Firm survival in the German automobile industry

In this paper, methods of duration analysis are applied to investigate determinants of firm survival in the German automobile industry during the period 1886–1939. A new comprehensive data set has been assembled in order to secure data comparable to that for the US automobile industry. Our results show that the forces shaping the survival pattern of firms over the life cycle are quite similar in both countries, i.e. early entry in the life cycle and prior experience are associated with a lower risk of exit. This finding holds equally when parametric, semiparametric and nonparametric methods are applied.We thank the participants of the 10th conference of the International Schumpeter Society in Milan, June 2004, and the 31st EARIE conference in Berlin, September 2004, for helpful discussion. We also thank two anonymous referees for their comments. All remaining errors are in our responsibility.     

A model of repeat advertising

Advertising conveys information not only about product characteristics but also about the number of consumers who know about the product. More advertising may shift expectations towards a larger consumer base, increasing buyers' valuation when there are consumption externalities.     

A dynamic model of advertising by the regulated firm

A profit-maximizing firm subject to price regulation typically seeks alternative variables to control if the regulatory constraint is binding. Advertising may be one such variable. By shifting the demand curve inward or outward between rate hearings, the firm may increase its earnings above the allowed level. Here, a simple discrete-time optimal-control model is proposed to examine the dynamic implications of advertising by the regulated firm. Our results indicate that, in the long run, the combined effect of regulation and advertising leads to a steady-state equilibrium that is closer to the minimum point on the firm's long-run average-cost curve than the original output level. Thus, an invisible-hand property is established that pushes the regulated firm to shift its demand curve toward the minimum point on its long-run average-cost curve in the presence of regulation. As a result, the well-known allocative inefficiency created by rate-of-return regulation (PMC), on which so much has been written over the past 100 years, is reduced (and, under certain conditions, eliminated) if the regulated firm is allowed to advertise.     

A two-stage technology foresight model with system dynamics simulation and its application in the Chinese ICT industry

Technology foresight is a process that identifies the critical technologies a country or industry needs to develop in order to shape a desired future. In this paper, a two-stage technology foresight approach is proposed. During the first stage, critical technologies are identified and evaluated by nationwide experts through Delphi surveys. In the second stage, a system dynamics simulation model is used to estimate how critical parameter values are likely to impact the attainment of foresight goals. A detailed illustration of this two-stage process is provided by a technology foresight case study in the Chinese information and communication technologies (ICT) industry. Because it was identified by the first-stage Delphi method as a critical technology, the diffusion of 4th generation wireless telecommunication technology (4G) was simulated, and experimentation was conducted. Suggestions are provided regarding how the Chinese information industry would need to expand the IP network infrastructure in order to support technology foresight goals under different scenarios.     

A diffusion model with application to evolving medical technologies

This paper reports on a system dynamics simulation model which was developed to study the diffusion of medical technologies but which should be applicable to other sorts of technologies as well. The model addresses both the adoption and the changing extent of use of an evolving, product-based technology and also endogenously accounts for changes in actual and perceived performance. Two specific medical case studies provide background to the model and are used for testing the model's ability to reproduce various aspects of historical behavior. The model's relatively complex structure is presented in the form of influence diagrams showing major flows and relationships. The paper concludes with a discussion of contributions and possible future uses and modifications of the model.     

The automobile industry and new trade theory: A classroom experiment

In this study, the author describes a classroom experiment on new trade theory appropriate for undergraduate international economics and trade courses. Students portray U.S. and Japanese automobile manufacturers with different average cost schedules. There are five rounds in the experiment, starting with autarky in the 1960s and ending with the Great Recession of 2008–9. In each round, the instructor announces a market price and quantity and then each producer calculates its market share, average cost and profit; and makes its shutdown decision. By varying the market price and size, the experiment illustrates the gains from intra-industry trade and also how efficiency gains and economic recession impact individual firm performance.     

Measuring advertising intensity and intangible capital in the Greek food industry

The objective of the present paper is to examine market conduct and its determinants in the Greek food industry and to measure how and to what degree the industry and the firm's structural characteristics affect advertising intensity. An advertising intensity model giving emphasis to intangible capital is formulated. Data from ICAP have been used on a four-digit classification for the food industry during the 1990–1997 period. The empirical results indicate that intangible capital positively affects the advertising intensity of the firm and plays an important role in strategies that affect total cost, demand and structure of the market.     

A baseline model of industry evolution

The paper analyses some general dynamic properties of industries characterized by heterogeneous firms and continuing stochastic entry.After a brief critical assessment of some significant drawbacks of recent contributions to modeling of stochastic industrial dynamics, we propose a novel analytical apparatus able to derive some generic properties of the underlying competition process combining persistent technological heterogeneity, differential growth of individual firms and turnover. The basic model, we suggest, is indeed applicable with proper modifications to a large class of evolutionary processes, well beyond industrial dynamics.JEL Classification: L11, O30, C60Support to this research by the International Institute for Applied Systems Analysis (IIASA), Austria; the Fujitsu Research Institute for Advanced Information (FRI), Japan; the Italian National Research Council (CNR), the Italian Ministry of Education, University and Research (MIUR, prot. 2002132413 003) and the Free University of Bozen Bolzano, Italy, is gratefully acknowledged. Comments by Andrea Bassanini, Francesca Chiaromonte, Steven Klepper, Uwe Cantner, Drew Fudenberg and the anonymous referees helped in shaping the paper to its present form. Mariele Berté provided the computer simulations of the model. The usual caveats apply.Correspondence to: G. Dosi     

Market share instability and stock price volatility during the industry life-cycle: the US automobile industry

Market share instability, during certain stages of the industry life-cycle, has become a stylized fact in the industrial organization literature. In the finance literature, volatility in the form of excess volatility, i.e. the much larger volatility of stock prices than dividends (although stock prices should in theory trace the present value of future dividends), has given rise to controversies regarding stock price determination (Campbell and Shiller, 1988; Shiller, 1989). Recent evolutionary models, both theoretical and empirical, have tied the presence of market share instability to industry specific variables, such as specific periods in the industry life-cycle and specific “technological regimes”. The object of the paper is to explore whether there is a relationship between market share instability and stock price volatility and to what degree this relationship is connected to the concept of the industry life-cycle, and hence to industry specific factors. To do so, we explore the relationship in one particular industry, the US automobile industry. Since neither life-cycle nor finance theories attack this problem directly, we use insights from both approaches to build hypotheses which guide the data analysis. The empirical results confirm many of these hypotheses, suggesting that the degree of excess volatility is indeed partly affected by industry specific factors.     

我国汽车工业自主创新问题研究

汽车产业已成为我国的支柱产业,随着市场竞争的加剧,中国本土汽车企业面临着更大的威胁与机会.通过对我国汽车企业自主创新发展过程及存在问题的分析,提出了促进我国汽车工业自主创新的相关对策.     

Copyright reform and business model innovation: Regulatory propaganda at German music industry conferences

Inspired by new digital technologies, diverse actors in cultural and creative industries propagate conflicting visions of how to adequately innovate – or rather preserve and strictly enforce – copyright-related business models, which has resulted in substantial amounts of regulatory uncertainty. Looking at a decade of regulatory discourse at industry events in the popular music industry in Germany, we investigate how these actors make sense of and strategically shape this uncertainty in the process of industry transformation. Our longitudinal argumentative discourse analysis reveals cycles of regulatory propaganda of two discourse coalitions that do not engage in debate, but aim to find support for competing business models among regulators and the public. Organizing, canceling, and participating in industry events are discursive strategies used effectively to transport their claims by both industry lobbyists and challenging actors, but industry incumbents are failing to use these sites for testing out and introducing new business models. We conclude that regulatory struggles, not least at industry events, mediate between disruptive technologies and business model innovation.     

A model of advertising format competition: on the use of celebrities in ads

We develop a model that endogenizes both advertising format – ads with or without celebrity endorsements – and the endorsement fee. Marketing studies suggest that celebrities enhance brand recall and perception of product value. In our model, ads featuring celebrities occur when the product market is large – endorsements are likely for products sold nationally – and when products are sufficiently similar that the persuasive character of advertising looms large in demand – running shoes, beauty products, soft drinks, for example. Celebrity endorsement fees are increasing in market size and in the degree of similarity of the products being advertised.     

The effect of offshoring on knowledge flows in the US automobile industry

This paper examines the impact of financial constraints on innovation for established firms. We make use of a direct measure of the existence of financial constraints obtained thanks to a specific survey addressed to French established firms. This is a distinctive feature of this paper as most of previous studies had to rely on proxies (like the cash-flow sensitivity), which may be subject to interpretation problems. The probability to have innovative activities and the probability to face financial constraints are simultaneously estimated by a recursive bivariate probit model. Accounting for the endogeneity of the financial constraint variable, we find that financial constraints significantly reduce the likelihood that firms have innovative activities. The probability to encounter financial constraints is explained by firms’ ex ante financing structure and economic performances.     

Medium,message and advertising effectiveness in the Greek processed meats industry

This paper examines the effectiveness of advertising in the fast-growing Greek processed meats sector using an unbalanced panel data set of 34 firms during the period 1983–1997. In analysing the relationship between firms' sales and advertising this study differentiates between the type/content of the advertising message and the medium used to communicate it. Advertising expenditures are disaggregated into company and product campaigns in television, radio, and print media. Empirical results strongly reject the hypothesis of homogeneous consumer response to all kinds of advertising that is implicit in studies that aggregate advertising expenditures. The results also indicate an inefficient allocation of advertising resources by the firms of the sector; advertising in the least utilized print media was determined to be by far the most effective strategy during the study period.     

German income tax reform. A simulation model

An independent commission on tax reforms and the Federal Ministry of Finance had been working for some time on basic changes of the German tax system. Their suggestions recently have been published (Bericht, 1971) just as many other proposals for tax reform from various experts, organizations, and political parties. Yet, compared with the Report (1966) of the Royal Commission on Taxation of Canada (Carter Commission) the German reform plans are less comprehensive and fundamental than the thorough economic analysis in the six volumes of the Carter Report.     

Advertising and search engines. A model of leadership in search advertising

We analyze the role of leadership in a multi-sided market as search advertising, assuming quantity competition and different entry conditions (with barriers to entry or endogenous entry). The model can be microfounded taking into account network effects, multi-homing on the advertising side and scale in search. If there are barriers to entry and the network effects are strong, there is an incentive for the leader to exploit them and attract more consumers to monopolize advertising. Under barriers to entry, the leading platform has also a strategic incentive to exploit scale in search, to manipulate search results to divert search traffic from other platforms, and to introduce limits to multi-homing, with the aim of expanding its market share and deny scale to competitors.     

原型理论在化妆品广告中的运用

原型理论最早运用于文学研究,后来广泛运用于艺术、美学、影视、品牌策划、甚至企业管理中。在化妆品广告中有效地运用原型,可以赋予产品永恒的意义,从而更好地促进品牌形象的宣传,通过分析原型理论在化妆品广告中的运用,为化妆品广告设计者提供参考。