Corporate Profitability and Competitive Circumstance

Among firms with income, profit on equity is generally greater for small firms than for large firms. The strong profit showing of small businesses is associated with higher sales/asset ratios than for large firms, higher debt/equity ratios, and higher realized losses. The authors conclude that differences in profitability among firms of different sizes are indicators of their differing competitive circumstances and of their differing contribution to industry development. These findings are based on cross-industry and intraindustry analysis of data from the Corporate Source Books of the Statistics of Income.

Technological opportunity and the relationship between innovation output and market structure

This study examines influences of technological opportunity on the relationship between market structure and the innovation output of different-size firms. A simultaneous-equations model is specified and estimated separately for technologically progressive and technologically unprogressive industries. The study finds that innovation activities of small firms and large firms bear different relationships to market structure, in part resulting from interindustry differences in technological opportunity. In technologically progressive industries, innovation output (especially of small firms) is lower in the presence of high concentration and is increased substantially by high R&D intensity. Large-firm innovation output has a positive effect on industry concentration, but only in technologically unprogressive industries. Copyright © 2005 John Wiley & Sons, Ltd.

The Influence of Technological Opportunity on Union Membership in U.S. Manufacturing Industries

I examine influences of technological opportunity on a set of factors determining interindustry variation in union membership density. A data set of 239 U.S. manufacturing industries is divided into subsets of "technologically progressive" and "technologically unprogressive" industries, and my unionization model is estimated for each subset. The study confirms recent findings indicating that innovation activity and industry concentration have significant negative effects on union membership density. However, these results are obtained only for the subset of "technologically progressive" industries and not for the "technologically unprogressive" industries. These findings suggest that estimation bias is imparted to interindustry studies of the extent of union membership through the influence of technological opportunity on the interrelationships between innovation output, industry concentration, and union membership density.

Employment Growth in High-Tech New Ventures

We specify and estimate a model of the early employment growth of technology-driven new ventures. Our estimated model is derived from labor demand theory. A data set of 100 German firms is used to conduct this analysis. The study's findings support the relevance of the theory as applied to these nascent firms. Employment growth is significantly enhanced in ventures exhibiting high profits, experienced founders, formal information processes, and outsourced product distribution. Our findings also confirm aspects of Penrose's theory of firm growth suggesting that transactions costs associated with larger founder teams may inhibit employment growth.