Modularity and intellectual property protection

Modularity is a means of partitioning technical knowledge about a product or process. When state‐sanctioned intellectual property (IP) rights are ineffective or costly to enforce, modularity can be used to hide information and thus protect IP. We investigate the impact of modularity on IP protection by formally modeling the threat of expropriation by agents. The principal has three options to address this threat: trust, licensing, and paying agents to stay loyal. We show how the principal can influence the value of these options by modularizing the system and by hiring clans of agents, thus exploiting relationships among them. Extensions address screening and signaling in hiring, the effects of an imperfect legal system, and social norms of fairness. We illustrate our arguments with examples from practice.© 2014 The Authors. Strategic Management Journal published by John Wiley & Sons Ltd.     

The exporter productivity premium along the productivity distribution: evidence from quantile regression with nonadditive firm fixed effects

A vast literature on the international activities of heterogeneous firms finds the existence of a positive exporter productivity premium. On average, exporting firms are more productive than firms that sell on the national market only. The Melitz (Econometrica 71:1695–1725, 2003) model, however, has implications for not only mean differences but also differences in the distribution of productivity. Furthermore, exporting firms may be different from non-exporting firms for reasons that are not included in the Melitz model. We believe that conditioning on firm fixed effects and studying the distribution of productivity are both necessary for empirical tests of the Melitz model. This paper is the first to employ a new quantile estimation technique for panel data introduced in Powell (Did the economic stimulus payments of 2008 reduce labor supply? Evidence from quantile panel data estimation. RAND Corporation Publications Department, Santa Monica, 2014). We find that the premium is positive at all productivity levels, but highest at the lowest quantiles. These results support theoretical models which suggest that there is a division in productivity between exporters and non-exporters.     

Das Mindestlohngesetz — Hoffnungen und Befürchtungen

The German government plans to introduce a minimum wage from 2015. This must be understood as a response to the decline in collective bargaining coverage and the marked increase in employment in the low-wage sector. The authors discuss how many workers are affected by this new regulation and whether the minimum wage is too high in relation to the average wage of workers (Kaitz index). They assume that the introduction of a minimum wage in Germany can have a number of effects. It is not possible to forecast all the reactions and behaviour of market participants to handle higher wages and goods prices. Some authors warn that these measures are significant labour market interventions that could have adverse employment effects. They recommend allowing more exemptions from the minimum wage law than intended by the government, especially for young employees and student apprentices. Other authors hope that minimum wages would help to strengthen collective bargaining and stabilise wages. Some authors emphasise that there should be a careful evaluation of the economic effects by scientists.     

How would Swiss consumers decide if they had freedom of choice? Evidence from a field study with organic,conventional and GM corn bread

In 2005, the Swiss expressed their negative attitude towards genetic engineering in agriculture by voting in favor of a ban to use genetically modified (GM) crops in domestic agriculture. At the same time, certain GM food products remain approved but are not on offer since retailers assume that consumers would shun labeled GM food. In our study we tested this claim by conducting a large-scale field study with Swiss consumers. In our experimental design, three clearly labeled types of corn bread were offered at five different market stands across the French and German-speaking part of Switzerland: one made with organic, one made with conventional, and one made with genetically modified (GM) corn. In addition, we tested the consistency between purchasing decision at the market stand and the previous voting decision on GMOs in 2005 by means of an ex-post questionnaire. The results of our discrete choice analysis show that Swiss consumers treat GM foods just like any other type of novel food. We conclude from our findings that consumers tend to appreciate transparency and freedom of choice even if one of the offered product types is labeled as containing a genetically modified ingredient. Retailers should allow consumers to make their own choice and accept the fact that not all people appear to be afraid of GM food.     

From Estimation Results to Stylized Facts Twelve Recommendations for Empirical Research in International Activities of Heterogeneous Firms

Heterogeneous firms are at the heart of both the New New International Trade Theory and the Micro-econometrics of International Firm Activities. One important aim of micro-econometric studies is to uncover stylized facts that hold over space and time, and that can both inspire theoretical models that are based on “realistic” assumptions, and inform policy debates in an evidence-based way. Which results from the thousands of empirical estimates reported in the literature on the micro-econometrics of international firm activities do we consider as convincing? Based on my own experience from the last twenty years I use the opportunity of this paper to make twelve recommendations that, hopefully, will help to find the right way on the thorny road from estimation results to stylized facts. I will deal with the following topics: comparisons of means vs. comparisons of distributions; extremely different firms, or outliers; unobserved heterogeneity; simultaneous occurrence of differences across quantiles, outliers, and unobserved heterogeneity; heterogeneous effects of international firm activities on firm performance; replication; within-study replication by international research teams; meta-analysis; and talking to practitioners.