Firm size distribution under horizontal and vertical innovation

This paper studies the firm size distribution arising from an endogenous growth model of quality ladders with expanding variety. The probability distribution function of a given cohort is a Poisson distribution that converges asymptotically to a normal of log size. However, due to firm entry propelled by horizontal R&D, the total distribution—i.e., when the entire population of firms is considered—is a mixture of overlapping Poisson distributions which is systematically right skewed and exhibits a fatter upper tail than the normal distribution of log size. Our theoretical results qualitatively match the empirical evidence found both for the cohort and the total distribution, and which has been presented as a challenge for theory to explain. Moreover, by obtaining a total distribution with a gradually increasing average over a long time span, the model is able to address complementary empirical evidence that points to a total distribution subtly evolving over time.     

Evolutionary policy targeting: towards a conceptual framework for effective policy intervention

This special issue reflects on innovation and industrial policy from the premise that economic growth can be based on the permanent transformation of an economic system via the emergence and/or transformation of multi-agent structures and their inherent competences and knowledge base. The process of emergence or transformation is conceived as being the result of entrepreneurial effort, or entrepreneurs reacting to external stimuli in a way that takes advantage of an evolving knowledge base. The same process, however, can be undermined by both market and institutional failures. Past research has clearly indicated the importance of institutional structures for innovation, but also that structures as they exist may not be ideal: some institutions involved in innovation may provide the wrong incentives, faulty information, or allocate insufficient resources to accomplish their goals or mandates; and they may fail to reduce uncertainty. The paper asks whether and how a targeted, co-evolutionary approach can help overcome a lack of dynamic coordination and other failures that originate in coincidence with the emergence of a complex form of industrial organisation, be it an innovation system, cluster or a new industrial sector. More specifically, it builds upon the extended industry life cycle (EILC) model and the notion of evolutionary targeting to explore the potential benefits (and drawbacks) of targeting biotechnology innovation systems (BISs).     

Traffic accidents,deaths and alcohol consumption

The main goal of this article is to analyse the relationship existing among prices of alcoholic beverages, alcohol consumption and traffic fatalities for the Spanish Autonomous Communities during the time interval 1998 to 2002. Among the main results, we highlight a positive correlation between alcohol consumption and traffic mortality rate. Basically, governments implement two kinds of policies to reduce the traffic mortality rate. One is oriented to control the supply of alcohol by increasing alcohol taxes. The other is oriented to preserve traffic security, increasing the number of sanctions for traffic rule infraction. We find evidence that both policies exert a positive influence in the reduction of traffic fatalities. There is no empirical evidence to indicate that being a novice driver increases the tendency to be involved in a mortal traffic accident.     

Privatization,private equity and executive remuneration: privatizing QinetiQ

The process of modernizing the UK's public sector over the past 30 years has relied on significant amounts of privatization. Initially this was controversial, but by the time Labour came to power in 1997 even top secret defence establishments were subjected to selective marketization and sell-offs. This article explores the privatization of part of the Ministry of Defence and the relationship between private equity organizations and executive remuneration in the subsequently privatized company: QinetiQ. The sale of QinetiQ was controversial. It removed an essential element of the British defence research potential from direct state control and transferred ownership to an overseas private equity company. It may provide a template for future privatizations, but this article also shows some of the dangers inherent to this approach.     

Modelling roles of task‐technology fit and self‐efficacy in hotel employees' usage behaviours of hotel information systems

The purpose of this study was to examine the relationship between hotel information system (HIS) users' personal perceptions and beliefs of the given system and their daily routine usage intention via the technology acceptance model (TAM), considering the two external variables (motivational variables) of the model — ‘task‐technology fit’ (extrinsic motivation; system feature) and ‘self‐efficacy’ (intrinsic motivation; personal feature). Data were collected from hotel employees of 13 upscale hotels in Jeju, South Korea, and path analysis was utilised to test structural model and hypotheses. The results provided empirical support for an extended TAM, and verified its robustness in predicting hotel employees' intention to use a HIS. Copyright © 2010 John Wiley & Sons, Ltd.     

Spanish Demand for Food Away from Home: Analysis of Panel Data

We analyse the Spanish demand for food away from home (FAFH). A panel dataset is built and appropriate techniques for estimating limited dependent variable models are applied. Results indicate that where there are zero expenditures, these are largely due to infrequency of purchase rather than to abstention, or for economic reasons. Furthermore, important differences appear among households. Households whose head is a highly educated person, male, young and living on a salary in a large town is more likely to purchase FAFH. FAFH expenditure responses to an increase in total per capita expenditure are markedly different depending on the age of the household's head, their employment status and also the size of the resident's town. The lowest elasticity is shown by single‐person households, between 36 and 55 years old, employed and living in large towns, for whom FAFH has become a necessity. On the other hand, FAFH remains a luxury for unemployed couples with one or two children.     

Book Reviews

The importance of the automotive industry in the global economy is widely recognised. The sector has undergone enormous changes in order to prepare for the fierce competition of the 21st century. Among these transformations, the most relevant are those technologies developed for the rapid evolution of activities linked to new designs, new products, and new manufacturing processes and systems. Innovative Japanese carmakers have stimulated international performance comparisons in these activities.
International technology alliances may be one way of gaining access to new competitive technologies. Risks and costs associated with new product development can be shared among the partners and more effective use can be made of manufacturing facilities and production capabilities. Sometimes, an alliance agreement may lead to the deployment of new capabilities. However, in spite of this potential, the literature presents the success rate of alliances at less than 50%.
Our study considers two examples of companies that developed international joint ventures (IJVs): Rover with Honda, and Seat with Volkswagen. Since these two European peripheral companies, Rover and Seat, no longer remain as independent firms, we are interested in identifying the reasons leading to the success or failure of these IJVs as regards the New Product Development (NPD) process. In particular, in both cases the paper looks at the problems of the weaker partner becoming increasingly dependent on the other partner and the need for a well-defined strategy to benefit from IJVs.     

The King Never Emigrates

This paper uses a locational model of rent-seeking to describe incentives to emigrate. A country is considered in which how a person fares in privileged income redistribution is determined by proximity to a king. Contests for privilege determine whether the more or the less productive in the population are located closer to the king. A distinction is drawn between contests for privilege that are "easy" and "difficult." When contests are "easy," the more productive are furthest from the king and emigrate first. When contests are "difficult," the least productive emigrate first. In either case, the population begins to unravel.     

An Assessment of the Agricultural Trade Impact of Spain's Integration into the EU

The aim of this paper is to provide an econometric framework from which to assess the impact on Spanish agricultural trade by the entry of Spain into the European Union. This framework is based on the estimation of a gravity equation. Special attention is paid to the inclusion of dynamics in the gravity equation. To do that, the Kalman filter is used to define the antimonde, that is, the hypothetical situation that would exist without the integration of Spain into the EU. Results show that although Spain joined the EU in 1986, there existed a transition period that lasted until 1990. This result is consistent with the homogenization of agricultural intervention prices during the same period. Empirical results indicate that internal trade creation and external trade diversion are the predominant effects of integration on both imports and exports. L'objectif de cet article est d'illustrer une approche économétrique pour évaluer l'impact de l'adhésion de l'Espagne à la Union Européenne sur le commerce agricole. La méthodologie utilisée est basée sur l'estimation des équations de gravité. Une attention spéciale est portée à la manière d'introduire des effets dynamiques dans ces équations. Sur un autre plan, et au‐delà de l'intérêt des relations dynamiques, le filtre de Kalman est utilisé pour définir l'antimonde, ou la situation hypothétique qu'il doit exister sans que le systéme d'intégration soit mis en ?uvre. Les résultats obtenus permettent de confirmer que malgré l'intégration avait lieu en 1986, la période de transition a prolongé jusqu'à 1990. Ce résultat est consistent avec l'homogénéisation des prix d'intervention agricoles dans le même période. Les résultats empiriques indiquent que la création du commerce interne et la diversion du commerce exteme constituent les effets plus prédominants sur l'intégration aussi bien sur les exportations comme sur les importations.