|
on Technology and Industrial Dynamics |
| By: | Heli Koski |
| Abstract: | ABSTRACT : This paper addresses the question of the software companies’ timing of adoption of the open source software (OSS) business models comprising the supply of OSS products and/or services. The game-theoretic technology adoption models do not explain well the observed diffusion patterns of the OSS business model among the sample of 716 European software firms. Instead, it seems that the network effects influentially shape the diffusion path of the OSS supply strategies. Our study further contributes to the technology diffusion literature as our econometric model aims at separating, unlike the previous empirical studies on technology diffusion, the role that the replacement effect has in the diffusion patterns of new technologies. Our data detect a clear replacement effect hindering the incumbents’ investments in new technology. The expected price declines of the computer programs – and thus the expected declining license revenues from the proprietary software – accelerate less the incumbent firms’ timing of adoption of the OSS supply model than that of the entrants. |
| Keywords: | timing of technology adoption, diffusion, open source software, business models |
| JEL: | C41 D21 D23 L2 L86 O14 |
| Date: | 2007–10–29 |
| URL: | http://d.repec.org/n?u=RePEc:rif:dpaper:1102&r=tid |
| By: | Ghosal, Vivek |
| Abstract: | Against the backdrop of the theories developed in the real options and financing constraints literatures, this paper examines the impact of profit uncertainty and sunk costs on firms’ entry and exit decisions. For our empirical analysis, we compile an extensive dataset containing information on 267 U.S. manufacturing industries over a 30-year period containing industry-specific information on the number of firms and establishments, the size distribution of establishments, measures of sunk capital costs and profit uncertainty, among others. Our dynamic panel data estimates show that greater uncertainty about profits, especially in conjunction with higher sunk costs, results in (1) a marked decrease in the number of small firms and establishments; (2) a less skewed size distribution of firms and establishments; and (3) a marginal increase in industry output concentration. In sharp contrast, large establishments seem virtually unaffected. The results point to uncertainty in conjunction with sunk costs fundamentally affecting firms’ decision-making and altering the structure of industries by putting smaller businesses at a disadvantage. |
| Keywords: | Uncertainty; sunk costs; real options; financing constraints; decision-making; small businesses. |
| JEL: | L40 G10 O30 L11 D80 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:5461&r=tid |
| By: | Schmidt, Tobias; Rammer, Christian |
| Abstract: | Non-technological innovation is an important element of firms’ innovation activities that both supplement and complement technological innovation, i.e. the introduction of new products and new processes. We analyse the spread of nontechnological innovation in firms, their relation to technological innovation, and their effects to firm performance and success with product and process innovation, using data from the German Community Innovation Survey conducted in 2005 (German CIS 4). Non-technological innovation is defined as the introduction of new organisational methods or the introduction of new marketing methods. We find that the determinants of a firm’s propensity to introduce technological and non-technological innovations are very similar and that both types are closely related. There are only small effects of non-technological innovation on a firm’ profit margin, which contrasts the strong effects to be found from technological innovation. However, non-technological innovation spurs success with product and process innovation terms of sales with market novelties and cost reductions from new processes. |
| Keywords: | organisational innovation, marketing innovation, effects of innovation, CIS 4 |
| JEL: | L25 O30 O31 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:6355&r=tid |
| By: | Aubhik Khan; Julia K. Thomas |
| Abstract: | The authors study a model of lumpy investment wherein establishments face persistent shocks to common and plant-specific productivity, and nonconvex adjustment costs lead them to pursue generalized (S,s) investment rules. They allow persistent heterogeneity in both capital and total factor productivity alongside low-level investments exempt from adjustment costs to develop the first model consistent with the cross-sectional distribution of establishment investment rates. Examining the implications of lumpy investment for aggregate dynamics in this setting, the authors find that they remain substantial when factor supply considerations are ignored, but are quantitatively irrelevant in general equilibrium. ; The substantial implications of general equilibrium extend beyond the dynamics of aggregate series. While the presence of idiosyncratic shocks makes the time-averaged distribution of plant-level investment rates largely invariant to market-clearing movements in real wages and interest rates, the authors show that the dynamics of plants' investments differ sharply in their presence. Thus, model-based estimations of capital adjustment costs involving panel data may be quite sensitive to the assumption about equilibrium. Their analysis also offers new insights about how nonconvex adjustment costs influence investment at the plant. When establishments face idiosyncratic productivity shocks consistent with existing estimates, they find that nonconvex costs do not cause lumpy investments, but act to eliminate them. |
| Keywords: | Investments |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:07-24&r=tid |