IDEAS home Printed from https://ideas.repec.org/p/cri/cespri/wp228.html
   My bibliography  Save this paper

User-producer relations, innovation and the evolution of market structures under alternative contractual regimes

Author

Listed:
  • Franco Malerba

    (KITeS, Bocconi Univerity - Milan - Italy)

  • Luigi Orsenigo

    (Università degli Studi di Brescia and KITeS, Bocconi Univerity - Milan - Italy)

Abstract

In this paper we examine the effects that user-producer interactions have on innovation and the dynamics of market structure of two vertically related industries under alternative contractual regimes. The existence of advantages stemming from users-producers relationships introduces a dynamic "matching" problem between firms characterized by heterogeneous capabilities and imperfect information who act in a continuously changing environment but are however able to improve their products also through interactive and interdependent learning processes. Our results highlight the subtle trade-offs and dynamic interdependencies that arise in these contexts. In particular, we show that: (a) a trade-off is present between the exploitation of past experience and the exploration of new suppliers; (b) externalities are present, even if the advantages arising from interactions do not spill over to other firms; (c) imperfect information and agents heterogeneity are crucial factors in determining the consequences of alternative contractual arrangements on industry dynamics; (d) vertical interdependencies propagate the effects of specific firms' decisions across industries and over time, so that the resulting dynamics is characterized by interacting path-dependent processes.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Franco Malerba & Luigi Orsenigo, 2009. "User-producer relations, innovation and the evolution of market structures under alternative contractual regimes," KITeS Working Papers 001, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Dec 2009.
  • Handle: RePEc:cri:cespri:wp228
    as

    Download full text from publisher

    File URL: ftp://ftp.unibocconi.it/pub/RePEc/cri/papers/KitesWP1.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Langlois, Richard N., 2002. "Modularity in technology and organization," Journal of Economic Behavior & Organization, Elsevier, vol. 49(1), pages 19-37, September.
    2. Tommaso Ciarli & Marco Valente & Riccardo Leoncini & Sandro Montresor, 2009. "Technological change and the vertical organization of industries," Springer Books, in: Uwe Cantner & Jean-Luc Gaffard & Lionel Nesta (ed.), Schumpeterian Perspectives on Innovation, Competition and Growth, pages 115-135, Springer.
    3. Eric von Hippel, 1986. "Lead Users: A Source of Novel Product Concepts," Management Science, INFORMS, vol. 32(7), pages 791-805, July.
    4. Marengo, Luigi & Dosi, Giovanni, 2005. "Division of labor, organizational coordination and market mechanisms in collective problem-solving," Journal of Economic Behavior & Organization, Elsevier, vol. 58(2), pages 303-326, October.
    5. G. M.P. Swann, 2009. "The Economics of Innovation," Books, Edward Elgar Publishing, number 13211.
    6. Franco Malerba & Richard Nelson & Luigi Orsenigo & Sidney Winter, 2007. "Demand, innovation, and the dynamics of market structure: The role of experimental users and diverse preferences," Journal of Evolutionary Economics, Springer, vol. 17(4), pages 371-399, August.
    7. Franco Malerba & Luigi Orsenigo, 2002. "Innovation and market structure in the dynamics of the pharmaceutical industry and biotechnology: towards a history-friendly model," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 11(4), pages 667-703, August.
    8. Masahiko Aoki, 2013. "Horizontal vs. Vertical Information Structure of the Firm," Chapters, in: Comparative Institutional Analysis, chapter 5, pages 57-58, Edward Elgar Publishing.
    9. Cusmano, Lucia & Mancusi, Maria Luisa & Morrison, Andrea, 2009. "Innovation and the geographical and organisational dimensions of outsourcing: Evidence from Italian firm-level data," Structural Change and Economic Dynamics, Elsevier, vol. 20(3), pages 183-195, September.
    10. Fagerberg, Jan, 1995. "User-Producer Interaction, Learning and Comparative Advantage," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 19(1), pages 243-256, February.
    11. Shane Greenstein & Timothy F. Bresnahan, 2001. "special issue: The economic contribution of information technology: Towards comparative and user studies," Journal of Evolutionary Economics, Springer, vol. 11(1), pages 95-118.
    12. Paul Windrum & Andreas Reinstaller & Christopher Bull, 2009. "The outsourcing productivity paradox: total outsourcing, organisational innovation, and long run productivity growth," Journal of Evolutionary Economics, Springer, vol. 19(2), pages 197-229, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Roberto Fontana & Lorenzo Zirulia, 2015. "“…then came Cisco, and the rest is history”: a ‘history friendly’ model of the Local Area Networking industry," Journal of Evolutionary Economics, Springer, vol. 25(5), pages 875-899, November.
    2. Gianluca Capone & Franco Malerba & Richard R. Nelson & Luigi Orsenigo & Sidney G. Winter, 2019. "History friendly models: retrospective and future perspectives," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 9(1), pages 1-23, March.
    3. Yuxin Li & Derek Bosworth, 2020. "R&D spillovers in a supply chain and productivity performance in British firms," The Journal of Technology Transfer, Springer, vol. 45(1), pages 177-204, February.
    4. R. Fontana & L. Zirulia, 2015. "then came Cisco, and the rest is history : a history friendly model of the Local Area Networking industry," Working Papers wp993, Dipartimento Scienze Economiche, Universita' di Bologna.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Baier , Elisabeth & Rammer , Christian & Schubert , Torben, 2013. "The Impact of Innovation Off-shoring on Organizational Adaptability," Papers in Innovation Studies 2013/44, Lund University, CIRCLE - Centre for Innovation Research.
    2. Franco Malerba, 2006. "Innovation, Industrial Dynamics and Industry Evolution: Progress and the Research Agendas," Revue de l'OFCE, Presses de Sciences-Po, vol. 97(5), pages 21-46.
    3. Malerba, Franco, 2007. "Innovation and the dynamics and evolution of industries: Progress and challenges," International Journal of Industrial Organization, Elsevier, vol. 25(4), pages 675-699, August.
    4. Marengo, Luigi & Valente, Marco, 2010. "Industry dynamics in complex product spaces: An evolutionary model," Structural Change and Economic Dynamics, Elsevier, vol. 21(1), pages 5-16, March.
    5. Claudio Fassio, 2018. "Export-led innovation: the role of export destinations," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 27(1), pages 149-171.
    6. Hanen Sdiri & Mohamed Ayadi, 2016. "Innovation and service outsourcing: an empirical analysis based on data from Tunisian firms," Journal of Innovation and Entrepreneurship, Springer, vol. 5(1), pages 1-13, December.
    7. Valeria De Bonis, 2016. "Innovation, competition and public procurement in the pre-commercial phase," Public Finance Research Papers 23, Istituto di Economia e Finanza, DSGE, Sapienza University of Rome.
    8. Sdiri, Hanen & Ayadi, Mohamed, 2012. "Innovation et externalisation des services: une analyse empirique sur données d'entreprises tunisiennes [Innovation and outsourcing of services: a firm-level analysis]," MPRA Paper 39359, University Library of Munich, Germany.
    9. Davide Consoli & Pier Paolo Patrucco, 2011. "Complexity and the Coordination of Technological Knowledge: The Case of Innovation Platforms," Chapters, in: Handbook on the Economic Complexity of Technological Change, chapter 8 Edward Elgar Publishing.
    10. Derya Fındık & Aysıt Tansel, 2013. "Intangible investment and Technical efficiency: The case of software-intensive manufacturing firms in Turkey," EY International Congress on Economics I (EYC2013), October 24-25, 2013, Ankara, Turkey 235, Ekonomik Yaklasim Association.
    11. Paul Windrum, 2013. "The co-production of health innovations," Chapters, in: Faïz Gallouj & Luis Rubalcaba & Paul Windrum (ed.), Public–Private Innovation Networks in Services, chapter 9, pages 228-246, Edward Elgar Publishing.
    12. Antonietti, Roberto & Cainelli, Giulio & Lupi, Claudio, 2013. "Vertical disintegration and spatial co-localization: The case of Kibs in the metropolitan region of Milan," Economics Letters, Elsevier, vol. 118(2), pages 360-363.
    13. Mazzanti, Massimiliano & Mancinelli, Susanna, 2007. "SME Performance, Innovation and Networking Evidence on Complementarities for a Local Economic System," Knowledge, Technology, Human Capital Working Papers 9554, Fondazione Eni Enrico Mattei (FEEM).
    14. Paul Windrum & Doris Schartinger & Luis Rubalcaba & Faiz F. Gallouj & Marja Toivonen, 2016. "The co-creation of multi-agent social innovations," Post-Print halshs-01322603, HAL.
    15. Gianluca Capone & Franco Malerba & Richard R. Nelson & Luigi Orsenigo & Sidney G. Winter, 2019. "History friendly models: retrospective and future perspectives," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 9(1), pages 1-23, March.
    16. Nicolai J. Foss & Keld Laursen & Torben Pedersen, 2011. "Linking Customer Interaction and Innovation: The Mediating Role of New Organizational Practices," Organization Science, INFORMS, vol. 22(4), pages 980-999, August.
    17. Caroline Stiel, 2017. "Modern Public Enterprises: Organisational Innovation and Productivity," Discussion Papers of DIW Berlin 1713, DIW Berlin, German Institute for Economic Research.
    18. Christian Peukert, 2012. "External Technology Supply and Client-Side Innovation," International Studies in Entrepreneurship, in: David B. Audretsch & Erik E. Lehmann & Albert N. Link & Alexander Starnecker (ed.), Technology Transfer in a Global Economy, edition 127, chapter 0, pages 161-184, Springer.
    19. Roberto Antonietti, 2016. "From outsourcing to productivity, passing through training: microeconometric evidence from Italy," Industry and Innovation, Taylor & Francis Journals, vol. 23(5), pages 407-425, July.
    20. Giulio Cainelli & Massimiliano Mazzanti & Simone Borghesi, 2012. "The European Emission Trading Scheme and environmental innovation diffusion: Empirical analyses using Italian CIS data," Working Papers 201201, University of Ferrara, Department of Economics.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cri:cespri:wp228. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Valerio Sterzi (email available below). General contact details of provider: http://www.kites.unibocconi.it/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.