Industrial Dynamics. Lecture / Seminar (Master level) Fachbereich Wirtschaftswissenschaften. Economic Policy Research Group

Transcription

1 Lecture / Seminar (Master level) Industrial Dynamics Fachbereich Wirtschaftswissenschaften Economic Policy Research Group Professor Dr. Guido Bünstorf / Dipl. Ök. Ann Kathrin Blankenberg Winter Term 2013/14 Time and location Monday, (first class on October 21, 2013) Nora Platiel Strasse 6; Room 0207 Overview In recent years, the development of markets and industries has attracted substantial scholarly attention. A rich theoretical and empirical literature on industrial dynamics and industry life cycles has been developed to complement the models of game theoretic industrial organization. This literature has yielded important new insights into the conditions and dynamics of entry, exit, market structure and innovation activities in competitive industries. Evolutionary approaches to industrial dynamics have highlighted the relevance of firm heterogeneity. At the same time, the research on industrial dynamics is closely related to the current work on entrepreneurship and also to strategic management research. Credits and requirements Requirements (6 ECTS Credits): Seminar paper (about 15 pages; in German or English) plus oral presentation (about 20 minutes; in English) Ungraded test (pass/fail; 45minutes; in German or English) after the lecture part of the course Active participation in the seminar discussion Note: Attendance is mandatory for the seminar part of the course (second half of semester) The seminar paper has to be handed in one week prior to the oral presentation. Registration and choice of topics by E Mail to ak.blankenberg@uni kassel.de

2 Structure of lecture (first half of semester) Part A: Firm Population and Market Competition 1. Firm size distributions, entry and turbulence in markets 1.1 Empirical findings 1.2 Theoretical explanations 1.3 Entry, exit and turbulence in the firm population 1.4 The distribution of firm sizes and firm ages 1.5 Implications (Introductory reading: Sutton, J. (1997): Gibrat s Legacy, Journal of Economic Literature, 35: ) 2. Replicator dynamics, selection and competition 2.1 Theoretical foundations 2.2 Empirical evidence 2.3 Implications: Can theory account for the stylized facts? 3. Competing technologies, path dependence and critical mass phenomena 3.1 Basic concepts 3.2 A model of path dependence 3.3 Frequency dependent adoption of inferior technologies: Is lock in a relevant problem? 3.4 Standards and strategic interaction in the competition of technologies 3.5 Historical example: the Battle of the Systems 3.6 Present day example: electric mobility (Introductory reading: Arthur, W. B. (1989): Competing Technologies, Increasing Returns, and Lock In by Historical Events. The Economic Journal, 99: ; Besen, S. M. and J. Farrell (1994): How to Compete: Strategies and Tactics in Standardization. Journal of Economic Perspectives, 8: ; David, P. A. (1992): Heroes, Herds and Hysteresis in Technological History: Thomas Edison and The Battle of The Systems Reconsidered. Industrial and Corporate Change, 1(1): )

3 Part B: An Introduction to the statistical analysis of duration data 1. Why hazard rate analysis? 2. Basic concepts 3. Models of hazard rate analysis 4. Extensions and applications Part C: Market evolution and the industry life cycle 1. Development of firm populations in innovative industries 1.1 Empirical findings 1.2 From Schumpeter to the industry lifecycle 1.3 Theory: development of shakeout industries 1.4 Theory: development of submarket industries 1.5 The transition from submarkets to the shakeout 1.6 The approach of organization ecology: substitute or complement? 1.7 The international dimension of industrial dynamics 2. Pre entry experience and firm performance 2.1 Introduction 2.2 Theory: the extended Klepper model 2.3 Related diversification 2.4 The spin off process 2.5 When does experience have adverse effects on firm performance? (Introductory reading: Moore, G. E. (1994): The Accidental Entrepreneur, Engineering & Science, Summer 1994: 23 30; Helfat, C. E., M. B. Lieberman (2002): The birth of capabilities: market entry and the importance of pre history, Industrial and Corporate Change, 11: ; Klepper, S. (2009): Spinoffs: A Review and Synthesis, European Management Review, 6: ) 3. Labor mobility, non compete clauses and embodied knowledge transfer (Introductory reading: Marx, M., D. Strumsky and L. Fleming (2009): Mobility, Skills and the Michigan Non Compete Experiment, Management Science, 55(6): )

4 Topics for seminar papers Topic 1: How much historical truth is in the Fable of the Keys? And how relevant is this for the lock in concept? Introductory reading: David, P. A. (1985): Clio and the Economics of QWERTY, American Economic Review, 75,(2): ; Liebowitz, S. J. und S. E. Margulis (1990): The Fable of the Keys, Journal of Law and Economics, 33(1): Topic 2: Firms, technology and institutions: How the German synthetic dye industry became a global market leader in the 19 th century Introductory reading: Murmann, J. P. (2003): Knowledge and Competitive Advantage: The Coevolution of Firms, Technology and National Institutions. Cambridge University Press. Topic 3: Ernst Heuss Marktphasentheorie an early model of industry evolution still useful today? (Note: This topic requires the ability to read German) Introductory reading: Heuss, E. (1965): Allgemeine Markttheorie, Tübingen: Mohr Siebeck. Topic 4: The Schumpeter Hypotheses: content and empirical evidence Introductory reading: Cohen, W. M. (2010): Fifty Years of Empirical Studies of Innovative Activity and Performance ; in: B. H. Hall und N. Rosenberg (Hrsg.): Handbook of the Economics of Innovation Vol. I, Amsterdam: North Holland, pp Topic 5: Knowledge and market exit in the early German automobile industry Introductory reading: Krüger, J. J. and K. von Rhein (2009): Knowledge, profitability and exit of German car manufacturing firms, Economics of Innovation and New Technology, 18(2): Topic 6: Pre entry experience and diversification in the digital camera market Introductory reading: Benner, M. J. and M. Tripsas (2012): The Influence of Prior Industry Affiliation on Framing in Nascent Industries: The Evolution of Digital Cameras, Strategic Management Journal, 33: Topic 7: Pre entry experience, timing of entry and firm performance in the market for MP3 players Introductory reading: Corrocher, N., R. Fontana and R. Camerani (2012): Entry time, pre entry experience and firms exit in the Digital Audio Players industry, presented at the 2012 DRUID conference, Copenhagen, June Topic 8: Imprinted by the early career? The Baxter Boys and the U.S. biotechnology industry Introductory reading: Higgins, M. (2005): Career Imprints: Creating Leaders Across an Industry. San Francisco: Jossey Bass.

5 Topic 9: Leadership and firm success in Silicon Valley Introductory reading: Baron, J. N. und M. T. Hannan (2002): Organizational Blueprints for Success in Hightech Start ups: Lessons from the Stanford Project on Emerging Companies, California Management Review, 44(3): Topic 10: Social capital and firm performance in the U.S. hotel industy Introductory reading: Kalnins, A. und W. Chung (2006): Social Capital, Geography, and Survival: Gujarati Immigrant Entrepreneurs in the U.S. Lodging Industry, Management Science, 52: Topic 11: Independence as key to success? The example of the Xerox spin offs Introductory reading: Chesbrough, H. (2003): The Governance and Performance of Xerox s Technology Spin off Companies, Research Policy, 32: Topic 12: Employment effects of young U.S. firms Introductory reading: Haltiwanger, J., R. S. Jarmin und J. Miranda (2013): Who Creates Jobs? Small versus Large versus Young, Review of Economics and Statistics, 95(2): Topic 13: Employment effects of spin offs: evidence for Denmark Introductory reading: Gjerlov Juel, P. and M. S. Dahl (2012): Spin off Growth and Job Creation: Evidence on Denmark. in: G. Buenstorf (Hrsg.): Evolution, Organization and Economic Behavior. Cheltenham: Edward Elgar. Topic 14: Does Toughness in patent litigation reduce brain drain from firms? Introductory reading: Agarwal, R., M. Ganco and R. H. Ziedonis (2009): Reputation for Toughness in Patent Enforcement: Implications for Knowledge Spillovers via Inventor Mobility, Strategic Management Journal, 30: Topic 15: Non compete clauses, compensation and investments into human capital Introductory reading: Garmaise, M. J. (2011): Ties that Truly Bind: Noncompetition Agreements, Executive Compensation, and Firm Investment, Journal of Law, Economics, and Organization, 27(2): Topic 16: Non compete clauses and regional development Introductory reading: Marx, M., J. Singh and L. Fleming (2010): Regional Disadvantage? Non Compete Agreements and Brain Drain, SSRN Working Paper ( Registration and choice of topics by E Mail to ak.blankenberg@uni kassel.de