The innovation value chain

The challenges of coming up with fresh ideas and realizing profits from them are different for every company. One firm may excel at finding good ideas but may have weak systems for bringing them to market. Another organization may have a terrific process for funding and rolling out new products and services but a shortage of concepts to develop. In this article, Hansen and Birkinshaw caution executives against using the latest and greatest innovation approaches and tools without understanding the unique deficiencies in their companies' innovation systems. They offer a framework for evaluating innovation performance: the innovation value chain. It comprises the three main phases of innovation (idea generation, conversion, and diffusion) as well as the critical activities performed during those phases (looking for ideas inside your unit; looking for them in other units; looking for them externally; selecting ideas; funding them; and promoting and spreading ideas companywide). Using this framework, managers get an end-to-end view of their innovation efforts. They can pinpoint their weakest links and tailor innovation best practices appropriately to strengthen those links. Companies typically succumb to one of three broad "weakest-link" scenarios. They are idea poor, conversion poor, or diffusion poor. The article looks at the ways smart companies - including Intuit, P&G, Sara Lee, Shell, and Siemens- modify the best innovation practices and apply them to address those organizations' individual needs and flaws. The authors warn that adopting the chain-based view of innovation requires new measures of what can be delivered by each link in the chain. The approach also entails new roles for employees "external scouts" and "internal evangelists," for example. Indeed, in their search for new hires, companies should seek out those candidates who can help address particular weaknesses in the innovation value chain.     

Industry dynamics: Foundations for models with an infinite number of firms

This paper explores the connection between three important threads of economic research offering different approaches to studying the dynamics of an industry with heterogeneous firms. Finite models of the form pioneered by Ericson and Pakes (1995) capture the dynamics of a finite number of heterogeneous firms as they compete in an industry, and are typically analyzed using the concept of Markov perfect equilibrium (MPE). Infinite models of the form pioneered by Hopenhayn (1992), on the other hand, consider an infinite number of infinitesimal firms, and are typically analyzed using the concept of stationary equilibrium (SE). A third approach uses oblivious equilibrium (OE), which maintains the simplifying benefits of an infinite model but within the more realistic setting of a finite model. The paper relates these three approaches. The main result of the paper provides conditions under which SE of infinite models approximate MPE of finite models arbitrarily well in asymptotically large markets. Our conditions require that the distribution of firm states in SE obeys a certain “light-tail” condition. In a second set of results, we show that the set of OE of a finite model approaches the set of SE of the infinite model in large markets under a similar light-tail condition.     

The emergence, advance and future of international entrepreneurship research — An introduction to the special forum

Since its genesis over twenty years ago, research in International Entrepreneurship has emerged as a field of study, and moved through the process of differentiation, mobilization and legitimacy building. Generally referred to as IE, research in this area is conducted by scholars worldwide and supported by various community structures, conferences and journals. In recognition of IE, this Special Forum was initiated to help clarify its parameters and history of development, the areas of research pertinent to it and critically, directions for future research.     

Participation index: a measure to identify rural transport disadvantage?

This paper develops a composite participation index (PI) to identify patterns of transport disadvantage in space and time. It is operationalised using 157 weekly activity-travel diaries data collected from three case study areas in rural Northern Ireland. A review of activity space and travel behaviour research found that six dimensional indicators of activity spaces were typically used including the number of unique locations visited, distance travelled, area of activity spaces, frequency of activity participation, types of activity participated in, and duration of participation in order to identify transport disadvantage. A combined measure using six individual indices were developed based on the six dimensional indicators of activity spaces, by taking into account the relativity of the measures for weekdays, weekends, and for a week. Factor analyses were conducted to derive weights of these indices to form the PI measure. Multivariate analysis using general linear models of the different indicators/indices identified new patterns of transport disadvantage. The research found that: indicator based measures and index based measures are complement each other; interactions between different factors generated new patterns of transport disadvantage; and that these patterns vary in space and time. The analysis also indicates that the transport needs of different disadvantaged groups are varied.     

Pattern of childhood falls in a low-income setting: a cross-sectional study in Dar es Salaam

The objective was to determine patterns and circumstances of childhood falls in a low-income setting in Dar es Salaam, Tanzania. This cross sectional study is based on a household survey conducted in July 2009. A total of 3927 children up to age 18 from 1928 households in 15 sampled wards were surveyed through a structured questionnaire. The current study includes information regarding fall occurrence, socio-demographic and economic factors. Data were analysed using chi-square, t-test and logistic regression. Male children had 42% higher odds of falls compared to females, and rural residents had more than two times higher odds compared to urban residents. Falls occurred three times more among age group 1-4 and two times more among age group 5-9 compared to those between 15 and 18 years. Most falls occurred outdoors (62%) while playing (51%) with boys being over-represented. Females and children aged 1-4 years fell more from stairs whereas most infants fell from furniture. Male gender, younger age groups and rural residence were significant factors for fall injuries. The circumstances in which these falls occur also differ significantly. Intervention efforts should emphasise these patterns.     

Attending to inattention: Identification of deadweight loss under nonsalient taxes

Recent developments in behavioral public economics have shown that heterogeneous biases prevent point identification of deadweight loss. We replicate this result for an arbitrary (closed) consumption set, whereas previous results on heterogeneous attention focused on binary choice. We find that one can bound the efficiency costs of taxation based on aggregate features of demand. When individuals have linear demand functions, the bounds for deadweight loss are easy to calculate from linear regressions.     

The Effect of Fuel Price Changes on Fleet Demand for New Vehicle Fuel Economy

New vehicle purchases by private companies and government agencies, or ‘fleet’ buyers, represent a significant percentage of overall new vehicle sales in the United States. Yet little is known about fleet demand for new vehicle fuel economy including how it responds to fuel price changes. Using unique disaggregated data on fleet and household registrations of new vehicles from 2009 to 2016, we estimate how fleet demand for new vehicle fuel economy responds to fuel price changes. We find that fleet purchases of low fuel economy vehicles fall relative to high fuel economy vehicles when gasoline prices increase, a finding that is consistent with fleet buyers’ taking into account capitalization of fuel costs in the second‐hand market. Our estimates imply that raising gasoline prices by one dollar would increase fuel economy of new vehicles acquired by fleet buyers by 0.33 miles per gallon. We estimate a similar response for household buyers during the same period. This result justifies basing fuel economy responses to fuel cost changes on household data alone, an assumption widely used in the vehicle demand literature and the fuel economy valuation literature. We also find, however, that the response to fuel price changes varies across the types of fleet buyers: rental companies respond strongly to fuel price changes, whereas commercial and government buyers are insensitive. Our estimates imply that an increase in the federal gasoline tax would modestly increase fuel economy of vehicles bought by households and rental companies but would have little to no impact on fuel economy of vehicles bought by non‐rental companies and governments.     

Does nonagricultural labor relax farmers’ credit constraints? Evidence from longitudinal data for Vietnam

We examine the relationship between participation in nonagricultural labor activities and farming production decisions, focusing on the use of inputs. Using longitudinal data for Vietnam from 1993 to 1998, we find that households engaged in nonagricultural labor spend significantly more on seeds, services, hired labor, and livestock inputs. This is consistent with the hypothesis that nonagricultural labor income relaxes credit constraints to farming.     

Estimation of consistent multi-country FEERs

Most studies on equilibrium exchange rates focus on a limited number of G7 countries. But in a situation of world imbalances, emerging countries can no longer be excluded. The study of all equilibrium exchange rates is delicate. First, the trade model has to be balanced at the aggregate level. This paper suggests a method to achieve world balance both in volume and in value. Second, the N − 1 bilateral exchange rates cannot ensure that the N areas will reach their macroeconomic equilibrium simultaneously. This paper examines the existing solutions to solve the N − 1 problem and proposes an alternative which minimizes the distance to the current-account targets. Finally, in order to compare the relevance of the different methodologies, FEERs are calculated for 19 industrialized and developing countries. The results, which are taking into account the modification on output gap assessment induced by the 2008–2009 crisis, lead for the year 2010 to a USD closed to its equilibrium, a RMB undervalued by around 35% in real effective terms and to a EUR/USD parity equals to 1.47.