nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2006‒08‒19
four papers chosen by
Roberto Fontana
Universita Bocconi

  1. Productivity, Exporting and the Learning-by-Exporting Hypothesis: Direct Evidence from UK Firms By Gustavo Crespi; Chiara Criscuolo; Jonathan Haskel
  2. Competing Technologies in the Database Management Systems Market By Tobias Kretschmer
  3. Knowledge Flow and Sequential Innovation: Implications for Technology Diffusion, R&D and Market Value By Sharon Belenzon
  4. Original and Derived Judgment: An Entrepreneurial Theory of Economic Organization By Kirsten Foss; Nicolai J. Foss; Peter G. Klein

  1. By: Gustavo Crespi; Chiara Criscuolo; Jonathan Haskel
    Abstract: Case study evidence suggests that exporting firms learn from their clients. But econometric evidence,mostly using exporting and TFP growth, is mixed. We use a UK panel data set with firm-levelinformation on exporting and productivity. Our innovation is that we also have direct data on thesources of learning (in this case about new technologies). Controlling for fixed effects we have twomain findings. First, we find firms who exported in the past are more likely to then report that theylearnt from buyers (relative to learning from other sources). Second, firms who had learned frombuyers (more than they learnt from other sources) in the past are more likely to then have productivitygrowth. This suggests some support for the learning-by-exporting hypothesis.
    Keywords: Productivity, Exporting, Learning
    JEL: F12 L1
    Date: 2006–05
  2. By: Tobias Kretschmer
    Abstract: In this paper, we study the dynamics of the market for Database Management Systems(DBMS), which is commonly assumed to possess network effects and where there is stillsome viable competition in our study period, 2000 - 2004. Specifically, we make use of aunique and detailed dataset on several thousand UK firms to study individual organizations'incentives to adopt a particular technology. We find that there are significant internalcomplement effects - in other words, using an operating system and a DBMS from the samevendor seems to confer some complementarities. We also find evidence forcomplementarities between enterprise resource planning systems (ERP) and DBMS and findthat as ERP are frequently specific and customized, DBMS are unlikely to be changed oncethey have been customized to an ERP. We also find that organizations have an increasingtendency to use multiple DBMS on one site, which contradicts the notion that differentDBMS are near-perfect substitutes.
    Keywords: Database software, indirect network effects, technology adoption, microdata
    JEL: L86 O33
    Date: 2006–08
  3. By: Sharon Belenzon
    Abstract: It is shown that spillovers can enhance private returns to innovation if they feed back into the dynamic researchof the original inventor (Internalized spillovers), but will always reduce private returns, if theoriginal inventor does not benefit from the advancements other inventors build into the"spilled" knowledge (Externalized spillovers). I empirically identify unique patterns ofknowledge flows (based on patent citations), which provide information about whether"spilled" knowledge is reabsorbed by its inventor. A simple model of sequential innovationwith dynamic spillovers is developed, which predicts that market value and R&Dexpenditures should rise with Internalized spillovers and fall with Externalized spillovers.These predications are confirmed using panel data on U.S. firms between 1981 and 2001. Tothe extent that firms internalize some of the spillovers they create, the classicalunderinvestment problem in R&D will be mitigated and the central role of spillovers inpromoting economic growth will be enhanced.
    Keywords: market value, patents, R&D and spillovers
    JEL: O31 O32 O33
    Date: 2006–05
  4. By: Kirsten Foss; Nicolai J. Foss; Peter G. Klein
    Abstract: Recent work links entrepreneurship to the economic theory of firm using the Knightian concept of entrepreneurship as judgment. When judgment is complementary to other assets, and these assets or their services are traded in well-functioning markets, it makes sense for entrepreneurs to hire labor and own assets. The entrepreneur’s role, then, is to arrange or organize the human and capital assets under his control. We extend this Knightian concept of the firm by developing a theory of delegation under Knightian uncertainty. What we call original judgment belongs exclusively to owners, but owners may delegate a wide range of decision rights to subordinates, who exercise derived judgment. We call these employees “proxy-entrepreneurs,” and ask how the firm’s organizational structure — its formal and informal systems of rewards and punishments, rules for settling disputes and renegotiating agreements, means of evaluating performance, and so on — can be designed to encourage forms of proxy-entrepreneurship that increase firm value while discouraging actions that destroy value. Building on key ideas from the entrepreneurship literature, Austrian economics, and the economic theory of the firm we develop a framework for analyzing the tradeoff between productive and destructive proxy-entrepreneurship. We link this analysis to the employment relation and ownership structure, providing new insights into these and related issues in the economic theory of the firm.
    Keywords: Judgment; entrepreneur; delegation; employment relation; ownership
    JEL: B53 D23 L2
    Date: 2006

This nep-tid issue is ©2006 by Roberto Fontana. 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.