ALBERT

Notes: This paper examines the forward-looking rational expectations buffer stock model of Cuthbertson and Taylor (1987) in the context of the personal sector of the UK. The buffer stock model is evaluated for both narrow and broad money definitions in the UK using the encompassing the VAR methodology of Mizon (1984). This suggests that the buffer stock model is a congruent model, and that the broad definition is the most appropriate aggregate with which to model buffering behaviour — in line with previous studies, Mizen (1992). Further analysis of the models, in the light of Hendry (1988), confirms this view.

Notes: The concept of Nash equilibrium is widely used to analyse non-cooperative games. However, one of the problems with that concept is that many games have multiple equilibria. Recent work has concentrated on reducing or refining the set of Nash equilibria in some games. In this paper, we survey some equilibrium concepts based on perturbations of strategies that refine the set of Nash equilibria. We discuss the pros and cons of each concept and its relationship to the others by the use of numerous examples and intuition. It is hoped that this survey will enable the economist to consider the relevance of a particular equilibrium concept to a given economic model of interest. Journal of Economic Literature Classification Number: C72.

Notes: The modified theory of the Illyrian firm was developed, in part, to correct a perversity exhibited by the traditional theory of the Illyrian firm — that output rises in response to a fall in output price or a rise in fixed costs. We show that while this revised model has solved the problem for the short-run the problem remains in the long-run, and this long-run perversity may have important policy implications for the short-run as well. We also show that the under-production problem associated with the traditional LMF is mitigated (and perhaps even reversed) in the modified LMF.

Notes: Using a fairly general principal-agent model in which both firms and workers can affect the risk of a workplace accident, this note shows theoretically that an accident tax and/or a safety bonus scheme could unambiguously reduce the incidence of workplace accidents, contrary to the ambiguous theoretical results that are obtained with safety regulations

Notes: . State and local governments commonly finance investment in public capital by issuing bonds and by using current revenues. This paper presents a model of state and local governments' reliance on borrowing in which the optimal share of debt in the financing of capital investment depends on the relative costs of tax and debt finance. Equations are derived and estimated for spending on public capital and the share of debt in the financing of that spending. The results reveal that the level of private incomes plays an important role in both the capital investment and financial decisions of the jurisdiction. Even after controlling for Sunbelt-Snowbelt differences in incomes, grants, outstanding debt and certain demographic factors, the results indicate that state and local governments located in the Snowbelt rely more heavily on bond issues to finance capital investment. Finally, the estimated invariance of the level of state and local capital investment to the share of debt in the financing of the investment suggests that investment decisions are not greatly affected by factors influencing the willingness to issue bonds.

Notes: . Consider a community investigating the integration of recycling into its waste management program. Even if (1) the county's citizens do not gain utility from recycling, (2) landfill space is plentiful, and (3) the market price for recyclables is zero, recycling can still be optimal for a local government. By determining the relationship between the amount of recycling and the location of a recycling center, conditions are identified under which recycling will reduce total waste management costs enough that municipal recycling will be optimal. In addition, it is shown that the likelihood of municipal recycling increases with the size of the city.

Notes: . National and regional employment patterns are subject to growth-instability tradeoffs. This paper applies the portfolio selection model to detailed employment data for the U.S. economy and selected states. Empirical results indicate that growth-instability trade-offs exist in a form not previously understood. The paper also identifies growth and stabilization potential by identifying stabilizing sectors.

Notes: . The paper takes microlevel data on U.K. regional policy instruments and other financial assistance payments to industry to examine the time profile of assisted employment up to five years after the date of assistance. The theoretical analysis indicates factors bearing on the employment effect of industrial assistance and highlights the possibly key role played by the firm's access to private funds. The results from the regression analysis indicate that both the build-up and duration of subsidy-induced jobs vary between assistance form and firm, and that assistance is generally ineffective in large firms. Elsewhere, assisted jobs accumulate over a period of three years, but then are lost to policy at high rates.

Notes: . This paper analyzes 1954–1987 state manufacturing employment growth in 19 two-digit industries. Markets were found to be the strongest influence in 18 industries. Labor was the second strongest, followed by a threshold variable. Weaker influences were resources, taxes, and amenities. Regional values for the market, labor, and threshold variables corresponded well with regional employment change in the Manufacturing Belt and all other regions of the U.S.

Notes: . We develop an alternative specification of the regional portfolio diversification problem that explicitly incorporates important information on regional economic structure and avoids certain inconsistencies in the traditional specification with respect to what constitutes the choice set. We also implement improved econometric procedures for estimating the required parameters and provide an empirical example using 1987 data for the Colorado economy to illustrate the potential differences in sectoral allocations obtained when applying our alternative approach versus the traditional one.

Notes: . This study proposes, and finds evidence supporting, the hypothesis that restrictive residential land-use and minimum lot-size zoning are substitute ways of controlling the population intensity of future residential development. In addition, evidence is found linking externality, fiscal and exclusionary objectives to restrictive residential zoning.

Notes: . This paper examines the possibility of sustaining a collusive equilibrium in a standard location model. Drawing on recent developments in game theory, it is suggested that collusion is only feasible if market areas lie within a certain range. When market areas are large the threat of entry is likely to undermine any collusive agreement. In contrast when market areas are small, defection from the cartel is shown to be profitable. Thus collusion is shown to be feasible only when market areas and demand lie within certain bounds. More generally, this result appears to be consistent with the somewhat ambiguous empirical evidence which suggests that competitive pricing behavior is likely to prevail in periods of excessively high demand and during recessions.

Notes: . Associative memory techniques are drawn from the artificial intelligence literature, and have demonstrated considerable utility for parameter identification in dynamical systems. Previous turning point forecasts constructed by LeSage are compared to forecasts generated by associative memories and simple autoregressive models. Both the associative memories and the autoregressions perform as well or better than the more complicated econometric procedures described by LeSage, with the exception of West and Harrison's (1989) dynamic linear model specification. Extensions are suggested.

Notes: Book reviewed in this article: Trading Industries, Trading Regions, edited by Helzi Noponen, Julie Graham, and Ann R. Markusen. The New Social Economy: Reworking the Division of Labor, by Andrew Sayer and Richard Walker. Regional Economic Modeling: A Systematic Approach to Economic Forecasting and Policy Analysis, by George I. Treyz. International Futures: Choices in the Creation of a New World Order, by Barry B. Hughes. The Migration of Labor, by Oded Stark. Regional Economic Development: Canada's Search for Solutions, second edition, by Donald J. Savoie. Scarcity by Design: The Legacy of New York City's Housing Policies, by Peter D. Salins and Gerald C. S. Mildner. The Metropolis in Black and White: Place, Power, and Polarization, edited by George C. Galster and Edward W. Hill. The Changing Social Geography of Canadian Cities, edited by Larry S. Bourne and David F. Ley. 1993. Land and Labor in the Greek World, by Alison Burford. Visions and Strategies of European Integration: A North European Perspective, edited by Lars Lundqvist and Lars Olof Persson. Playing the Field: Why Sports Teams Move and Cities Fight to Keep Them, by Charles C. Euchner. Minor League Baseball and Local Economic Development, by Arthur T. Johnson.

Notes: . The performance of five criteria for identifying significant interregional labor market linkages is compared. The criteria suggest differential model specifications based on the implicit tradeoff between parsimony and specification bias. Models were specified using: Akaike's final prediction error; Schwarz's Bayesian information criterion; an input-output model; Aoki's time series algorithm; and a combined input-outputi/time series approach. Models of the changes in monthly employment for twelve industries in six regions in northeastern Utah were specified using each criterion. Models based on Schwarz's criterion and the input-output criterion were preferred to those based on other criteria.

Notes: . Models of the firm with costly labor turnover and models of migration with location-specific consumption amenities are two standard explanations of the co-existence of persistent wage differentials with extensive labor mobility. Labor turnover models postulate a worker quit function where the quit rate is inversely related to the regional wage differential in the steady state. We use amenity-consumption models of migration to show conditions under which this postulate is consistent with household utility maximization. Our model extends standard amenity-consumption analysis by making the value of amenities contingent on the “state” of the household. These household states are defined in terms of demographic, education, and health characteristics and are assumed to follow a Markov process.

Notes: . We consider a location and allocation game for two competitor firms, A and B, that each seek to locate p facilities in a network. A market is captured by a particular firm if that market's closest facility belongs to that firm rather than a competitor. The question is as follows: Firm A wants to locate its p facilities so that B, which enters also with p facilities after Firm A has located its facilities, will capture the minimum market value possible. That is, Firm A wishes to preempt Firm B in its bid to capture market share to the maximum extent possible. A model is presented that addresses this issue, together with solution methods and computing times.

Notes: . This paper departs from the human capital tradition in the migration literature by formalizing the market-specific information contained in wages along the lines suggested by Phelps's (1969) “island parable” of search. It allows us to incorporate the role of market wage variability as a source of information in individual migration decisions. Essentially wages are assumed to vary due to two types of sources: local and national. Individuals observe their current market wage but are uncertain about the source of variation in their wage level. An integral part of the expected utility comparison that migrants make then is evaluating the information content of their current market wage; how much of it is local and how much of it is common with other markets? Given this evaluation, what can they expect of wages at alternative markets; how precise is their expectation? A linear approximation to the expected utility comparison that migrants make is used to formulate a probit specification of the move or stay decision conditional on origin market and individual characteristics. The focus here is on quantifying the effects of the origin market acting through amenities and the share of market-specific wage variability as it affects forecasts of alternative wages and forecast precision. A subsample of employed males, not in school or in the military, from the National Longitudinal Survey of Youth (NLS) age 16 to 22 years is used for estimation. The empirical results are consistent with the theoretically predicted relationship between migration propensities and regional differences in the information content of wages. In addition, the results provide evidence that risk aversion deters migration given uncertainty, measured by forecast precision, about alternative market wage levels.

Notes: Book reviewed in this article: The Cosmo-Creative Society: Logistical Networks in a Dynamic Economy, edited by Åe E. Andersson, David F. Batten, Kiyoshi Kobayashi, and Kazuhiro Yoshikawa. Regional Advantage: Culture and Competition in Silicon Valley and Route 128, by Anna Lee Saxenian. Potentials and Bottlenecks in Spatial Development: Festschrift in Honor of Yasuhiko Oishi, edited by Hirotada Kohno and Peter Nijkamp. Diffusion and Use of Geographic Information Technologies, edited by Ian Masser and Harlan J. Onsrud. The Colonizer's Model of the World: Geographical Diffusionism and Eurocentric History, by James M. Blaut. Guangdong: Survey of a Province Undergoing Rapid Change, edited by Y. M. Yeung and David K. Y. Chu. Urban Development in the Muslim World, edited by Hooshang Amirahmadi and Salah S. El-Shakhs. The Lost Frontier: Water Diversion in the Growth and Destruction of Owens Valley Agriculture, by Robert A. Sauder. The Costs of Worker Dislocation, by Louis Jacobson, Robert LaLonde, and Daniel Sullivan. Foreign Direct Investment in the United States, by Jan Ondrich and Michael Wasylenko. Rural America and the Changing Structure of Manufacturing: Spatial Implications of New Technology and Organization, Conference Proceedings.

Notes: . We propose a mixed fixed and random coefficients framework for regional modeling. The framework allows the presence of both the region-specific effects and commonality of responses across regions. Bayes solutions for estimating parameters of interest and for generating predictions are derived. Within a Bayesian framework a predictive density approach to evaluate the impact of changes is suggested. We apply the methodology to evaluate the impact of new rate structures on Ontario regional demand for electricity.

Notes: . We discuss the distance to shopping in the context of three fundamental theories: The Optimal City Theory, the Central Business District Theory and a Cost-Benefit Theory. Each is described and estimated separately by econometric models. The three theories are combined in a final model using the expansion method. The final model, including all three theories, is based on enquiry data from 15 Danish towns.

Notes: . This paper examines medium-run and long-run equilibria in unbounded (circular) and bounded (linear) one-dimensional multifirm markets. A price-location adjustment model is outlined that dows simulation of the spatial equilibrium when these firms anticipate reactions from their nearest spatial rivals. Thus, the market equilibrium is derived from the interdependent but atomistic decisions of the competing firms and is not imposed by some outside observer or agency. Ail conjectures are exogenous; the three well-known price conjectures (Greenhut-Ohta, Hotelling-Smithies, and Losch) are highlighted; and the relevant comparative statics are provided.

Notes: . The location of a new facility in a competitive environment is investigated. It is assumed that customers patronize the facility with the highest utility value rather than the closest facility. Simulations show that the new approach yields a superior location in terms of market size captured. Sensitivity analyses of the problem parameters illustrate the sensitivity of the location and the sensitivity of the market size captured to the facility's quality.

Notes: . .The growth of health maintenance organizations (HMOs) commonly has been viewed as a “procompetitive” change in the structure of the health care delivery system. Because HMOs collect a prepaid fee from subscribers, they serve a dual role as insurers and providers of health care. While HMOs may have competed directly with conventional insurance plans, their effect in health care markets is potentially quite different. A multisector spatial equilibrium model, which incorporates the optimizing behavior of consumers, independent fee-for-service(FFS)providers, and a centralized HMO, is used to explore the effects of an exogenous shift in market structure away from FFS delivery toward the provision of seivices by the HMO. As more physicians are diverted from FFS practice to enter the HMO, both the HMO membership fee and prices in the FFS sector tend to rise. This pattern is consistent with empirical trends in the United States during the 1980s where, despite the rapid growth in HMOs and other forms of prepaid care, both FFS prices and HMO membership fees have risen sharply.

Notes: . This paper analyzes the implications of an exogenous shift in relative prices for an economy that suffers from urban unemployment, as well as uncertainty, in the agricultural sector. Among other things, we show that with agricultural uncertainty, an exogenous shift in relative prices will lower agricultural profit. This result is in sharp contrast with the conventional case of risk-neutrality or certainty where agricultural profit is unaffected by changes in the terms of trade.

Notes: Book reviewed in this article: Migration and Residential Mobility: Macro and Micro Approaches, by Martin Cadwallader Integrated Urban Models 2: New Research and Applications of Optimization and Dynamics, by Stephen H. Putman. Urban Public Finance in Developing Countries, by Roy W. Bahl and Johannes F. Linn. The Randstad A Research and Policy Laboratory, edited by Frans M. Dieleman and Sako Musterd. Jumpstart: The Economic Unification of Germany, by Gerlinde Sinn and Hans-Werner Sinn. 1993. (Translation, by Juli Irving-Lessmann Problems of Economic Transition: Regional Development in Central Europe, edited by Tibor Vasko. Regions Reconsidered: Economic Networks, Innovation, and Local Development in Industrialized Countries, edited by Edward Bergman, Gunther Maier, and Franz Tödtling. The Changing Role of Rural Communities in an Urbanizing World Saskatchewan 1961–90, by Jack C. Stabler, Margaret R. Olfert, and Murray Fulton. Restructuring Rural Saskatchewan: The Challenge of the 1990's, by Jack C. Stabler and Margaret R. Olfert. Housing Markets and Residential Mobility, edited by G. Thomas Kingsley and Margery Austin Turner. Spreadsheet Models for Urban and Regional Analysis, edited by Richard E. Klosterman, Richard K. Brail, and Earl G. Bossard. Microcomputer-Based Input-Output Modeling: Applications to Economic Development, edited by Daniel M. Otto and Thomas G. Johnson. Institutional Incentives and Sustainable Development: Infrastructure Policies in Perspective, by Elinor Ostrom, Larry Schroeder, and Susan Wynne. Preparing for the Twenty-First Century, by Paul Kennedy.

Notes: . This article examines how a metropolitan area's job growth affects its income distribution, using CPS data from 1979 to 1988. Metropolitan growth increases the poorest quintile's income by a greater percentage than for the average family. Metropolitan growth also increases the value of property owned by the richest quintiles. Economic development programs to increase local growth will have a net progressive effect if the cost per job created is low, and these costs are financed by personal taxes. But programs with a high cost per job, or financed by cutting welfare, will reduce the net income of the poorest quintile.

Notes: . During the last thirty years there has been much research effort in regional science devoted to modeling interactions over geographic space. Theoretical approaches for studying these phenomena have been modified considerably. This paper suggests a new modeling approach, based upon a general nested sigmoid neural network model. Its feasibility is illustrated in the context of modeling interregional telecommunication traffic in Austria, and its performance is evaluated in comparison with the classical regression approach of the gravity type. The application of this neural network approach may be viewed as a three-stage process. The first stage refers to the identification of an appropriate network from the family of two-layered feedforward networks with 3 input nodes, one layer of (sigmoidal) intermediate nodes and one (sigmoidal) output node (logistic activation function). There is no general procedure to address this problem. We solved this issue experimentally. The input-output dimensions have been chosen in order to make the comparison with the gravity model as close as possible. The second stage involves the estimation of the network parameters of the selected neural network model. This is performed via the adaptive setting of the network parameters (training, estimation) by means of the application of a least mean squared error goal and the error back propagating technique, a recursive learning procedure using a gradient search to minimize the error goal. Particular emphasis is laid on the sensitivity of the network performance to the choice of the initial network parameters, as well as on the problem of overfitting. The final stage of applying the neural network approach refers to the testing of the interregional teletraffic flows predicted. Prediction quality is analyzed by means of two performance measures, average relative variance and the coefficient of determination, as well as by the use of residual analysis. The analysis shows that the neural network model approach outperforms the classical regression approach to modeling telecommunication traffic in Austria.

Notes: . Assessing regional economic impacts of recreation trips is important to public agencies' decisions about using recreation as a rural development tool. Minimizing the total cost of recreation trip production implies that households will spatially distribute their purchases of inputs to trip production, including both trip-specific inputs and durable recreation equipment. A recreation site contributes to a region's economic growth through household purchases of trip inputs. The site's cost effects, price information effects, and recreation and retail agglomeration effects cause changes in household recreation purchases and ultimately generate regional economic impacts.

Notes: . This paper describes statistics for model criticism in spatial econometrics. The purpose of these statistics is to evaluate how well a chosen model fits the data and to identify influential cases and how they affect the aggregate picture. The paper reviews results in Martin (1992) for the regression model with correlated errors where the coefficients of the variance matrix are assumed either known or fixed. The problems of applying the statistics in spatial econometric modeling are discussed. An application is reported which considers diagnostics for the mean function and highlights cases that might influence estimates of the parameter of the error model. Different ways of assessing the influence of cases are also described.

Notes: . Recent research suggests that in nonmonocentric cities compensation for commutes takes the form of both lower housing prices and higher wages. This paper develops a random utility model that predicts the probability of an actor choosing to commute between each residence and job in a metropolitan area conditional on the observed location of housing units and job sites. The model allows commuting time, origin-specific amenities, land prices, destination-specific amenities and wages to influence actors' choices. We estimate the model using maximum likelihood and generalized least squares techniques and data on commuting between each of 38 origin and 15 destination jurisdictions in the Tokyo metropolitan area.The empirical results show that, all else equal, a one percent increase in commuting time reduces the probability that a route (origin-destination combination) will be chosen by almost five percent. Origin-specific amenities are not completely capitalized into land prices and destination-specific amenities are not completely capitalized into wages. Desirable residential amenities include school quality and a low ratio of day to night population. Desirable workplace amenities include a large share of white collar jobs and a high density of employment.

Notes: . This paper investigates the regional variations in the impact of technological change and in gains from consolidation among U.S. commercial banks. We estimate a multiproduct translog cost function with the appropriate regional dummy variables. Technological change, ray scale economies and scale biases in technological change are estimated for each region. Furthermore, pairwise expansion path economies between all the regions are calculated to evaluate the potential gains from interregional consolidation. In general Southwest banks had the worst and Southeast the best technological change. There is substantial disparity across regions. It also appears that technological change increased the efficient size in the Midwest and Southwest regions and reduced it in the West, Northeast and Southeast. Banks in all regions show ray economies of scale, affirming the need for larger banks if output mix remains constant. Finally, the results support takeover of regional banks by the Money Center banks but not vice-versa, and favor consolidation among regional banks. The biggest potential gains accrue from mergers of Southeast banks with either Midwest or Southwest banks and the least gains are derived from mergers between Midwest and Southwest banks.

Notes: Book reviewed in this article: The Slow Plague: A Geography of the AIDS Pandemic, by Peter Gould. Economic Adaptation: Alternatives for Nonmetropolitan Areas, edited by David L. BarMey. The Rebirth of Urban Democracy, by Jeffrey M. Berry, Kent E. Portney, and Ken Thomson. Economic Logistics: The Optimization of Spatial and Sectoral Resource, Production, and Distribution Systems, by Sten Thore. Geographic Information Systems, Spatial Modeling, and Policy Evaluation, edited by Manfred M. Fischer and Peter Nijkamp. Marketing Places: Attracting Investment, Industry and Tourism to Cities, States, and Nations, by Philip Kotler, Donald H. Haider, and Irving Rein. The Language of Planning: Essays on the Origins and Ends of American Planning Thought, by Albert Z. Guttenberg. Economic Aspects of German Unification: National and International Perspectives, edited by Paul J.J. Welfens. Sustainable Development and Urban Form, edited by Michael Breheny. Japanese Cities in the World Economy, edited by Kuniko Fujita and Richard Child Hill.

Notes: . This paper presents the derivations of several new algorithms for the computation of maximum likelihood estimates of the parameters of a very general form of the gravity model. The algorithms are then compared with previously available algorithms including GLIM and that given in Sen (1986). One of the new algorithms emerges as far superior in just about every way to its competitors. In particular, it is usually much more than an order of magnitude faster than the GLIM procedure and that given in Sen (1986). It is also not substantially affected by pitfalls such as multicollinearity and (unlike the GLIM procedure) is capable of comfortably handling large O-D matrices.

Notes: . Migrants are generally assumed to gather specific information about the destination primarily through physical contact, or through family, friends, and acquaintances. In this paper, I propose an additional source of information: similarities between origin and destination labor markets. Data from the 1983–1987 PSID are used in a two-stage least squares model of postmove search duration in the U.S. Rural-to-urban migrants (except for rural Southerners) exhibit significantly lower search duration than other groups, controlling for productivity-related characteristics and postmove earnings. In addition, employment growth differences between origin and destination are found to be better predictors of search duration than are differences in average earnings. This research is among the first to integrate search-theoretics and conventional migration models to explain postmove economic outcomes.

Notes: This paper reports the first phase of a major study into the linkages between technology and strategy, with particular reference to smaller firms. As a preliminary step, a wide review of relevant literature was undertaken.Two main strands of knowledge have been identified. First, a number of high profile issues have dominated the field of technology management starting with Schumpeter's ‘creative destruction’. This seminal work has been refined, notably by Pavitt and Porter, culminating in the view that technology has become one of the principal determinants of competition. Second, a number of models were examined that assess development of technology within the firm over time.The principal implication for R&D managers is the authors' conclusion that the various constructs must be used pro-actively in formulating technology strategy, thus providing a basis for better assessing acquisitions and disposals of technology-intensive operations.

Notes: In a previous paper, we have argued that technological communities provide a useful level of analysis to examine information and knowledge flows among researchers. Based on an international survey of more than 700 scientists and engineers engaged in the development of neural network technology, the information and knowledge exchange patterns of two important subsets of that particular technological community, i.e. academic researchers and industrial researchers, were explored. The analyses demonstrated that industrial researchers, even if they are more commercially oriented than their colleagues in academia, recognise the professional community as a relevant locus of information and knowledge. An obvious methodological need exists, though, to generalize beyond the neural networks community. This is the aim of the present paper. Based on questionnaire surveys of researchers belonging to two other technological communities, the empirical results from the neural network community study are replicated and, to a large extent, validated.

Notes: There is a widespread belief in the business community that firms can rely on the market for buying and selling technological opportunities. The argument is: with so much technology development going on in the world, ‘there must be somebody somewhere who has the technology we need.’ According to this belief, acquiring new technology just boils down to finding the supplier, possibly with the help of a specialized intermediary. Several large firms have indeed developed ambitious mechanisms for acquiring the needed technological know-how as they proceed to make and market a new product.We contend that this concept of the technology transfer process is erroneous, as it conflicts with actual practice. The very high transaction costs entailed leave considerable room for opportunistic behavior and are more likely to occur when the parties do not know each other. An effective way to reduce transaction costs, therefore, is to limit technology transfers to the firm's partners, i.e. organizations with which the firm has already interacted in the past. Our research provides evidence that successful technology transfers typically take place between suppliers and buyers who had business relationships before considering a technology agreement. In addition, we report findings that companies using intermediaries (technological opportunities catalogues, databases, fairs, etc.) have been disappointed in their attempts to find new technologies from unknown sources.Because of the high risk of opportunistic behavior, it is practically impossible to assess the value of a technology without knowing who sells it. Similarly, the technology transfer capabilities of a company are difficult to appraise without prior knowledge through business interaction. To a certain extent, it may be better to buy any technology from a partner that one knows well than to buy a supposedly good technology from a firm with which one has had no experience. To put it bluntly: the identity of the partner may actually matter more than the technology being traded!Consequently, the relevant framework for technology transfer is built on a ‘network concept’ rather than the ‘market concept’. Firms wishing to acquire new technology should turn first to their network of trusted business partners, looking for available technological opportunities instead of trying to buy technology from unrelated organizations.

Notes: Many firms in the transitionary economies of Central and Eastern Europe are searching for Western partners to assist them with technological development. They are particularly interested in joint ventures, strategic alliances, and management contracts. They feel that rapid infusion of new technology is the fastest way to economic recovery.The problem is that they do not understand how their level of technology compares to the technology level in Western economies. A significant technology gap exists. This problem is further complicated because managers from transitionary economies do not have appropriate technology assessment processes to assess internal as well as external technologies. This paper reviews this problem and offers some insights on it.

Notes: A method was developed to quantify the impacts of research. The method is able to identify indirect impacts of research, and the pathways through which they are disseminated. A fully connected network is constructed whose nodes represent research, technology, and mission areas. The total impact of a given research node on any other node is the sum of the impacts (link value products) along every path in the network, and includes research-research, research-technology, and technology-research impacts. A pilot study was performed using a taxonomy of research and development nodes, with the raw input data (the link values) obtained from a survey of experts. An algorithm processed the data to provide total impact results, which are presented here.

Notes: RESPRO is a computer-based planning tool for new-product chemical research, particularly in the pharmaceutical and agro-chemical industries. It helps the research manager to make quantitative judgements about the effects of different effort allocations to projects at the stage when large numbers of formulations are being tested. These then serve as the basis for estimating the profitability of any given allocation plan, and for adjusting a given plan to make it more profitable. The paper introduces RESPRO and sets it in the context of other similar procedures.

Notes: The purpose of this paper is to build up a theoretical framework to study university-industry interorganisational relations (U-1 IOR) and formulate hypotheses which will be tested on empirical data in a future research phase. Then, a taxonomy for university-industy relationships is proposed. Finally, the problem of evaluating relationships between universities and industries by defining the concept of ‘relationship performance’ is addressed.

Notes: Dynamic changes within global markets are creating a need for different strategies for firms in the pursuit of competitive advantage. International technology alliances are one mode of organising the acquisition of competitive technologies which is especially important in technology-intensive industries. However, managers have an especially difficult challenge when trying to deal with problems of high technical risk, frequent changes in technologies, different cultural and managerial styles and perspectives. This article addresses these issues as it examines the planning and implementation of the international technology alliance between Rover and Honda, during the past fourteen years. By most criteria used, this alliance was highly successful, and the article discusses not only the areas of successful technical impact which the alliance had on these companies, but also the insights learned by Rover from the management process of the alliance. It also develops a framework of issues which managers can use to implement and manage international technology alliances.

Notes: For a number of years, pharmaceutical companies have been departing from a tradition of strict vertical integration, looking to external sources for at least some of their novel technology and products. The aim of this study was to determine whether (1) this is a long term, industry-wide trend, or (2) merely a temporary or local response to acquire the technical capabilities of the biotechnology revolution of the 1970's, after which, with the new generation of technology in-house, they will revert to primarily in-house innovation. Analysis of secondary data on a representative sample of the fifteen largest drug companies in the United States, the United Kingdom, Germany and Switzerland indicated that between 1977 and 1987, these pharmaceutical companies increased their external R&D alliances nearly six-fold on average. A large and growing proportion of pharmaceutical companies’ R&D alliances are formed with biotechnology firms which have proprietary technology, due to financial and innovative pressures. Far from being temporary, this resort to external sources of technology in the pharmaceutical industry follows the trends of the wider industrial world towards functional specialization. Thus, biotechnology companies are increasingly taking on the role of suppliers of innovation.

Notes: Skills shortages and training problems are forgotten by many companies when they adopt new technology. 52 engineering firms in a ‘traditional’ industry in a single local labour market were interviewed to examine their attitudes to new technology and the skills and training implications of technology adoption. Skills and training issues were often forgotten or misjudged during the new technology appraisal process. It was these same areas which created most problems for many companies after adoption. Misjudgements concerning the level of labour force flexibility and training requirements for staff often created problems after the adoption of new technology. Skills shortages for adopting firms are most acute at the skilled level, this predominantly concerns the ‘local labour market'. Most firms adopted a short term response to skills shortages. Relatively low utilisation of policy initiatives and ‘formal’ avenues of assistance prior to new technology adoption were also identified.

Notes: Evidence indicates that Japanese Multinational Enterprises (MNEs) have established a large number of R&D labs outside of Japan in recent years. It is suggested that these units play particular roles in global-innovation strategies, which are themselves a key element in global competition. The first role played by such overseas units is to provide basic research inputs, that help the Japanese parent companies to derive the basis for a new generation of products. It appears that this role is especially prominent in Japanese MNEs, who are notably responsive to the high-quality science-base in certain countries. The second role of overseas R&D in global-innovation strategies is to develop specific variants of new products that fully respond to distinctive consumer needs, and production conditions, in important national (or regional, e.g. European) markets.

Notes: With technology gaining greater recognition as a key factor in the economic performance of a country, foresight studies to identify emerging technologies get more attention. In a lot of countries foresight studies are carried out in order to target national resources to better improve economic competitiveness. This article describes foresight studies done in the Netherlands. Started as an experiment by the Ministry of Economic Affairs in 1989 they are now an integral part of the methods for determining technology policy in the Netherlands.The ministry defined three objectives for the foresight studies: (a) they must generate information for strategic technology policy; (b) they have to provide SME's with advance information about the possibilities for application of new technologies; (c) they have to stimulate the creation of networks between actors in industry, research and the educational system who are involved in a defined technology area. From six studies done so far (adhesives, chipcards, mecha-tronics, matrix composites, signal processing and separation technology) the author shows how these objectives were met, which bottlenecks and which opportunities were identified and which activities were set up to exploit the situation in a certain technology area. She concludes that it is essential for the success of the foresight studies to bring together different stakeholders, to create consensus between them on future directions and to commit them to the results.

Notes: Within the context of linkage between universities and the productive sector in Mexico, this article seeks to answer the following questions: i) which are the principal motivations for researchers at universities to carry out technological research and to seek ties to industry? ii) which are the main motivations for industrial entrepreneurs to establish cooperation with universities to develop technology? and iii) which are the main barriers to a healthy relationship between both institutions?Our answers are based on data from two sources: (a) an exploratory survey of 31 researchers at the National University of Mexico and of 28 Mexican entrepreneurs, half of whom had previous experience in collaborative projects; and, (b) a subsequent panel discussion among questionnaire respondents designed to elicit in-depth qualitative data concerning motivations and obstacles to university-industry cooperation.The authors present the factors identified in the study as key elements in the development of liaisons between the two sectors in Latin American countries, and argue the need to rethink our conceptions of motivations and barriers within a theoretical framework of interinstitutional communications and organizational cultural change.

Notes: AbstractThe paper focuses on several research questions: How do the firms differ in terms of their strategic objectives for foreign acquisitions? What are the determinants of ‘success’ of acquisition? What are the differences between the American and German firms in terms of their acquisition strategies and successes?Our special interest was to get a closer look into the technological motive of the foreign acquisitions. This made a two-step procedure necessary. A first survey of 86 firms had to identify those acquisitions which were motivated by technological interests through a questionnaire. Findings: There are four classes of companies with different motives for acquisitions: Market oriented entrepreneurs, Short-term profit seekers, Technological acquirers, Preemptive market protectors.The second survey investigated the process and the results of acquisitions with a special view on the role of research and development through 60 interviews in 30 acquisition cases in both acquiring and acquired units. Findings: A network of variables explains the success. The most important are context variables (uncertainty, cultural differences), size of both firms, low degree of formalization, expertise, and lack of conflicts about technological philosophy.

Notes: AbstractIn this paper we have analysed the innovation processes occurring in several cross-industry technology partnerships in order to suggest some key managerial issues pertaining to the effectiveness of these increasingly popular initiatives. Our general proposition, based on an extensive literature review and clinical research, is that the managerial hurdles in partnerships frequently offset, and in some cases eliminate, the expected innovation advantages. We submit that there is a fundamental tension between the dynamics of innovation and the logic of partnering. The extent of the tension, however, depends on the nature of the innovation project and on the characteristics of the partnership. Thus we recommend that managers involved in the formation of joint-R&D agreements should carry out an innovation-partnering assessment to design an appropriate management structure that would minimise the ‘tension’. Lastly, we suggest some ingredients for carrying out such an assessment, and directions for further research.Alliances seem to be today's answer to most management challenges. As recent surveys show, companies all over the world are forming partnerships to alleviate difficulties met in nearly every business activity —design, manufacturing, distribution, service… (e.g. Hergert & Morris, 1987; Urban, 1989), The popularity of such strategic initiatives in the 1980's has led to a dramatic increase in the number as well as in the forms of alliances (Hagedoorn and Schakenraad, 1990).

Notes: AbstractThe aim of the paper is to identify a number of different patterns of international R&D cooperation during the initial phases of the product development process. This is a case-study of new product development based on the work of the Olivetti Multimedia Laboratory in Pisa, how it set up its own pattern of multinational collaboration in the idea generation and pre-competitive phase; how, in turn, this collaboration led to new R&D collaboration agreements to satisfy specific problem-solving requirements connected with the confirmation of a dominant design, though limited to a certain extent by previous agreements between Olivetti and other firms; the role played by marketing in the choice of alternative solutions. Finally, in the product implementation phase, the emergence of a defined technological paradigm leads to a highly competitive environment, where R&D collaboration is increasingly directed towards multifunctional requirements (R&D, manufacturing, marketing) within a strategic network of alliances that involves large sized companies, start-up firms, industrial and university research units.

Notes: Abstract Strategic behaviour has been defined as managing environmental risks and matching organisational capabilities with the opportunities offered by the environment (e.g. Hofer & Schendel (1978)). One possible theoretical framework for analysing strategies of a firm is the Miles & Snow typology (Miles & Snow, 1978). It has received considerable attention and has been tested empirically with respect to business strategy in various industries (Snow & Hrebiniak, 1980; Hambrick, 1983) as well as marketing strategy (McDaniel & Kolari, 1987).In this paper we attempt to apply the Miles & Snow typology to technology strategy and to relate technology strategies to the perception of environment and project risks. Thus, weEmpirical data from companies involved in biotechnology is used to study some key questions.

Notes: AbstractMuch attention has been paid in the literature to methods for the evaluation and selection of R&D projects. The evidence is that these are less extensively used than might be expected. More recently, an approach based on Option Pricing Theory has been suggested as one which is likely to be of considerable value to management. In this paper the method is described, the information which is required is identified and the way in which it might be applied in practice is discussed.

Notes: AbstractEnvironmental imperatives are seen by many business leaders to represent a major issue for the 1990's and beyond. The debate about the environmental sustainability of economic activity has important implications for the development of business and places considerable emphasis on the need for planned corporate change. The strategic significance of the environment is particularly critical to R&D as this is characterised by long planning horizons and provides the setting for the development of future products and processes.The purpose of this paper is to examine the connections between environmental imperatives, strategic change and R&D management. To this end the paper reviews the strategic nature of environmental pressures on business. From this base, consideration is given to the responses required by business, in meeting these pressures. The paper concludes by suggesting that the application of management techniques in concert with organisational change is needed for R&D management to build environmental considerations effectively into innovation. These suggestions can be used to gauge how far individual businesses have developed the systems and structures to enable them to move towards sustainability. The implication of the paper is that R&D management will not only need to apply new management techniques but will have to play a leading role in innovative organisational structures in order to fulfil the full potential of environmentally sensitive products and processes.

Notes: Screening criteria for selecting energy R& D projects are discussed and applied to a dozen projects currently underway. The impact on energy balance and environmental quality cannot be seen as the only, nor even the dominating, attribute. In the cases studied, the R&D portfolio seeks to achieve a balance between these factors and the other criteria related to technology and the market. In the event the development work is carried out at an independent R&D centre, it will be necessary to have a committed industrial partner from an early stage onwards in order to ensure objectivity, market perception and provide the best chance of commercialisation.

Notes: Drug regulation and pricing have put strong pressure on the cost-benefit ratio of the innovative pharmaceutical industry. Therefore a study has been conducted in fourteen large and medium sized companies to determine some important organisational and managerial factors influencing success in pharmaceutical innovation. The study consists of structured interviews with Research Directors and questionnaires, submitted to the heads of the different research departments. The following conclusions are tentatively drawn. Firstly, the data suggest that a threshold investment of approximately $150–200 million is needed to maintain the innovative potential. Above approximately $750 million, ‘economies of scale’ seem to appear in pharmaceutical innovation. Secondly, an incremental strategy aimed at reducing the duration of the development process seems to be more successful than a radical strategy which lays more emphasis on discovery. Thirdly, pure play pharmaceuticals seem to be more successful than the pharmaceutical divisions of conglomerates. Management control, especially the way in which reorganisations are performed, is assessed more positively in pure play pharmaceuticals. Fourthly, the greater emphasis on human resources management in Anglo-American companies, in comparison to continental European companies, seems to be an important explanatory factor for their greater success on the pharmaceutical market.

Notes: This paper discusses the factors which determine the human resource reputations of science-based organisations. Reputation, in this context, refers to the extent to which scientists regard the department in which they work as a good employer, and implicitly, a good place to practise science. As a consequence, this study is concerned with internal rather than external reputation. The R&D departments of ten science-based organisations employing approximately 1500 scientists were included in the study. The sample of 402 respondents was representative, in terms of age, sex, qualifications and experience, of the population of scientists in the organizations included in the research. All employees were educated to at least the level of a Bachelor of Science degree (BSc) and in many cases had obtained a higher degree, Master of Science (7.0%), or Doctor of Philosophy (35.6%). The perceptions of employees are reported; it was beyond the scope of the research to examine the managerial views on reputation.

Notes: This article describes a joint project conducted from 1991 until 1993 by the Japanese National Institute of Science and Technology Policy (NISTEP) and the German Fraunhofer institute for Systems and Innovation Research (ISI). Some first outcomes, and different alternatives on how to use the data for trend interpretation and priority setting, are described.The Japanese Delphi survey is conducted every five years and was first undertaken in 1971. In 1992, NISTEP and ISI agreed on a joint project. About 3000 Japanese experts were asked to answer more than 1000 questions based on 16 different technological areas. With financial aid from the Federal German Ministry of Research and Technology (BMFT) the Japanese fifth Delphi survey was replicated in Germany. The Japanese questions were translated and more than 1000 German experts responded to the questionnaires and judged the possible technological development within the next 20 to 30 years. The aim of this joint project is to compare the Japanese and the German answers in order to analyse possible differences and to understand the cultural influences on technology assessment.

Notes: Synthetic diamond technology appears to have the capability of significantly changing the future technological landscape. Accordingly, The Institute for the Management of Technology regards it as a ‘marker’ technology. This paper suggests that there is a need to review expectations concerning synthetic diamond developments. Technology analysis is used as a method to understand and communicate the expectations. The history trends and applications are presented. Two challenges are revealed: First, High Pressure and High Temperature is being challenged by Chemical Vapour Deposition as the dominant manufacturing technology, suggesting that the latter should be monitored for breakthroughs. Second, the distinction between synthetic and natural gems is becoming harder to determine. This threat to the gem industry, in combination with the expanding industrial use, suggests that efforts should be pursued to establish the uniqueness of natural gems and to prevent the name ‘diamond’ from being ubiquitously used.

Notes: This paper describes the use of hazard rate models for assessing emerging technologies. It suggests that on a global scale the decisions of researchers, in terms of their entrance, continuance, and exit from a field, can serve as an indicator of the rate of progress in the emergence of a new technology. The approach is demonstrated using the literature on magnetic bubble memory technology as a source of data to determine the contribution-spans of researchers. Survival and hazard functions are estimated based upon the experience of more than seventeen-hundred researchers contributing to the field over two decades.The author is indebted to Professor Raghu Garud (New York University) and Dr. Koenraad Debackere (Gent University) for their help in developing this avenue of research, and Professors Thomas Allen and Edward Roberts (MIT) for their support and encouragement.

Notes: AbstractThe allocation of R&D resource in a multi-business organisation is often based more on current operating performance than on the relative potential for technological development of the businesses. The approach suggested in this paper attempts to overcome these problems by linking R&D allocation very closely to business strategy. The two key concepts are technology leverage, i.e. the extent to which technology can change the business environment in an industry to yield competitive advantage, and business leverage i.e. the current competitive strength of an individual business within an industry. Where technology leverage is weak, competitive advantage will be mainly dependent on factors other than R&D and it is suggested that levels of R&D effort at or below 1 % of turnover are appropriate. Where technology leverage is strong, R&D can be effective in maintaining strong business leverage by achieving technology mastery or in transforming a weak business position by creating a technological discontinuity. R&D intensities ranging from 3 to 15 or more % of turnover are thought to be appropriate in these cases. This framework can be used for policy debates on R&D allocation, for example whether the R&D allocation is appropriate for the business strategy or whether R&D could spearhead a more expansionist business strategy. The framework has been successfully used in ICI Chemicals and Polymers Limited during the annual R&D budget process.

Notes: This paper presents a contemporary survey and synthesis of research on the regional dimensions of technology and competitiveness and explores ways in which technological change has influenced industrial restructuring in U.S. regions. Neoclassical models of regional growth are judged to be seriously wanting in their treatment of technological change. Industrial organization theories such as product/profit cycles, best-practice firms, and flexible specialization have proven to be more illuminating. However, the task remains to integrate technology as a core element in a geography of production and regional economic change that includes both global strategic decision-making of companies and the viability of plants in particular regional settings. Although the federal government as sponsor and procurer of technology has contributed significantly to regional industrial restructuring, the prospects for state and local governments to facilitate technological change appear to be very limited.

Notes: A case study of the Hong Kong watch industry demonstrates the adaptive flexibility of labor-intensive industrial clusters. The study describes the evolution of industry in Hong Kong, and highlights the unique attributes of the country's economic history which have influenced the structure of production systems in the country. Focusing on the role of global competition, the case study identifies the constraints posed by a labor-intensive flexible production system in the face of continuous technological change in the industry.

Notes: There is little consensus in the development literature on whether it is supply explanations such as competitiveness levels, or, the external demand structure which drive the link between exports and economic growth. This paper attempts to reconcile the polarization of the aforementioned viewpoints by examining the effects of both world demand and a country's competitiveness in exports on the relationship between export growth and economic growth. The results indicate that only developing countries which are highly competitive and which also face relatively favorable external demand for their exports experience above-average growth. Weak external demand reduces the positive effects of exports on growth substantially but may be offset by high levels of competitiveness in trade. The results imply that both regional and Third World growth studies on the link between exports and economic growth would profit more from integrating both supply as well as external demand explanations rather than succumb to one of the two viewpoints.

Notes: Institutions matter to economic development—particularly to the process of economic transformation. New technologies and new ways of organizing economic activity do not emerge in a vacuum, but bear the imprint of institutional arrangements. Economic transformation thus entails institutional adaptation as well as technological change—the emergence of new ways of organizing production or production systems and new sets of social and economic relationships which provide the institutional context for economic growth and development. Just as importantly, new institutional arrangements do not emerge tabula rasa, but reflect the legacy of old social and institutional forms. Given particular social and institutional legacies, different societies adapt differently to economic transformation. This article employs a theoretically-informed comparative examination of postwar Japanese capitalism to explore the critical role played by institutions in the process of economic transformation.