Organisation of industry and innovation dynamics
The paper aims at investigating how the organization of a certain industry evolves once the competition among its firms, producing a ‘complex’ (i.e. non-modular) product, is modeled as the intertwining of innovative search and organizational change. In order to take the full roster of participants into account, and to retain the inner complexity of their decisions, a Pseudo–NK model is built–up in which a population of firms is called to match a technological frontier. By evolving along different stagesof the sector’s life-cycle, such a kind of technological calls for a trade–off between two strategies of cost–reduction through either outsourcing ortechnological search. Overall, the simulation results confirm previous literature as, for example, in the introductory stage of the industry life–cycle,marked by frequent and intense jumps of the technological frontier, firms need to vertically integrate in order to have higher chances to win the competition for a new standard. On the contrary, in the decline stage,in which the technological frontier almost stabilizes, deverticalization allows firms to better compete on costs. These results change if suppliers are allowed to innovate, as they are more likely to lock the market in sub–optimal configurations.
|Date of creation:||Oct 2007|
|Contact details of provider:|| Postal: Piazza Scaravilli, 2, and Strada Maggiore, 45, 40125 Bologna|
Phone: +39 051 209 8019 and 2600
Fax: +39 051 209 8040 and 2664
Web page: http://www.dse.unibo.it
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Philippe Aghion & Nick Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2005.
"Competition and Innovation: an Inverted-U Relationship,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 120(2), pages 701-728.
- Philippe Aghion & Nicholas Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2002. "Competition and Innovation: An Inverted U Relationship," NBER Working Papers 9269, National Bureau of Economic Research, Inc.
- Philippe Aghion & Nicolas Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2002. "Competition and innovation: an inverted U relationship," IFS Working Papers W02/04, Institute for Fiscal Studies.
- Howitt, Peter & Griffith, Rachel & Aghion, Philippe & Blundell, Richard & Bloom, Nick, 2005. "Competition and Innovation: An Inverted-U Relationship," Scholarly Articles 4481507, Harvard University Department of Economics.
- Marengo, Luigi, et al, 2000. "The Structure of Problem-Solving Knowledge and the Structure of Organizations," Industrial and Corporate Change, Oxford University Press, vol. 9(4), pages 757-788, December.
- Luigi Marengo & Giovanni Dosi & Paolo Legrenzi & Corrado Pasquali, 1999. "The structure of problem-solving knowledge and the structure of organisations," LEM Papers Series 1999/09, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
- Utterback, James M & Abernathy, William J, 1975. "A dynamic model of process and product innovation," Omega, Elsevier, vol. 3(6), pages 639-656, December.
- Richardson, G B, 1972. "The Organisation of Industry," Economic Journal, Royal Economic Society, vol. 82(327), pages 883-896, September.
- Giovanni Dosi & Mike Hobday & Luigi Marengo, 2000. "Problem-Solving Behaviours, Organisational Forms and the Complexity of Tasks," LEM Papers Series 2000/06, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
- Daron Acemoglu & Philippe Aghion & Fabrizio Zilibotti, 2003. "Vertical Integration and Distance to Frontier," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 630-638, 04/05.
- Daron Acemoglu & Philippe Aghion & Fabrizio Zilibotti, 2002. "Vertical Integration and Distance to Frontier," NBER Working Papers 9191, National Bureau of Economic Research, Inc.
- Acemoglu, Daron & Zilibotti, Fabrizio & Aghion, Philippe, 2003. "Vertical Integration and Distance to Frontier," Scholarly Articles 4481512, Harvard University Department of Economics.
- Acemoglu, Daron & Aghion, Philippe & Zilibotti, Fabrizio, 2002. "Vertical Integration and Distance to Frontier," CEPR Discussion Papers 3565, C.E.P.R. Discussion Papers.
- Kauffman, Stuart & Lobo, Jose & Macready, William G., 2000. "Optimal search on a technology landscape," Journal of Economic Behavior & Organization, Elsevier, vol. 43(2), pages 141-166, October.
- Brusoni, Stefano & Prencipe, Andrea, 2001. "Unpacking the Black Box of Modularity: Technologies, Products and Organizations," Industrial and Corporate Change, Oxford University Press, vol. 10(1), pages 179-205, March.
- Robertson, Paul L. & Langlois, Richard N., 1995. "Innovation, networks, and vertical integration," Research Policy, Elsevier, vol. 24(4), pages 543-562, July.
- Paul L. Robertson & Richard N. Langlois, 1994. "Innovation, Networks, and Vertical Integration," Industrial Organization 9406006, EconWPA.
- Herbert A. Simon, 1996. "The Sciences of the Artificial, 3rd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262691914, January.
- Dieter Ernst, 2005. "Limits to Modularity: Reflections on Recent Developments in Chip Design," Industry and Innovation, Taylor & Francis Journals, vol. 12(3), pages 303-335.
- Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132-132.
- Bart Nooteboom, 2004. "Governance and competence: how can they be combined?," Cambridge Journal of Economics, Oxford University Press, vol. 28(4), pages 505-525, July.
- Erol Taymaz & Yilmaz Kilicaslan, 2005. "Determinants of subcontracting and regional development: An empirical study on Turkish textile and engineering industries," Regional Studies, Taylor & Francis Journals, vol. 39(5), pages 633-645.
- Marco Valente, 2008. "Pseudo-NK: an Enhanced Model of Complexity," LEM Papers Series 2008/26, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:bol:bodewp:609. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dipartimento Scienze Economiche, Universita' di Bologna)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.