Discontinuous innovation capability accumulation in latecomer natural resource-processing firms

Most of the studies that describe the building of innovation capability in emerging and developing economies have focused on the ways in which latecomer firms develop continuously towards advanced capability levels along existing technological trajectories, particularly for the assembled products industries, especially in Asia. A slightly different approach is adopted herein by focusing on pathways of discontinuous capability building of firms in natural resource-processing industries. By drawing on evidence from a variety of case studies taken from 13 forestry, pulp, and paper firms in Brazil in the period 1950-2007, it was found that: (1) in contrast with the majority of case studies reported in the literature, the pathways followed by firms in their accumulation of innovation capability involved a qualitative departure from the established technological trajectory at an early stage in the development of their capability; (2) the pathways of firms along the new technological trajectories were nevertheless characterised by a high degree of variability (from intermediate to world leading innovators) in terms of the levels and speeds of the accumulation of innovation capability; (3) firms that have attained progressively higher levels of innovative performance have more rapidly developed a combination of internal and external research-based arrangements in order to undertake increasingly complex, but firm-centred innovation efforts. This paper sheds some light on some of the discussions that relate to the role of natural resources in the patterns of industrial progress and growth in those countries endowed with particular natural resource-based industries. It also provides a methodological contribution to the study of the long-term innovation strategies that make use of the dynamics of capability building, especially within natural resource-processing industries.     

Simultaneous Pooled Auctions

Suppose a seller wants to sell k similar or identical objects and there are n > k potential buyers. Suppose that each buyer wants only one object. In this case, we suggest the use of a simultaneous auction that would work as follows. Players are asked to submit sealed bids for one object. The individual with the highest bid chooses an object first; the individual with the second-highest bid chooses the next object; and this process continues until the individual with the kth highest bid receives the last object. Each individual pays the equivalent to his or her bid. When objects are identical, we show that the proposed auction generates the same revenue as a first-price sealed-bid sequential auction. When objects are perfectly correlated, there is no known solution for sequential auctions, whereas we can characterize bidding strategies in the proposed auction. Moreover, the proposed auction is optimal (given an appropriately chosen reserve price), and it may be easier and cheaper to run than a sequential auction.     

Trade effects of the Europe agreements: A theory-based gravity approach

We analyze normalized productivity differences for 15 developing Latin American countries and four firm types: National Domestic, National Exporter, Foreign Domestic, and Foreign Exporter. There are no productivity thresholds for viability, export activity, or multinational activity, but we do find a clear size productivity premium and development productivity premium in the manufacturing sectors. We also find a clear foreign-ownership productivity premium, both for domestic firms and for exporting firms and both for manufacturing sectors and services sectors. In contrast, we only find an export productivity premium for national firms in the manufacturing sectors.     

A Model of Market Power in Customer Markets

We develop a model for studying dynamic competition in environments with frictions that lead to partial lock-in of customers to products. The dynamic aspects associated with customer retention and acquisition introduce pricing incentives that do not exist in more traditional, static product markets. The proposed model, while highly stylized, maintains certain symmetry properties that allow us to obtain equilibrium existence and uniqueness. We then study the comparative statics of the model and derive a closed-form relationship between average equilibrium markups and the Herfindahl index. We illustrate how the model can be used by analyzing mergers in such a dynamic environment.     

The use of management control mechanisms by public organizations with a network coordination role: A case study in the port industry

Our paper addresses two gaps in the literature on management control mechanisms in the context of inter-organizational relationships. Firstly, several studies have focused on one-to-one relationships, but few take a network perspective which analyses the deployment of management control mechanisms in the context of networks involving multiple interactions between organizations. Secondly, even fewer studies have specifically tackled the use of these mechanisms in the context of mixed-type networks, where a public organization acts as the network coordinator responsible for key governance activities. This is the position in Ports, which are collectives of several related organizations and in which one organization – the “port authority” – assumes the role of network coordinator. In this paper we report the results of a case study, the aims of which were: to identify the management control mechanisms deployed, or relied upon, by the Portuguese Port Authority in the Port of Aveiro in the exercise of its coordinating role; and to discern – on the basis of theoretical reasoning and empirical evidence – the factors explaining the nature and use of these mechanisms.Several conclusions emerged from the study. A general conclusion was that our prior literature-based theorization is generally consistent with the case observations. That is, in mixed-type networks, the nature and use of management control mechanisms by the public organization acting as a network coordinator seems to be shaped by its assessment of motivations to cooperate and of the contribution to network performance of the various organizations involved in the network. Other more specific conclusions are encapsulated in a “coordination framework”, which relates those assessments to specific features of the management control mechanisms. Crucially, our results provide insights into the roles of public organizations acting as network coordinators in the context of mixed-type networks, and, in general, on the nature of the numerous such public organizations in today's economy and society.     

Irrigation water productivity in Cambodian rice systems

Knowledge of the marginal productivity of water is crucial for decisions about its allocation between uses, which is particularly important in the context of increasing competition for water. Using primary, plot‐level panel data, this article estimates the marginal productivity of water from supplementary irrigation in lowland rice systems in Cambodia, taking into account farmer and plot heterogeneity as well as self‐selection of supplementary irrigation. Our estimates indicate a range of elasticities for rice output with respect to water inputs of between 0.057 and 0.069 for wet season production, substantially lower than previous estimates based on either aggregate or trial data. We discuss the policy implications of these results, in particular with respect to the utility of demand management policies and the challenges they pose to the decentralization of water management to Farmer Water Users Groups.     

The Euro Changeover and Numerical Intuition for Prices in the Old and New Currencies

This study examines how numerical intuition for prices in euros and in the Portuguese currency escudos developed in Portugal after the euro changeover. Estimates of prices of 40 different products were collected in the two currencies and at four different times from November 2001 to April 2004. The results regarding price estimates in euros were more in accordance with a relearning hypothesis considering that price estimates become progressively more accurate by a process that is related to purchase frequency. It was also suggested that this is a very slow process and that prices in the former currency are not simply forgotten. On the contrary, the escudos remained a general benchmark for an extended period. The results regarding estimated price intuition and use of intuition in estimating prices are also consistent with a slow adaptation process. Implications for future euro changeovers are discussed.     

Run theorems for low returns and large banks

In this paper, we revisit the issue of bank fragility in the Diamond and Dybvig (J Polit Econ 91:401–419, 1983) model with sequential service and finite traders. We provide a precise condition under which banks are susceptible to a run when the return on investment is low, and we show that sufficiently large banks are always susceptible to a run. One interpretation of the condition is that exposure to runs occurs when desire for consumption smoothing or predictability of preference profiles are relatively high.