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on Technology and Industrial Dynamics |
| By: | Dennis Fok (Erasmus University Rotterdam); Andre van Stel (University of Amsterdam); Andrew Burke (Cranfield University, UK); Roy Thurik (Erasmus University Rotterdam) |
| Abstract: | This paper conducts the first general equilibrium analysis of the role of entry, exit and profits in industry dynamics. The benefit of our model is twofold. First, to discriminate between entrants’ role of performing the entrepreneurial function of creating disequilibrium and the conventional equilibrating role of moving the industry to a new equilibrium. Second, to discriminate between three aspects of industry dynamics: the effect of entry and exit on market equilibrium, duration of disequilibrium and patterns of adjustment. Using a rich data set of the retail industry, we construct a dynamic simultaneous equilibrium model of profits, entry and exit. We find that indeed entrants play an entrepreneurial function causing long periods of disequilibrium after which a new equilibrium is attained. Moreover, we find ample support for the statement that disequilibrium is the essence of economic progress. |
| Keywords: | entry; exit; profits; equilibrium; industrial dynamics; retailing |
| JEL: | B50 J01 L00 L1 L26 |
| Date: | 2010–01–13 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20100012&r=tid |
| By: | Aiello, Francesco; Cardamone, Paola |
| Abstract: | This paper assesses the impact of R&D efforts on production in the North and Centre-South of Italy by using a panel of 1203 manufacturing firms over the period 1998-2003. The estimations are based on a nonlinear translog production function augmented by a measure of R&D spillovers. This measure combines the geographical distance between firms, the technological similarity within each pair of firms and the technical efficiency of each firm. The estimation method takes into account the endogeneity of regressors and the potential sample selection issue regarding firms’ decision to invest in R&D. Results show that the external stock of technology exerts a higher impact in the Centre-South of Italy. Finally, it emerges that R&D capital and R&D spillovers are substitutes for Northern firms and complements for Centre-Southern firms. |
| Keywords: | R&D spillovers; Italian economic divide; translog production function; technical efficiency |
| JEL: | C23 O33 L29 |
| Date: | 2010–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:22572&r=tid |
| By: | Andrew Atkeson; Ariel Burstein |
| Abstract: | We present a general equilibrium model of the response of firms' decisions to operate, innovate, and engage in international trade to a change in the marginal cost of international trade. We find that, although a change in trade costs can have a substantial impact on heterogeneous firms' exit, export, and process innovation decisions, the impact of changes in these decisions on welfare is largely offset by the response of product innovation. Our results suggest that microeconomic evidence on firms' responses to changes in international trade costs may not be informative about the implications of changes in these trade costs for aggregate welfare. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmsr:444&r=tid |