Public Policy and Innovative Capabilities: The Case of Philips' IT Activities

The main aim of this paper is to analyze the impact of public policy on innovative capabilities of firms, focusing on, on the one hand, the measure of sheltering provided by the policies and, on the other hand, the effects of policies on industrial life cycles and on the life cycle related patterns of firms' behaviour. The paper deals with one sector, IT, and discusses EU and Dutch policies directed toward this sector. Furthermore, a case will be presented concerning Philips' ventures in the IT sector. The way in which public policy influenced the innovative capabilities of Philips helps to explain the relative success of the various projects.     

ON THE GROWTH OF THE AGRICULTURAL FIRM*

Theoretical problems involved in the reconciliation of the assumption of constant returns to scale with determinacy of firm size are discussed with particular reference to Australian farms. Various techniques for examining changes in the size distribution of firms are examined and their use demonstrated. The work is stochastic rather than deterministic. B.A.E. sheep industry survey data is used and flock size is used as the measure of farm size. The results do not suggest that inequality in the distribution of farm sizes is increasing. Growth differs between flock sizes within the same region and for the same flock size between regions. Profitability seems to be relatively larger in the medium flock sizes.     

Income Inequality,Human Capital,and Income Growth: Evidence from a State-Level VAR Analysis

We use Granger causality and impulse response analysis to examine the relationship between income inequality, human capital attainment, and income growth using annual state-level data over the period 1929–2000. We find consistent evidence that the income share of the top decile Granger-causes income growth, but only weak evidence that income growth Granger-causes the top decile income share. Moreover, an impulse response analysis indicates that income growth responds negatively to permanent changes in the income share of the top decile. These findings appear to have important regional variations, however, with the more densely populated Eastern states showing the strongest associations. We also find evidence that years of schooling may Granger-cause income levels, but little evidence that years of schooling Granger-causes the top decile income share.

Information Precision and Long‐Run Performance of Initial Public Offerings

Due to a lack of an information history, IPO firms' information precision is not only generally low but also likely to be estimated initially with considerable error. I hypothesize and find that the deviation between expected and realized information precision is predictably associated with the magnitude and the persistence of long‐run abnormal returns after an IPO. Specifically, an upward (downward) revision of information precision results in positive (negative) abnormal returns over the period in which investors update their beliefs. In addition, the positive abnormal returns of firms with unexpectedly high realized information precision are less persistent than the negative abnormal returns of firms with unexpectedly low realized information precision, which can extend up to 18 months after the IPO. The findings imply that long‐term investors in IPO stocks do not necessarily behave irrationally, but that both positive and negative post‐IPO abnormal performance is also consistent with rational investors gradually updating the perceived information precision parameter of these stocks.     

FDI, exports, and GDP in East and Southeast Asia—Panel data versus time-series causality analyses

Using time-series and panel data from 1986 to 2004, this paper examines the Granger causality relations between GDP, exports, and FDI among China, Korea, Taiwan, Hong Kong, Singapore, Malaysia, Philippines, and Thailand, the eight rapidly developing East and Southeast Asian economies. After reviewing the current literature and testing the properties of individual time-series data, we estimate the VAR of the three variables to find various Granger causal relations for each of the eight economies. We found each country has different causality relations and does not yield general rules. We then construct the panel data of the three variables for the eight economies as a group and then use the fixed effects and random effects approaches to estimate the panel data VAR equations for Granger causality tests. The panel data causality results reveal that FDI has unidirectional effects on GDP directly and also indirectly through exports, and there also exists bidirectional causality between exports and GDP for the group. Our results indicate that the panel data causality analysis has superior results over the time-series causality analysis. Economic and policy implications of our analyses are then explored in the conclusions.