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on Network Economics |
| By: | John S. Earle (W.E. Upjohn Institute for Employment Research and Central European University); Klara Sabirinova Peter (Georgia State University, CEPR, and IZA) |
| Abstract: | We analyze a model of wage delay in which strategic complementarity arises because each employer's costs of violating its contracts decrease with the arrears in its labor market. The model is estimated on panel data for workers and firms in Russia, facilitating identification through fixed effects for employees, employers, and local labor markets, and instrumental variables based on policy interventions. The estimated reaction function displays strongly positive neighborhood effects, and the estimated feedback loops – worker quits, effort, strikes, and legal penalties – imply that costs of wage delays are attenuated by neighborhood arrears. We also study a nonlinear case with two stable equilibria: a punctual payment and a late payment equilibrium. The estimates imply that the theoretical conditions for multiple equilibria under symmetric labor market competition are satisfied in our data. |
| Keywords: | Earle, Sabirinova, contract violation, wage arrears, social custom, strategic complementarity, neighborhood effect, social interactions, multiple equilibria, network externality, transition, Russia" |
| JEL: | D21 G34 J23 J31 L33 P23 B52 J30 K42 L14 O17 P31 P37 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:06-129&r=net |
| By: | Lee Fleming; Koen Frenken |
| Abstract: | While networks are widely thought to enhance regional innovative capability, there exist few longitudinal studies of their formation and evolution over time. Based on an analysis of all patenting inventors in the U.S. from 1975 to 2002, we observe dramatic aggregation of the regional inventor network in Silicon Valley around 1989. Based on network statistics, we argue that the sudden rise of giant networks in Silicon Valley can be understood as a phase transition during which small isolated networks form one giant component. By contrast, such a transition in Boston occurred much later and much less dramatically. We do not find convincing evidence that this marked difference between the two regions is due to regional differences in the propensity to collaborate or the involvement of universities in patenting. Interviews with key network players suggest that contingent labor mobility between established firms in Silicon Valley, in particular resulting from IBM’s policy as a central player in patenting activity, promoted inter-organizational networking, leading to larger inventor networks. |
| Keywords: | evolutionary economic, inventor networks |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:0609&r=net |
| By: | Christian Growitsch (Halle Institute for Economic Research); Heike Wetzel (Institute of Economics, University of Lüneburg) |
| Abstract: | In the course of railway reforms at the end of the last century, European national governments, as well the EU Commission, decided to open markets and to separate railway networks from train operations. Vertically integrated railway companies argue that such a separation of infrastructure and operations would diminish the advantages of vertical integration and would therefore not be suitable to raise economic welfare. In this paper, we conduct a pan-European analysis to investigate the performance of European railways with a particular focus on economies of scope associated with vertical integration. We test the hypothesis that integrated railways realize economies of joint production and, thus, produce railway services on a higher level of efficiency. To determine whether joint or separate production is more efficient we apply an innovative Data Employment. Analysis super-efficiency bootstrapping model which relates the efficiency for integrated production to a virtual reference set consisting of the separated production technology and which is applicable to other network industries as energy and telecommunication as well. Our findings are that for a majority of European Railway economies of scope exist. |
| Keywords: | Efficiency, Vertical Integraton, Railway Industry |
| JEL: | L22 L43 L92 |
| Date: | 2006–07–24 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:29&r=net |
| By: | Lorenz Blume (Department of Economics, University of Kassel); Detlef Sack (Political Science Department, University of Kassel) |
| Abstract: | Social capital is often defined as consisting of trust and post materialist values on the one hand, and social networks on the other. From an institutionalist point of view this concept is not convincing. Norms (i.e. informal institutions) can combine with different governance modes, not only with networks. The regional governance literature distinguishes between at least three governance modes, hierarchies, markets, and networks, each having its own advantages. This paper examines how regional preferences for these modes are related to trust and post materialist values. A principle component analysis of 48 social capital indicators for 74 West German regions shows that trust and post materialist values do not solely combine with networks but also with preferences for markets and hierarchies. A cluster analysis identifies two dominant types of regional social capital. These types are different from the well-known Italian patterns described by Robert Putnam in his seminal work. In the period 1995- 2002, annual economic growth was on average one percent higher in regions that have combined trust with strong preferences for markets and weak political networks than in opposite regions. |
| Keywords: | Markets, Hierarchies, Networks, Social Capital, Regional Governance |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:kas:wpaper:2006-85&r=net |