The Social Psychology of Organizations.

Benedict Anderson’s deservedly famous thesis about the origins and nature
of modern nationalism turns around the central notion of an “imagined
community.” This category provides him with a matrix out of which one
can apprehend-theoretically and historically-the different variants of nationalist discourse formulated over the last two hundred years. We will refer,
in the brief comments that follow, to three basic dimensions structuring
the fabric of Anderson’s argument: 1) the presuppositions implicit in the
notion of an “imagined” community; 2) the kind of substitutability or solidarity which is required to be a member of such a community; 3) the kind
of relationship that is established between such a community-which is by
definition finite or limited-and its outside. Before that, however, let us
describe the main features of Anderson’s thesis.

On Imagined Communities

Business cycles are both less volatile and more synchronized with the world cycle in rich countries than in poor ones. We develop two alternative explanations based on the idea that comparative advantage causes rich countries to specialize in industries that use new technologies operated by skilled workers, while poor countries specialize in industries that use traditional technologies operated by unskilled workers. Since new technologies are difficult to imitate, the industries of rich countries enjoy more market power and face more inelastic product demands than those of poor countries. Since skilled workers are less likely to exit employment as a result of changes in economic conditions, industries in rich countries face more inelastic labour supplies than those of poor countries. We show that either asymmetry in industry characteristics can generate cross-country differences in business cycles that resemble those we observe in the data. We are grateful to Daron Acemoglu and Fabrizio Perri for useful comments. The views expressed here are the authors' and do not necessarily reflect those of The World Bank. Business cycles are not the same in rich and poor countries. A first difference is that fluctuations in per capita income growth are smaller in rich countries than in poor ones, in the top panel of Figure 1 , we plot the standard deviation of per capita income growth against the level of (log) per capita income for a large sample of countries. We refer to this relationship as the volatility graph and note that it slopes downwards. A second difference is that fluctuations in per capita income growth are more synchronized with the world cycle in rich countries than in poor ones. In the bottom panel of Figure 1 , we plot the correlation of per capita income growth rates with world average per capita income growth, excluding the country in question, against the level of (log) per capita income for the same set of countries. We refer to this relationship as the comovement graph and note that it slopes upwards. Table 1 , which is self-explanatory, shows that these facts apply within different sub-samples of countries and years. 1 Why are business cycles less volatile and more synchronized with the world cycle in rich countries than in poor ones? Part of the answer must be that poor countries exhibit more political and policy instability, they are less open or more distant from the geographical center, and they also have a higher share of their economy devoted to the production of agricultural products and the extraction of minerals. Table 1 shows that, in a statistical sense, these factors explain a substantial fraction of the variation in the volatility of income growth, although they do not explain much of the variation in the comovement of income growth. More important for our purposes, the strong relationship between income and the properties of business cycles reported in Table 1 is still present after we control for these variables. In short, there must be other factors behind the strong patterns depicted in Figure 1 beyond differences in political instability, remoteness and the importance of natural resources. With the exception that the comovement graph seems to be driven by differences between rich and poor countries and not within each group. Acemoglu and Zilibotti (1997) also present the volatility graph. They provide an explanation for it based on the observation that rich countries have more diversified production structures. We are unaware of any previous reference to the comovement graph. In this paper, we develop two alternative but non-competing explanations for why business cycles are less volatile and more synchronized with the world in rich countries than in poor ones. Both explanations rely on the idea that comparative advantage causes rich countries to specialize in industries that require new technologies operated by skilled workers, while poor countries specialize in industries that require traditional technologies operated by unskilled workers. This pattern of specialization opens up the possibility that cross-country differences in business cycles are the result of asymmetries between these types of industries. In particular, both of the explanations advanced here predict that industries that use traditional technologies operated by unskilled workers will be more sensitive to country-specific shocks. Ceteris paribus, these industries will not only be more volatile but also less synchronized with the world cycle since the relative importance of global shocks is lower. To the extent that the business cycles of countries reflect those of their industries, differences in industrial structure could potentially explain the patterns in Figure 1 . One explanation of why industries react differently to shocks is based on the idea that firms using new technologies face more inelastic product demands than those using traditional technologies. New technologies are difficult to imitate quickly for technical reasons and also because of legal patents. This difficulty confers a cost advantage on technological leaders that shelters them from potential entrants and gives them monopoly power in world markets. Traditional technologies are easier to imitate because enough time has passed since their adoption and also because patents have expired or have been circumvented. This implies that incumbent firms face tough competition from potential entrants and enjoy little or no monopoly power in world markets. The price-elasticity of product demand affects how industries react to shocks. Consider, for instance, the effects of country-specific shocks that encourage production in all industries. In industries that use new technologies, firms have monopoly power and face inelastic demands for their products. As a result, fluctuations in supply lead to opposing changes in prices that tend to stabilize industry income. In industries that use traditional technologies, firms face stiff competition from abroad and therefore face elastic demands for their products. As a result, fluctuations in supply have little or no effect on their prices and industry income is more volatile. To the extent that this asymmetry in the degree of product-market competition is important, incomes of industries that use new technologies are likely to be less sensitive to country-specific shocks than those of industries that use traditional technologies. Another explanation for why industries react differently to shocks is based on the idea that the supply of unskilled workers is more elastic than the supply of skilled workers. A first reason for this asymmetry is that non-market activities are relatively more attractive to unskilled workers whose market wage is lower than that of skilled ones. Changes in labour demand might induce some unskilled workers to enter or abandon the labour force, but are not likely to affect the participation of skilled workers. A second reason for the asymmetry in labour supply across skill categories is the imposition of a minimum wage. Changes in labour demand might force some unskilled workers in and out of unemployment, but are not likely to affect the employment of skilled workers. The wage-elasticity of the labour supply also has implications for how industries react to shocks. Consider again the effects of country-specific shocks that encourage production in all industries and therefore raise the labour demand. Since the supply of unskilled workers is elastic, these shocks lead to large fluctuations in employment of unskilled workers. In industries that use them, fluctuations in supply are therefore magnified by increases in employment that make industry income more volatile. Since the supply of skilled workers is inelastic, the same shocks have little or no effects on the employment of skilled workers. In industries that use them, fluctuations in supply are not magnified and industry income is less volatile. To the extent that this asymmetry in the elasticity of labour supply is important, incomes of industries that use unskilled workers are likely to be more sensitive to country-specific shocks than those of industries that use skilled workers To study these hypotheses we construct a stylized world equilibrium model of the cross-section of business cycles. Inspired by the work of Davis (1995), we consider in section one a world in which differences in both factor endowments a la Heckscher-Ohlin and industry technologies a la Ricardo combine to determine a country's comparative advantage and, therefore, the patterns of specialization and trade. To generate business cycles, we subject this world economy to the sort of productivity fluctuations that have been emphasized by Kydland and Prescott (1982). 2 In section two, we characterize the cross-section of business cycles and show how asymmetries in the elasticity of product demand and/or labour supply can be used to explain the evidence in Figure 1 . Using available microeconomic estimates of the key parameters, we calibrate the model and find that: (i) The model exhibits slightly less than two-thirds and one-third of the observed cross-country variation in volatility and comovement, respectively; and (ii) The asymmetry in the elasticity of product demand seems to have a quantitatively stronger effect on the slopes of the volatility and comovement graphs, than the elasticity in the labour supply. We explore these results further in sections three and four. In section three, we extend the model to allow for monetary shocks that have real effects since firms face cash-in-advance constraints. We use the model to study how cross-country variation in monetary policy and financial development affect the cross-section of business cycles. Once these factors are considered, the calibrated version of the model exhibits roughly the same cross-country variation in volatility and about 40 percent of the variation in comovement as the data. In section four, we show th

http://link.springer.com/content/pdf/10.1007/BF01322868.pdf

Business cycles: A methodological approach

A double-edged sword.

The Creative Mind: Myths and Mechanisms.

The view of innovation as a process of searching and recombining existing knowledge elements has been adopted in several industries. The innovation management literature has recognized the fundamental role that search and recombination play in innovation development. However, the relevant research has provided complex, fragmented and mixed results. The authors aim to identify areas of convergence and provide directions for future research by collecting empirical evidence regarding how firms conduct the search and recombination process. They conducted a systematic literature review of 87 empirical articles in the innovation management field. The review reveals differences among the solutions adopted both within and across organizational boundaries. Specifically, it shows that the variety and diversity of knowledge elements are critical in creating breakthrough innovations. Therefore, this paper discusses how to provide access to a variety of knowledge elements. It also highlights other fundamental questions calling for further investigation, such as how scientific knowledge elements are successfully recombined and how recombination and search dynamics occur in small and medium-sized firms. The review concludes by summarizing the current state of affairs and suggests promising directions for future investigation.

Search and Recombination Process to Innovate: A Review of the Empirical Evidence and a Research Agenda

Purpose




Knowledge assumes a pivotal role in the open innovation (OI) paradigm. Yet OI has been scantly investigated by adopting a knowledge management (KM) lens. Therefore, the purpose of this paper is to provide a systematic literature review of the KM practices analysed by prior literature to support OI activities.




Design/methodology/approach




To perform a valuable literature review, the steps for systematic review proposed by previous studies have been adopted. These steps have yielded a final sample of 34 articles. Afterward, the authors have distinguished and analysed the identified articles according to the three main OI processes, i.e. inbound, outbound and coupled OI processes.




Findings




This research groups and highlights the most relevant KM practices to support OI activities on the basis of the inbound, outbound and coupled OI processes.




Originality/value




Despite knowledge is the most relevant resource exchanged in OI activities, this is the first attempt to highlight how knowledge should be managed in an OI context by adopting a KM lens. Furthermore, the authors also identify relevant topics that have been so far understudied, which the authors suggest as future research directions.

Managing knowledge assets for open innovation: a systematic literature review

Search, recombination, and innovation: : lessons from haute cuisine

Maturity of knowledge inputs and innovation value: The moderating effect of firm age and size

The present research investigates the development of new products within cultural and creative industries resulting from the use of traditional elements. In particular, we analyse methods facilitating the recombination of traditional elements into new products. Accordingly, we conducted an inductive qualitative research, based on five case studies represented by Italian restaurants awarded with three Michelin stars. Findings reveal how traditional elements may be combined with elements coming from different and distant cultures. In addition, the elements of tradition may be the only source of innovation if atypical links are established among them. Our results mainly contribute to shed new light on the dynamics which allow to achieve the equilibrium between familiarity and novelty in cultural and creative industries where products suffer a rapid obsolescence. Finally, we advance the debate on tensions created by the inclusion of novelties in traditions by proposing method facilitating combinations.

Tommaso Savino

Papers

Search and Recombination Process to Innovate: A Review of the Empirical Evidence and a Research Agenda

Managing knowledge assets for open innovation: a systematic literature review

Search, recombination, and innovation: : lessons from haute cuisine

Maturity of knowledge inputs and innovation value: The moderating effect of firm age and size

Reinterpreting Tradition to Innovate: The Case of Italian Haute Cuisine