Showing papers in "Industrial and Corporate Change in 2006"
TL;DR: In this paper, a large scale survey of UK manufacturing firms was conducted to explore different explanations for why firms develop process innovations, and they found that the presence of formal research and development, and the use of suppliers as a source of knowledge all increase the chances that a firm will be a process innovator.
Abstract: Although it retains a central position in the main theories of innovation, there are few studies that examine the factors that provide inducements for process innovation at the firm level. Using a large scale survey of UK manufacturing firms, we explore different explanations for why firms develop process innovations. Contrasting the sources of incremental and radical process innovation, our study indicates that there may be complementarities between them. We also find that firm size, the presence of formal research and development, and the use of suppliers as a source of knowledge all increase the chances that a firm will be a process innovator. This article discusses the implications of these results for future theoretical and empirical studies of the innovation process.
442 citations
TL;DR: Project-based firms differ considerably in a number of respects, notably the singularity of their goals and outputs and the distinctiveness and stability of work roles and task organization as discussed by the authors.
Abstract: The increasing significance of project-based forms of organizing economic activities in many industries has stimulated considerable interest in project-based firms (PBFs) as distinctive kinds of economic actors that are seen by some as heralding a new logic of organizing. In particular, their fluid, temporary nature and membership of multiple networks, alliances, and partnerships have been construed as critical to the generation of radical innovations. However, PBFs differ considerably in a number of respects, notably the singularity of their goals and outputs and the distinctiveness and stability of work roles and task organization. At least four distinct ideal types of PBFs can be distinguished in these terms that can be expected to vary in their prevalence and importance across industrial sectors and in different kinds of societies because of differences in investor and employee commitment and coordination costs.
375 citations
TL;DR: In this paper, the authors investigated whether liquidity constraints affect firm size and growth dynamics using a large longitudinal sample of Italian manufacturing firms and found that the stronger liquidity constraints, the more size negatively affects firm growth.
Abstract: The paper investigates whether liquidity constraints affect firm size and growth dynamics using a large longitudinal sample of Italian manufacturing firms. We run standard panel-data Gibrat regressions, suitably expanded to take into account liquidity constraints (proxied by cash flow scaled by firm sales). Moreover, we characterize the statistical properties of fi rms size, growth, age, and (scaled) cashflow distributions. Pooled data show that: (i) liquidity constraints engender a negative, statistically significant, effect on growth once one controls for size; (ii) smaller firms grow more (and experience more volatile growth patterns) after controlling for liquidity constraints; (iii) the stronger liquidity constraints, the more size negatively affects firm growth. We find that pooled size distributions depart from log-normality and growth rates are well approximated by fat-tailed, tent-shaped (Laplace) densities. We also study the evolution of growth-size distributions over time. Our exercises suggest that the strong negative impact of liquidity constraints on firm growth which was present in the pooled sample becomes ambiguous when one disaggregates across years. Finally, firms who were young and strongly liquidity-constrained at the beginning of the sample period grew persistently more than those who were old and weakly liquidity-constrained.
230 citations
TL;DR: In this paper, the authors investigate how established firms innovate and even initiate new technological trajectories, using a longitudinal case study of Corning's invention and development of fiber optics technology.
Abstract: This article investigates how established firms innovate and even initiate new technological trajectories. We build on and expand the notion of technological speciation to describe how a new technology emerges when a firm leverages its technological knowledge into a new application domain. Current research on technological speciation does not investigate how firms accumulate the technological knowledge which they eventually redeploy into different domains. Nor does it clarify the precise role of luck (historical accidents) and foresight (strategy) in shaping the overall process. This requires a finer grained investigation of the microprocesses and evolutionary forces underlying the dynamics of technological speciation. To this end, we use a longitudinal case study of Corning’s invention and development of fiber optics technology. We focus less on testing theory and more on describing a phenomenon to generate new theoretical insight.
187 citations
TL;DR: In this article, the authors examined the relationship between the technological regime and the technological catch-up, using US patent data, and found that catching-up is more likely to happen in those technological classes with shorter technological cycle time and more initial stock of knowledge.
Abstract: This article examines the relationship between the technological regime and the technological catch-up, using US patent data. This study first extends the notion of technological regimes as more appropriate for the catching-up context before it goes on to develop the quantitative expressions of technological regime variables. Then, it investigates in which technological classes technological catch-up tends either to occur or not to occur and what affects the speed of the catch-up. This study has found that catching-up is more likely to happen in those technological classes with shorter technological cycle time and more initial stock of knowledge and that among those candidate classes the actual speed of catch-up varies depending on appropriability and knowledge accessibility. This implies that the factors that determine the occurrence of catch-up and the speed of catch-up are different. Comparing the level of technological capability of the advanced and catching-up economies, the article has found that catching-up countries tend to achieve high levels in the technological sectors with shorter cycle time, easier access to knowledge, and higher appropriability, whereas the advanced countries show the exactly opposite performances. The study also confirms the organizational selection hypothesis such that the firms of different organizations and strategies show divergent degrees of fitness in the different environment or technological regime. We find that the Korean firms find themselves more fitted to technological regimes featured by low appropriability and high cumulativeness (persistence), whereas the Taiwanese firms are more fitted to technological regimes featured by high appropriability and low cumulativeness (persistence). Our findings are consistent with the following characterization of the firms in Korea and Taiwan. The Korean firms, dominated by the so-called Chaebols especially in patent registrations, are characterized as less flexible, large diversified conglomerates and pursing more independent R&D and learning strategies. The Taiwanese firms are characterized as more flexible, network-based, specialized firms and pursuing more cooperative R&D and learning strategies. Copyright 2006, Oxford University Press.
172 citations
TL;DR: In this article, a modified version of the model proposed by Harrison, Jaumandreu, Mairesse and Peters (2005), which separates employment growth rates into those associated with old and new products, is presented.
Abstract: Italian manufacturing firms have been losing ground with respect to many of their European competitors. This paper presents some empirical evidence on the effects of innovation on employment growth and therefore on firms' productivity with the goal of understanding the roots of such poor performance. We use firm level data from the last three surveys on Italian manufacturing firms conducted by Mediocredito-Capitalia, which cover the period 1995-2003. Using a modified version of the model proposed by Harrison, Jaumandreu, Mairesse and Peters (2005), which separates employment growth rates into those associated with old and new products, we provide robust evidence that there is no employment displacement effect stemming from process innovation. The sources of employment growth during the period are split equally between the net contribution of product innovation and the net contribution from sales growth of old products. However, the contribution of product innovation is somewhat lower than that for the four comparison European countries considered by Harrison et al.
147 citations
TL;DR: In this article, the authors present a sketch of what an economic theory of the firm would look like if it were founded on the thought of Joseph Schumpeter, particularly on Chapters 1 and 2 of his Theory of Economic Development.
Abstract: This article offers a sketch of what an economic theory of the firm would look like if it were founded on the thought of Joseph Schumpeter, particularly on Chapters 1 and 2 of his Theory of Economic Development. Schumpeterian analysis requires an intuitively appealing and realistic conceptualization of the distinction between routine and innovative behavior, and in particular, a conceptualization relevant to complex organizations and complex tasks. It is argued that the production theory found in mainstream economics does not meet this requirement, particularly because its characterization of productive knowledge involves an overly sharp distinction between "technically possible" and "technically impossible"--a distinction which has no counterpart in the realities of organizational knowledge. The main elements of a Schumpeterian view are described and contrasted with those in the mainstream view. Copyright 2006, Oxford University Press.
137 citations
TL;DR: Hannan et al. as mentioned in this paper examined how the life chances and financial performance of nascent high-technology firms were affected by two kinds of organizational changes: altering founders' blueprints for the employment relation and replacing a founder-chief executive officer (CEO) by an outsider.
Abstract: Industrial and Corporate Change, Volume 15, Number 5, pp. 755–784 doi:10.1093/icc/dtl020 Advance Access published August 8, 2006 Organizational identities and the hazard of change Michael T. Hannan, James N. Baron, Greta Hsu and Ozgecan Kocak We examine how the life chances and financial performance of nascent high- technology firms were affected by two kinds of organizational changes: altering founders’ blueprints for the employment relation and replacing a founder–chief executive officer (CEO) by an outsider. We argue that both events destabilize organizations but that changes in employment blueprints are tied more tightly to the organization’s identity and thus are more destabilizing. We analyze three dimensions of organizational performance among a sample of young high- technology companies in California’s Silicon Valley: survival versus failure, launching an initial public offering (IPO), and changes in financial valuations among organi- zations that underwent an IPO. As predicted, changing the employment blueprint increased the hazard of failure and diminished growth in market value. Appoint- ing an outsider as CEO did not affect the hazard of failure appreciably but did depress the rate of growth in market capitalization. The implications of these results for ecological and institutional perspectives on organizations are discussed. 1. Imprinting, identity, and disruptive change The proposition advanced by Hannan and Freeman (1984) that altering an organiza- tion’s core features is hazardous has been the focus of much theorizing and empirical research (Barnett and Carroll, 1995; Carroll and Hannan, 2000). This research has generally emphasized one side of the inertia story: the disruption entailed in reorgan- izing routines and architectures. The other side of the story—that changes in core fea- tures might be viewed as violations of deep-seated, taken-for-granted expectations by key organizational constituents—has received less attention. This article attempts to redress the balance by developing an identity-based notion of an organization’s core and testing the proposition that changing such core features is especially destabilizing. Notions of identity played an important part in shaping the original inertia argu- ment. For instance, Hannan and Freeman (1984: 155–156) motivated their argument with the example of the university: although some features, such as textbooks, con- stantly change in an adaptive way, changing a curriculum from liberal arts to voca- tional training would be extraordinarily difficult. “The curriculum is difficult to © The Author 2006. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved.
135 citations
TL;DR: Hsu et al. as discussed by the authors explored the constraints evaluative schemas place on critics' allocation of attention and found that producers within such categories will receive disproportionately greater critical attention, and that this creates a fundamental bias in the allocation of critical attention such that critics will have a tendency to favor arenas in which they have developed clear and struc- tured schemas for evaluation.
Abstract: Industrial and Corporate Change Advance Access published May 8, 2006 Industrial and Corporate Change, page 1 of 30 doi:10.1093/icc/dtl009 Evaluative schemas and the attention of critics in the US film industry Greta Hsu This article explores the constraints evaluative schemas place on critics’ allocation of attention. Prior research suggests that a critic’s ability to establish himself as an expert of the market is based on the appeal to a rationalized and defensible sys- tem of standards for evaluating products. In this article, I argue that this creates a fundamental bias in the allocation of critical attention such that critics will dem- onstrate a tendency to favor arenas in which they have developed clear and struc- tured schemas for evaluation. As a result, producers within such categories will receive disproportionately greater critical attention. I test and find support for this hypothesis within the context of the US feature film industry. The implications of this bias in terms of producer legitimacy are discussed. 1. Introduction Several prominent lines of research within organizational theory have called attention to legitimacy as an underlying driver of diverse organizational processes and dynamics. Neo-institutional theorists, for example, propose that organizational actors conform to institutionalized beliefs regarding how organizations should look and behave in order to gain legitimacy and, as a result, valuable resources (Meyer and Rowan, 1977; DiMaggio and Powell, 1983). Researchers interested in the social structuration of markets have demonstrated that perceptions of what is legitimate impact on the opportunities available to organizations (Podolny, 1993, 1994, 1996; Stuart et al., 1999). Organizational ecologists, meanwhile, have focused on the impact of legitimacy at the category or population level. Ecological research finds that the legitimacy audiences’ award to organizational populations affects the resources available to population members and, as a result, organizational vital rates (Hannan and Freeman, 1989). While the importance of legitimacy in shaping organizational dynamics is clearly established, the cognitive processes by which certain types of organizational actors gain legitimacy relative to others remain largely unexplored. As Suchman (1995) observes, legitimacy is a generalized perception created by audiences toward organiza- tions. Audiences, and the beliefs they hold, determine the degree of legitimacy con- ferred onto categories of organizations. And while researchers have identified a variety of different types of audiences who act as sources of legitimacy (see Ruef and Scott, © The Author 2006. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved.
119 citations
TL;DR: In this article, the authors discuss the relation between three different levels of analysis of technologies, namely (i) bodies of problem-solving knowledge, (ii) organizational procedures, and (iii) input-output relations.
Abstract: In this work, inspired by Winter (2006), in fact of vintage 1968, we discuss the relation between three different levels of analysis of technologies, namely as (i) bodies of problem-solving knowledge, (ii) organizational procedures, and (iii) input–output relations. We begin by arguing that the “primitive” levels of investigation, “where the action is,” are those which concern knowledge and organizational procedures while in most respects the I/O representation is just an ex post, derived, one. Next, we outline what we consider to be important advances in the understanding of productive knowledge and of the nature and behaviors of business organizations which to a good extent embody such a knowledge. Finally, we explore some implications of such “procedural” view of technologies in terms of input–output relations (of which standard production functions are a particular instantiation). We do that with the help of some pieces of evidence, drawing both upon incumbent literature and our own elaboration on micro longitudinal data on the Italian industry.
113 citations
TL;DR: The authors examines what Joseph Schumpeter said on the emergence of novelty in economic institutions, what Sidney Winter did to build on and deviate from that foundation, and what puzzles remain.
Abstract: This article examines what Joseph Schumpeter said on the emergence of novelty in economic institutions, what Sidney Winter did to build on and deviate from that foundation, and what puzzles remain. Winter built a framework for answers to a puzzle that Schumpeter could not solve--how novelty emerges in a system based on routines. He identified two major sources of novelty: the combinatorics of routines and the unreliability of routine imitation. As possible inspirations for further progress in evolutionary thought, the article points to ideas from chemistry, linguistics, and the diffusion of fashion for elaborations of these key Winterian insights. Copyright 2006, Oxford University Press.
TL;DR: In this article, the authors examined the contribution of plant turnover to labour productivity growth in the manufacturing sector over the three periods and found that a disproportionately large fraction of the contribution to productivity growth was due to multi-plant or foreign-controlled firms closing down and opening up new plants.
Abstract: Entry is important because new firms and new plants provide an important source of competition to incumbents. They are a source of new products and technologies. In this paper, we outline the size of the turnover in plants that have entered and exited the Canadian manufacturing sector over each of the last three decades – 1973-79, 1979-88 and 1988-97. We also examine the contribution of plant turnover to labour productivity growth in the manufacturing sector over the three periods. Plant turnover makes a significant contribution to productivity growth as more productive entrants replace exiting plants that are less productive. We also find that a disproportionately large fraction of the contribution of plant turnover to productivity growth is due to multi-plant or foreign-controlled firms closing down and opening up new plants. The plants opened up by multi-plant or foreign-controlled firms are typically much more productive than those opened by single-plant or domestic-controlled ...
TL;DR: In this article, the authors examined the relationship between the characteristics of the firms' knowledge base in terms of knowledge capital and knowledge integration and the stock market value of 84 firms active in biotechnology during the 1990s.
Abstract: We examine the relationship between the characteristics of the firms' knowledge base in terms of knowledge capital and knowledge integration and the stock market value of 84 firms active in biotechnology during the 1990s. Panel data regression models show that the degree of knowledge integration within firms is a significant explanatory variable of firms' stock market value. Moreover, knowledge integration becomes an increasingly important determinant of market value, which illustrates the growing integration of biotechnology in several industrial applications. However, the role of knowledge is sector specific, revealing differences in the extent to which biotechnology has become a key technology. Copyright 2006, Oxford University Press.
TL;DR: In this paper, the organizational capabilities of academic spinoff firms in new industries are shaped by the organization of the research communities in universities from which these spin-off firms emerge, and the central role UCSF scientists played in comparison with their Berkeley and Stanford counterparts, in the formation and development of the biotech industry in the San Francisco region during the late 1970s and early 1980s.
Abstract: This article examines how the organizational capabilities of academic spin-off firms in new industries are shaped by the organization of the research communities in universities from which these spin-off firms emerge. Contrasting the organization of research in the biochemistry departments of the University of California at Berkeley (Berkeley), Stanford University (Stanford), and the University of California at San Francisco (UCSF) and key biotech firms spun-off from these departments, this article attempts to explain the central role UCSF scientists played in comparison with their Berkeley and Stanford counterparts, in the formation and development of the biotech industry in the San Francisco region during the late 1970s and early 1980s. It is demonstrated how the research environment at UCSF during this period positioned UCSF scientists comparatively well to identify in the context of their research new technological opportunities in therapeutic product markets and pursue these opportunities in the industrial research environment of the biotech industry. Finally, drawing parallels between this study on the role of UCSF in the formation of the San Francisco biotech industry and other studies on the role of Stanford in the formation of the Silicon Valley high-tech electronics industry, this article attempts to infer some general insights into the institutional dynamics that give rise to new science-based industries.
TL;DR: In this article, the authors identify the main changes that have characterized South Africa's big business since democracy in 1994, including the unbundling of traditional conglomerates, transfer of primary listing to overseas stock exchanges, and slow emergence of black-owned economic groups.
Abstract: Under the apartheid regime, South African business was marked by a high degree of concentration, both in terms of ownership and activities; indeed, it could be argued that this concentration was both created by and reinforced the exclusions linked to apartheid. In this paper, we identify the main changes that have characterized South Africa's big business since democracy in 1994--unbundling of traditional conglomerates, transfer of primary listing to overseas stock exchanges, and slow emergence of black-owned economic groups. These changes are related to key policy actions taken by government, including liberalization, black economic empowerment (BEE) policies, and competition policies. We demonstrate that South Africa still maintains its own distinctive features, including the very large, although reduced, weight of a few conglomerates, while evolving toward structures more similar to Organization for Economic Cooperation and Development (OECD) norms. Finally, we argue that the policy emphasis on ownership transfers, combined with limits in the enforcement of competition policies, has restricted the capacity to generate additional jobs and meet the ultimate objectives of BEE. Copyright 2006, Oxford University Press.
TL;DR: In this paper, the explanatory power of transaction cost economics and resource dependence theory is examined, first individually, and then the theories are unified to provide a more comprehensive model for understanding of firms' decisions to pursue relational exchanges.
Abstract: This study develops and then tests an expanded conceptual framework for understanding relational customer--supplier exchanges. The explanatory power of transaction cost economics and resource dependence theory is examined, first individually, and then the theories are unified to provide a more comprehensive model for understanding of firms' decisions to pursue relational exchanges. Regression analyses performed on data from 372 pulp, paper, and paperboard mills indicate that the combined framework provides a better explanation of customer choices than either theory individually. Implications and future research are discussed. Copyright 2006, Oxford University Press.
TL;DR: In this article, the authors consider how ideas from evolutionary theory in general, and Sidney Winter in particular, can be fruitfully combined with ideas from Herbert Simon and the Carnegie tradition on decomposability and cognitive limits.
Abstract: This article considers how ideas from evolutionary theory in general, and Sidney Winter in particular, can be fruitfully combined with ideas from Herbert Simon and the Carnegie tradition on decomposability and cognitive limits. Rather than focusing on any one individual issue, this article outlines a research program on the architecture and design of organizational capabilities. Such a program can help us explain how labor is divided and organized within and between firms and can consider the implications of the division of labor for the process of capability development. Extensions to this emerging research program are proposed: The emergence and evolution of intraand inter-organizational boundaries, the implications of such boundaries for different types of capabilities and for the knowledge accumulation process, and the design of firms’ architecture to support adaptation and change are all briefly discussed.
TL;DR: The authors identify core ideas and contentions Sidney Winter helped put on the research agenda for scholars interested in complex business organization and point out that Winter's early contentions have implications for strategic thinking (in both business and military contexts).
Abstract: This article begins with some notes on the intellectual climate in which the article of (Winter 1968, "Towards a Neo-Schumpeterian Theory of the Firm," The RAND Corporation; 2006, Industrial and Corporate Change, 15, 1) was first written. It identifies core ideas and contentions Sidney Winter helped put on the research agenda for scholars interested in complex business organization. We point out that Winter's early contentions have implications for strategic thinking (in both business and military contexts) and that a promising research agenda lies in the further development of notions of organizational capability. Copyright 2006, Oxford University Press.
TL;DR: In this article, small-world analysis techniques applied to the ownership networks among Italian enterprises in 1990 and 2000 were applied to analyze the structural characteristics of these networks, showing signs of significant fragmentation of the overall network, but at the same time of stability in the structure of its main component, as measured by smallworld coefficients, while the role of the key players in the network seems to remain relatively stable despite the major turbulence at the institutional level as well as in the structural properties of the complete network.
Abstract: How do ownership networks among business enterprises evolve over time? What roles do corporate governance reforms and privatization programs play in shaping the structural characteristics of these networks? This article addresses these questions by leveraging on small-world analysis techniques applied to the ownership networks among Italian enterprises in 1990 and 2000 Italy underwent a significant program of privatizations over the decade under study, coupled with changes in the corporate law aimed at strengthening the defense of minority shareholders The data show signs of significant fragmentation of the overall network, but at the same time of stability in the structure of its main component, as measured by small-world coefficients Further, the role of the key players in the network seems to remain relatively stable despite the major turbulence at the institutional level as well as in the structural characteristics of the complete network Copyright 2006, Oxford University Press
TL;DR: In this paper, the authors present an analysis of the growth patterns of the worldwide top 200 firms in the pharmaceutical industry and find that a violation concerning the variance of growth can be completely accounted for by a diversification effect, namely a scale relation between the number of sub-markets in which a firm is active and its size.
Abstract: This article presents an analysis of the growth patterns of the worldwide top 200 firms in the pharmaceutical industry. A test of the Gibrat’s Law of Proportionate Effect is performed and we find, in line with previous literature, a violation concerning the variance of growth. Using disaggregated data on sub-markets, we are however able to show that this violation can be completely accounted for by a diversification effect, namely a scale relation between the number of sub-markets in which a firm is active and its size. To interpret these findings, we propose a stochastic branching model of firm diversification consistent with a notion of cumulative corporate competences.
TL;DR: In this article, the authors present a two-level approach, at the region's and the firm's level, to compare specialized with diversified regions on numbers of accommodated innovators.
Abstract: The literature is inconclusive as to whether Marshallian specialization or Jacobian diversification externalities favour regional innovativeness. The specialization argument poses that regional specialization towards a particular industry improves innovativeness in that industry. Regional specialization allows for knowledge to spill over among similar firms. By contrast, the diversification thesis asserts that knowledge spills over between firms in different industries, causing diversified production structures to be more innovative. Building on an original database, we address this controversy for the Netherlands. We thereby advance on the literature by providing a two-level approach, at the region’s and the firm’s level. At the regional level, we compare specialized with diversified regions on numbers of accommodated innovators. At the firm level, we establish causalities between externalities and degree of innovativeness. The results unambiguously suggest Marshallian externalities: specialized regions accommodate increased numbers of innovating firms and, consistently, incumbent firms’ innovativeness increase with regional specialization. Once the product has been launched, innovators in diversified Jacobian regions appear to be more successful in commercial terms than innovators in specialized Marshallian regions.
TL;DR: In this article, the Stanford-Yale-Sussex synthesis is defined as the relationship between notional opportunities of innovation, private appropriability of return from innovating, and realized rates of innovation.
Abstract: This introduction sets in context the works that follow, which are meant to take stock of the theoretical advances and also historical changes since the seminal Arrow (1962) and Nelson (1959). First, we summarize some of the original Arrow--Nelson insights. Second, we map the subsequent developments shorthanded as the "Stanford-Yale-Sussex synthesis." A particularly controversial issue concerns the relationships between notional opportunities of innovation, private appropriability of return from innovating, and realized rates of innovation: hence, third, we briefly offer a framework for its discussion, in general and with reference to the private appropriation of scientific knowledge. Copyright 2006, Oxford University Press.
TL;DR: In this paper, the authors examine the impact of the patent system on biomedical research, an area in which patent system is generally thought to be particularly important to the incentives of innovators.
Abstract: Richard Nelson's The Simple Economics of Basic Scientific Research (1959) and Kenneth Arrow's Economic Welfare and the Allocation of Resources for Invention (1962) presented the basic analytical tools still used to understand the patent system. Two subsequent changes--one primarily legal and the other primarily technological--represent a sufficient departure from the prior state of the world as to call for ongoing re-examination of some old assumptions about the economics of R&D. First, an increase over time in the appropriability (and appropriation) of basic research results through the patent system raises new questions about the role of government funding. Second, the revolution in information technology (IT) and information networks has had reverberations outside the law of intellectual property in the evolving norms of the scientific community regarding data-sharing. This article examines these changes with particular attention to their impact on biomedical research, an area in which the patent system is generally thought to be particularly important to the incentives of innovators. Copyright 2006, Oxford University Press.
TL;DR: This article analyzed the Finnish retail industry in 1945-1995 and found that the structural and cognitive-cultural dimensions of firms that offered opportunities for success in some specific historical situations turned to be disadvantageous in other situations.
Abstract: In this study, we analyze the Finnish retail industry in 1945--1995. Triangulating the major developments in society, technology, and firm-level strategic choices, we identified extensive variation in the sources of competitive advantage over time. We found that the structural and cognitive-cultural dimensions of firms that offered opportunities for success in some specific historical situations turned to be disadvantageous in other situations. We propose a research framework that parcels managerial cognition into the elements of structure, ideology, and systemic and technical properties of the firm. Especially the notion of ideology is novel in the context of path dependence and cognition. Copyright 2006, Oxford University Press.
TL;DR: In this paper, the authors deal with the economic analysis of trademark and show how different disciplines can provide some key epistemological tools for enabling economists to effectively evaluate the welfare outcomes of the introduction and progressive alteration of a particular intellectual property right within the realm of signs and meanings.
Abstract: This paper deals with economic analysis of trademark. Its presence in markets is originally connected with the problem of information asymmetries and the need to provide information for assisting exchanges, so as to avert the market failure brought about by adverse selection. However this information-conveying function is also accompanied by a differentiation effect, arising from the power of persuasion that signs can exert on individuals. The exploitation of differentiation has given rise to the practice of branding, which ties markets and consumption to the realms of meaning and experience. Branding is so all-pervasive in today's economy as to have somehow transfigured it, so that the role of persuasion is now pre-eminent. Nonetheless, the mainstream economic theory tends to resist acknowledging this change, which would to a large extent call into question well-established hypotheses and theoretical tools. The general response has therefore been to assume that the informational role of trademark predominates, and to use this hypothesis to construct models, welfare evaluations and policy prescriptions that bear little or no relation to the actual markets. The opposing approach - in the shadow of the Nelson's and Arrow's seminal papers on economics of information - is recognising the idiosyncratic character of information, and therefore drawing conclusions and devising solutions that, while still based upon the welfare criterion, also incorporate a wider awareness and a deeper representation of the scenario under study. The present work attempts to move in this direction, showing how different disciplines can provide some key epistemological tools for enabling economists to effectively evaluate the welfare outcomes of the introduction and progressive alteration of a particular intellectual property right within the realm of signs and meanings.
TL;DR: In this article, the authors evaluate the meaning and practical effects of the Trade-Related Intellectual Property Rights (TRIPS) agreement on public health issues and highlight the way in which TRIPS has disrupted the existing situation by generating a series of serious tensions.
Abstract: The aim of this article is to contribute to an evaluation of the meaning and practical effects of the Trade-Related Intellectual Property Rights (TRIPS) agreement on public health issues. Section 2 presents the situation that prevailed for intellectual property (IP) protection in the pharmaceutical industry before the signing of the TRIPS, in both developed countries and developing countries (DCs). Section 3 is devoted to a presentation of the key changes that have taken place at the legal level with the signing of the TRIPS, providing an opportunity to highlight the way in which TRIPS has disrupted the existing situation by generating a series of serious tensions, notably in the relations between North and South countries. Section 4 is devoted to the new challenges posed by the post-2005 scenario, 2005 being the end of the transition period granted DCs to comply with the TRIPS requirements. Section 5, focusing on the Brazilian anti-AIDS program, tries to illustrate how the post-2005 scene has narrowed the margins for efficient action against the AIDS pandemics and put the Brazilian national public health program under strain. Copyright 2006, Oxford University Press.
TL;DR: In this paper, the authors argue that co-design relations are likely to be diverse, unstable, and conflictual due to the inherent nature of the codesign activity and the need to organize for distinct coordination needs.
Abstract: Co-design by a firm and its suppliers has become a widely accepted means of developing new products, especially technologically-complex products. Much existing research emphasizes stable and trusting relationships as a "one-best way" for governing these co-design relations. This article questions this view. The article argues that co-design relations are likely to be diverse, unstable, and conflictual due to the inherent nature of the co-design activity. The inherent diversity of co-design relations is explained by the need to organize for distinct coordination needs. Three coordination processes, each directed toward a different coordination need, are derived from the study of a single aerospace co-design project. Interactions between these processes are shown to systematically produce conflict and instability in co-design relations. The main implication of the study is that co-design performance depends on a firm and its suppliers dealing explicitly with these interactions but that there is no "one-best way" of doing so. Copyright 2006, Oxford University Press.
TL;DR: This paper reviewed the available evidence and presented new data, indicating that increasing global integration has not been accompanied by general increases in four types of global concentration measures: industry seller concentration, cross-industry superconcentration, national/regional hegemony, and geographic concentration.
Abstract: There is a widespread belief that increases in the cross-border integration of markets are associated with increases in global concentration along various dimensions. This article reviews the available evidence and presents new data, indicating that increasing global integration has not been accompanied by general increases in four types of global concentration measures: industry seller concentration, cross-industry superconcentration, national/regional hegemony, and geographic concentration. The article also uses the automobile industry to illustrate a bias toward believing concentration is increasing even when it is not and to discuss possible reasons. Copyright 2006, Oxford University Press.