nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2005‒04‒03
twelve papers chosen by
Francesco Lissoni
Universita degli Studi di Brescia

  1. The Environmental Porter Hypothesis as a Technology Adoption Problem? By Kriechel,Ben; Ziesemer,Thomas
  2. Interdependencies in the Dynamics of Firm Entry and Exit By Nyström, Kristina
  3. Time to complete and research joint ventures : a differential game approach By Navas,Jorge; Kort,Peter M.
  4. Education and Training in a Model of Endogenous Growth with Creative Destruction By Zon,Adriaan ,van; Antonietti,Roberto
  5. General Purpose Technologies and Energy Policy By Zon,Adriaan,van; Kronenberg,Tobias
  6. Innovation, new market and governance choices of entry : the internet brokerage market case By QUELIN, Bertrand V.; CLAUDE-GAUDILLAT, Valérie
  7. Higher Education, Localization and Innovation: Evidence from a Natural Experiment By Andersson, Roland; John M. Quigley, John M.; Wilhelmsson, Mats
  8. Innovation Behaviour and Productivity Performance in the Nordic Region Does Foreign Ownership Matter? By Ebersberger, Bernd; Lööf, Hans
  9. Are Intellectual Property Rights Detrimental to Innovation? By Crampes, Claude; Langinier, Corinne
  10. Industrialization and Urbanization: Did the Steam Engine Contribute to the Growth of Cities in the United States? By Sukkoo Kim
  11. The Contributions from Firm Entry, Exit and Continuation to Labour Productivity Growth in New Zealand By David Law; Nathan McLellan
  12. "Foreign Technology Acquisition Policy and Firm Performance in Japan, 1957-1970: Micro-aspects of Industrial Policy" By Kozo Kiyota; Tetsuji Okazaki

  1. By: Kriechel,Ben; Ziesemer,Thomas (MERIT)
    Abstract: The Porter Hypothesis postulates that the costs of compliance with environmental standards may be offset by adoption of innovations they trigger. We model this hypothesis using a game of timing of technology adoption. We show that times of adoption are earlier the higher the non-adoption tax. The environmental tax turns the preemption game with low profits into a game with credible precommitment yielding high profits (pro-Porter). If there is a precommitment game without environmental taxes, the introduction of a tax leads to lower profits (anti-Porter).
    Keywords: economics of technology ;
    Date: 2005
  2. By: Nyström, Kristina (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: This paper investigates the dynamics of firm entry and exit with a focus on differences between industrial sectors. The paper discusses how entry and exit rates in industrial sectors are affected by previous exit and entry rates. Economic theory presents two different approaches to how entry and exit of firms are interrelated to each other, the multiplier effect and the competition effect. This paper intends to investigate which force that is the predominant one. The empirical analysis is based on data for 25 Swedish manufacturing industries at the 2-digit SIC-level, for firms with more than five employees during the period 1991-2000. A dynamic panel data approach as suggested by Anderson and Hsio (1981) and Arellano and Bond (1991) are used in estimating the relationships. The empirical results find some evidence of the multiplier effect being the predominant effect explaining entry while competition effects are more important for explaining exit patterns.
    Keywords: Entry; exit; dynamic panel data
    JEL: C33 L10
    Date: 2005–03–18
  3. By: Navas,Jorge; Kort,Peter M. (Tilburg University, Center for Economic Research)
    Abstract: In this paper we analyze cooperation in R&D in the form of RJVs. We show that the optimal size of an RJV does not only depend on the degree of spillovers, as literature suggests, but also on the cost function of R&D activities. Moreover, the explicit consideration of the fact that R&D projects take time to complete shows that benefits from cooperation in R&D not only allow RJVs to carry out larger R&D projects, but also to reduce the time to completion for projects with a given size and, consequently, to accelerate the acquisition of the benefits associated with the innovation.
    JEL: C73 L13 O31
    Date: 2005
  4. By: Zon,Adriaan ,van; Antonietti,Roberto (MERIT)
    Abstract: By formulating an endogenous growth model that combines elements from Romer (1990), Aghion and Howitt (1992), and van Zon and Yetkiner (2003), the present paper studies the contribution of education and training on economic growth through their impact on the rate of innovation. The article addresses two main issues. The first is the optimum provision of on-the-job training necessary to be able to adopt, and adapt to new technologies. The second is the impact of both formal education and on-the-job training on the innovative capacity of an economic system that is the ultimate cause of output growth. In our set-up, education enhances R&D activities and lowers adjustment costs to new technologies, thus facilitating their adoption, while on the other hand on-the-job training ensures the possibility to implement the new coming technologies and reap all the related future profits. We assume that the adoption of a new technology consists of two periods, i.e. the training phase during which newly hired workers acquire the right amount of know how in order to become familiar with the specific new technology, and the implementation or production phase in which profit flows arise for firms and in which the cost savings that can be realized arise from productivity increases in the previous phase. By extending the training phase, entrepreneurs run a greater risk of shortening the production phase for a given arrival rate of new technologies that progressively erode the profit flows obtained from existing technologies. The paper shows first that it is possible to find a profit-maximizing, endogenously determined, amount of training that depends on the workers’ educational attainment. Thus, a situation in which better educated workers may be disproportionately selected for training issues is possible, especially in times of rapid technological change. However, the paper also shows that a non-linear relationship between education and technological change (and growth) exists, so that an increase in the formal level of education can even result in a reduction in the rate of growth. The reason for this is the increase in creative destruction that raises ‘technology adoption costs’ in terms of output foregone during re-training spells that arrive at a faster rate. The results offer some insights that are interesting from an education policy perspective.
    Keywords: labour economics ;
    Date: 2005
  5. By: Zon,Adriaan,van; Kronenberg,Tobias (MERIT)
    Abstract: We employ a general purpose technology model with endogenous stochastic growth to simulate the effects of different energy policy schemes. An R&D sector produces endogenous growth by developing radical and incremental technologies. These innovations result in blueprints for capital intermediates, which require raw capital and either carbon or non-carbon-based fuels. A carbon tax therefore affects not only the final production sector but also the R&D sector by making the development of non-carbon-based technologies more attractive. Due to path dependencies and possible lock-in situations, policy can have a significant long-term impact on the energy structure of the economy. Allowing for different elasticities of substitution between consumption and environmental quality, we examine the effects of different carbon policies on growth, environmental quality, and welfare. We find that an anti-carbon policy may reduce welfare initially, but in the long run there is a strong potential for a ‘double dividend’ due to faster growth and reduced pollution.
    Keywords: research and development ;
    Date: 2005
  6. By: QUELIN, Bertrand V.; CLAUDE-GAUDILLAT, Valérie (CERAM)
    Abstract: This paper investigates the case of market entry strategies following the introduction of a disruptive innovation. Recognizing that market entry strategies have been envisioned in the literature as a discrete phenomenon, we develop an empirical framework that portrays these strategies as a capability building process. These organizational modes are integrated into our model : acquisition, alliance, and market transaction. We compare the first two with the third one and we test our model in the setting of the online brokerage industry by using a sample of 897 moves made by 98 firms over a seven-year period (1994 to 2000). We built this dataset by collecting secondary data.By suggesting that the entry into a new industry is not a discrete phenomenon, our research should lead the path to additional research on this topic.
    Keywords: innovation; market entry; capabilities; firm's boundaries
    JEL: L22 L86 M10
    Date: 2004–12–01
  7. By: Andersson, Roland (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); John M. Quigley, John M. (University of CaliforniaBerkeley, CA, USA); Wilhelmsson, Mats (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: During the past fifteen years, government policy has decentralized post-secondary education in Sweden. We investigate the economic effects of this decentralization policy on the level of innovation and its spatial distribution in the Swedish economy. We rely upon micro data on patent activity over time, which records the home address of each patent awardee during the past eight years. These measures of innovation, together with data documenting the decentralization of university-based researchers and students, permit us to estimate the effects of exogenous changes in educational policy upon the extent and locus of innovative activity. We find important and significant effects of this policy upon the locus of knowledge production, suggesting that the decentralization has affected regional development through local innovation and increased creativity. We also find some evidence that this policy has affected the aggregate output of “knowledge industries.”
    Keywords: Higher Education; Localization; Innovation; Natural Experiment
    JEL: N34 O31 R11
    Date: 2005–03–18
  8. By: Ebersberger, Bernd (Technology Analysis & Innovation Strategies, Fraunhofer Institute for Systems and Innovation); Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: This paper addresses the involvement of foreign companies in domestic economies; the relative engagement of foreign-owned companies in R&D-activities; the relative embeddedness in various national innovation systems and the relative output performance from R&D and innovation. A comparison is made between the innovation and productivity of foreign owned enterprises, of different corporate styles, (Nordic, Anglo-Saxon and Continental European) and the different corporate structures of domestically owned firms (multinational and uninational). Using 5 186 firm level observations from Denmark, Finland, Norway and Sweden, and based on the international harmonized Community Innovation Survey and uniform econometric approaches; the study confirms previous findings, presents new results and identifies country, corporate style and corporate governance differences. Some new lights is also shed on a seemingly paradoxical relationship between R&D and innovation, and between R&D and productivity.
    Keywords: Multinational enterprises; Take-Over; Corporate governance; Cross-country comparison; Spillovers; R&D; Innovation; Productivity
    JEL: C31 D21 F23 G34 L22 O31 O33
    Date: 2005–03–18
  9. By: Crampes, Claude; Langinier, Corinne
    Abstract: Intellectual property rights are legal constraints that limit entry in industries where incumbents are innovators. The set of legal constraints is the same for all industries, without considering that the externalities created by entry are not necessarily negative for the incumbent or that the incumbent's R&D expenditures can be detrimental to entrants. We show that one unique set of legal rules can foster innovation and increase total R&D expenditures in some industries and be detrimental in others. The model is illustrated by case studies from the information and communication technologies industry (software, hardware, music and videogame industries).
    JEL: L1
    Date: 2005–03–25
  10. By: Sukkoo Kim
    Abstract: Industrialization and urbanization are seen as interdependent processes of modern economic development. However, the exact nature of their causal relationship is still open to considerable debate. This paper uses firm-level data from the manuscripts of the decennial censuses between 1850 and 1880 to examine whether the adoption of the steam engine as the primary power source by manufacturers during industrialization contributed to urbanization. While the data indicate that steam-powered firms were more likely to locate in urban areas than water-powered firms, the adoption of the steam engine did not contribute substantially to urbanization.
    JEL: N60 N90 R38
    Date: 2005–03
  11. By: David Law; Nathan McLellan (New Zealand Treasury)
    Abstract: This paper evaluates the contributions from firm entry, exit and continuation to labour productivity growth in New Zealand over the period 1995 to 2003. Decomposition techniques developed by Griliches and Regev (1995) and by Foster, Haltiwanger and Krizan (1998) are employed. Results suggest significant heterogeneity across both industries and firms. Most entering firms’ initial level of labour productivity is below the industry average but grows rapidly thereafter. Continuing firms generally add to industry labour productivity growth. On average exiting firms experience stagnant or declining labour productivity in the years leading up to their death, and when they eventually die most have below average labour productivity compared to their industry. This pattern persists even at a highly disaggregated industry level and indicates that firm turnover has positively contributed to labour productivity growth in New Zealand.
    Keywords: Firm Performance; Entry; Exit; Turnover; Mobility; Labour Productivity; New Zealand
    JEL: D21
    Date: 2005–04
  12. By: Kozo Kiyota (International Graduate School of Social Sciences, Yokohama National University and RIETI); Tetsuji Okazaki (Faculty of Economics, University of Tokyo)
    Abstract: We examine the determinants and effects of technology acquisition licensing, using firm-level data between 1957 and 1970. Our results indicate that in technology acquisition licensing, the government screened a firm's application based on (i) the industry that the firm belonged to and (ii) its past experience of technology acquisition. As a result, inefficient firms with considerable experience tended to acquire more technologies before deregulation. Despite this screening process, the technology acquisition policy contributes to improve a firm performance: The firms with acquired technology succeeded in capital accumulation, which results in much faster growth of labor productivity.
    Date: 2005–03

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