A Growth Accounting Analysis of Cost Efficiency in Milk Production for Six Northern States in the United States

This paper reports on the use of a growth accounting approach to calculate and decompose cost efficiency indices into technical change, regional competitive advantage stemming from spatial effects, and economies of size. Dairy farm data for Connecticut, Maine, Vermont, Michigan, New York and Pennsylvania for the years 1968, 1970, 1977, 1980 and 1988 are utilized in the analysis. The results show that technological change yielded a 1.8% average annual rate of cost reduction over the period studied. In addition, medium and large farms were, on average, 12% to 20% more efficient than small farms. Pennsylvania had a distinct competitive advantage (13.8%), while Maine exhibited a clear competitive disadvantage (−18.2%) in producing milk relative to New York.     

THE GENDER PAY GAP UNDER DUOPSONY: JOAN ROBINSON MEETS HAROLD HOTELLING

This paper presents an alternative explanation of the gender pay gap resting on a simple Hotelling-style duopsony model of the labour market. Since there are only two employers, equally productive women and men have to commute and face travel cost to do so. We assume that some women have higher travel cost, e.g., due to more domestic responsibilities. Employers exploit that women on average are less inclined to commute and offer lower wages to all women. Since women's firm-level labour supply is for this reason less wage-elastic, this model is in line with Robinson's explanation of wage discrimination.     

Feasibility Frontier—A Method for Aligning Competitive Strategy with the Choice of IT Architectures

This article introduces an approach that addresses the challenge of aligning choices about IT architecture with the strategic goals of a corporation. This takes the form of a framework that captures how managers make IT architecture choices and how those choices impact an organization's competitive position. Based on microeconomic theory, the framework provides a set of conceptualizations for understanding alignment, plus some recommendations on how organizations should approach IT architecture adoption in a way that assures optimal alignment with strategic goals. The most important facilitating factor for the framework is the commitment to complete, accurate, and unbiased cost and quality assessment of business processes and their supporting IT infrastructure.     

Determinants of Alliance Portfolio Complexity and Its Effect on Innovative Performance of Companies*

Alliance formation is often described as a mechanism used by firms to increase voluntary knowledge transfers. Access to external knowledge has been increasingly recognized as a main source of a firm's innovativeness. A phenomenon that has recently emerged is alliance portfolio complexity. In line with recent studies this article develops a measure of portfolio complexity in technology partnerships in terms of diversity of elements of the alliance portfolio with which a firm must interact. The analysis considers an alliance portfolio that includes different partnership types (competitor, customer, supplier, and university and research center). So far factors that determine portfolio complexity and its impact on technological performance of firms have remained largely unexplored. This article examines firms' decisions to form alliance portfolios of foreign and domestic partners by two groups of firms: innovators (firms that are successful in introducing new products to the market), and imitators (firms that are successful at introducing products which are not new to the market). This study also assesses a nonlinear impact of the portfolio complexity measure on firms' innovative performance. The empirical models are estimated using data on more than 1800 firms from two consecutive Community Innovation Surveys conducted in 1998 and 2000 in the Netherlands. The results suggest that alliance portfolios of innovators are broader in terms of the different types of alliance partners as compared to those of imitators. This finding underlines the importance of establishing a “radar function” of links to various different partners in accessing novel information. Specifically, the results indicate that foremost innovators have a strong propensity to form portfolios consisting of international alliances. This underlines the importance of this type of partnership in the face of the growing internationalization of R&D and global technology sourcing. Being an innovator or imitator also increases the propensity to form a portfolio of domestic alliances, relative to non‐innovators; but this propensity is not stronger for innovators. Innovators appear to derive benefit from both intensive (exploitative) and broad (explorative) use of external information sources. The former type of sourcing is more important for innovators, while the latter is more important for imitators. Finally, alliance complexity is found to have an inverse U‐shape relationship to innovative performance. On the one hand, complexity facilitates learning and innovativeness; on the other hand, each organization has a certain management capacity to deal with complexity which sets limits on the amount of alliance portfolio complexity that can be managed within the firm. This clearly suggests that firms face a certain cognitive limit in terms of the degree of complexity they can handle. Despite the noted advantages of an increasing level of alliance portfolio complexity firms will at a certain stage reach a specific inflection point after which marginal costs of managing complexity are higher than the expected benefits from this increased complexity.     

The impact of Universal Service Obligations and International Cross-subsidies on the dispersion of telephone services in developing countries

This paper re-evaluates the telecommunication policies often applied to create regional dispersion of services in developing countries. We observe that failure to consider the complexities of the regional telecommunication systems in creating policies and investment strategies has increased the telecom gap between urban and rural regions worldwide. In particular, the teledensities of rural telecommunications in developing countries have remained very low in spite of support through universal service obligation fees and cross-subsidization from international services. As traditional methods for economic analysis and modeling have failed to identify mechanisms that improve telephone dispersion in these countries, we use a system dynamics modeling approach to deal with complexities of the situation in order to evaluate how Universal Service Obligations (USOs) and International Cross-Subsidy (ICS) policies affect telephone densities. We demonstrate that these policies may be counterproductive due to the structure of the telecom system itself. We also show that, when market-clearing pricing is combined with USOs once the urban telephone density reaches a minimum threshold, the dispersion of rural telecommunications can be considerably improved.     

Human capital of entrepreneurial teams in nascent high-tech sectors: a comparison between Cleantech and Internet

We use an inductive approach to understand what types of founders’ human capital, at individual and team levels, are necessary to recognise and exploit entrepreneurial opportunities. A sample of 195 founders who teamed up in the nascent phases of Cleantech and Interned-based sectors is analysed. The results suggest a twofold moderating effect of the sectoral context. First, a more hard science-based and complex sector like Cleantech demands technically more skilled entrepreneurs, but at the same time, it still requires fairly commercially experienced and economically competent individuals. Furthermore, the business context also appears to exert an important influence on team formation dynamics: individuals are more prone to team-up with cofounders possessing complementary know-how when they are starting a new business venture in the Cleantech rather than in the Internet-based sector. Overall, these results stress the role of the specific high-tech business context at stake when analysing entrepreneurial team composition patterns.     

Complementarity in R&D Cooperation Strategies

This paper assesses the performance effects of simultaneous engagement in R&D cooperation with different partners (competitors, clients, suppliers, and universities and research institutes). We test whether these different types of R&D cooperation are complements in improving productivity. The results suggest that the joint adoption of cooperation strategies could be either beneficial or detrimental to firm performance, depending on firm size and specific strategy combinations. Customer cooperation helps to increase market acceptance and diffusion of product innovations and enhances the impact of competitor and university cooperation. On the other hand, smaller firms also face diseconomies in pursuing multiple R&D cooperation strategies, which may stem from higher costs and complexity of simultaneously managing multiple partnerships with different innovation objectives.The empirical analysis for this paper has been performed at CEREM/Statistics Netherlands. We thank Bert Diederen of CEREM for his assistance. The views expressed in this paper are those of the authors and do not necessarily reflect the policies of Statistics Netherlands. We thank two anonymous referees, the editor (Lawrence White), Bonnie Beerkens, Geert Duysters, Katrin Hussinger, and Pierre Mohnen for helpful comments on earlier drafts     

Technical efficiency measures for dairy farms using panel data: A comparison of alternative model specifications

This article examines the impact of fixed effects production functions vis-à-vis stochastic production frontiers on technical efficiency measures. An unbalanced panel consisting of 96 Vermont dairy farmers for the 1971–1984 period was used in the analysis. The models examined incorporated both time-variant and time-invariant technical efficiency. The major source of variation in efficiency levels across models stemmed from the assumption made concerning the distribution of the one-sided term in the stochastic frontiers. In general, the fixed effects technique was found superior to the stochastic production frontier methodology. Despite the fact that the results of various statistical tests revealed the superiority of some specifications over others, the overall conclusion of the study is that the efficiency analysis was fairly consistent throughout all the models considered.     

INTRODUCTION OF THE SNA INTO THE OFFICIAL STATISTICS OF THE COMMONWEALTH OF INDEPENDENT STATES

The work on the introduction of the elements of the SNA into the official statistical practice of the former U.S.S.R. began in 1988 when estimates of the GDP using conversion keys were prepared. In 1991 the decision was made to implement the entire SNA gradually on the basis of the international standards. The methodology of compilation of the main accounts was formulated by the Statistical Committcc of the C.I.S. with the assistance of the OECD. It originally drew on the ESA with introduction of elements of the revised SNA and adaption to specific economic processes in the country. It required solution of a number of conceptual and statistical problems referring to the treatment, allocation and valuation of selected activities. The estimates of the main accounts were made for the former U.S.S.R. by sectors and by industries for 1988–90. This project has provided the basis for further work on implementation of the SNA in C.I.S. countries.