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on Technology and Industrial Dynamics |
| By: | Roberto M. Samaniego (Department of Economics, George Washington University) |
| Abstract: | Across industries, this paper finds that the rate of investment-specific technical change (ISTC) is positively related to rates of entry and exit. This finding is consistent with industry dynamics along the balanced growth path of a general equilibrium, multi-industry model of the plant lifecycle, in which technology adoption is costly and the rate of ISTC varies across industries. Results are robust to allowing for structural change induced by technological progress. The model also generates lumpy investment as a result of technology adoption by incumbents. |
| Keywords: | Entry, exit, turnover, investment-specific technical change, entry costs, vintage capital, embodied technical change, selection, obsolescence, structural change, lumpy investment. |
| JEL: | L16 O33 O41 |
| Date: | 2008–04–02 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:08-013&r=tid |
| By: | Lucia Cusmano; Maria Luisa Mancasi; Andrea Morrison |
| Abstract: | The paper investigates the diversified patterns of outsourcing in the Lombardy region and relates them to the probability of introducing product and process innovation. Based on a large firm-level survey, we show that outsourcing processes are strongly regionally embedded and that offshoring is still a limited phenomenon. Outsourcing strategies are shown to have a positive impact on firms’ innovation. In particular, the outsourcing of service activities contributes the most to innovation, thus suggesting that firms successfully pursue core strengthening strategies. Our econometric estimates show that both geographical and organizational proximity matter. Indeed, the positive association of services with innovation is strongly related to their regional dimension, which points toward the importance of local user-producer relationships. When outsourcing crosses national borders, keeping the outsourced activities at least loosely connected to the firm appears critical, as offshoring to non affiliated firms has a clear negative impact on innovation. |
| Keywords: | Product Innovation, Process Innovation, Outsourcing, Offshoring |
| JEL: | D21 F23 L22 L23 O31 O32 O33 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:0806&r=tid |
| By: | Badunenko, Oleg (DIW Berlin); Fritsch, Michael (Friedrich Schiller University Jena, Max Planck Institute of Economics Jena and DIW); Stephan, Andreas (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | This paper investigates the factors that explain the level and dynamics of manufacturing firm productive efficiency. In our empirical analysis, we use a unique sample of about 39,000 firms in 256 industries from the German Cost Structure Census over the years 1992-2005. We estimate the efficiencies of the firms and relate them to firm-specific and environmental factors. We find that (1) about half the model’s explanatory power is due to industry effects, (2) firm size accounts for another 20 percent, and (3) location of headquarters explains approximately 15 percent. Interestingly, most other firm characteristics, such as R&D intensity, outsourcing activities, or the number of owners, have extremely little explanatory power. Surprisingly, our findings suggest that higher R&D intensity is associated with being less efficient, though higher R&D spending increases a firm’s efficiency over time. |
| Keywords: | Frontier analysis; determinants of efficiency; firm performance; industry effects; regional effects; firm size |
| JEL: | D24 L10 L25 |
| Date: | 2008–04–02 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0126&r=tid |
| By: | Carlos Carreira (GEMF and Faculdade de Economia, Universidade de Coimbra); Paulino Teixeira (GEMF and Faculdade de Economia, Universidade de Coimbra) |
| Abstract: | This paper proposes a neo-Schumpeterian model in order to discuss how the mechanisms of entry and exit contribute to industry productivity growth in alternative technological regimes. By assuming a) that firms learn about the technology through a variety of sources, and b) a continuous flow of entry and exit, our numerical simulation exercise does show that exits and contraction take mostly place among less productive firms, while entry and expansion are concentrated among the more efficient ones. We were also able to replicate the fact that the entry-exit effect is larger in the entrepreneurial regime, while the contribution of continuing firms is larger in the routinized regime. Our model was thus very effective in replicating some major empirical regularities of industry dynamics, including the very prominent role of entry and exit in productivity growth. Our analysis also suggests that micro analysis is the proper complement to aggregate industry studies, as it provides a considerable insight into the causes of productivity growth. |
| Keywords: | Entry and Exit; Industrial Dynamics; Learning; Productivity growth; Nelson-Winter evolutionary industry model |
| JEL: | L1 D24 O3 C63 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:gmf:wpaper:2008-01&r=tid |
| By: | Joze P. Damijan; Crt Kostevc; Matija Rojec |
| Abstract: | The paper examines implications of endogenous growth theory on the relationship between firm productivity, innovation as well as productivity growth by combining information on firm-level innovation (CIS) with accounting data for a large sample of Slovenian firms in the period 1996-2002. We employ several different estimation methods in order to control for the endogeneity of innovation (Crépon-Duguet- Mairesse - CDM - approach) and idiosyncratic firm characteristics (matching and average treatment effects). We find a significant and robust link between productivity levels and firm propensity to innovate, while the results on the link between innovation activity and productivity growth are not robust to different econometric approaches. OLS estimates seem to provide some empirical support to the thesis of positive impact of innovation on productivity growth. More detailed empirical tests, however, reveal that these results are mainly driven by the exceptional performance of a specific group of services firms located in the fourth quintile with respect to size, productivity and R&D propensity measure. Estimates based on the matching techniques do not reveal any significant positive effects of innovation on productivity growth, regardless of the sectors, firm size and type of innovation. |
| Keywords: | Research and development, innovation, knowledge spillovers, productivity growth |
| JEL: | D24 F14 F21 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:lic:licosd:20308&r=tid |
| By: | Damiani, Mirella; Pompei, Fabrizio |
| Abstract: | Comparisons by countries and by sectors of mergers and acquisitions have usually been performed in separate fields of research. A first group of studies, focusing on international comparisons, has explored the role of corporate governance systems, investor protection laws and other countries’ regulatory institutions as the main determinants of takeovers around the world. A second group of contributions has attributed a central role to variations in industry composition, documenting that, in each country, mergers occur in waves and within each wave clustering by industry is observed. This paper aims to integrate both perspectives and to make comparisons by countries and by sectors, thus exploring the role of various driving forces on takeover activities. It also intends to consider the specific influence that technological regimes and their innovation patterns may exert in reallocating assets and moving capital among sectors. This will be done by examining the European experience of the last few years (2002-2005). We found that even in countries where transfer of control is a frequent phenomenon, mergers are less frequent in those sectors where innovation is a cumulative process and where takeovers may be a threat to the continuity of accumulation of innovative capabilities. |
| Keywords: | Mergers and Acquisitions; Corporate Governance; Technological Regimes |
| JEL: | O30 G34 L60 |
| Date: | 2008–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8226&r=tid |
| By: | Frank Neffke; Martin Svensson Henning; Ron Boschma; Karl-Johan Lundquist; Lars-Olof Olander |
| Abstract: | In this paper, the changing roles of agglomeration externalities during different stages of the industry life cycle are investigated. A central argument is that agglomeration externalities vary with mode of competition, innovation intensity, and characteristics of learning opportunities in industries. Following the Industry Life Cycle perspective, we distinguish between young and mature industries, and investigate how these benefit from MAR, Jacobs’ and Urbanization externalities. The empirical analysis builds on a Swedish plant level dataset that covers the period of 1974-2004.The outcomes of panel data regression models show that the benefits industries derive from their local environment are strongly associated with their stage in the industry life cycle. Whereas MAR externalities increase with the maturity of industries, Jacobs’ externalities decline when industries are more mature. This is in line with the hypothesis that young industries operate in an environment dominated by rapid product innovation and low levels of standardization. Hence, it pays off when knowledge can be sourced locally from many different sources, but there is still little scope for specialization benefits. Mature industries, in contrast, are associated with lower innovation intensities and a focus on cost saving process innovations. Therefore, there are major benefits to be derived from specialization, whereas knowledge spillovers from different industries are less relevant. The distinction between the product competition in young industries and price competition in mature industries is reflected in our finding that high regional factor costs are detrimental to mature industries, but not to young industries. This can also be related to the finding that high quality living environments, attractive for highly paid employees, are important to young industries. Overall, the outcomes stress that industrial life cycles have to be taken into account in the analysis of agglomeration externalities. |
| Keywords: | agglomeration externalities, industry life cycle, urbanization, Sweden |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:0808&r=tid |
| By: | Yves Breitmoser (Institute of Microeconomics, European University Viadrina); Jonathan H.W. Tan (Nottingham University Business School, University of Nottingham); Daniel John Zizzo (School of Economics, University of East Anglia) |
| Abstract: | This paper presents an experimental study of dynamic indefinite horizon R&D races with uncertainty and multiple prizes. The theoretical predictions are highly sensitive: small parameter changes determine whether technological competition is sustained, or converges into a market structure with an entrenched leadership and lower aggregate R&D. The subjects’ strategies are far less sensitive. In most treatments, the R&D races tend to converge to entrenched leadership. Investment is highest when rivals are close. This stylized fact, and so the usefulness of neck-to-neck competition in general, is largely unrelated to rivalry concerns but can be explained using a quantal response extension of Markov perfection. |
| Keywords: | R&D race; innovation; dynamics; experiment. |
| JEL: | C72 C91 O31 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:cdx:dpaper:2008-04&r=tid |