nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2005‒05‒07
thirteen papers chosen by
Francesco Lissoni
Universita degli Studi di Brescia

  1. Knowledge and Creative Destruction over the Industry Life Cycle - The Case of the German Automobile Industry By Uwe Cantner; Kristina Dreßler; Jens J. Krüger
  2. Technology Frames: The Art of Perspective and Interpretation in Strategy By Virginia Acha
  3. Persistent Knowledge Specialisation and Intra-Industry Heterogeneity: an Analysis of the Spanish Pharmaceutical Industry By Pablo D'Este Cukierman
  4. The Dynamics of Innovation Networks By Lionel Nesta; Vincent Mangematin
  5. When Micro Shapes the Meso: Learning Networks in a Chilean Wine Cluster By Elisa Giuliani; Martin Bell
  6. Organisational Memory and Innovation Across Projects: Integrated Service Provision in Engineering Design Firms By Eugenia Cacciatori
  7. Social Networks of Researchers in Business To Business Marketing: A Case Study of the IMP Group 1984-1999 By Piera Morlacchi; Ian F. Wilkinson; Louise Young
  8. Knowledge and Productivity in the World's Largest Manufacturing Corporations By Lionel Nesta
  9. Sustained Innovation: Career Engineers, Stock Markets, and the Theory of the Innovative Enterprise By William Lazonick; Andrea Prencipe
  10. A Combinatorial Model of Organizational Innovation: The Case of Pilkington Plc By Anna Grandori; Andrea Prencipe
  11. The Impact of Dual Use Controls on UK Science: Results from a Pilot Study By Caitriona McLeish; Paul Nightingale
  12. Modelling and Measuring Scientific Production: Results for a Panel of OECD Countries By Gustavo Crespi; Aldo Geuna

  1. By: Uwe Cantner (University of Jena, Faculty of Economics); Kristina Dreßler (University of Jena, Faculty of Economics); Jens J. Krüger (University of Jena, Faculty of Economics)
    Abstract: This paper investigates how the survival of firms over the industry life cycle is affected by different kinds of knowledge, namely post-entry experience, pre-entry experience, and knowledge acquired by innovative activity. Therefore, a statistical survival analysis is performed for the German automobile industry over the period 1886- 1939 which applies a new approach that links instrumental variable estimation with the Cox regression. The main results are that all three knowledge components exert a significantly positive effect on the survival of firms. Furthermore, innovative activity is able to compensate for lacking pre-entry or post-entry experience, completely in accord with Schumpeterian creative destruction.
    Keywords: firm survival, patents, innovation, automobile industry, hazard rates
    JEL: L10 L62 O33 C41
    Date: 2005–04–30
  2. By: Virginia Acha (SPRU, University of Sussex)
    Abstract: In this paper, I bring together the literatures of the economics of innovation, corporate strategy and managerial and organizational cognition to explore how and why companies come to different conclusions and strategies for technology when presented with essentially very similar situations and information. Building on the work of Orlikowski and Gash (1994) on technological frames, I seek to explore the role of the technology frame of key senior managers in defining corporate strategy with respect to technology. To provide an empirical basis for the study, I take the case of the 6 leading US vertically integrated oil companies involved in the exploration and production of petroleum during the period 1984 to 1997. The analysis considers two key salients for the technology frame which are operationalised for the six companies based on their R&D expenditures, patents, publications and contrasted with their operational performance measures. These salients reflect respectively adaptational mapping (whereby signals in the environment prompt adaptation) and formational mapping (whereby experience and path-dependency influence interpretation) within the technology frame. The findings indicate support for the proposed approach to proxying technology frames on the two key points of salience for the upstream petroleum industry, and the paper concludes with a short discussion of future lines of research.
    Keywords: technology frames, upstream petroleum, technology strategy, adaptational mapping, formational mapping
    JEL: O32
    Date: 2005–04–26
  3. By: Pablo D'Este Cukierman (SPRU, University of Sussex)
    Abstract: This paper aims to contribute to the analysis of within industry inter-firm variety. Building upon the knowledge-based theory of the firm (Nelson and Winter, 1982; Penrose, 1959; Fransman, 1994), this paper develops two themes. First, the analysis of intra-industry heterogeneity: why do firms that operate in the same industry differ, and why are such differences persistent? Second, the paper investigates the extent to which higher performance is associated with the capacity of firms to expand their knowledge base (rather than with their initial conditions). The main contribution of the paper is empirical, based on a data source consisting of information on documents published in scientific international journals by Spanish pharmaceutical firms. The empirical results support the argument that the firm's knowledge base is a main driver of persistent heterogeneity within industries on the one hand, because of the systematic variety in terms of how firms articulate and organise their research activities and their background knowledge, and on the other hand, because of the positive correlation between the firms' knowledge diversification and performance.
    Keywords: Firm heterogeneity, Knowledge diversification, Bibliometric analysis, Spanish pharmaceutical industry
    JEL: O33 L65
    Date: 2005–04–26
  4. By: Lionel Nesta (SPRU, University of Sussex); Vincent Mangematin (INRA, University Pierre Mendes-France)
    Abstract: We analyse the changing contribution of networks to the innovative performance of 30 pharmaceutical companies from 1989 to 1997. Count data models show that collaborations with universities and biotechnology companies are important determinants of the firms' innovative performance, but their respective contributions diverge when industry matures. Larger firms enjoy a significant size advantage and in-house research activities are highly significant. Returns to scale in research are decreasing over time while the size advantage is increasing. The changing contribution of networks to knowledge production suggests that these are phase-specific, which has substantial managerial and policy implications.
    Keywords: pharmaceutical industry, biotechnology, innovative processes, networks
    JEL: O31 D85
    Date: 2005–04–26
  5. By: Elisa Giuliani (SPRU, University of Sussex); Martin Bell (SPRU, University of Sussex)
    Abstract: Most analyses of the relationship between spatial clustering and the technological learning of firms have emphasised the influence of the former on the latter, and have focused on intra-cluster learning as the driver of innovative performance. This paper reverses those perspectives. It examines the influence of individual firms' absorptive capacities on both the functioning of the intra-cluster knowledge system and its interconnection with extra-cluster knowledge. It applies social network analysis to identify different cognitive roles played by cluster firms and the overall structure of the knowledge system of a wine cluster in Chile. The results show that knowledge is not diffused evenly 'in the air', but flows within a core group of firms characterised by advanced absorptive capacities. Firms' different cognitive roles include some - as in the case of technological gatekeepers - that contribute actively to the acquisition, creation and diffusion of knowledge. Others remain cognitively isolated from the cluster, though in some cases strongly linked to extra-cluster knowledge. Possible implications for policy are noted.
    Keywords: clusters, absorptive capacity, knowledge communities, technological gatekeepers
    JEL: O33
    Date: 2005–04–26
  6. By: Eugenia Cacciatori (CRORA, Bocconi University and SPRU, University of Sussex)
    Abstract: This paper provides an exploration of the dynamics of organisational remembering in firms operating through projects. The paper focuses in particular on the deliberate use of experience accumulated in the past in order to sustain innovation in the provision of services. It relies on the notions of boundary objects and brokers to empirically explore how a common memory crossing occupational and organisational boundaries is built. In so doing, it highlights how a boundary object as memory device in a project environment operates at different levels, i.e. personal, project-specific, organisational-specific and occupational specific, and how it takes different formats to perform its roles at each level. Finally, the paper highlights the role of specific communities, beyond that of specific individuals, as boundary brokers.
    Keywords: project development, innovation processes, organisational memory, boundary brokers
    JEL: O22 O31
    Date: 2005–04–26
  7. By: Piera Morlacchi (SPRU, University of Sussex); Ian F. Wilkinson (University of New South Wales); Louise Young (University of Technology, Sydney)
    Abstract: Science is a social process that functions through social networks of researchers that form invisible colleges. Analysis of these social networks provides a means for examining the structure of relations among researchers. The Industrial Marketing and Purchasing (IMP) group, "an informal international group of scholars concerned with developing concepts and knowledge in the field of business-to-business marketing and purchasing," is used as a case study of a network of researchers because it has been responsible for considerable research over the last decades in the area of business-to-business marketing, yet its structure remains hidden because of its informal network characteristics. The results of a social network analysis of the IMP group is described based on the pattern of co-authorship at annual IMP conferences. The results reveal a power law distribution of paper co-authorship and a small world network that conforms to the results of studies of other types of social networks. A core network of 57 researchers is identified and its network properties are described, including how it has evolved over time. The study provides the basis for further studies of the social networks of marketing and business researchers.
    Keywords: informal networks, business-to-business marketing
    JEL: D85
    Date: 2005–04–26
  8. By: Lionel Nesta (SPRU, University of Sussex)
    Abstract: I examine the relationship between the characteristics of firm knowledge in terms of capital, diversity and relatedness, and productivity. Panel data regression models suggest that unlike knowledge diversity, knowledge capital and knowledge relatedness explain a substantial share of the variance of firm productivity. Activities based on a set of related technological knowledge are more productive than those based on unrelated knowledge because the cost of co-ordinating productive activities decreases as the knowledge used in these activities becomes integrated efficiently. The contribution of knowledge relatedness to productivity is significantly higher in high-technology sectors than in other sectors.
    Keywords: knowledge, productivity, large corporations, knowledge measurement, panel data
    JEL: O33
    Date: 2005–04–26
  9. By: William Lazonick (INSEAD and University of Massachusetts); Andrea Prencipe (Università G. D’Annunzio di Pescara, and SPRU, University of Sussex)
    Abstract: The aim of this paper is to document the role that career engineers played in the investment strategies and eventual survival of an organization producing large high technology capital goods. Using the theory of innovative enterprise developed by Lazonick and O'Sullivan (2000), we analyze the locus of strategic control and its interactions with the cognitive and behavioral dimensions of Rolls-Royce, nowadays a successful industrial firm. The company has been analyzed during an intense period of radical changes in the ownership structure of the company that followed the firm's misdemeanors. Analysis of the role of engineers is paralleled with an analysis of what influence the firm's exposure to the stock market had on its innovative activities. The case analyzed shows that there was a clear lead by the engineering-related functions, while other functions had little say in important investment decisions. Company decisions were driven by the creed of engineering excellence transmitted from generation to generation of engineers via the recruitment and apprentice systems that were at the basis of the company's internal training policy.
    Keywords: career engineers, investment strategies, Rolls-Royce, innovative processes
    JEL: L10 L62 O31
    Date: 2005–04–26
  10. By: Anna Grandori (CRORA, Bocconi University); Andrea Prencipe (Università G. D’Annunzio di Pescara, and SPRU, University of Sussex)
    Abstract: Based on an in-depth case study of Pilkington Plc, this study illustrates that received perspectives in organization theory and theory of the firm fall short of explaining organizational evolution. The framework of organizational evolution developed in this paper is combinatorial in two ways. First, it shows how factors drawn from different perspectives can be combined in understanding organizational evolution. Second, it shows the explanatory and prescriptive potential of a combinatorial approach to resources and organizational configurations. This approach helps distinguish those features of organizational history that are ineffective and those that are instead effective for the firm survival. In Pilkington, the successful changes of firm boundaries have been predominantly linked to the combination of complementary resources rather than the resolving of transactional problems or realizing economies of scope through related diversification. The changes of internal structure have been successful due to a combination of waves of decentralization and centralization with a stable, robust coordination by communities at the level of research activities.
    Keywords: organizational structure and evolution, Pilkington plc, combinatorial approach, organization theory
    JEL: L20
    Date: 2005–04–26
  11. By: Caitriona McLeish (SPRU, University of Sussex); Paul Nightingale (SPRU, University of Sussex)
    Abstract: Concerns about the proliferation of biological weapons and the threat posed by bioterrorism have assumed greater political prominence in recent years. In response, governments are actively attempting to frustrate the diffusion of technologies, relevant to the production of biological weapons, to regimes and non-state actors which might develop and use such weapons. Their most recent efforts have involved the introduction of a range of new national measures to control access to materials, knowledge and technologies. Preventing the diffusion of the necessary knowledge and technologies used to develop biological weapons is complicated because the underlying technologies often have legitimate and socially beneficial applications. Any controls to prevent their hostile application can also potentially disrupt legitimate activity, thereby generating social costs. For example, anecdotal evidence suggests that the introduction of biosecurity controls in the US and Germany are adversely affecting scientific research in those countries. Governments therefore need to balance these costs against the security benefits that such controls generate. To do this policy makers need information on the impact of these new ‘biosecurity’ measures. However, this is a new area of policy and few impact assessments have been performed. This pilot project, funded by the Economic and Social Research Council3, developed and validated new methods for assessing the impact that UK government biosecurity policies, introduced to prevent legitimate scientific research from being misused, are having on the practice of science. This short report briefly explains the project and outlines a sample of the initial results.
    Keywords: biological weapons, bioterrorism, knowledge, control of proliferation, biosecurity
    JEL: O33
    Date: 2005–04–20
  12. By: Gustavo Crespi (SPRU, University of Sussex); Aldo Geuna (SPRU, University of Sussex)
    Abstract: This paper presents results from employing an econometric approach to examine the determinants of scientific production at cross-country level. The aim of this paper is not to provide accurate and robust estimates of investment elasticities (a doubtful task given the poor quality of the data sources and the modelling problems), but to develop and critically assess the validity of an empirical approach for characterising the production of science and its impact from a comparative perspective. We employ and discuss the limitations of a production function approach to relate investment inputs to scientific outputs using a sample of 14 countries for which we have information about Higher Education Research and Development (HERD). The outputs are taken from the Thomson ISI® National Science Indicators (2002) database on published papers and citations. The inputs and outputs for this sample of countries have been recorded for a period of 21 years (1981-2002). A thorough discussion of data shortcomings is presented in this paper. On the basis of this panel dataset we investigate the profile of the time lag between the investment in HERD and the research output and the returns to national investment in science. We devote particular attention to analysis of the presence of cross-country spillovers. We show their relevance and underline the international effect of the US system.
    Keywords: productivity of science, lag structure, returns to HERD investment, international spillovers
    JEL: L3 O3
    Date: 2005–04–19
  13. By: Stan J. Liebowitz (University of Texas at Dallas); Stephen E. Margolis (North Carolina State University)
    Abstract: In 2002, seventeen economists including five Nobel Laureates presented an amicus curiae brief discussing the economics of copyright extension in support of the petitioners in Eldred v. Ashcroft. The economists’ amicus brief was unusual in several respects, not least in that it brought together a group of economists almost as notable for its diversity of opinion (spanning the ideological spectrum from Kenneth Arrow to Milton Friedman) as for its academic distinction. When such a distinguished and broad panel of economists readers would have every reason to believe that the arguments set forth in this document are sound down to the smallest details. Yet this is not the case. Scholars in the fields of law and economics will continue to address the economics of copyright duration in the foreseeable future, so it is important that they understand the imperfections in the economists’ brief. This Article provides a counterweight to the amicus brief, identifying some points the economists ignored, clarifying some discussions they did not quite get right, and providing data that runs counter to some assumptions they made.
    Keywords: Eldred, coypright, sonny bono, lessig
    JEL: K
    Date: 2005–05–03

This nep-tid issue is ©2005 by Francesco Lissoni. 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.