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on Technology and Industrial Dynamics |
| By: | Nyström, Kristina (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | Recent empirical research by, for example, Audretsch and Fritsch (1999) and Armington and Acs, (2002) shows that regional determinants of new firm formation differs between industries. It has also been suggested that a large part of the regional variation of new firm formation can be explained by differences in industrial structure. This paper reinvestigates the regional determinants of entry and exit considering these findings. The empirical analysis is performed using data on Swedish firm entry and exit rates for 1997-2001. It is shown that on average about 0.5 to 2.7 percent of the regional variation in entry and exit rates remains to be explained, after controlling for differences in industrial structure, but that there is substantial regional variation. A majority of the firms in the 47 industries investigated are sensitive to unobserved regional characteristics, such as regional policy when deciding to enter or exit a particular region. Agglomeration and the size structure in the particular industry and region are factors that are found to influence entry and exit rates in almost all industries. |
| Keywords: | Entry; exit; industry structure; regions |
| JEL: | L10 R12 |
| Date: | 2005–08–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0033&r=tid |
| By: | T. Broekel; T. Brenner |
| Abstract: | A growing body of work emphasizes the role that the spatial component plays in the in the innovation process. These perspectives brought the region's infrastructure and its endowment with crucial factors into the focus of research. Given that these factors do significantly influence the innovativeness of local firms, it is important to identify precisely which regional characteristics matter. The aim of this paper is to identify a number of key influences out of a multitude of structural factors that are thought to influence the firm's innovation activity. We examine more than eighty variables that approximate the financial, geographical and social-economic factor endowment of a region. The variables are tested with a linear and log - linear model. The two staged procedure examines the variable's bivariate correlation with patent data of five industries. Based on these outcomes multivariate regression models are applied in the second stage. The results for the different models are compared and their advantages and disadvantages are discussed. We find a strong impact of economic agglomeration, extramural science institutions and human capital. In the case of human capital, especially the graduates at the technical colleges are collocated with high regional innovativeness. Furthermore, significant differences are observed for the five industries and for using the two models. |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2005-09&r=tid |
| By: | Lucia Foster; John Haltiwanger; Chad Syverson |
| Abstract: | There is considerable evidence that producer-level churning contributes substantially to aggregate (industry) productivity growth, as more productive businesses displace less productive ones. However, this research has been limited by the fact that producer-level prices are typically unobserved; thus within-industry price differences are embodied in productivity measures. If prices reflect idiosyncratic demand or market power shifts, high "productivity" businesses may not be particularly efficient, and the literature's findings might be better interpreted as evidence of entering businesses displacing less profitable, but not necessarily less productive, exiting businesses. In this paper, we investigate the nature of selection and productivity growth using data from industries where we observe producer-level quantities and prices separately. We show there are important differences between revenue and physical productivity. A key dissimilarity is that physical productivity is inversely correlated with plant-level prices while revenue productivity is positively correlated with prices. This implies that previous work linking (revenue-based) productivity to survival has confounded the separate and opposing effects of technical efficiency and demand on survival, understating the true impacts of both. We further show that young producers charge lower prices than incumbents, and as such the literature understates the productivity advantage of new producers and the contribution of entry to aggregate productivity growth. |
| JEL: | E2 L1 L6 O4 |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11555&r=tid |
| By: | U. Witt |
| Abstract: | In the debate on why firms exist, the question of who chooses between firms and markets and on what basis is rarely addressed. This paper argues that the choice is a core element of the entrepreneurial pursuit of visions or conceptions of business opportunities. To successfully organize resources into the envisioned businesses – be it via firms or markets – resource owners must be coordinated on the entrepreneur’s conception of the business and be motivated to perform properly. To solve the dual problem, the organizational form of the firm offers the entrepreneur unique advantages not feasible under the organizational form of markets. |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2005-10&r=tid |
| By: | Steven N. Kaplan; Berk A. Sensoy; Per Strömberg |
| Abstract: | We study how firm characteristics evolve from early business plan to initial public offering to public company for 49 venture capital financed companies. The average time elapsed is almost 6 years. We describe the financial performance, business idea, point(s) of differentiation, non-human capital assets, growth strategy, customers, competitors, alliances, top management, ownership structure, and the board of directors. Our analysis focuses on the nature and stability of those firm attributes. Firm business lines remain remarkably stable from business plan through public company. Within those business lines, non-human capital aspects of the businesses appear more stable than human capital aspects. In the cross-section, firms with more alienable assets have substantially more human capital turnover. |
| JEL: | L2 G3 |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11581&r=tid |
| By: | G. Buenstorf; S. Klepper |
| Abstract: | We use new data on the location and background of entrants into the U.S. tire industry to analyze the factors that caused the industry to be so regionally concentrated around Akron, Ohio, a small city with no particular advantages for tire production. We analyze the states where firms entered and for the Ohio entrants the counties where they originated and entered, and we conduct various analyses of how proximity to other tire firms and to demanders affected the longevity of tire producers. We also examine how the heritage of the Ohio entrants influenced their longevity. Our findings suggest that the Akron tire cluster grew primarily through a process of organizational reproduction and heredity rather than through agglomeration economies, as has been commonly posited by scholars of the industry. |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2005-08&r=tid |
| By: | K. BAEYENS; T. VANACKER; S. MANIGART |
| Abstract: | The paper analyses venture capitalists’ selection process in biotechnology ventures. Biotech ventures operate in an extremely risky environment making this an interesting research setting. The majority of venture capitalists exclude certain biotech sectors exante because of regulatory uncertainty, the long development process to a market ready product and the difficulty to understand the technology. The more thorough due diligence process focuses on financial, market and technology criteria. Management team capabilities are more important for later stage investors, whereas early stage investors expect to have an impact on the future recruiting of professional managers. Despite the higher risk of biotech investments, we find no evidence that VCs require higher hurdle rates or more complete contracts for these investments, compared to investments in other technology-based companies. The most important reason for not reaching an investment agreement is disagreement over valuation, due to large differences in risk perception between entrepreneurs and venture capitalists and the lack of a standard valuation tool for biotech projects. |
| Keywords: | Venture capital; Selection process; Biotechnology. |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:05/313&r=tid |
| By: | Paola Criscuolo; Rajneesh Narula |
| Abstract: | Over the last decade or so, multinational enterprises (MNEs) have shifted from centralised hub structures to multi-hub structures. While these new structures provide greater potential for cross-fertilization of technologies and access to location-specific competences, promoting effective knowledge transfer within an MNE – especially in their R&D activities - presents significant managerial challenges. Using evidence collected on the R&D activities of MNEs in the pharmaceutical sector, this paper analyses the challenges associated with complexities of promoting and integrating knowledge flows in the face of inter-unit geographical, organizational and technological distance. MNEs are faced with organizational inertia that hinders efficient lateral communication and inter-unit knowledge transfer, and the evidence suggests that while socialization mechanisms help overcoming some of these bottlenecks, there remain a number of obstacles in optimising knowledge flows in physically and technologically dispersed R&D facilities. |
| Keywords: | Multinational enterprises; R&D; Geographical distance |
| JEL: | F23 D85 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:05-13&r=tid |
| By: | Lee Branstetter; Yoshiaki Ogura |
| Abstract: | What is driving the remarkable increase over the last decade in the propensity of patents to cite academic science? Does this trend indicate that stronger knowledge spillovers from academia have helped power the surge in innovative activity in the U.S. in the 1990s? This paper seeks to shed light on these questions by using a common empirical framework to assess the relative importance of various alternative hypotheses in explaining the growth in patent citations to science. Our analysis supports the notion that the nature of U.S. inventive activity has changed over the sample period, with an increased emphasis on the use of the knowledge generated by university-based scientists in later years. However, the concentration of patent-to-paper citation activity within what we call the "bio nexus" suggests that much of the contribution of knowledge spillovers from academia may be largely confined to bioscience-related inventions. |
| JEL: | O31 O38 |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11561&r=tid |
| By: | Sandro Mendonça |
| Abstract: | This empirical paper analyses the importance of information and communications technologies (ICT) in the technological diversification trend among the world’s largest manufacturing firms during the 1980s and 1990s. The objective of the research is twofold: firstly, to emphasise the emerging differences among technologies when companies from different industries patent outside their traditional technological capabilities; secondly, to investigate whether the tendency among large companies from all industries to patent in ICT is distinctive when compared with the tendency to patent in other technologies. We find that technological diversification in large companies has clearly occurred in ICTs. Non-ICT specialist industries increasingly develop, rather than just utilise, the cluster of ICT-related technologies. We conclude that the development of corporate capabilities in the key technologies of the emerging ICT paradigm is more widespread than previously emphasised in the literature. One implication of this observation is that technological diversification and the information revolution may be related phenomena. |
| Keywords: | Technological diversification, Large firms, ICT, Patents. |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2005/19&r=tid |
| By: | Eugen Kovac |
| Abstract: | This paper analyzes tying and bundling as an entry deterrence tool. It shows that a multi-product firm can defend its monopoly position in one market via tying even when it does not have market power in another market. This is shown on a model with two complementary goods, each of which is vertically differentiated and in which consumers’ preferences for the goods are positively correlated. Some possible ways of defending against entry deterrence, and implications for competition policy, are discussed. |
| Keywords: | Industrial organization, vertical differentiation, anti-trust policy, entry deterrence, foreclosure, tying, bundling. |
| JEL: | L11 L12 L13 L41 |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp266&r=tid |