Concubinage or Marriage? Informal and Formal Cooperations for Innovation

Based on a sample of German innovating firms that contains information on formal and informal innovation cooperation between customers and suppliers, we state that firms perceive informal cooperation as being more important than formal cooperation modes. We then investigate the determinants of firms? decisions to engage into the respective cooperation modes. In line with previous empirical work, we do not find much empirical evidence for the relevance of incoming spillovers. In addition, our results suggest that this finding holds as well for informal cooper- ations. A firm?s ability to protect its proprietary innovations, however seems to be a key determinant of formal as well as informal cooperations. Furthermor absorptive capacity and the organizational structur of in-house R&D play an important role. Another relevant driver of vertical cooperations are the innovation dynamics at the industry level. Firms who operate an R&D department and firms who are involved in costly R&D projects tend to cooperate formally rather than informally. --R&D Cooperation,Spillovers,Appropriability,Innovation

What drives market structure? On the relation between firm demographic processes, firms? innovative behaviour and market structure

In this paper we suggest an structural model that specifies firm growth as a function of firm specific parameters and of competition for purchase power with other firms on a given market. Moreover, we explicitely model firms? innovative behaviour and distinguish between dierent innovation regimes. On the basis of a set of simulations of this model we derive a number of empirically testable hypotheses. A subset of these have already found support in the empirical literature. We take these as evidence in favour of the explanatory power of the model. In addition, we are able to derive further testable propositions on the interaction of firm-demographic processes, in-novative behaviour and market structure that go beyond the existing literature and that we suggest for further research. We conclude that the approach chosen here provides a fruitful pathway for further research. --Firm size distribution,innovation regime,technological regime,industrial dynamics,firm demography,carrying capacity,market concentration

Firm Level Implications of Early Stage Venture Capital Investment: An Empirical Investigation

The paper analyses the impact of venture capital finance on growth and innovation activities of young German firms. Among other variables, our panel of firm data includes data on venture capital funding and patent applications. With a statistical matching procedure we draw an adequate control group of non venture funded firms. The analysis gives evidence that innovative firms will be able to close a venture capital deal with higher probability. Once the firms are venture funded, they display higher growth rates but do not differ in their innovative output from otherwise comparable firms. We derive strategic implications. --Firm Demography,Firm Start-Ups,Firm Growth,Venture Capital,Patented Inventions,Microeconometric Evaluation Methods

SIMFIRMS - SIMULATING THE SPATIAL DEMOGRAPHY OF FIRMS, WITH AN APPLICATION IN THE NETHERLANDS

Recently, there is an increasing demand in spatial planning for models based on the demographic concepts of birth and death of firms. This paper describes the structure of a spatial demographic simulation model of firms, and its application within the Netherlands. The model structure is essentially of the familiar demographic cohort component type, where an initial cohort of firms ages in a number of discrete steps, and where in each step additions and subtractions to and from the population are modelled using birth, death and migration components. Apart from the central processes of birth, death and migration, the type of economic activity and firm size are highly important for understanding firm behaviour over time. The paper describes the transition functions for each of the demographic components and for firm growth. In addition, some empirical results are presented of a number of model simulations in the Netherlands. The results were partly validated using observed economic demographic data. It is concluded that a substantial amount of work remains to be done in this new field. The model presented here has direct implications for the research agenda of the study of the demography of the firm.

Network Externalities and Path Dependent Consumer Preferences

Commodities of high technological level play an increasingly important role in the economy. The market of these commodities can exhibit network externalities if different standards compete. This is due to the fact that the market of these technologies is linked to the market of its co-products. Network externalities engender positive feedback on the market i.e. the higher the market share of a certain technology, the higher the demand for it. The present paper suggests a flexible formal model of the dynamics of these markets. This approach allows for identification the dynamic behaviour of markets under different hypotheses concerning behaviour of producers and consumers. It makes explicit the role of network externalities on markets that exhibit increasing returns

Firm Level Implications of Early Stage Venture Capital Investment – An Empirical Investigation –

The paper analyses the impact of venture capital finance on growth and innovation activities of young German firms. Among other variables, our panel of firm data includes data on venture capital funding and patent applications. With a statistical matching procedure we draw an adequate control group of non venture funded firms. The analysis gives evidence that innovative firms will be able to close a venture capital deal with higher probability. Once the firms are venture funded, they display higher growth rates but do not differ in their innovative output from otherwise comparable firms. We derive strategic implications