The Competencies of Regions – Canada's Clusters in Biotechnology

Knowledge-intensive industries tend to concentrate geographically, because of the many spillovers that they generate. Thus new biotechnology firms often set up in regions that have innovative firms, government laboratories and universities, which attract them to enter. In this paper we unveil some of the characteristics of Canadian clusters in biotechnology: the key regions, their relative importance, and the main firms and government laboratories that attract new entrants. Moreover, we develop the concept of regions as nexus of competencies, a notion already put forward for firms, but that may be relevant to regions within nations and, ultimately, to nations as well. Capabilities of organizations and regions vary, and a thorough study of organizational and regional capabilities should precede the analysis of knowledge spillovers.Toronto is the main center of biotechnology in Canada, followed by Montreal, and Vancouver. The total population of the metropolitan area (a proxy for immediate market size and venture capital) explains the size, location and characteristics of most Canadian clusters. University research is also a key factor explaining the size of the biotechnology clusters, once population is held constant.Within nations, scientific and technical competencies vary strongly among regions. Some regions within countries concentrate a disproportionate share of the capabilities of all developed and developing nations. Moreover, regions tend to concentrate competencies on a few domains of expertise. This is what literature calls "agglomeration effects": companies active in the same field of technology tend to cluster geographically. They do so in order to share a common labor pool, and to obtain ready access to research institutions such as government laboratories and universities, or to key markets and customers, such as large assemblers or government facilities (Feldman et al., 1999). The specialized literature calls these institutions and key markets/customers "entry attractors" (Swan et al., 1998).In many types of science-based industries (SBIs), such as biotechnology, information technology and advanced materials, the major attractors are universities and government laboratories. In a few more mature SBIs, including aerospace and aircraft, large assemblers tend to naturally attract smaller producers of, components and specialized software.In this respect Canada is similar, to other nations (Niosi, 2000). Its competencies cluster around a few large and medium-sized urban agglomerations, such as Toronto, Montreal, Vancouver, Ottawa, Edmonton, and Calgary. Specialized clusters have also developed around smaller cities. This study builds a theory of the competencies of regions using biotechnology as a case study. Government laboratories, as well as universities and a few large firms, attract entry. The goal of the paper is to examine – using quantitative data – the relative competencies of regions in biotechnology, and the role of NRC laboratories and university research.     

Removing the contextual lens: A multinational, multi-setting comparison of service evaluation models

Four service evaluation models are identified from the literature that are commonly offered to depict the relationships amongst the primary service evaluation constructs of sacrifice, service quality, service value, satisfaction, and behavioral intentions. We comparatively test the models using samples of service consumers in Australia, Hong Kong, Morocco, the Netherlands, and the United States, as well as across varied temporal and service settings. The results of the comparative analyses reveal that one conceptualization, the “comprehensive” model, best captures the identified relationships. This model is the best fitting across all countries and settings, which indicates it has the greatest external validity. These findings are discussed relative to the limitations associated with the use of less generalizable models.     

Empirical evidence of the value of monitoring in joint ownership

Joint ownership of assets by two partners can have an adverse effect on the incentives to invest and can result in unstable and inefficient organizational structures. Control sharing, however, plays an important role in economic, political, and social institutions. There is scarce empirical evidence on the benefits of joint ownership in corporate finance. We analyze acquisitions of corporate assets by joint ventures to empirically ascertain the value of joint ownership in economic activities. The results indicate that firms experience significantly larger returns in joint acquisitions than in full-control acquisitions and that this difference is restricted to the sample of firms in which both partners share equal ownership in the target. These findings suggest that monitoring in joint ownership structures ameliorates the possibility of value-destroying corporate decisions.     

Dynamic information release

This note discusses the desirability of dynamic information releases. It is argued that such releases are socially valuable because theycreate insurance opportunities that do not exist without them. These new insurance opportunities occur because new public information causes prices to change which in turn allows traders to improve the spanning ability of existing securities by dynamic trading. This argument contrasts the static argument pioneered by Hirshleifer (1971) that public information oftendestroys insurance opportunities and is therefore not socially valuable.I thank Robert Litzenberger and Jiang Wang for helpful comments. Financial support from the Royal Swedish Academy of Sciences is gratefully acknowledged. Remaining errors are my own.     

Social reformers and regulation: the prohibition of cigarettes in the United States and Canada

Anti-smoking legislation in North America reached its peak early in the last century. In 1903, the Canadian Parliament passed a resolution to prohibit the manufacture, importation, and sale of cigarettes. Fifteen states in the United States banned the sale of cigarettes and 37 states considered prohibitory legislation. In both the United States and Canada, prohibition was part of the Progressive Movement. Cigarette prohibition was special interest regulation, but it was also the means by which crusaders sought to alter public behavior. In the United States, the cigarette lobby opposed cigarette prohibition while in Canada the French-Canadians offered the most vociferous opposition. An active Progressive Movement was the necessary condition for generating interest in prohibition, while the anti-prohibition forces played a significant role later in the legislative process.     

Transferability and Naturalistic Generalization: New Generalizability Concepts for Social Science or Old Wine in New Bottles?

Interpretative qualitative social science has attempted to distinguish itself from quantitative social science by rejecting traditional or ‘received’ notions of generalization. Traditional concepts of scientific generalization it is claimed are based on a misguided objectivism as to the mechanisms operating in the social world, and particularly the ability of statements to capture such mechanisms in any abstract sense. Instead they propose new versions of the generalizability concept e.g. ‘transferability’, which relies on the context dependent judgement of ‘fit’ between two or more cases instances made by a researcher. This paper argues that the transferability concept, as outlined and argued by interpretativist methodologists, is thoroughly coextensive with notions of generalizability formalized for natural science and naturalistic social science by philosophers and methodologists of science. Therefore, it may be concluded that the interpretativist claim to a break with received scientific traditions is a premature one, at least with regard to the issue of generalization.     

The IPO market as a screening device and the going public decision: evidence from acquisitions of privately and publicly held firms

The main purpose of this paper is using a unique data set from IPO filings to study the IPO market as a screening device and the going public decision. We find that private firms that are less likely to have the option to access public equity markets receive 54 cents for each dollar they expected to raise in an IPO, whereas firms that are more likely to have the option to go public but sell privately sell at $1.11 for each dollar they expected to receive at the IPO. This result suggests that the lower valuation for firms sold in private markets compared to firms sold in public markets can be at least partially explained by the lower relative bargaining power of private firms. However, owners that took their firms public before selling received, on average, 40% larger payoffs than owners that had the option to go public but decided to sell privately. The results in this study indicate that these differences in valuation are not fully explained by existing theoretical models on the decision to sell privately or in two stages.