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Competition, cooperation, and the neighboring farmer effect

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Author Info

  • Braguinsky, Serguey
  • Rose, David C.

Abstract

In this paper we propose a model that explains how cooperation can emerge spontaneously between firms in a highly competitive market environment. The basic idea is that the more competitive is the market, the less costly it is for firms to help each other like good neighbors. Cooperation takes the form of sharing technical know-how, which speeds up the adoption of new technologies (normally developed elsewhere) that spur industrial development. The model comports with the development history of Japan's first example of successful industrial development - its cotton spinning industry - whose conditions match those of firms in small open economies today.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 72 (2009)
Issue (Month): 1 (October)
Pages: 361-376

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Handle: RePEc:eee:jeborg:v:72:y:2009:i:1:p:361-376

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Web page: http://www.elsevier.com/locate/jebo

Related research

Keywords: Competition Cooperation Collective invention Technology adoption Technical know-how Infant industry development Small open economies Less developed countries;

References

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  1. Loury, Glenn C, 1979. "Market Structure and Innovation," The Quarterly Journal of Economics, MIT Press, vol. 93(3), pages 395-410, August.
  2. Saxonhouse, Gary, 1974. "A Tale of Japanese Technological Diffusion in the Meiji Period," The Journal of Economic History, Cambridge University Press, vol. 34(01), pages 149-165, March.
  3. Serguey Braguinsky & Salavat Gabdrakhmanov & Atsushi Ohyama, 2007. "A Theory of Competitive Industry Dynamics With Innovation and Imitation," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 10(4), pages 729-760, October.
  4. Spence, Michael, 1984. "Cost Reduction, Competition, and Industry Performance," Econometrica, Econometric Society, vol. 52(1), pages 101-21, January.
  5. Gary Bornstein, 2002. "Intergroup conflict: Individual, group and collective interests," Discussion Paper Series dp297, The Center for the Study of Rationality, Hebrew University, Jerusalem.
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  7. Cowan, R. & Jonard, N., 2003. "The dynamics of collective invention," Journal of Economic Behavior & Organization, Elsevier, vol. 52(4), pages 513-532, December.
  8. Nuvolari, A., 2004. "Collective invention during the British Industrial Revolution: the case of the Cornish pumping engine," Working Papers 04.02, Eindhoven Center for Innovation Studies.
  9. Alessandro Nuvolari, 2004. "Collective invention during the British Industrial Revolution: the case of the Cornish pumping engine," Cambridge Journal of Economics, Oxford University Press, vol. 28(3), pages 347-363, May.
  10. Teece, David J., 1992. "Competition, cooperation, and innovation : Organizational arrangements for regimes of rapid technological progress," Journal of Economic Behavior & Organization, Elsevier, vol. 18(1), pages 1-25, June.
  11. von Hippel, Eric, 1987. "Cooperation between rivals: Informal know-how trading," Research Policy, Elsevier, vol. 16(6), pages 291-302, December.
  12. Allen, Robert C., 1983. "Collective invention," Journal of Economic Behavior & Organization, Elsevier, vol. 4(1), pages 1-24, March.
  13. Peter B. Meyer, 2003. "Episodes of Collective Invention," Working Papers 368, U.S. Bureau of Labor Statistics.
  14. Stephen L. Parente, 2000. "Learning-by-Using and the Switch to Better Machines," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 3(4), pages 675-703, October.
  15. Atsushi Ohyama & Serguey Braguinsky & Kevin M. Murphy, 2004. "Entrepreneurial Ability and Market Selection in an Infant Industry: Evidence from the Japanese Cotton Spinning Industry," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 7(2), pages 354-381, April.
  16. Pack, Howard & Westphal, Larry E., 1986. "Industrial strategy and technological change : Theory versus reality," Journal of Development Economics, Elsevier, vol. 22(1), pages 87-128, June.
  17. Rabellotti, Roberta, 1995. "Is there an "industrial district model"? Footwear districts in Italy and Mexico compared," World Development, Elsevier, vol. 23(1), pages 29-41, January.
  18. Grossman, G.M. & Helpman, E., 1993. "Endogenous, Innovation in the Theory of Growth," Papers 165, Princeton, Woodrow Wilson School - Public and International Affairs.
  19. Keller, Wolfgang, 2001. "Geographic Localization of International Technology Diffusion," CEPR Discussion Papers 2706, C.E.P.R. Discussion Papers.
  20. Parente, Stephen L & Prescott, Edward C, 1994. "Barriers to Technology Adoption and Development," Journal of Political Economy, University of Chicago Press, vol. 102(2), pages 298-321, April.
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Cited by:
  1. Antoci, Angelo & Sabatini, Fabio & Sodini, Mauro, 2010. "The Solaria Syndrome: Social Capital in a Growing Hyper-technological Economy," MPRA Paper 21023, University Library of Munich, Germany.

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