specific networks and/or in innovation. Collective entrepreneurship induced by PPP instrument has presented a clear bias toward the provision of services that have a public or semi-public nature, by the fact that firms that can use these services are in a large number (all the firms of a sub sector or even larger universes). But technological projects and/or projects addressed to specific networks of firms were very few. In particular, the impact of PPP on structural change seems to have been short.
    Keywords: Public-private partnerships; Competitiveness policy; Entrepreneurship; Collective entrepreneurship
    JEL: M13 H50 O20 C14
    Date: 2005–04

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