nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2005‒10‒22
seven papers chosen by
Roberto Fontana
Universita Bocconi

  1. The Knowledge Spillover Theory of Entrepreneurship By Zoltan J. Acs; David B. Audretsch; Pontus Braunerhjelm; Bo Carlsson
  2. Job-Hopping in Silicon Valley: Some Evidence Concerning the Micro-Foundations of a High Technology Cluster By Bruce Fallick; Charles A. Fleischman; James B. Rebitzer
  3. Historical Financing of Small- and Medium-Sized Enterprises By Robert Cull; Lance E. Davis; Naomi R. Lamoreaux; Jean-Laurent Rosenthal
  4. Executive Compensation, Firm Performance, and Chaebols in Korea: Evidence from New Panel Data By Takao Kato; Woochan Kim; Ju Ho Lee
  5. To Buy or Not to Buy? Uncertainty, Irreversibility and Heterogeneous Investment Dynamics in Italian Company Data By Stephen Bond; Domenico Lombardi
  6. Science, social networks and spillovers By O. Sorenson; J. Singh; L. Fleming
  7. If Star Scientist do no Patent: an Event History Analysis of Scientific Eminence and the Decision to Patent in the Academic World By Mario Calderini; Chiara Franzoni; Andrea Vezzulli

  1. By: Zoltan J. Acs; David B. Audretsch; Pontus Braunerhjelm; Bo Carlsson
    Abstract: Contemporary theories of entrepreneurship generally focus on the decision-making context of the individual. The recognition of opportunities and the decision to commercialize them is the focal concern. While the prevalent view in the entrepreneurship literature is that opportunities are exogenous, the most prevalent theory of innovation in the economics literature suggests that opportunities are endogenous. This paper bridges the gap between the entrepreneurship and economic literature on opportunity by developing a knowledge spillover theory of entrepreneurship. The basic argument is that knowledge created endogenously via R&D results in knowledge spillovers. Such spillovers give rise to opportunities to be identified and exploited by entrepreneurs. Our results show that there is a strong relationship between knowledge spillovers and new venture creation.
    Keywords: Opportunity, knowledge, entrepreneurship, management science
    JEL: O3 R1 J24 M13
    Date: 2005–10
  2. By: Bruce Fallick (Federal Reserve Board of Governors); Charles A. Fleischman (Federal Reserve Board of Governors); James B. Rebitzer (Case Western Reserve University, Levy Institute, NBER and IZA Bonn)
    Abstract: In Silicon Valley's computer cluster, skilled employees are reported to move rapidly between competing firms. This job-hopping facilitates the reallocation of resources towards firms with superior innovations, but it also creates human capital externalities that reduce incentives to invest in new knowledge. Using a formal model of innovation we identify conditions where the innovation benefits of job-hopping exceed the costs from reduced incentives to invest in human capital. These conditions likely hold for computers, but not in most other settings. Features of state law also favor high rates of inter-firm mobility in California. Outside of California, employers can use non-compete agreements to inhibit mobility, but these agreements are unenforceable in California. Using new data on labor mobility we find higher rates of job-hopping for college-educated men in Silicon Valley's computer industry than in computer clusters located out of the state. Mobility rates in other California computer clusters are similar to Silicon Valley's, suggesting some role for state laws restricting non-compete agreements. Consistent with our model of innovation, we also find that outside of the computer industry, California’s mobility rates are no higher than elsewhere.
    Keywords: job mobility, industrial clusters, Silicon Valley, innovation, knowledge spillovers, non-compete agreements
    JEL: R12 L63 O3 J63 J48
    Date: 2005–10
  3. By: Robert Cull; Lance E. Davis; Naomi R. Lamoreaux; Jean-Laurent Rosenthal
    Abstract: We focus on the economies of the North Atlantic Core during the nineteenth and early twentieth centuries and find that an impressive variety of local financial institutions emerged to supply the needs of SMEs wherever there was sufficient demand for their services. Although these intermediaries had significant weaknesses, they were able to tap into local information networks and so extend credit to firms that were too young or small to secure funds from large regional or national institutions. In addition, by raising the return to savings for local households, they helped to mobilize significant new resources for economic development.
    JEL: G2 N2
    Date: 2005–10
  4. By: Takao Kato (Colgate University, Columbia University and IZA Bonn); Woochan Kim (KDI School of Public Policy and Management); Ju Ho Lee (KDI School of Public Policy and Management)
    Abstract: This paper provides the first rigorous econometric estimates on the pay-performance relations for executives of Korean firms with and without Chaebol affiliation. To do so, we have assembled for the first time panel data (that provide information not only on executive compensation and firm performance but also on Chaebol affiliation) for 246 firms that were included in KOSPI200 for at least two consecutive years from 1998 to 2001. Contrary to a popular belief that Korean corporate governance and the structure of Korean executive compensation is considerably different from elsewhere in the West, we find that cash compensation of Korean executives is statistically significantly related to stock market performance and that the magnitude of the sensitivity of pay to stock market performance is comparable to the U.S. and Japan. Perhaps even more importantly, further analysis reveals for the first time that such overall significant executive pay-performance link is driven by non- Chaebol firms and that no such link exists for Chaebol firms. The evidence is consistent with the recent literature on the nature of Chaebols in Korea and the current corporate governance reform efforts in Korea that are aimed mostly at Chaebol firms.
    Keywords: executive compensation, firm performance, corporate governance, Korea, Chaebols
    JEL: M52 M12 G30 G15 J33 O53
    Date: 2005–09
  5. By: Stephen Bond; Domenico Lombardi
    Abstract: This study tests for the presence of real options effects induced by uncertainty and (partial) irreversibility on fixed capital investment using Italian company data. The approach recognizes that firm-level investment spending may, itself, be aggregated over multiple investment decisions in separate types of capital goods and emphasizes effects of uncertainty on short-run investment dynamics. Using a survey-based measure of uncertainty related to the assessment of managers responsible for the firms' investment plans, the study finds evidence of heterogeneous and nonlinear dynamics pointing to a slower adjustment of investment in response to demand shocks at higher levels of uncertainty. The results also point to an additional source of nonlinearity originating from a convex response of investment to demand shocks.
    Keywords: Investment incentives , Italy , Economic models ,
    Date: 2004–07–07
  6. By: O. Sorenson; J. Singh; L. Fleming
    Abstract: Previous empirical research has established that science appears to stimulate the widespread diffusion of knowledge. The exact mechanism through which science catalyzes knowledge flow, however, remains somewhat ambiguous. This paper investigates whether the observed knowledge diffusion associated with science-based innovation genuinely stems from the norm of openness and incentives for publication, or whether it arises as an artifact of scientists having more dispersed social networks that facilitate the dissemination of tacit knowledge. Our findings support the former possibility: We use patent citation patterns to track knowledge flows, and find that science-based innovations diffuse more widely even after controlling for the underlying social networks of researchers as measured using data on prior collaborations.
    Date: 2005–10
  7. By: Mario Calderini (DSPEA, Polytechnic of Turin); Chiara Franzoni (University of Bergamo and CERIS (CNR)); Andrea Vezzulli (DEAS, University of Milan)
    Abstract: This paper contributes to the debate upon the trade-off between science and technology by looking at how the scientific performances of a researcher relate ex-ante to his/her attitude to patent, during his/her academic career. We run an event history analysis explaining the hazard for a scientist to become the inventor of a private-company-assigned patent as depending on publications and on personal, institutional and environmental characteristics. A striking result is that, although either productivity or quality, independently taken, are likely to increase the hazard to patent, top performers scientists, i.e. those scientists that publish a lot on highly-rated journals, are at very low risk.
    Keywords: academic patenting, research funding, technology transfer.,
    Date: 2005–04–29

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