nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2007‒02‒10
five papers chosen by
  1. New goods and the size distribution of firms By Erzo G.J. Luttmer
  2. Dominant Firms, Imitation, and Incentives to Innovate By Luis Cabral; Ben Polak
  3. What determines entrepreneurial clusters? By Luigi Guiso; Fabiano Schivardi
  4. The role of technology in M&As: a firm-level comparison of cross-border and domestic deals By Frey, Rainer; Hussinger, Katrin
  5. Preface to the Japanese Translation of An Evolutionary Theory of Economic Change By Richard R. Nelson; Sidney G. Winter
  1. By: Erzo G.J. Luttmer
    Abstract: This paper describes a simple model of aggregate and firm growth based on the introduction of new goods. An incumbent firm can combine labor with blueprints for goods it already produces to develop new blueprints. Every worker in the economy is also a potential entrepreneur who can design a new blueprint from scratch and set up a new firm. The implied firm size distribution closely matches the fat tail observed in the data when the marginal entrepreneur is far out in the tail of the entrepreneurial skill distribution. The model produces a variance of firm growth that declines with size. But the decline is more rapid than suggested by the evidence. The model also predicts a new-firm entry rate equal to only 2.5% per annum, instead of the observed rate of 10% in U.S. data.
    Date: 2007
    URL: http://d.repec.org/n?u=RePEc:fip:fedmwp:649&r=tid
  2. By: Luis Cabral; Ben Polak
    Date: 2007
    URL: http://d.repec.org/n?u=RePEc:ste:nystbu:07-6&r=tid
  3. By: Luigi Guiso; Fabiano Schivardi
    Abstract: We contrast two potential explanations of the substantial differences in entrepreneurial activity observed across geographical areas: entry costs and external effects. We extend the Lucas model of entrepreneurship to allow for heterogeneous entry costs and for externalities that shift the distribution of entrepreneurial talents. We show that these assumptions have opposite predictions on the relation between entrepreneurial activity and firm level TFP: with different entry costs, in areas with more entrepreneurs firms’ average productivity should be lower and vice versa. We test these implications on a sample of Italian firms and unambiguously reject the entry costs explanation in favor of the externalities one. We also investigate the sources of external effects, finding robust evidence that learning externalities are an important determinant of cross-sectional differences in entrepreneurial activity
    Keywords: Entrepreneurship, clustering, agglomeration economies
    JEL: D24 D62 J23
    Date: 2006
    URL: http://d.repec.org/n?u=RePEc:cns:cnscwp:200616&r=tid
  4. By: Frey, Rainer; Hussinger, Katrin
    Abstract: Technological change is often hypothesized as one of the main drivers of merger activities. This paper analyzes the role of technology in mergers and acquisitions (M&As) at the firm level. Based on a newly created data set that combines financial information and patent data for public limited companies in Europe as well as country level variables, we apply a structural model to investigate technology-related motivations behind merger formation. Distinguishing between cross-border and domestic M&As, we find that technological relatedness of the M&A partners reduces uncertainty and the expected risk of failure associated with cross-border acquisitions significantly, whereas there is no evidence for technological complementarities driving domestic M&As. The relevance of technology for crossborder M&As further illustrates the international character of technology markets.
    Keywords: domestic versus cross-border M&As, technological relatedness, market relatedness
    JEL: C25 G34 O32 O34
    Date: 2006
    URL: http://d.repec.org/n?u=RePEc:zbw:bubdp1:5194&r=tid
  5. By: Richard R. Nelson; Sidney G. Winter
    Date: 2007–01–24
    URL: http://d.repec.org/n?u=RePEc:ssa:lemwps:2007/04&r=tid
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