Electricity and natural gas markets have traditionally been serviced by one of two market structures. In some markets, electricity and natural gas are sold by a dual-product regulated monopolist, while in other markets, electricity and natural gas are sold by separate single-product regulated monopolies. This paper analyzes the relative pricing and investment decisions of electricity firms operating in the two market structures. The unique relationship between these two products, namely that electricity and natural gas are substitutes in consumption and natural gas is an input into the generation of electricity, allows me to gain inferences regarding the efficacy of regulation in both the electricity and natural gas industries. The results imply that both electricity prices and reliance on natural gas generation are higher in a dual-product setting, both suggestive that regulators respond to the relative incentives of electricity and natural gas firms.
{"title":"Regulatory Imperfections in the Electricity and Natural Gas Industries: Evidence from the Pricing and Investment Decisions of Single and Multi-Product Electricity Firms","authors":"Christopher R. Knittel","doi":"10.2139/ssrn.199049","DOIUrl":"https://doi.org/10.2139/ssrn.199049","url":null,"abstract":"Electricity and natural gas markets have traditionally been serviced by one of two market structures. In some markets, electricity and natural gas are sold by a dual-product regulated monopolist, while in other markets, electricity and natural gas are sold by separate single-product regulated monopolies. This paper analyzes the relative pricing and investment decisions of electricity firms operating in the two market structures. The unique relationship between these two products, namely that electricity and natural gas are substitutes in consumption and natural gas is an input into the generation of electricity, allows me to gain inferences regarding the efficacy of regulation in both the electricity and natural gas industries. The results imply that both electricity prices and reliance on natural gas generation are higher in a dual-product setting, both suggestive that regulators respond to the relative incentives of electricity and natural gas firms.","PeriodicalId":151613,"journal":{"name":"Industrial Organization & Regulation eJournal","volume":"22 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1999-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123676291","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper aims at showing how "path dependence" approach may explain the technological challenge in the PV cells industry. The first section will point up the factual elements which satisfy the conditions of path-dependence as defined by Arthur and David in the industry of the photovoltaic cells. In the second part a technological model of competition that integrates increasing returns adapted to the sector of cells statement will be proposed, what will enable us to locate singularities in the decision-making process and the way in which small events of the history can condition the choices of development of a technology to the detriment of another. The representation of the economic dynamics suggested in the two fist sections will allow us to approach, in the last and conclusive section, the question of the policies to implement for preventing too early and too restrictive lock-in phenomenon during the early stages of an innovation process.
{"title":"Path-Dependence and Technological Competition in the Pv Cells Industry: The Case of Crystalline and Amorphous Silicon","authors":"N. Levratto","doi":"10.2139/ssrn.185115","DOIUrl":"https://doi.org/10.2139/ssrn.185115","url":null,"abstract":"This paper aims at showing how \"path dependence\" approach may explain the technological challenge in the PV cells industry. The first section will point up the factual elements which satisfy the conditions of path-dependence as defined by Arthur and David in the industry of the photovoltaic cells. In the second part a technological model of competition that integrates increasing returns adapted to the sector of cells statement will be proposed, what will enable us to locate singularities in the decision-making process and the way in which small events of the history can condition the choices of development of a technology to the detriment of another. The representation of the economic dynamics suggested in the two fist sections will allow us to approach, in the last and conclusive section, the question of the policies to implement for preventing too early and too restrictive lock-in phenomenon during the early stages of an innovation process.","PeriodicalId":151613,"journal":{"name":"Industrial Organization & Regulation eJournal","volume":"03 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1999-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127370596","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This document (of 362 pages) contains the proceedings of a one-day roundtable exploring the regulatory and competition issues arising in the course of deregulation of the postal sector. The roundtable was held at the OECD in February 1999. The publication includes submissions from 16 OECD member countries describing in detail the nature of postal regulation applying in the sector and the competition issues that have arisen. The document also includes a background paper prepared by the OECD secretariat summarising the economic characteristics of the postal sector, the prevalence of non-commercial service obligations and the resulting impact on competition and the potential for anticompetitive behaviour. The document includes a summary of the oral discussion at the roundtable and a five-page executive summary setting out the key ideas to emerge.
{"title":"Promoting Competition in Postal Services","authors":"D. Biggar","doi":"10.2139/SSRN.185092","DOIUrl":"https://doi.org/10.2139/SSRN.185092","url":null,"abstract":"This document (of 362 pages) contains the proceedings of a one-day roundtable exploring the regulatory and competition issues arising in the course of deregulation of the postal sector. The roundtable was held at the OECD in February 1999. The publication includes submissions from 16 OECD member countries describing in detail the nature of postal regulation applying in the sector and the competition issues that have arisen. The document also includes a background paper prepared by the OECD secretariat summarising the economic characteristics of the postal sector, the prevalence of non-commercial service obligations and the resulting impact on competition and the potential for anticompetitive behaviour. The document includes a summary of the oral discussion at the roundtable and a five-page executive summary setting out the key ideas to emerge.","PeriodicalId":151613,"journal":{"name":"Industrial Organization & Regulation eJournal","volume":"24 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1999-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133440810","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We model early expectations about the value and technological importance ('quality') of a patented innovation as a latent variable common to a set of four indicators: the number of patent claims, forward citations, backward citations and family size. The model is estimated for four technology areas using a sample of about 8000 U.S. patents applied for during 1960-91. We measure how much noise' each individual indicator contains and construct a more informative, composite measure of quality. The variance in quality', conditional on the four indicators, is just one-third of the unconditional variance. We show the variance reduction generated by subsets of indicators, and find forward citations to be particularly important. Our measure of quality is significantly related to subsequent decisions to renew a patent and to litigate infringements. Using patent and R&D data for 100 U.S. manufacturing firms, we find that adjusting for quality removes much of the apparent decline in research productivity (patent counts per R&D) observed at the aggregate level.
{"title":"The Quality of Ideas: Measuring Innovation with Multiple Indicators","authors":"J. Lanjouw, Mark A. Schankerman","doi":"10.3386/W7345","DOIUrl":"https://doi.org/10.3386/W7345","url":null,"abstract":"We model early expectations about the value and technological importance ('quality') of a patented innovation as a latent variable common to a set of four indicators: the number of patent claims, forward citations, backward citations and family size. The model is estimated for four technology areas using a sample of about 8000 U.S. patents applied for during 1960-91. We measure how much noise' each individual indicator contains and construct a more informative, composite measure of quality. The variance in quality', conditional on the four indicators, is just one-third of the unconditional variance. We show the variance reduction generated by subsets of indicators, and find forward citations to be particularly important. Our measure of quality is significantly related to subsequent decisions to renew a patent and to litigate infringements. Using patent and R&D data for 100 U.S. manufacturing firms, we find that adjusting for quality removes much of the apparent decline in research productivity (patent counts per R&D) observed at the aggregate level.","PeriodicalId":151613,"journal":{"name":"Industrial Organization & Regulation eJournal","volume":"33 2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1999-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130744452","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper examines the Federal Trade Commission's recent settlement with Intel. Evaluating the FTC's case against Intel turns on tricky issues regarding the dynamics of cross-licensing. These are essentially barter transactions, and we have only a weak understanding of when firms will turn to barter. Interfering with cross-licensing will make it more difficult for these transactions to take place, and to understand the importance of that, we need to have a better handle on the relative importance for a licensor of cash returns versus the in-kind returns that are obtained from cross-licenses. We can say with more confidence that the FTC's case appears to give very little weight to the benefits that arise from royalty-free cross-licenses. These licenses eliminate the double monopoly problem that can arise when two patent holders hold essential patents. Royalty-free cross-licensing eliminates through a contract an externality between the patent holders that would otherwise push up prices, to the detriment of the patent holders and their customers. The settlement may very well make it more difficult for Intel to negotiate royalty-free cross-licenses and may harm society in doing so. The licensing regime that emerges from the settlement may have the benefit of making it possible for prospective PC makers who might not deal with Intel to do so -- though this point does not appear to have figured in the FTC's calculus. These prospective PC makers will have less reason to fear that Intel will later pressure them into a cross-license. This will increase the pool of PC makers, though the benefits of this are quite speculative. Equally speculative is whether the settlement will foster R&D on microprocessors -- the chief focus of the FTC's complaint -- though there is little public evidence to suggest that outcome.
{"title":"Regulating Network Industries: A Look at Intel","authors":"Randal C. Picker","doi":"10.2139/SSRN.186668","DOIUrl":"https://doi.org/10.2139/SSRN.186668","url":null,"abstract":"This paper examines the Federal Trade Commission's recent settlement with Intel. Evaluating the FTC's case against Intel turns on tricky issues regarding the dynamics of cross-licensing. These are essentially barter transactions, and we have only a weak understanding of when firms will turn to barter. Interfering with cross-licensing will make it more difficult for these transactions to take place, and to understand the importance of that, we need to have a better handle on the relative importance for a licensor of cash returns versus the in-kind returns that are obtained from cross-licenses. We can say with more confidence that the FTC's case appears to give very little weight to the benefits that arise from royalty-free cross-licenses. These licenses eliminate the double monopoly problem that can arise when two patent holders hold essential patents. Royalty-free cross-licensing eliminates through a contract an externality between the patent holders that would otherwise push up prices, to the detriment of the patent holders and their customers. The settlement may very well make it more difficult for Intel to negotiate royalty-free cross-licenses and may harm society in doing so. The licensing regime that emerges from the settlement may have the benefit of making it possible for prospective PC makers who might not deal with Intel to do so -- though this point does not appear to have figured in the FTC's calculus. These prospective PC makers will have less reason to fear that Intel will later pressure them into a cross-license. This will increase the pool of PC makers, though the benefits of this are quite speculative. Equally speculative is whether the settlement will foster R&D on microprocessors -- the chief focus of the FTC's complaint -- though there is little public evidence to suggest that outcome.","PeriodicalId":151613,"journal":{"name":"Industrial Organization & Regulation eJournal","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1999-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123091751","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper estimates the nature and magnitude of the local externalities from own industry scale, as envisioned by Marshall. Census panel data on individual plants in high-tech and machinery industries across up to 487 countries are utilized, to quantify the direct effects of local external environment on plant productivity. Careful attention is paid to endogeneity issues in estimation. Magnitudes of scale externalities for corporate versus single plant firms are estimated and the sources of externalities (employment, numbers of plants, numbers of births, etc.) and extent (within the county versus extending to the rest of the MSA) are investigated. The paper asks in addition whether externalities are static or dynamic, a key issue in thinking about urban growth and industrial mobility; and whether they are dependent just on local own industry activity or also on overall local urban scale and/or diversity, a key issue in analyzing industrial composition and development of cities. The paper relates the findings on externalities for different industries to the extent of agglomeration and the degree of mobility of those industries across cities.
{"title":"Marshall&Apos;S Economies","authors":"J. Henderson","doi":"10.3386/W7358","DOIUrl":"https://doi.org/10.3386/W7358","url":null,"abstract":"This paper estimates the nature and magnitude of the local externalities from own industry scale, as envisioned by Marshall. Census panel data on individual plants in high-tech and machinery industries across up to 487 countries are utilized, to quantify the direct effects of local external environment on plant productivity. Careful attention is paid to endogeneity issues in estimation. Magnitudes of scale externalities for corporate versus single plant firms are estimated and the sources of externalities (employment, numbers of plants, numbers of births, etc.) and extent (within the county versus extending to the rest of the MSA) are investigated. The paper asks in addition whether externalities are static or dynamic, a key issue in thinking about urban growth and industrial mobility; and whether they are dependent just on local own industry activity or also on overall local urban scale and/or diversity, a key issue in analyzing industrial composition and development of cities. The paper relates the findings on externalities for different industries to the extent of agglomeration and the degree of mobility of those industries across cities.","PeriodicalId":151613,"journal":{"name":"Industrial Organization & Regulation eJournal","volume":"41 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1999-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133805424","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
How far do the contractual implications of hold-up-based theories (Klein, Crawford, and Alchian (1978), Williamson (1979, 1985)) extend? I investigate this in the context of trucking. Quasi-rents in trucking are generally smaller than in the contexts studied in the previous empirical literature. They vary with hauls' distance and the thickness of local markets. I find that doubling the thickness of the market increases the likelihood that simple spot arrangements govern transactions by about 30% for long hauls. I find weaker evidence of relationships between local market thickness and contractual form for short hauls -- hauls for which quasi-rents are particularly small. Contracts' role as protectors of quasi-rents becomes less important as quasi-rents decrease, but exists over a surprisingly large range.
基于hold- based理论(Klein, Crawford, and Alchian (1978)， Williamson(1979,1985))的契约含义延伸到什么程度?我在卡车运输的背景下对此进行了调查。卡车运输中的准租金通常比以前实证文献中研究的情况要小。它们随运输距离和当地市场的厚度而变化。我发现，如果市场规模扩大一倍，那么在长途运输中，由简单的现货安排支配交易的可能性就会增加30%左右。我发现当地市场厚度与短途运输合同形式之间关系的证据较弱——短途运输的准租金特别小。随着准租金的减少，合同作为准租金保护者的角色变得不那么重要，但存在的范围却大得惊人。
{"title":"How Wide is the Scope of Hold-Up-Based Theories? Contractual Form and Market Thickness in Trucking","authors":"T. Hubbard","doi":"10.3386/W7347","DOIUrl":"https://doi.org/10.3386/W7347","url":null,"abstract":"How far do the contractual implications of hold-up-based theories (Klein, Crawford, and Alchian (1978), Williamson (1979, 1985)) extend? I investigate this in the context of trucking. Quasi-rents in trucking are generally smaller than in the contexts studied in the previous empirical literature. They vary with hauls' distance and the thickness of local markets. I find that doubling the thickness of the market increases the likelihood that simple spot arrangements govern transactions by about 30% for long hauls. I find weaker evidence of relationships between local market thickness and contractual form for short hauls -- hauls for which quasi-rents are particularly small. Contracts' role as protectors of quasi-rents becomes less important as quasi-rents decrease, but exists over a surprisingly large range.","PeriodicalId":151613,"journal":{"name":"Industrial Organization & Regulation eJournal","volume":"42 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1999-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125675961","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Deregulation is often aimed at reducing mark-up pricing in technologically stagnant sheltered sectors. The paper shows that this may decrease the process of catching-up and welfare since it shifts resources away from R&D-intensive tradables sectors. Catching-up and deregulation are analyzed in an R&D-based growth model that allows for international capital mobility, trade, and spillovers. Knowledge spillovers raise the productivity of R&D in the exposed sector which results in catching-up. In the long run, the economy grows at the exogenous world growth rate. Capital mobility speeds up convergence. Temporary shocks have long-lasting effects as the economy exhibits hysteresis. Copyright 1999 by Blackwell Publishing Ltd.
{"title":"Catching-Up and Regulation in a Two-Sector Small Open Economy","authors":"T. van de Klundert, S. Smulders","doi":"10.2139/ssrn.54862","DOIUrl":"https://doi.org/10.2139/ssrn.54862","url":null,"abstract":"Deregulation is often aimed at reducing mark-up pricing in technologically stagnant sheltered sectors. The paper shows that this may decrease the process of catching-up and welfare since it shifts resources away from R&D-intensive tradables sectors. Catching-up and deregulation are analyzed in an R&D-based growth model that allows for international capital mobility, trade, and spillovers. Knowledge spillovers raise the productivity of R&D in the exposed sector which results in catching-up. In the long run, the economy grows at the exogenous world growth rate. Capital mobility speeds up convergence. Temporary shocks have long-lasting effects as the economy exhibits hysteresis. Copyright 1999 by Blackwell Publishing Ltd.","PeriodicalId":151613,"journal":{"name":"Industrial Organization & Regulation eJournal","volume":"61 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1999-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133608254","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A significant amount of software development is being outsourced to countries such as India. Many Indian software firms have applied for and received quality certifications like the ISO9001, and the number of quality certified software firms has steadily increased. Despite its growing popularity among Indian software developers, there is very little systematic evidence on the relationship of ISO certification to organizational performance. Using data on 95 Indian software firms and their US clients, we develop a stylized model of a firm that develops software for others to articulate the different ways in which ISO certification can affect firm profits. We conclude that ISO certification enhances firm growth. The results provide partial support for the proposition that ISO certification also enhances revenue for a given size, suggesting that firms are receiving a higher price per unit of output. In turn, this is consistent with the notion that ISO certification also enhances the quality of output. Our field studies confirm that although most firms see ISO certification as a marketing ploy, some of them do proceed to institute more systematic and better-defined processes for software development.
{"title":"Quality Certification and the Economics of Contract Software Development a Study of the Indian Software Industry","authors":"A. Arora, J. Asundi","doi":"10.3386/W7260","DOIUrl":"https://doi.org/10.3386/W7260","url":null,"abstract":"A significant amount of software development is being outsourced to countries such as India. Many Indian software firms have applied for and received quality certifications like the ISO9001, and the number of quality certified software firms has steadily increased. Despite its growing popularity among Indian software developers, there is very little systematic evidence on the relationship of ISO certification to organizational performance. Using data on 95 Indian software firms and their US clients, we develop a stylized model of a firm that develops software for others to articulate the different ways in which ISO certification can affect firm profits. We conclude that ISO certification enhances firm growth. The results provide partial support for the proposition that ISO certification also enhances revenue for a given size, suggesting that firms are receiving a higher price per unit of output. In turn, this is consistent with the notion that ISO certification also enhances the quality of output. Our field studies confirm that although most firms see ISO certification as a marketing ploy, some of them do proceed to institute more systematic and better-defined processes for software development.","PeriodicalId":151613,"journal":{"name":"Industrial Organization & Regulation eJournal","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1999-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115290563","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The local academic science base plays a dominant role in determining where and when biotechnology is adopted by existing firms or -- much more frequently -- exploited by new entrants in the U.S. In Japan this new dominant technology has almost exclusively been introduced through organizational change in existing firms. We show that for the U.S. and global pharmaceutical business -- biotechnology's most important application -- the performance enhancement associated with this organizational change is necessary for incumbent firms to remain competitive and, ultimately, to survive. Japan's sharply higher organizational change/new entry ratio compared to the U.S. during the biotech revolution is related to Japan's relatively compact geography and institutional differences between the higher-education and research funding systems, the venture capital and IPO markets, cultural characteristics and incentive systems which impact scientists' entrepreneurialism, and tort-liability exposures. Both local science base and pre-existing economic activity explained where and when Japanese firms adopted biotechnology, with the latter playing a somewhat larger role. De nova entry was determined similarly as if entry and organizational change are alternative ways of exploiting the scientific base with relative frequency reflecting underlying institutions. While similar processes are at work in Japan and America, stars in Japan induce entry or transformation of significantly fewer firms than in the U.S. and preexisting economic activity plays a greater role. We find no such significant difference for entry of keiretsu-member and nonmember firms within Japan.
{"title":"Local Academic Science Driving Organizational Change: the Adoption of Biotechnology by Japanese Firms","authors":"M. Darby, L. Zucker","doi":"10.3386/W7248","DOIUrl":"https://doi.org/10.3386/W7248","url":null,"abstract":"The local academic science base plays a dominant role in determining where and when biotechnology is adopted by existing firms or -- much more frequently -- exploited by new entrants in the U.S. In Japan this new dominant technology has almost exclusively been introduced through organizational change in existing firms. We show that for the U.S. and global pharmaceutical business -- biotechnology's most important application -- the performance enhancement associated with this organizational change is necessary for incumbent firms to remain competitive and, ultimately, to survive. Japan's sharply higher organizational change/new entry ratio compared to the U.S. during the biotech revolution is related to Japan's relatively compact geography and institutional differences between the higher-education and research funding systems, the venture capital and IPO markets, cultural characteristics and incentive systems which impact scientists' entrepreneurialism, and tort-liability exposures. Both local science base and pre-existing economic activity explained where and when Japanese firms adopted biotechnology, with the latter playing a somewhat larger role. De nova entry was determined similarly as if entry and organizational change are alternative ways of exploiting the scientific base with relative frequency reflecting underlying institutions. While similar processes are at work in Japan and America, stars in Japan induce entry or transformation of significantly fewer firms than in the U.S. and preexisting economic activity plays a greater role. We find no such significant difference for entry of keiretsu-member and nonmember firms within Japan.","PeriodicalId":151613,"journal":{"name":"Industrial Organization & Regulation eJournal","volume":"50 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1999-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116514960","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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