Building scenarios with Fuzzy Cognitive Maps: An exploratory study of solar energy

In scenario planning, causal mapping has long been used as a means to elicit the worldviews of multiple experts, facilitate discussion, and challenge and improve mental models. Large and complex causal maps, however, are difficult to analyze. This paper proposes a novel method for scenario building, based on Fuzzy Cognitive Maps, that combines intuitive, cognitive mapping techniques with formal, quantitative analysis. The proposed method helps scenario planners to integrate the qualitative and partial knowledge of multiple individuals and overcome information processing limitations. The feasibility of the proposed approach is investigated with two scenario studies on solar photovoltaic panels.     

A Classification of Dutch Manufacturing based on a Model of Innovation

Summary The paper studies the degree of homogeneity of innovative behavior in order to determine empirically an industry classification of Dutch manufacturing that can be used for policy purposes. Defining homogeneity in terms of an economic model distinguishes our classification from existing taxonomies such as those of the OECD, Pavitt and the various classifications based on a principal components analysis. We use a two-limit tobit model with sample selection, which explains the decisions by business enterprises to innovate and the impact these decisions have on the share of innovative sales. The model is estimated for eleven industries based on the Dutch Standard Industrial Classification (SBI 1993). A likelihood ratio (LR) test is then performed to test for equality of the parameters across industries. We find that Dutch manufacturing consists of three groups of industries in terms of innovative behavior, a high-tech group, a low-tech group and the industry of wood. The same pattern shows up in the three Dutch Community Innovation Surveys. The empirical part of this study has been carried out at the Centre for Research of Economic Microdata at Statistics Netherlands. The authors wish to thank Statistics Netherlands, and in particular Bert Diederen, for helping us in accessing and using the Micronoom data set. The views expressed in this paper are solely those of the authors. The authors also wish to thank Fran?ois Laisney, Patrick Waelbroek and participants at presentations in Maastricht, Strasbourg, Leuven and Lille for their helpful comments. The first author acknowledges financial support from METEOR.     

How to improve scenario analysis as a strategic management tool?

Scenarios are claimed to support strategic decision makers. They are especially effective in dealing with uncertainties. This paper addresses some drawbacks of the conventional scenario method, which is especially directed at handling these uncertainties, and indicates possible avenues for methodological adaptations. We take the approach, which rests in the Shell tradition, as exemplary for our discussion on the mainstream scenario methodology. This approach has some limitations when it comes to dealing with simultaneous trends and countertrends, and trends or clusters of trends that are not thought of beforehand, especially the methodological requirements of causality and consistency, which might be limiting factors in this respect. This paper indicates alternative ways for scenario construction. It discusses the use of either recombinant scenarios, context scenarios, or inconsistent scenarios and/or combinations of these scenarios. These options explicitly incorporate the notion of ‘paradoxical trend’ as the codriver of future developments into the methodology.     

Random Economic Disturbances and Lagged Countermeasures

Fluctuations in domestic product and balance of payments are treated as Markov processes in discrete time instead of as deterministic paths. Emphasis is on the case when movements are in probability away from steady-state paths until they reach some barrier. The initiating disturbances are random events, and the task of policymakers is to respond with countervailing measures. These occur with time lags and produce stochastic processes of their own. The outcome is a probabilistic path which never quite matches the desired steady-state path. The first, one-dimensional case is that of the domestic product and the government budget. Next, the paper deals with the two-dimensional case of domestic product and balance of trade, with budget and exchange rate as instruments. Finally, it treats domestic product, trade balance, and capital account—using the budget, the exchange rate, and the monetary measures—as corrective devices.     

Common cyclical features analysis in VAR models with cointegration

The paper considers n-dimensional VAR models for variables exhibiting cointegration and common cyclical features. Two specific reduced rank vector error correction models are discussed. In one, named the “strong form” and denoted by SF, the collection of all coefficient matrices of a VECM has rank less than n, in the other, named the “weak form” and denoted by WF, the collection of all coefficient matrices except the matrix of coefficient of error correction terms has rank less than n. The paper explores the theoretical connections between these two forms, suggests asymptotic tests for each form and examines the small sample properties of these tests by Monte Carlo simulations.     

Foreign investment and technology transfer: Optimal policies

Zusammenfassung Optimale Politiken bei Auslandsinvestitionen und Technologietransfer.-Untersucht wird in diesem Aufsatz die Frage, ob die technologische überlegenheit von ausl?ndischen Unternehmen eine finanzielle F?rderung durch das Empf?ngerland impliziert oder ob eine Politik des freien Waren-und Kapitalverkehrs ausreicht, die optimale Kombination von Handel und Auslandsinvestitionen herbeizuführen. Das Ergebnis ist, da\ die überlegenheit der ausl?ndischen Produktionsfunktionen allein keine Rechtfertigung für Subventionen liefert. Nur im Fall einer übertragung des technologischen Wissens auf inl?ndische Unternehmen, wobei diese eine Funktion der ausl?ndischen Pr?senz w?re, ist die optimale Subvention eine positive Gr?\e. Diese wird in Form der marginalen Ver?nderung in der Wirksamkeit der inl?ndischen Arbeit und des inl?ndischen Kapitals ausgedrückt. Die Schlu\folgerung wird durch Unvollkommenheiten z. B. auf inl?ndischen M?rkten für Güter und Faktoren oder durch Handelsrestriktionen nur unwesentlich ver?ndert.

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Résumé Investissement étranger et transfert de technologie: Politiques optimum.-Le sujet analysé dans cet article est si les entreprises étrangères avec une technologie supérieure devraient être subventionnées par le pays emprunteur ou si une politique de commerce libre et de la mobilité libre des capitaux serait suffisante pour réaliser la combinaison optimum de commerce et d’investissement. La conclusion est que les fonctions de production optimum seules ne sont pas d’argument pour réclamer des subventions. Seulement au cas d’une transmission de la technologie aux entreprises locales, dont la mesure dépend de l’étendue de la présence étrangère, la subvention optimum pour l’investissement étranger serait positive. Cela s’exprime en termes de changement marginal de l’efficacité de la main d’oeuvre locale et du capital. Cette conclusion est modifiée mais pas changée essentiellement par quelques imperfections de marché, par exemple sur les marchés locaux des biens et des facteurs, ou par des restrictions du commerce.

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Resumen Inversión extranjera y transferencia de tecnología: Politicas óptimas.-El prop?sito del présente trabajo es examinar la pregunta, si empresas extranjeras con superioridad tecnológica deberían recibir ayuda financiera del país en el cual operan, o si una política de libre comercio y de libre movimiento de capitales no sería suficiente para lograr una combinación óptima de comercio e inversión. Se concluye que funciones de productión superiores no bastan por sí solas para justificar subvenciones. Unicamente en caso de externalidades tecnológicas a favor de empresas nacionales, cuya magnitud dependeá del peso de la presencia extranjera, el subsidio óptimo para la inversión extranjera será positive Esto se expresa en términos de una variación marginal en la efectividad de los factores de producción domésticos, trabajo y capital. Esta conclusión se modifica parcialmente en caso de existir imperfecciones de mercado, por ejemplo en los mercados de bienes y factores domésticos, o a raíz de restricciones al comercio exterior.