Diffusion of mobile phones in Portugal: unexpected success?

This paper begins with a somewhat paradoxical situation: Portugal is one of the less innovative countries within the European Union by most innovation indicators but, simultaneously, it is a leading country in the diffusion of mobile phones. The remarkable evolution of the mobile telecommunications sector over the last 15 years turns the issue a little more intriguing. This paper addresses the diffusion of mobile phones in Portugal and focuses particularly on the take-off stage, which signalled a sudden change in the pattern of diffusion. The introduction of an innovation – prepaid cards – explains most of the change in the diffusion curve occurred around 1996 and the subsequent increase in the penetration rate. Prior known research has not considered pre-paid cards an important determinant of mobile phone diffusion, but pre-paid services had an enormous impact on the rate of adoption of mobile phones in many countries and it is the major take-off determinant of mobile phone diffusion in Portugal. The time lag between the launching of this innovation in Portugal and its adoption by other EU countries explains why Portugal not just caught up with the EU average mobile phone penetration rate around 1996, but moved ahead of it from then on

The Monetary Transmission Mechanism for a Small Open Economy in a Monetary Union

This paper develops a model of a small open economy integrated in a monetary union. The model incorporates the standard nominal and real frictions in the literature. The parameters of the model are calibrated to the Portuguese data and the effects of the standard monetary policy shock are studied.

In search of excellence - Innovation contests to foster innovation and entrepreneurship in Portugal

Numerous initiatives of different nature have taken place in Portugal over the recent years aiming at raising consciousness of the importance and advantages of innovation and entrepreneurship, persuading businesspeople to place innovation as strategic intent and encouraging would-be entrepreneurs to come forward with novel businesses ideas. Innovation contests are but one of such initiatives. From sporadic events before 2000, the phenomenon gained unprecedented dimension and growing sophistication at several levels, including the number of innovation contests launched annually, number and kind of organizations involved, volume and kind of prizes and support in business plan construction. Today, this is a popular means that a range of different organizations use to uncovering novel business ideas and promoting innovation and entrepreneurship. Based on a large data base purposefully built for this research by the author, this paper aims to describe the phenomenon of innovation contests in Portugal and characterize its evolution over the period 2000-2008. Findings show a general use of contests as instruments to promote and prize innovation across a range of target audiences going from high school students to established businesses; an increasing trend in the number of innovation contests launched annually in Portugal; high rates of rotation of the innovation contests launched annually over the period under analysis; a growing diversification in the type of promoters which is particularly clear from 2004 onwards; and that private firms, higher education institutions and business associations appear to be gaining a prominent role as promoters of innovation contests.Innovation contest, innovation, entrepreneurship, Portugal.

Why are tax incentives increasingly used to promote private R&D?

Although not new, tax incentives have known major changes over recent years and it is becoming an increasingly important instrument in the policy mix to stimulate private R&D in many countries around the world. The OECD reports three major trends: The implementation of R&D tax incentives schemes by a growing number of OECD and non- OECD countries; A steady substitution of direct funding schemes for tax incentives schemes to stimulate business R&D; The many changes to tax incentives schemes most countries have done to increase the levels of generosity and attractiveness. This paper attempts to explain the motives behind these trends in R&D policy to stimulate private R&D and takes a multi-level approach as the issue involves political, strategic and economic considerations. The reasons behind the growing preference for tax incentives go much beyond any possible advantage these policies might have over direct measures, and are also the consequence of a political change in the EU R&D policy after the Lisbon Strategy and the subsequent actions to stimulate R&D expenditures, a change in the economic rationale of public support of private R&D in face of the insufficiency of market failures to justify that public intervention in a new context characterised by a public determination to increase the amount of business R&D expenditures, and the growing competition between countries for international R&D investment.Tax incentives; Business R&D; R&D policy.

Entry Mistakes with Strategic Pricing

This paper concerns entry mistakes when the incumbent practices strategic pricing. It is shown that an entry mistake may be a Pareto outcome. Due to an agency problem between the owner and the manager of the entrant firm there may be pooling sequential equilibria with too much entry that are preferred by both the entrant and the incumbent. This result is surprising because it would be expected that the entrant would prefer to know the type of incumbent in the industry before he takes his decision.

Iberian Financial Integration

Pricing discrepancies in the Iberian stock market are assessed. The estimation results suggest three conclusions. When considered individually each of the three stock markets considered, Frankfurt, Lisbon and Madrid Stock Exchanges, constitutes an almost perfectly integrated market. Even though the achieved level of integration between the three pairs of the stock markets considered is large, it can be improved upon. The level of integration achieved by the Iberian stock markets is lower than the one achieved between each Iberian market and the Frankfurt market.