Does legal system matter for directed technical change? Evidence from the auto industry

Does the effect of fuel taxes on clean innovations (e.g. hybrid technology) depend on the legal system’s rigidity? Using 1986–2005 data from more than 1900 firms, evidence suggests that auto-industry firms located in civil law (with more rigid laws) countries increase clean technology patenting more than common law (with more flexible laws) firms when the tax-inclusive fuel price rises. A rigid legal system appears to raise clean technology innovation.     

Labor market reforms, job instability, and the flexibility of the employment relationship

We endogenize separation in a search model of the labor market and allow for bargaining over the continuation of employment relationships following productivity shocks to take place under asymmetric information. In such a setting separation may occur even if continuation of the employment relationship is privately efficient for workers and firms. We show that reductions in the cost of separation, owing for example to a reduction in firing taxes, lead to an increase in job instability and, when separation costs are initially high, may be welfare decreasing for workers and firms. We furthermore show that, in response to an exogenous reduction in firing taxes, workers and firms may switch from rigid to flexible employment contracts, which further amplifies the increase in job instability caused by policy reform.     

The strategic nature of advertising in segmented markets

We develop a simple model in which firm-specific advertising has cooperative and predatory effects. Our model is set in a static market where firms are naturally segmented into two distinct submarkets: several large firms located in the core, with small firms operating as a fringe. We test the net effect of opposing market size (cooperative) and market share (predatory) effects of both fringe and core firm advertising on the advertising decisions of large firms in several US consumer industries. Empirically, fringe firm advertising leads to an increase in advertising efforts by large firms, implying strategic complementarity. On the other hand, increased advertising by core firms in an industry decreases advertising expenditures of other core firms, indicating they are strategic substitutes. Our findings imply that equilibrium levels of advertising can be greater with asymmetric, rather than symmetric, strategic interactions.     

Standardization Process of Systems Technologies: Creating a Balance between Competition and Cooperation

Many firms are experimenting with how to standardize new technologies. They may use proprietary technologies for their products and services, and let them compete in the market selection. Alternatively, they can cooperate to jointly set a standard and experiment with combinations of market process and cooperation. If firms let the market decide, they can compete with technologies and need not invest time and effort in hammering out a standard. If they do incur the costs of negotiated standardization, they may enable end users to realize the benefits of standards. A hybrid standardization process combines the advantages of both market selection and negotiated decision making. This paper presents a contingency framework to identify conditions that will affect the preferred standardization process for vendors who introduce new technologies. A major contingency that this paper points to is the systemic nature of technologies in information and communication technology industries. The more systemic the technology is (in a way to be clarified), the less likely that firms will establish a hybrid standardization process. One advantage of decomposing technology systems in smaller components (modules) is that this approach enables firms to combine market selection with negotiated selection of standards.     

Market power of firms and exchange-rate fluctuations

This paper explores the potential of firms to restrict industry outputs (market power) in oligopolistically organized markets where domestic firms compete with foreign ones. Within a stochastic price-setting supergame framework, market power is shown to be lower in general with flexible exchange rates for the following reasons. (i) The conditions that the fully collusive outcome—oligopolists maximizing joint profits — is sustainable in equilibrium become stronger if the exchange rate fluctuates, provided that fluctuations are sufficiently small. (ii) Even if full collusion can be sustained, industry outputs will be higher on the average with flexible than with fixed exchange rates.     

Exports, unemployment, and the welfare state

Abstract .  The paper analyzes the labour market effects of globalization when foreign market entry is costly and risky. With flexible labour markets, a fall in foreign market entry cost tends to generate more income inequality, but not necessarily so, as more firms pay foreign entry cost. By contrast, when labour markets are inflexible in the short run, globalization tends to increase unemployment. In this situation, government unemployment benefits reduce the wages that exporting firms need to pay workers as risk compensation. Thus more firms within an industry and more industries enter the foreign market, which in turn tends to increase unemployment.     

Migration,Unemployment, and Skill Downgrading

In this paper, we analyze the labor market impacts of immigration under flexible and rigid labor market regimes. A general equilibrium framework is developed, accounting for skill heterogeneity and labor market frictions, where unemployed medium‐skilled manufacturing workers are downgraded into low‐skilled service jobs, while low‐skilled service workers might end up unemployed. The analytical analysis shows that medium‐skill immigration decreases low‐skilled unemployment under the flexible regime, indicating a complementarity effect, while the rigid regime induces a substitution effect, leading to low‐skilled unemployment. Moreover, it leads to wage polarization. In a numerical analysis, the economic effects of different migration scenarios are quantified.     

The Economics of Vocational and Technical Education: A Report on three Studies

This paper analyzes new forms of flexibility in the US apparel industry and the consequences of this flexibility for labor market segmentation. Post-Fordist flexible work organization takes place only in those enterprises that occupy privileged positions in newly established hierarchical networks of firms. Subcontracting work to smaller firms results in labor segmentation between rather than within firms. Dominant firms in hierarchical networks gain production efficiencies similar to that attained by a fixed hierarchy within Fordist type enterprises. For most apparel workers, the new production system could best be described as neo-Fordist, since it appears to be predicated on routinization and work intensification.     

Labour market rigidity and expansionary austerity

This study provides new evidence on how labour market rigidities affect the transmission of fiscal consolidations using a sample of 17 OECD countries. Owing to a novel empirical approach, the outcomes of consolidations are modelled as a function of employment and wage rigidities. The evidence confirms that tax-based consolidations are distortionary, while expenditure-based consolidations have wealth effects. These effects are then magnified by flexible employment and rigid wages, while they are moderated by rigid employment and flexible wages. This indicates that labour market conditions influence how fiscal consolidation is propagated in the economy by affecting both the magnitude and the transmission channels of consolidation plans. This result has crucial policy implications and suggests that the design of consolidation plans should account for the labour market structure.     

How does the marriage market clear? An empirical framework

Abstract. The paper surveys the Choo and Siow (2006a; CS) marriage matching model and its extensions. CS derives a behavioural marriage‐matching function. The collective model of intra‐household allocations can be integrated into this framework. Spousal labour supplies respond to changing marriage market conditions. Marriage market tightness, the ratio of unmarried type i men to unmarried type j women is a sufficient statistic for marriage market conditions for those types of individuals. The hypothesis that spousal labour supplies vary to equilibrate the marriage market has overidentifying restrictions. The framework extends to a dynamic marriage‐matching environment. Empirically, this paper shows how the famine caused by the great leap forward in Sichuan affected the marital behaviour of famine‐born cohorts. Marriage market tightness is shown to be a useful statistic for summarizing marriage market conditions in the United States. Marriage market conditions in the contemporary United States primarily affect spousal labour force participation rather than hours of work.     

产业的柔性集聚及其区域竞争力

由于新技术革命的推动,世界范围内许多产业的发展已经或正在从福特制向后福特制转变,柔性专业化中小企业随之不断涌现。在此过程中,同一产业或相关产业部门中的大量专业化企业通过彼此间稠密的生产合作或市场交易网络,在地域空间上形成专业化的产业集聚体。这些柔性集聚体发展成为颇具竞争力的区域系统,奠定了现代区域经济发展中最重要的空间格局。     

Chinese competition and product variety of Indian firms

Using detailed firm-product-year data across manufacturing industries in India, and exploiting the exogenous nature of China’s entry into the WTO in 2001, we investigate the link between the impact of import penetration from China on the product variety of Indian manufacturing firms. We find: (i) robust and significant effects of product drop, with the effect coming only from competitive pressure in the domestic market; (ii) robust evidence of product drop or ‘creative destruction’ only for firms belonging to the lower-half of the size distribution; (iii) firms drop their peripheral/marginal products and concentrate on the core ones; and (iv) the result is strongest for firms producing intermediate goods. For an average Indian manufacturing firm, a 10 percentage point increase in India’s Chinese share of imports in the domestic market reduces the product scope of firms by 1.7–4.4%. In contrast, we find positive effects on product scope when firms are importing intermediate goods. We also find evidence of significant productivity effects and within-firm factor reallocation. Our results are consistent to a battery of robustness checks and IV estimation.     

A HYBRID DISCRETE CHOICE MODEL OF DIFFERENTIATED PRODUCT DEMAND WITH AN APPLICATION TO PERSONAL COMPUTERS

In this article, I consider a new discrete choice model of differentiated product demand that distinguishes a brand‐level differentiation from a product‐level differentiation. The model is a hybrid of the random coefficient logit model of Berry et al. (Econometrica 63 (1995), 841–90) and the pure characteristics model of Berry and Pakes (International Economic Review 48 (2007), 1193–1225) and describes markets where firms offer multiple products of different qualities under the same brand name. I compare the hybrid model with existing models using data on personal computers. Using the estimates of the hybrid model, I also provide empirical evidence that firms reposition their brands in a postmerger market.     

The three regimes of the IS-LM model: A non-Walrasian analysis

Three different versions of the IS-LM model are generally found in the literature: A first version assumes both price and wage rigid, and excess supply on the two markets. A second version assumes a rigid wage, but a flexible price clearing the goods market. Finally, a third version assumes that both markets are cleared. We develop in this paper a synthetic model which displays the three above cases as particular regimes of the same model, by formalizing the implicit assumption of Keynesian models that the price and wage levels are rigid downwards, but flexible upwards. The resulting non-Walrasian equilibria can be of three types, which correspond to the three versions of the IS-LM model described above. In each case we show how production and employment are determined, and compute the multipliers for fiscal and monetary policy. Finally, the parameter space is partitioned into three subregions corresponding to each regime.     

Stable market structures from merger activities in mixed oligopoly with asymmetric costs

This paper examines endogenous merger formations in a mixed oligopoly. Applying the core as a solution concept, we analyze which market structure(s) remain(s) stable when three firms—two symmetric private firms and one inefficient public firm—are allowed to merge with each other in a mixed Cournot industry. We show that according to the value of the marginal cost of the public firm, there always exists a pair of share ratios of the owners of both the (pre-merged) public firm and the (pre-merged) private firm such that the market structure with the merger between the public firm and one private firm belongs to the core. When the initial market structure is a mixed triopoly, it can only be blocked when one public firm and one private firm merge. Furthermore, we conduct a similar analysis in a general mixed oligopoly with one public firm and n private firms.      

创业导师指导效果影响因素与对策研究

创业导师是指凭借自身丰富知识和经验向初创企业创业者提供激励与建议,以帮助他们避免出现致命错误的人。采用自我决定理论和社会认知理论考察创业导师外部服务动机、内部服务动机、创业指导自我效能感对新创企业成长、创业者成长及创业导师自身幸福感的影响,对176名创业导师数据进行回归分析。结果显示：①创业导师外部服务动机与新创企业销售额增长、创业者成长呈显著正向关系;②创业导师内部服务动机与新创企业市场份额增长、创业者成长及创业导师幸福感呈显著正向关系;③创业导师创业指导自我效能感与新创企业销售额及市场份额增长、创业者成长及创业导师幸福感呈显著正向关系。基于上述研究结果,从培育创业导师特色文化、强化创业导师激励机制、培养创业导师核心能力和搭建创业导师智库平台4个方面提出提升创业导师指导效果的对策建议。     

REGULATIONS AND STRATEGY: EVIDENCE ON ADVERTISING

This article evaluates the impact of the introduction of incentive regulation on firms’ advertising spending among the population of local exchange carriers in the United States telecommunications industry between 1988 and 2001. The results show that the hybrid rate of return method and other intermediate incentive schemes have a negative relationship with advertising spending. Conversely, the introduction of pure price caps schemes has had a positive and significant impact on firms’ advertising spending. These results highlight the importance of incentive compatible mechanism design in motivating firms to be market oriented and strive for superior performance.     

MNEs and market valuation of firms: a cross-sectional study of Indian electrical and electronic goods manufacturing firms

This paper argues that inter-firm differences in the direction of change in market valuation will depend mainly on the ‘salience’ and unique risk characteristics of the firms. These characteristics are largely influenced by mulinational enterprise (MNE) affiliation. The sample for the study consists of electrical and electronic manufacturing firms in India for 1994–1996. Maximum Likelihood Estimates of the Probit model show that even during a downswing in the stock market MNE affiliates were able to hold their own and increase their market valuation. These results hold good for a wide variety of products produced in this sector where both MNEs and local firms compete. The results have implications for theories relating to MNEs, stock market valuation and also for policy makers.     

Capitalism, profits and innovation in the new techno-economic paradigm

Innovative profits (of the kind conceptualized by Schumpeter) are today being increasingly created through international corporate networks for technological development. Such profits through innovation are encouraged by newer more flexible organizational forms, and further encouraged (unlike in the conventional perspective on profits and on the incentive to innovate) by knowledge flows between firms. Our empirical evidence, based on US patent data, shows that multinational companies are currently more likely to develop abroad technologies which are less science-based, and less dependent upon tacit knowledge. However, within the science-based industries firms may generate abroad some technologies which are heavily dependent on tacit knowledge, but normally in fields that lie outside their own core technological competencies. We find some evidence of a convergence in corporate technological diversification across large firms, facilitated by the now common spread in the use of information and communication technologies (ICT) as an integrator of formerly separate technological systems. This has led smaller firms to diversify, but giant firms to consolidate activity around those technologies that have become most interrelated.     

Skills,Tasks and the Scarcity of Talent in a Global Economy

The scarcity of talent is a tremendous challenge for firms in the globalized world. This paper investigates the role of labor market imperfection in open economies for the usage of talent in the production process of firms. For this purpose, I set up a heterogeneous firms model, where production consists of a continuum of tasks that differ in complexity. Firms hire low‐skilled and high‐skilled workers to perform these tasks. How firms assign workers to tasks depends on factor prices for the two skill types and the productivity advantage of high‐skilled workers in the performance of complex tasks. I study the firms’ assignment problem under two labor market regimes, which capture the polar cases of fully flexible wages and a binding minimum wage for low‐skilled workers. Since the minimum wage lowers the skill premium, it increases the range of tasks performed by high‐skilled workers, which enhances the stock of knowledge within firms to solve complex tasks and reduces the mass of active firms. In a setting with fully flexible wages trade does not affect the firm‐internal assignment of workers to tasks. On the contrary, if low‐skilled wages are fixed by a minimum wage, trade renders high‐skilled workers a scarce resource and reduces the range of tasks performed by this skill type with negative consequences for the human capital stock within firms. In this case, trade leads to higher per‐capita income for both skill types and thus to higher welfare in the open than in the closed economy, whereas – somewhat counter‐intuitive – inequality between the two skill types decreases, as more low‐skilled workers find employment in the production process.