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on Technology and Industrial Dynamics |
| By: | Niels Bosma; Erik Stam; Veronique Schutjens |
| Abstract: | Do processes of firm entry and exit improve the competitiveness of regions? If so, is this a universal mechanism or is it contingent on the type of industry or region in which creative destruction takes place? This paper analyses the effect of firm entry and exit on the competitiveness of regions, measured by Total Factor Productivity (TFP) growth. Based on a study across 40 regions in the Netherlands over the period 1988-2002, we find that firm entry is related to productivity growth in services, but not in manufacturing. The positive impact found in services does not necessarily imply that new firms are more efficient than incumbent firms; high degrees of creative destruction may also improve the efficiency of incumbent firms. We also find that the impact of firm dynamics on regional productivity in services is higher in regions exhibiting diverse but related economic activities. |
| Keywords: | entrepreneurship, entry & exit, turbulence, creative destruction, regional competitiveness, total factor productivity |
| JEL: | L10 M13 O18 R11 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:0813&r=tid |
| By: | Scherer, F. M. (Harvard U) |
| Abstract: | This paper, written for an American Bar Association compendium on competition policy, reviews seven of the most important U.S. antitrust cases charging firms in high-technology industries with violations of Sherman Act Section II -- i.e., with monopolization. The principal target firms were Standard Oil of New Jersey, General Electric (in lamps), AT&T, du Pont (for cellophane), Xerox, IBM, and Microsoft (both in the United States and Europe). From an analysis of the historical records, it is clear that in most instances, the legal system took far too long to deal with the contested issues. In the interim, firms that had achieved dominant positions through innovation often embraced new technologies slowly, sometimes pursuing an explicit "fast second" strategy -- that is, waiting to innovate until their positions were threatened by outsiders. The stimulating effect of outside challenges suggests that entry should be kept open, among other things by combating the extension over time of blocking patent positions. Procedural reforms for accelerating the adjudication of complaints are proposed. |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp07-043&r=tid |
| By: | Chia-Lin Chang; Les Oxley (University of Canterbury) |
| Abstract: | The paper analyses the impact of geographic innovation on Total Factor Productivity (TFP) in Taiwan. Using 242 four-digit standard industrial classification (SIC) industries in Taiwan in 2001, we compute TFP by estimating Translog production functions with K, L, E and M inputs, and measure the geographic innovative activity using both Krugman's Gini coefficients and the location Herfindahl index. We also consider the geographic innovation variable as an endogenous variable and use 2SLS to obtain a consistent, albeit inefficient, estimator. The empirical results show a significantly positive effect of geographic innovation, as well as R&D expenditure, on TFP. These results are robust for the Gini coefficients and location Herfindahl index, when industry characteristics and heteroskedasticity are controlled. Moreover, according to the endogeneity of geographic innovation, the Hausman test shows that the geographic innovation variable should be treated as endogenous, which supports the modern theory of industrial clustering about innovation spillovers within clusters. |
| Keywords: | Industry agglomeration; Geographic innovation; Total factor productivity; Cluster; Research and Development |
| JEL: | O32 O33 L60 R12 |
| Date: | 2008–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:cbt:econwp:08/14&r=tid |
| By: | Hany El Shamy (University of Surrey); Paul Temple (University of Surrey) |
| Abstract: | This paper considers the sources of technological change and productivity growth in the small firm sector of UK manufacturing over the period 1973- 2002, focusing on the mechanisms by which spillovers occur between the large firms which perform the bulk of R&D and smaller firms which are the recipients. It is argued that the current volume of domestic R&D generates profitable and high productivity opportunities for smaller firms. However this mechanism ignores the ways in which R&D also contributes to the more general knowledge base available to small firms as codified information which frequently takes the measurable form of industrial standards. A simple model of labour demand among small manufacturing is developed which employs two measures of technological activity intended to capture both these channels. A co-integrating relationship based upon an augmented labour demand equation is established for UK manufacturing, showing the relevance of both channels for the explanation of productivity growth in the small firm sector. |
| Keywords: | Key Words: Small firms; productivity; technological change; R&D; standards. |
| JEL: | J23 L25 L26 O32 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:sur:surrec:0708&r=tid |
| By: | Anni Nevalainen |
| Abstract: | ABSTRACT : This paper investigates the connection between firm entry and exit and labour productivity growth. The study has its theoretical foundations in modern Schumpeterian growth theory, distance to frontier model and vintage capital models. The importance of productivity enhancing restructuring has been increasingly acknowledged and all these theories depict the productivity enhancing effects that external restructuring - in particular firm entry and exit – may have. Despite the vast theoretical discussion there is only a little empirical research on the subject. Thus, this study aims at contributing to the existing empirical literature by utilizing panel data that contain information on all manufacturing subsectors from eight EU member states between 1997 and 2004. Empirical analysis is conducted with fixed effects panel regression. It is noted that firm turnover, especially firm entry enhances productivity growth, but the effects appear with a lag. Productivity enhancing effects of firm entry are the strongest three years after the initial entry. The effects of firm exit on labour productivity growth are also positive but more modest than the effects of firm entry. Results of the analysis suggest that the population of firm entrants is extremely heterogeneous. |
| Keywords: | labour productivity, manufacturing, firm entry, firm exit, modern Schumpeterian growth theory |
| JEL: | L6 O4 |
| Date: | 2008–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:rif:dpaper:1152&r=tid |