Knowledge flow across inter-firm networks: the influence of network resources, spatial proximity, and firm size

The objective of this paper is to analyze the characteristics and nature of the networks firms utilize to access knowledge and facilitate innovation. The paper draws on the notion of network resources, distinguishing two types: social capital – consisting of the social relations and networks held by individuals; and network capital – consisting of the strategic and calculative relations and networks held by firms. The methodological approach consists of a quantitative analysis of data from a survey of firms operating in knowledge-intensive sectors of activity. The key findings include: social capital investment is more prevalent among firms frequently interacting with actors from within their own region; social capital investment is related to the size of firms; firm size plays a role in knowledge network patterns; and network dynamism is an important source of innovation. Overall, firms investing more in the development of their inter-firm and other external knowledge networks enjoy higher levels of innovation. It is suggested that an over-reliance on social capital forms of network resource investment may hinder the capability of firms to manage their knowledge networks. It is concluded that the link between a dynamic inter-firm network environment and innovation provides an alternative thesis to that advocating the advantage of network stability

Network Investment and Competition with Access-to-Bypass

This paper examines firms' incentive to make irreversible investments under an open access policy with stochastically growing demand. Using a simple model, we derive an access-to-bypass equilibrium. Analysis of the equilibrium confirms that the introduction of competition in network industries makes a firm's incentive to make investments greater than those of a monopolist. We then show that a change in access charges induces a trade-off in social welfare. That is, a decrease in the access charge expands a social benefit flow in the access duopoly, and deters not only the introduction of a new network facility, but also a positive network externality generated by the construction of an additional bypass network. The feasibility of the socially optimal investment timing is then discussedOpen access policy, Investment, Real options, Network facility, Access charge

Adaptive Network Dynamics and Evolution of Leadership in Collective Migration

The evolution of leadership in migratory populations depends not only on costs and benefits of leadership investments but also on the opportunities for individuals to rely on cues from others through social interactions. We derive an analytically tractable adaptive dynamic network model of collective migration with fast timescale migration dynamics and slow timescale adaptive dynamics of individual leadership investment and social interaction. For large populations, our analysis of bifurcations with respect to investment cost explains the observed hysteretic effect associated with recovery of migration in fragmented environments. Further, we show a minimum connectivity threshold above which there is evolutionary branching into leader and follower populations. For small populations, we show how the topology of the underlying social interaction network influences the emergence and location of leaders in the adaptive system. Our model and analysis can describe other adaptive network dynamics involving collective tracking or collective learning of a noisy, unknown signal, and likewise can inform the design of robotic networks where agents use decentralized strategies that balance direct environmental measurements with agent interactions.Comment: Submitted to Physica D: Nonlinear Phenomen

Economics of Road Network Ownership

This paper seeks to understand the economic impact of centralized and decentralized ownership structures and their corresponding pricing and investment strategies on transportation network performance and social welfare for travelers. In a decentralized network economic system, roads are owned by many agencies or companies that are responsible for pricing and investment strategies. The motivation of this study is two-fold. First, the question of which ownership structure, or industrial organization, is optimal for transportation networks has yet to be resolved. Despite several books devoted to this research issue, quantitative methods that translate ownership-related policy variables into short- and long-run network performance are lacking. Second, the U.S. and many other countries have recently seen a slowly but steadily increasing popularity of road pricing as an alternative to traditional fuel taxes. Not only is the private sector encouraged to finance new roads, this transition in revenue mechanism also makes it possible for lower-level government agencies and smaller jurisdictions to participate in network pricing and investment practice. The issue of optimal ownership is no longer a purely theoretical debate, but bears practical importance. This research adopts an agent-based simulator of network dynamics to explore the implications of centralized and decentralized ownership on mobility and social welfare, as well as potential financial issues and regulatory needs. Components of the simulator: the travel demand model, cost functions, and key variables of pricing and investment strategies, are empirically estimated and validated. Results suggest that road network is a market with imperfect competition. While there is a significant performance lag between the optimal strategy and the current network financing practice in the U.S. (characterized by centralized control, fuel taxes, and budget-balancing investment), a completely decentralized network suffers from issues such as higher-than-optimal tolls and over-investment. For the decentralized ownership structure, appropriate regulation on pricing and investment practices is necessary. Further analysis based on simulation comparisons suggests that with appropriate price regulation, a decentralized road economy consisting of profit-seeking road owners could outperform the existing centralized control, achieve net social benefits close to the theoretical optimum, and distribute a high percentage of welfare gains to travelers. Decentralized control is especially valuable in rapidly changing environments because it promptly responds to travel demand. These results seem to favor the idea of privatizing or decentralizing road ownership on congested networks. Further tests on real-world transportation networks are necessary and should make an interesting future study.Network economics, Modeling network dynamics, Road pricing, Transportation financing, Privatization.

Social networks among indigenous peoples in Mexico

This paper examines the extent to which social networks among indigenous peoples have a significant effect on a variety of human capital investment and economic activities, such as school attendance and work among teenage boys and girls, and migration, welfare participation, employment status, occupation and sector of employment among adult males and females. The analysis uses data from the 10 percent population sample of the 2000 Population and Housing Census of Mexico and an empirical strategy that allows taking into account the role of municipality and language group fixed effects. The authors confirm empirically that social network effects play an important role in the economic decisions of indigenous people, especially in rural areas. The analysis also provides evidence that better access to basic services, such as water and electricity, increases the size and strength of network effects in rural areas.Population Policies,Access to Finance,Anthropology,Labor Policies,Housing&Human Habitats

Social Overhead Capital Development and Geographical Concentration

In recent economic geography, it is emphasized that the effect of cost decreasing in transportation on agglomeration is nonlinear. It is said that the influence of traffic infrastructure investment and the change in transportation cost on urban agglomeration does not appear until the cost is below a certain amount, and that once agglomeration arises that effect would be kept with higher probability. In theoretical models such as Krugman (1991) and Fujita, Krugman and Venables (1999), multiple equilibria and path dependence are emphasized, as well as non linearity. Those models are intuitive, but it is hard to have a statistical analysis because of the non linearity. About the macroeconomic effect of social overhead capital investment, starting from the analysis by Aschauer (1985, 1989), a lot of empirical research has been done on the productivity effect of social capital. For example, we have Asako et al. (1994), Mitsui and Ohta (1995). Moreover, Roback (1982) uses the Hedonic approach to find the effect of amenity-based social overhead capital (related to waste disposal plants, or sewage facilities), followed by Mitsui and Hayashi (2001) for a Japanese case. In these Japanese studies, they are only concerned about the topic about inefficiency of the social overhead capital distribution but not about theoretical progress in urban economics. If Krugmans model is true, however, there is a possibility that rural traffic infrastructure investment for the purpose of redistribution will experience both a decline in rural areas and agglomeration into urban areas. In the following, we will examine general theory about how we should observe the effect of traffic network provision in section II. We will estimate a market potential function and an index with which the geographical concentration degree is measured, and see how the agglomeration degree has changed historically. In section II we will conduct analysis through using prefecture data and municipal data, particularly in the Kyushu district 2 .capital development, potential function, geographical concentration degree, Kyushu district, Japan, Public Policy, network effect

Methods of investment management in the Russian electricity transmission industry

The paper surveys the methods of investment management in the Russian electricity transmission industry: state regulation and corporate planning of investment activity. The analysis of these two methods highlights their features, advantages and disadvantages. The investigation of the forecasting and investment decision process is given with regard to the electricity industry restructuring. The algorithm of interests’ alignment between the state and the electricity network company is provided through the mechanism of investment management. The analysis of the methods of investment management in electricity transmission in Russia shows that corporate planning of investment activity coexists on a parallel basis with state regulation of investment activity. Corporate planning conforms to the interests of the electricity network company. Elaboration of efficient investment programs is associated with the lack of reliable development forecasts, regional specific features, tight deadlines for preparing the investment programs, centralized investment decision-making. A French approach for organizing the state forecasting system in Russia is also presented in the research and could be of use in Russia. Corporate planning of investment activity in France defers the goals of state regulation due to the fact that investment decisions are eventually made by the Regulator, which manages the electricity transmission company. Investment decision process is characterized by a larger degree of social responsibility taken by the electricity network company when making an investment decision. For that a special attention is drawn to public relations, whose interests are taken into account at the initial stage of investment process.peer-reviewe

Social Network Capital and Academic Careers

Social Network Capital and Academic Careers: The Case of a College of Agriculture ABSTRACT The relationship between economic performance and various forms of capital anchors a significant portion of mainstream economic theory and applied economics. Human, physical and financial capital represent important factors in the production of goods and services. The label “capital” implies characteristics such as investment, accumulation, maintenance, depreciation, and transfer. Recently, social capital or social network capital (SNC) has received increased scholarly attention in the literature of sociology, business, and economics. Limited analysis, however, has been directed at the role of SNC in the academy. We hypothesize that academic success at the professorial level is determined by the stock of human (HC) and SNC and the value flows emerging from these stocks. We view SNC as a complement to HC, increasing the productivity of HC while holding all other factors constant. An analysis of SNC’s importance to academic career success should interest the academy as well as other large organizations (i.e. research laboratories, government agencies) with similar structures and incentive systems.Social capital, academic networks, human capital, Institutional and Behavioral Economics, Labor and Human Capital, Teaching/Communication/Extension/Profession,

Social Protection and Human Capital: Test of a Hypothesis

The claim of this paper is to investigate the relationship between social protection and the investment in human capital. The idea is that investment in human capital is risky and therefore, as a prerequisite, needs some kind of protection as insurance. Investments in specific human capital, in particular, are very risky and require a special protection so as not to be avoided. An attempt is made to study the micro foundations of this relationship in depth which afterwards moves on to a macroeconomic analysis. Here a strong link is found between the levels and types of social protection and the skill profiles of a country (as predicted). The clusters we find seem to be in accordance with existing literature on ‘varieties of capitalism’. The last stage of this work is a hypothesis in the opposite direction of the nexus: how the choices of workers and firms influence the institutional framework (endogeneity of institutions of the welfare state). The result of this network of relations seems to be the formation of several organizational equilibria (and not a global convergence) in which institutions shape agents’ behaviour and, at the same time, agents, through their policy preferences, reinforce existing institutional infrastructures.