Two‐level CES Production Technology in the Solow and Diamond Growth Models*

The two‐level CES aggregate production function—that nests a CES into another CES function—has recently been used extensively in theoretical and empirical applications of macroeconomics. We examine the theoretical properties of this production technology and establish existence and stability conditions of steady states under the Solow and Diamond growth models. It is shown that in the Solow model the sufficient condition for a steady state is fulfilled for a wide range of substitution parameter values. This is in sharp contrast with the two‐factor Solow model, where only an elasticity of substitution equal to one is sufficient to guarantee the existence of a steady state. In the Diamond model, multiple equilibria can occur when the aggregate elasticity of substitution is lower than the capital share. Moreover, it is shown that for high initial levels of capital and factor substitutability, the effect of a further increase in a substitution parameter on the steady state depends on capital–skill complementarity.     

Rent Management – The Heart of Green Industrial Policy

At the heart of green industrial policy is rent management: government creating and withdrawing opportunities for profitable investment. This paper asks what the key factors are for rent management to succeed. Drawing on a range of literatures, the paper first deals with the critical success factors for ‘normal’ rent management and then turns to one of the most pressing and controversial issues of our time: how to bring about the transition to green energy. This is extra challenging because technological uncertainties are high, time horizons for investment are long, yet action is required now.     

Employment change in the small business sector: Evidence from five manufacturing industries

This paper examines the scale and nature of employment flows into and out of the small business sector (SBS) in five United Kingdom manufacturing industries over the period 1979–85. It first provides a taxonomic framework for analysing these flows. It then draws on specially prepared analyses from the Annual Census of Production (ACOP) for the UK to show that the SBS in each industry has experienced very substantial turbulence: although the SBS (across all five industries) lost only four per cent of 1979 employment over the period, movement in and out each represented about half of 1979 employment. Most gains and losses were in the very small size bands. The paper also briefly explores the relationship between births and deaths and industrial characteristics across the five industries. The study raises questions about the causes and costs of high turbulence in the SBS. It also demonstrates the potential value of the ACOP data base for longitudinal studies of business in the UK.

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Micromultinationals: Some Preliminary Evidence on an Emergent ‘Star’ of the International Entrepreneurship Field

This paper provides some preliminary evidence on the behaviour of the micromultinational, an emergent player in the international entrepreneurship field. Using survey data from the Scottish Council for Development and Industry, it found that mMNEs originate from a mixture of high and low technology sectors and employ Foreign Direct Investment as well as international contractual approaches in servicing their foreign target markets. It also concluded that micromultinationals overseas market selection decisions were mainly influenced by market- and knowledge-seeking factors rather than considerations of psychic proximity. The implications of these summary findings for policy, theory and future research are discussed in the paper.     

The EU's evolving stance on the international dimension of competition policy: A critical commentary

In recent years there has been a rapid increase in both the numbers and the value of cross-border mergers and acquisitions. As more and more competition cases fall within the jurisdiction of two or more competition authorities, the possibility of divergent and unpredictab]le outcomes increases. This article explores the response of the European Union to international competition concerns that impact on its, jurisdiction.     

Experimental analysis of choice

Experimental choice analysis continues to attract academic and applied attention. We review what is known about the design, conduct, analysis, and use of data from choice experiments, and indicate gaps in current knowledge that should be addressed in future research. Design strategies consistent with probabilistic models of choice process and the parallels between choice experiments and real markets are considered. Additionally, we address the issues of reliability and validity. Progress has been made in accounting for differences in reliability, but more research is needed to determine which experiments and response procedures will consistently produce more reliable data for various problems.Sawtooth SoftwareDecision Research