Technological Collaboration: Bridging the Innovation Gap between Small and Large Firms*

This paper analyzes how technological collaboration acts as an input to the innovation process and allows small and medium‐sized enterprises to bridge the innovation gap with their bigger counterparts. Based on a large longitudinal sample of Spanish manufacturing firms, the results show that though technological collaboration is a useful mechanism for firms of all sizes to improve innovativeness, it is a critical factor for the smallest firms. The impact of this collaboration varies depending on innovation output and type of partner. Specifically, the impact of collaboration in small and medium‐sized firms is more significant for product than process innovations. Regarding type of partner, vertical collaboration—with suppliers and clients—has the greatest impact on firm innovativeness, though this effect is clearer for medium‐sized enterprises than for the smallest firms.     

Enabling the Original Intent: Catalysts for Social Entrepreneurship

As capitalist economies have shifted their primary focus from providing goods and services for all, to concentrating wealth at the top echelons of societies, social entrepreneurs have been one source of re-capturing the original intent of capitalism. Social entrepreneurs have combined the efficiency and effectiveness of business organizations with the social concerns of many non-profit and governmental agencies. As a result, social entrepreneurship is viewed as having significant potential for alleviating many of the social ills we now face. To accomplish this mission, however, will require expansion of social enterprises beyond their current footprints. We explore alternate methods of expansion, scaling and replication, and then examine potential catalysts, which can enable social entrepreneurs to attain their goals of social improvement. The catalysts we identify are effectual logic, enhanced legitimacy through appropriate reporting metrics, and information technology. We conclude with two brief case studies that exemplify how these catalysts are currently working to enhance the effectiveness of social start-ups.     

The importance of the firm and destination effects to explain firm performance

An interesting question in tourism management is why tourist firms obtain different performance levels. Firm performance in the tourism industry depends mainly on the destination where the company operates (location or destination effect), and on firm internal resources and characteristics (firm effect). The purpose of this paper is to determine the relative importance of the firm and destination effects using a multilevel approach and hierarchical linear models. The findings show that both effects impact significantly on firm performance, and also that the firm effect is more important than the destination effect. We equally provide some insights about the relationships between these two levels with the aim of building bridges between them.     

Institutions and economic growth in Portugal: a quantitative exploration

This paper presents a broad diagnostic of the level of institutional development in Portugal in the legal, corporate governance and financial systems. A comparative assessment suggests that Portuguese institutions are less developed than their European Union and East Asian counterparts, more developed than Greek institutions and on a level similar to that of Spanish institutions. We use data for a wide cross-section of countries since 1960 and correlate indicators of institutional development with the long-term average growth rate, identifying issues where reform is likely to significantly affect economic growth. We construct three new indices that measure the potential of institutional reform - the impact of reform on growth, the required reform effort and the efficiency of reform index - by taking into consideration the institutional distance between Portugal and the European Union. These indices measure, respectively, which reforms have the most payoff in terms of growth, which are less costly to undertake and which deliver the most growth per required effort. Our results strongly suggest that in a large number of issues, institutional reform may translate into substantially higher rates of economic growth. Of the ten most promising reforms, six are in the legal area, irrespective of which of the indices is considered. Whereas legal reform is promising at the aggregate and the microeconomic levels, in the financial sector aggregate indicators offer the wider scope for productive reform, while in the corporate governance area it is indices at the micro level that hold the most promise. These results support the view that a comprehensive reform effort is likely to deliver higher rates of growth in Portugal, allowing faster real convergence with the rest of the European Union.Received: January 2003, Accepted: February 2004, JEL Classification: O0, O5, K00, K4, G2, G3This paper is based on Firms, Financial Markets and the Law: Institutions and Economic Growth in Portugal, prepared for the conference Desenvolvimento Económico Português no Espaço Europeu: Determinantes e Políticas, organized by the Banco de Portugal. Financial support by the Banco de Portugal, NOVA FORUM and FUNDAÇÃO Para a Ciência e tecnologia and Polti through feder are gratefully acknowledged. Comments from Marcelo Rebelo de Sousa, two anonymous referees and the editor are sincerely appreciated. The usual disclaimer applies.     

Investigating regional house price convergence in the United States: Evidence from a pair-wise approach

In this paper we examine long-run house price convergence across US states using a novel econometric approach advocated by Pesaran (2007) and Pesaran et al. (2009). Our empirical modelling strategy employs a probabilistic test statistic for convergence based on the percentage of unit root rejections among all state house price differentials. Using a sieve bootstrap procedure, we construct confidence intervals and find evidence in favour of convergence. We also conclude that speed of adjustment towards long-run equilibrium is inversely related to distance.     

Categorizing risks in seven large projects—Which risks do the projects focus on?

In a hierarchy of project objectives, strategic objectives will often be principally different from the operational ones. Operational objectives concern the project outputs/results, and strategic objectives concern the project goal and purpose. In this study, risks are categorized as risks to operational, long‐term, or short‐term strategic objectives, and, by studying a dataset of some 1,450 risk elements that make up the risk registers of seven large projects, we examine how operational and strategic risks are distributed in the projects. The study strongly indicates that risks to a project's strategic objectives rarely occur in the project's risk registers, though project success and failure stories indicate their importance.     

Incomplete regulation, market competition and collusion

Regulators often do not regulate all firms competing in a given sector. Due to product substitutability, unregulated competitors have incentives to bribe regulated firms to have them overstate their costs and produce less, thereby softening competition. The best collusion-proof contract entails distortions both for inefficient and efficient regulated firms (distortion ‘at the top’). But a contract inducing active collusion may do better by allowing the regulator to ‘team up’ with the regulated firm to indirectly tax its competitor. The best such contract is characterized. It is such that the unregulated firm pays the regulated one to have it truthfully reveals its inefficiency. We finally compare those contracts.