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Vintage organization capital

Author

Listed:
  • Boyan Jovanovic
  • Peter L. Rousseau

Abstract

We argue that a firm's organization capital depends on the state of technology when the firm was born and on the technologies that have followed. We estimate vintage effects on the value of firms from 114 years of stock market data. We find: 1) a surprisingly strong upward trend in the stock-market share of the largest firms, 2) a very large quantity of organization capital created by the 1920's vintage, 3) strong indications that the 1970's and 1980's vintages will be followed by more complementary technologies, and 4) major technological change since WW2 in the process by which organization capital is created.

Suggested Citation

  • Boyan Jovanovic & Peter L. Rousseau, 2000. "Vintage organization capital," Proceedings, Federal Reserve Bank of San Francisco, issue Apr.
  • Handle: RePEc:fip:fedfpr:y:2000:i:apr:x:5
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    References listed on IDEAS

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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Organizational failure
      by chris dillow in Stumbling and Mumbling on 2011-08-03 18:02:48
    2. Nokia, & organizational capital
      by chris dillow in Stumbling and Mumbling on 2011-02-10 20:39:17
    3. Leaders' constraints
      by chris dillow in Stumbling and Mumbling on 2014-10-15 17:29:20
    4. Heading for extinction?
      by chris in Stumbling and Mumbling on 2015-02-09 20:17:57
    5. Old blaggers & secular stagnation
      by chris in Stumbling and Mumbling on 2016-01-15 19:36:02
    6. Short-termism: what's the problem?
      by chris in Stumbling and Mumbling on 2018-09-06 12:51:11

    Citations

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    Cited by:

    1. Dimson, Elroy & Rousseau, Peter L. & Spaenjers, Christophe, 2015. "The price of wine," Journal of Financial Economics, Elsevier, vol. 118(2), pages 431-449.
    2. Chung Yi Tse, 2004. "New product introduction and diffusion with costly search," 2004 Meeting Papers 237, Society for Economic Dynamics.
    3. Fransisco M. Ganzalez & Alok Johri, 2002. "Asymmetric Labor Adjustment, Organizational Capital and Aggregate Job Flows," Department of Economics Working Papers 2002-03, McMaster University.
    4. Katsuya Takii, 2007. "The Persistence of Differences in Productivity, Wages, Skill Mixes and Profits Between Firms," Discussion Papers in Economics and Business 07-10, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
    5. Habib, Michel A. & Mella-Barral, Pierre, 2013. "Skills, core capabilities, and the choice between merging, allying, and trading assets," Journal of Mathematical Economics, Elsevier, vol. 49(1), pages 31-48.
    6. Jovanovic, Boyan, 2009. "Investment options and the business cycle," Journal of Economic Theory, Elsevier, vol. 144(6), pages 2247-2265, November.
    7. Boyan Jovanovic & Peter L. Rousseau, 2014. "Extensive and Intensive Investment over the Business Cycle," Journal of Political Economy, University of Chicago Press, vol. 122(4), pages 863-908.
    8. Tor Jakob Klette & Arvid Raknerud, 2002. "How and why do Firms differ?," Discussion Papers 320, Statistics Norway, Research Department.
    9. Boyan Jovanovic & Peter L. Rousseau, 2002. "The Q-Theory of Mergers," American Economic Review, American Economic Association, vol. 92(2), pages 198-204, May.
    10. Katsuya Takii, 2011. "Persistent Productivity Differences Between Firms," OSIPP Discussion Paper 11E004, Osaka School of International Public Policy, Osaka University.
    11. Sakellaris, Plutarchos, 2004. "Patterns of plant adjustment," Journal of Monetary Economics, Elsevier, vol. 51(2), pages 425-450, March.
    12. Katsuya Takii, 2008. "The Persistence of Differences in Productivity, Wages, Skill Mixes and Profits Between Firms in a Rapidly Changing Environment," OSIPP Discussion Paper 08E003, Osaka School of International Public Policy, Osaka University.
    13. Jovanovic, Boyan & Rousseau, Peter L., 2005. "General Purpose Technologies," Handbook of Economic Growth,in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 18, pages 1181-1224 Elsevier.
    14. Petsas Iordanis, 2015. "General Purpose Technologies and their Implications for International Trade," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 47(1), pages 7-35, September.
    15. Howell, Bronwyn & Obren, Mark, 2002. "Broadband Diffusion: Lags from Vintage Capital, Learning by Doing, Information Barriers and Network Effects," Working Paper Series 3896, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    16. Samaniego, Roberto M., 2006. "Organizational capital, technology adoption and the productivity slowdown," Journal of Monetary Economics, Elsevier, vol. 53(7), pages 1555-1569, October.
    17. Maliranta, Mika, . "Micro Level Dynamics of Productivity Growth. An Empirical Analysis of the Great Leap in Finnish Manufacturing Productivity in 1975-2000," ETLA A, The Research Institute of the Finnish Economy, number 38, 01-2015.
    18. Leif Danziger, 2008. "Adjustment Costs, Inventories and Output," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(3), pages 519-542, September.
    19. Boyan Jovanovic & Peter L. Rousseau, 2008. "Mergers as Reallocation," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 765-776, November.
    20. Leif Danziger, 2007. "Output Effects Of Inflation With Fixed Price- And Quantity-Adjustment Costs," Economic Inquiry, Western Economic Association International, vol. 45(1), pages 115-120, January.
    21. Che, Natasha Xingyuan, 2009. "The great dissolution: organization capital and diverging volatility puzzle," MPRA Paper 13701, University Library of Munich, Germany.

    More about this item

    Keywords

    Technology ; Corporations;

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • N2 - Economic History - - Financial Markets and Institutions

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