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Vertical Integration and Dis-integration of Computer Firms: A History Friendly Model of the Co-evolution of the Computer and Semiconductor Industries

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Author Info

  • Franco Malerba

    (Cespri, Bocconi University, Milano, Italy.)

  • Richard Nelson

    (Columbia University, New York, USA.)

  • Luigi Orsenigo

    (University of Brescia and CESPRI, Bocconi University, Milan, Italy.)

  • Sidney Winter

    (Wharton School, University of Pennsylvania, Philadelphia, USA.)

Abstract

In this paper we present a history-friendly model of the changing vertical scope of computer firms during the evolution of the computer and semiconductor industries. The model is “history friendly”, in that it attempts at replicating some basic, stylized qualitative features of the evolution of vertical integration on the basis of the causal mechanisms and processes which we believe can explain the history. The specific question addressed in the model is set in the context of dynamic and uncertain technological and market environments, characterized by periods of technological revolutions punctuating periods of relative technological stability and smooth technical progress. The model illustrates how the patterns of vertical integration and specialization in the computer industry change as a function of the evolving levels and distribution of firms’ capabilities over time and how they depend on the co-evolution of the upstream and downstream sectors. Specific conditions in each of these markets – the size of the external market, the magnitude of the technological discontinuities, the lock-in effects in demand – exert critical effects and feedbacks on market structure and on the vertical scope of firms as time goes by.

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File URL: ftp://ftp.unibocconi.it/pub/RePEc/cri/papers/WP191MalerbaNelsonOrsenigoWinter.pdf
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Bibliographic Info

Paper provided by KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy in its series KITeS Working Papers with number 191.

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Length: pages 30
Date of creation: Dec 2006
Date of revision: Dec 2006
Handle: RePEc:cri:cespri:wp191

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Related research

Keywords: Industrial Dynamics; Vertical Integration; Specialization; Technology.;

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References

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  1. Klepper, Steven, 1996. "Entry, Exit, Growth, and Innovation over the Product Life Cycle," American Economic Review, American Economic Association, vol. 86(3), pages 562-83, June.
  2. Utterback, James M & Abernathy, William J, 1975. "A dynamic model of process and product innovation," Omega, Elsevier, vol. 3(6), pages 639-656, December.
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Cited by:
  1. Antonio Revilla & Zulima Fernández, 2013. "Environmental Dynamism, Firm Size and the Economic Productivity of R&D," Industry and Innovation, Taylor & Francis Journals, vol. 20(6), pages 503-522, August.
  2. Marie-Claude BELIS-BERGOUIGNAN (GREThA UMR CNRS 5113), 2009. "An evolutionist analysis of sectoral dynamics (In French)," Cahiers du GREThA 2009-18, Groupe de Recherche en Economie Théorique et Appliquée.
  3. David, Paul & Aghion, Philippe, 2008. "Science, Technology and Innovation for Economic Growth: Linking Policy Research and Practice in "STIG Systems"," MPRA Paper 12096, University Library of Munich, Germany.
  4. Franco Malerba & Richard Nelson & Luigi Orsenigo & Sidney Winter, 2007. "Public Policies and Changing Boundaries of Firms in a "History Friendly" Model of the Co-evolution of the Computer and Semiconductor Industries," KITeS Working Papers 201, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jun 2007.
  5. Christian Garavaglia & Franco Malerba & Luigi Orsenigo & Michele Pezzoni, 2012. "Technological regimes and demand structure in the evolution of the pharmaceutical industry," Journal of Evolutionary Economics, Springer, vol. 22(4), pages 677-709, September.

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