Product Innovation and Survival in a High-Tech Industry

We investigate the relationship between product innovation and firm survival for a sample of 121 firms in a high-tech industry. We find that location near the technological frontier is an important determinant of firm survival. Firms that are located near the frontier are also more likely to be acquired than to exit by liquidation if they cannot survive as free-standing enterprises. This suggests that product location in the technology space acts as a signal of firm quality. Greater R&D efforts increase the probability of surviving; in the event that the firm does exit, however, its R&D efforts do not significantly influence whether it exits via acquisition or exits via liquidation.     

Why did he do that? Using counterfactuals to study the effect of intentions in extensive form games

We investigate the role of intentions in two-player two-stage games. For this purpose we systematically vary the set of opportunity sets the first mover can choose from and study how the second mover reacts not only to opportunities of gains but also of losses created by the choice of the first mover. We find that the possibility of gains for the second mover (generosity) and the risk of losses for the first mover (vulnerability) are important drivers for second mover behavior. On the other hand, efficiency concerns and an aversion against violating trust seem to be far less important motivations. We also find that second movers compare the actual choice of the first mover and the alternative choices that would have been available to him to allocations that involve equal material payoffs.     

COHERENCE OF THE KNOWLEDGE BASE AND THE FIRM'S INNOVATIVE PERFORMANCE: EVIDENCE FROM THE U.S. PHARMACEUTICAL INDUSTRY*

We examine the relationship between the coherence of the knowledge base and the innovative performance of U.S. pharmaceutical firms during the 1990's. We develop measures of the coherence and scope of the firms' knowledge base. Count data regression models show a strong link between these two properties and the firms' innovative performance. Firms experience decreasing returns to scale in research but larger firms enjoy a significant size advantage in innovation. Knowledge flows are necessary in knowledge production but not sufficient to secure its quality. Over time, the contribution of the scope and coherence of the knowledge base is increasing.     

Application of the “probable future competition” doctrine to the commercial banking and savings and loan industries

Conclusions This study identified two implicit assumptions inherent in the use of the probable future competition (PFC) doctrine by regulators in the commercial banking and savings and loan industries. One assumption was that an institution's merger request identified it as the most likely entrant (MLE). The other assumption was that the higher the likelihood that a merger requestor would enterde novo the more important it is to deny its merger request so as to maintain the over all probability of entry.Both of these implicit assumptions were shown to be tenuous. In all cases where PFC was the issue, it was demonstrated that there was no logical reason for regulators to presume that a merger request signaled an MLE. Also, it was shown that in some quite reasonable situations merger approval is less harmful to the probability of at least onede novo entrant the higher is the merger requestor's individual likelihood of entry.     

Turnpike theory, discounted utility, and the von Neumann facet

The convergence of infinite optimal paths to stationary optimal paths is proved in models of capital accumulation whose discount factors are near 1, where strict concavity is not required for utility functions and production functions. The critical assumptions are unique support prices for points of the von Neumann facet, where is near 1, a unique optimal stationary stock when is equal to 1, and the absence of cyclic paths on the von Neumann facet when is equal to 1. The results are illustrated in generalizing a model provided by Weitzman and Samuelson.     

How location and ethnicity affect ethnic entrepreneurs in three Canadian cities

Few studies on the entrepreneurial contributions of immigrant and/or ethnic entrepreneurs have been carried out in Canada. This article presents results from a cross‐Canadian project. Data were collected from 718 entrepreneurs in three cities. Analysis of the socio‐demographic profile suggests that ethnic entrepreneurs pursue different paths of integration. Firm characteristics suggest that similar support programs are needed for ethnic firms as for all small firms. Also, our analysis suggests that there is no need for new support programs for ethnic firms, except to help them better integrate. Lastly, the use that these entrepreneurs make of social capital only partially confirms the literature. © 2010 Wiley Periodicals, Inc.     

Of markets,products and prices: The effects of the euro on European firms

The introduction of the euro was initially expected to boost trade by an enormous percentage. Following many downward revisions of original estimates the current consensus estimate amounts to an increase of about 5 per cent. In view of the initial high expectations this is often seen as a dismal result. It is, however, based on aggregate data and may therefore hide important microeconomic gains that arise even for a given level of trade fl ows. This paper uses detailed product and firm level data to shed light on these hidden gains. This paper is based on the EFIGE Report 2008, issued under the same title as Bruegel Blueprint Series Volume VIII. The research leading to these results has received funding from the European Community’s Seventh Framework Programme (FP7/2007-2013) under grant agreement No. 225551 and from the Bank of France. The views expressed in this publication are the sole responsibility of the authors and do not necessarily reflect the views of the European Commission or the Bank of France. We are grateful to Andrew Fielding for editorial support. Opinions expressed in this publication are those of the authors alone.     

Passive Hedge Fund Replication – Beyond the Linear Case

In this paper we extend Hasanhodzic and Lo (2007) by assessing the out‐of‐sample performance of various non‐linear and conditional hedge fund replication models. We find that going beyond the linear case does not necessarily enhance the replication power. On the other hand, we find that selecting factors on the basis on an economic analysis allows for a substantial improvement in out‐of‐sample replication quality, whatever the underlying form of the factor model. Overall, we confirm the findings in Hasanhodzic and Lo (2007) that the performance of the replicating strategies is systematically inferior to that of the actual hedge funds.