|
on Technology and Industrial Dynamics |
| By: | Cristiana Benedetti Fasil |
| Abstract: | Recent empirical evidence based on firm level data emphasizes firm heterogeneity in innovation activities and the different effects of process and product innovations on the productivity level and productivity growth. To match this evidence, this paper develops an endogenous growth model with two sources of firm heterogeneity: production efficiency and product quality.Both attributes evolve endogenously through firms’ innovation choices. Growth is driven by innovation and self-selection of firms and sustained by entrants who imitate incumbents. Calibrating the economy to match the Spanish manufacturing sector, the model enables to quantify the different effects of selection, innovation, and imitation as well as product and process innovation on growth. Compared to single attribute models of firm heterogeneity, the model provides a more complete characterization of firms’ innovation choices explaining the partition of firms along different innovation strategies and generating consistent firm size distributions. |
| Keywords: | endogenous growth theory, firm dynamics, heterogeneous firms, productivity, quality, innovation |
| JEL: | L11 L16 O14 O31 O40 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:eui:euiwps:eco2009/30&r=tid |
| By: | Ramon Casadesus-Masanell (Harvard Business School, Harvard University); Gaston Llanes (Harvard Business School, Harvard University) |
| Abstract: | We study competitive interaction between profit-maximizing firms that sell software and complementary goods or services. In addition to tactical price competition, we allow firms to compete through business model reconfigurations. We consider three business models: the proprietary model (where all software modules offered by the firm are proprietary), the open source model (where all modules are open source), and the mixed source model (where a few modules are open). When a firm opens one of its modules, users can access and improve the source code. At the same time, however, opening a module sets up an open source (free) competitor. This hampers the firm's ability to capture value. We analyze three competitive situations: monopoly, commercial firm vs. non-profit open source project, and duopoly. We show that: (i) firms may become "more closed" in response to competition from an outside open source project; (ii) firms are more likely to open substitute, rather than complementary, modules to existing open source projects; (iii) when the products of two competing firms are similar in quality, firms differentiate through choosing different business models; and (iv) low-quality firms are generally more prone to opening some of their technologies than firms with high-quality products. |
| Keywords: | Open Source, User Innovation, Business Models, Complementarity, Vertical Differentiation, Value Creation, Value Capture |
| JEL: | O31 L17 D43 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:0906&r=tid |
| By: | Raquel Ortega-Argilés (European Commission, Joint Research Center (JRC), Institute for Prospective Technological Studies (IPTS)); Mariacristina Piva (DISCE, Università Cattolica); Lesley Potters (European Commission, Joint Research Center (JRC), Institute for Prospective Technological Studies (IPTS)); Marco Vivarelli (DISCE, Università Cattolica) |
| Abstract: | This paper discusses the link between R&D and productivity across the European industrial and service sectors. The empirical analysis is based on both the European sectoral OECD data and on a unique micro longitudinal database consisting of 532 top European R&D investors. The main conclusions are as follows. First, the R&D stock has a significant positive impact on labour productivity; this general result is largely consistent with previous literature in terms of the sign, the significance and the magnitude of the estimated coefficients. More interestingly, both at sectoral and firm levels the R&D coefficient increases monotonically (both in significance and magnitude) when we move from the low-tech to the medium and high-tech sectors. This outcome means that corporate R&D investment is more effective in the high-tech sectors and this may need to be taken into account when designing policy instruments (subsidies, fiscal incentives, etc.) in support of private R&D. However, R&D investment is not the sole source of productivity gains; technological change embodied in gross investment is of comparable importance on aggregate and is the main determinant of productivity increase in the low-tech sectors. Hence, an economic policy aiming to increase productivity in the low-tech sectors should support overall capital formation. |
| Keywords: | R&D, productivity, high-tech sectors, innovation, industrial policy |
| JEL: | O33 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:ctc:serie2:dises0955&r=tid |
| By: | Noriaki Matsushima; Yasuhiro Sato; Kazuhiro Yamamoto |
| Abstract: | We investigate the incentive and the welfare implications of a merger when heterogeneous oligopolists compete both in process R&D and on the product market. We examine how a merger affects the output, investment, and profits of firms, whether firms have merger incentives, and, if so, whether such mergers are desirable from the viewpoint of social welfare. We also derive equilibrium configurations and explore their welfare properties. |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:0754&r=tid |