Academic journal article NBER Reporter

Competition and Organization in Technology Intensive Industries

Academic journal article NBER Reporter

Competition and Organization in Technology Intensive Industries

Article excerpt

One hundred economists from the United States, Canada, and Europe gathered in Cambridge on December 5 and 6 for the recent NBER-Universities Research Conference on technology-intensive industries. NBER Research Associate Shane Greenstein of Northwestern University and Faculty Research Fellow Scott Stern of MIT organized this program:

Ashish Arora, Carnegie Mellon University, Andrea Fosfuri, Universitat Pompeu Fabra, and Alfonso Gambardella, University of Urbino, "Division of Labor and Transmission of Growth"

Discussants: Adam Jaffe, NBER and Brandeis University, and Sam Kortum, NBER and Boston University

Joshua Lerner, NBER and Harvard University, and Robert Merges, Boalt Hall Law School, "The Control of Technology Alliances: an Empirical Analysis of the Biotechnology Industry"

Discussants: David Audretsch, Georgia State University, and Alfonso Gambardella

Bruce Blonigen, University of Oregon, and Chris Taylor, U.S. International Trade Commission, "R and D Activity and Acquisitions in High Technology Industries: Evidence from the U.S. Electronics Industry"

Discussants: Lee Branstetter, NBER and University of California, Davis, and Bronwyn Hall, NBER and University of California, Berkeley

Eugenio J. Miravete, INSEAD, and Jose C. Pernias, Universitat Jaume I, "Innovation Complementaries and Scale of Production"

Discussants: Rebecca Henderson, NBER and MIT, and Harumi Ito, NBER and Brown University

Eric Brynjolfsson, MIT, and Lorin Hitt, University of Pennsylvania, "Information Technology and Organizational Design: Some Evidence from Micro Data"

Discussants: Susan Athey, NBER and MIT, and Tom Hubbard, NBER and University of California, Los Angeles

George Deltas and Eleftherios Zacharias, University of Illinois, Urbana-Champaign, "Pricing Dispersion over the Product Cycle: The Transition from the 486 to the Pentium Processor"

Discussants: Iain Cockburn NBER and University of British Columbia, and Nancy Rose, NBER and MIT

Sangin Park, State University of New York at Stony Brook, "Qualitative Analysis of Network Externalities in Competing Technology: the VCR Case"

Discussants: Neil Gandal, Tel Aviv University and Andrea Shepard, NBER and Stanford University

Louis Thomas, University of Pennsylvania, "Adopting Order of New Technologies in Evolving Markets"

Discussants: Steven Berry, NBER and Yale University, and Anita McGahan, Harvard University

Arora, Fosfuri, and Gambardella study how an independent, upstream capital good sector in a technology based industry can act as a mechanism for the transmission of growth across countries. Since the number of specialists is determined by the size of the downstream sector, the growth of the downstream sector in leading countries has beneficial effects for the growth of the downstream sector in follower countries (less developed countries, or LDCs). Using a comprehensive dataset of investments in chemical plants in the developing countries during the 1980s, the authors find that one additional specialized supplier in a given process technology would have increased the expected investment in LDCs by $100 million to $200 million, with the increases greater in more mature technologies, and for larger LDCS.

Lerner and Merges examine the determinants of control rights in technology alliances involving biotechnology firms. They undertake three case studies and a quantitative analysis of 200 alliances. Consistent with the framework they use, the allocation of control rights to the firm performing R and D increases with its financial resources. The empirical evidence is much more ambiguous on the relationship between the stage of the project at the time the alliance is signed and control rights.

Economic analysis of high-technology industries often assumes that firms' abilities to survive depend on their own internal R and D efforts. Blonigen and Taylor argue that high-technology finns may choose to specialize either in this internal growth (through R and D) strategy or in an external growth strategy of acquiring other firms or finns operations. …

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