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Knowledge, Profitability and Exit of German Car Manufacturing Firms

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  • Jens J. Krüger

    () (University of Jena, Faculty of Economics)

  • Kristina Dreßler

    () (University of Jena, Faculty of Economics)

Abstract

In this paper the profitability of German car manufacturing firms is related to different indicators for the knowledge incorporated in the firms since the birth of the industry in 1886. The analysis is performed with an ordered probit model, where information about the kind of exit of the firms is exploited to construct a latent profitability variable. Knowledge is represented by the number of patents, learning-by-doing and entrepreneurial experience before entry. The results show that knowledge is significantly positively related to firm profitability and that each of the three knowledge forms exerts an independent effect.

Suggested Citation

  • Jens J. Krüger & Kristina Dreßler, 2006. "Knowledge, Profitability and Exit of German Car Manufacturing Firms," Jenaer Schriften zur Wirtschaftswissenschaft (Expired!) 15/2006, Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät.
  • Handle: RePEc:jen:jenasw:2006-15
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    References listed on IDEAS

    as
    1. Susanne Büchner & Andreas Freytag & Luis González & Werner Güth, 2008. "Bribery and public procurement: an experimental study," Public Choice, Springer, vol. 137(1), pages 103-117, October.
    2. Uwe Cantner & Jens Kruger & Kristina von Rhein, 2011. "Knowledge compensation in the German automobile industry," Applied Economics, Taylor & Francis Journals, vol. 43(22), pages 2941-2951.
    3. Sebastian von Engelhardt, 2006. "Die ökonomischen Eigenschaften von Software," Jenaer Schriften zur Wirtschaftswissenschaft (Expired!) 14/2006, Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät.
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    More about this item

    Keywords

    firms profitability; exit modes; knowledge; ordered choice; automobile industry;

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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    1. Studies on the automobile industry

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