nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2005‒04‒09
seven papers chosen by
Francesco Lissoni
Universita degli Studi di Brescia

  1. Technology Adoption From Hybrid Corn to Beta Blockers By Jonathan Skinner; Douglas Staiger
  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. Entrepreneurial roles along a cycle of discovery By Nooteboom,Bart
  5. Innovation, learning and cluster dynamics By Nooteboom,Bart
  6. The social and industrial dynamics of retailing an evolutionary reconstruction By Nooteboom,Bart
  7. Does Sutton Apply to Supermarkets? By Ellickson, Paul

  1. By: Jonathan Skinner; Douglas Staiger
    Abstract: In his classic 1957 study of hybrid corn, Griliches emphasized the importance of economic incentives and profitability in the adoption of new technology, and this focus has been continued in the economics literature. But there is a distinct literature with roots in sociology emphasizing the structure of organizations, informal networks, and "change agents." We return to a forty-year-old debate between Griliches and the sociologists by considering state-level factors associated with the adoption of a variety of technological innovations: hybrid corn and tractors in the first half of the 20th century, computers in the 1990s, and the treatment of heart attacks during the last decade. First, we find that some states consistently adopted new effective technology, whether hybrid corn, tractors, or effective treatments for heart attacks such as Beta Blockers. Second, the adoption of these new highly effective technologies was closely associated with social capital and state-level 1928 high school graduation rates, but not per capita income, density, or (in the case of Beta Blockers) expenditures on heart attack patients. Economic models are useful in identifying why some regions are more likely to adopt early, but sociological barriers -- perhaps related to a lack of social capital or informational networks -- can potentially explain why other regions lag far behind.
    JEL: O3 I1
    Date: 2005–04
  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: The literature on entrepreneurship recognizes a variety of entrepreneurial roles, and the question arises what roles are played when and by whom. In this article, roles are attributed to different stages of innovation and organizational development. A central theme is the relation between discontinuity, in radical innovation (exploration), and continuity, in application, diffusion and adaptation (exploitation). Use is made of a concept of a 'cycle of discovery', which seeks to explain how exploration leads on to exploitation, and how exploitation may yield exploration, in a step-by-step development towards radical innovation. Parallel to this there are processes of organisational development.
    JEL: D83 M13
    Date: 2005
  5. 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
  6. By: Nooteboom,Bart (Tilburg University, Center for Economic Research)
    Abstract: This paper reconstructs the long-term development of retailing, including industrial, economic and social antecedents and consequences. Among other things, it includes innovation in the form of the emergence and diffusion of successive novel types of shop (including self-service), relations between large and small firms in innovation and diffusion, change of demand conditions, institutional change concerning the opening time of shops, increase of scale and concentration, and social effects. For the analysis of the process and costs of retailing, use is made of queuing theory rather than customary production functions. The reconstruction is conducted in evolutionary terms of selection, variety generation and transmission. Scripts with nodes for component activities are used in analogy to chromosomes composed of genes. The paper concludes with a discussion of the usefulness of evolutionary economics, and offers suggestions for its development.
    JEL: B52 L22 L81 M13 O31 O33
    Date: 2005
  7. 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

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