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The dynamics of firms in a micro-to-macro model: The role of training, learning and innovation

Author

Listed:
  • Erol Taymaz

    (Middle East Technical University, Ankara, Turkey)

  • G, rard Ballot

    (Universit, Panth, on-Assas & ERMES-CNRS, 92, rue d'Assas, F-75270 Paris, France)

Abstract

We analyze the co-evolution of the performances of firms and of the economy in an evolutionary micro-to-macro model of the Swedish economy. The model emphasizes the interactions between human capital (or competences) and technological change at the firm level and their effects on aggregate growth, taking into account the micro-macro feedbacks. The model features learning-by-doing, incremental and radical innovations, user-producer learning at the firm level, and a change in the techno-economic paradigm. We find that there is an optimal sequence for the firm to allocate their resources: (1) build a general human capital stock before the change in the techno-economic paradigm, (2) spend on R&D, and (3) invest in specific human capital. Innovators fare better than imitators on average, not only because they innovate, but also because they build a competence base, which supports the learning from other firms.

Suggested Citation

  • Erol Taymaz & G, rard Ballot, 1997. "The dynamics of firms in a micro-to-macro model: The role of training, learning and innovation," Journal of Evolutionary Economics, Springer, vol. 7(4), pages 435-457.
    • Handle: RePEc:spr:joevec:v:7:y:1997:i:4:p:435-457
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    Citations

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    Cited by:

    1. Ballot, Gerard & Taymaz, Erol, 2001. "Training policies and economic growth in an evolutionary world," Structural Change and Economic Dynamics, Elsevier, vol. 12(3), pages 311-329, September.
    2. Gerard Ballot & Antoine Mandel & Annick Vignes, 2015. "Agent-based modeling and economic theory: where do we stand?," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 10(2), pages 199-220, October.
    3. Bo Carlsson & Gunnar Eliasson & Karolin Sjöö, 2018. "The Swedish industrial support program of the 1970s revisited," Journal of Evolutionary Economics, Springer, vol. 28(4), pages 805-835, September.
    4. Erkan Erdil & H. Tolga Göksidan, 2015. "Review of International Production and Global Value Chain Studies: the Case of Turkish Regional Networks," STPS Working Papers 1504, STPS - Science and Technology Policy Studies Center, Middle East Technical University, revised Dec 2015.
    5. Olivier Goudet & Jean-Daniel Kant & Gérard Ballot, 2017. "WorkSim: A Calibrated Agent-Based Model of the Labor Market Accounting for Workers’ Stocks and Gross Flows," Computational Economics, Springer;Society for Computational Economics, vol. 50(1), pages 21-68, June.
    6. Santos Arteaga, Francisco J. & Tavana, Madjid & Di Caprio, Debora & Toloo, Mehdi, 2019. "A dynamic multi-stage slacks-based measure data envelopment analysis model with knowledge accumulation and technological evolution," European Journal of Operational Research, Elsevier, vol. 278(2), pages 448-462.
    7. Adli Abouzeedan & Magnus Klofsten & Thomas Hedner, 2013. "Internetization Management as a Facilitator for Managing Innovation in High-Technology Smaller Firms," Global Business Review, International Management Institute, vol. 14(1), pages 121-136, February.
    8. Olivier Goudet & Gérard Ballot & Jean-Daniel Kant, 2015. "How to choose a contract type in the French Labor Market : an agent-based model," Post-Print hal-01512938, HAL.
    9. Adli Abouzeedan & Boo Edgar & Thomas Hedner, 2011. "Can Innovation Enhance Entrepreneurial Activities of a Region? An Analysis Utilizing the Entrepreneurial Remedy Model (EREM)," ERSA conference papers ersa10p1277, European Regional Science Association.
    10. Jakob Grazzini & Matteo G. Richiardi, 2013. "Consistent Estimation of Agent-Based Models by Simulated Minimum Distance," LABORatorio R. Revelli Working Papers Series 130, LABORatorio R. Revelli, Centre for Employment Studies.
    11. Dittrich, Koen & Duysters, Geert & de Man, Ard-Pieter, 2007. "Strategic repositioning by means of alliance networks: The case of IBM," Research Policy, Elsevier, vol. 36(10), pages 1496-1511, December.
    12. Heshmati, Almas & Lenz-Cesar, Flávio, 2013. "Determinants and Policy Simulation of Firms Cooperation in Innovation," IZA Discussion Papers 7487, Institute of Labor Economics (IZA).
    13. Achmad Fajar Hendarman & Uwe Cantner, 2018. "Soft skills, hard skills, and individual innovativeness," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 8(2), pages 139-169, June.
    14. David B. Audretsch & Dirk Dohse, 2007. "Location: A Neglected Determinant of Firm Growth," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(1), pages 79-107, April.
    15. Gérard Ballot & Erol Taymaz, 1999. "Technological Change, Learning and Macro-Economic Coordination: an Evolutionary Model," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 2(2), pages 1-3.
    16. Carlsson , Bo, 2016. "Industrial Dynamics: A Review of the Literature 1990-2009," Papers in Innovation Studies 2016/3, Lund University, CIRCLE - Centre for Innovation Research.
    17. Thomas Hedner & Hanadi Almubaraki & Michael Busler & Adli Abouzeedan, 2011. "Business and Technology Incubators and their Role in the Nordic Countries in Comparison to the GCC countries: An Analysis of Current Affairs," ERSA conference papers ersa10p1283, European Regional Science Association.
    18. Lee, Chang-Yang, 2018. "Geographical clustering and firm growth: Differential growth performance among clustered firms," Research Policy, Elsevier, vol. 47(6), pages 1173-1184.
    19. Santos-Arteaga, Francisco J. & Di Caprio, Debora & Tavana, Madjid & O’Connor, Aidan, 2017. "Innovation dynamics and labor force restructuring with asymmetrically developed national innovation systems," International Business Review, Elsevier, vol. 26(1), pages 36-56.

    More about this item

    Keywords

    Evolutionary theory ; Endogeneous growth ; Human capital ; Innovation ; Diffusion ; Learning ; Artificial intelligence ; Microsimulation;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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