Learning-by-Doing and Cannibalization Effects at Multi-Vintage Firms: Evidence from the Semiconductor Industry

Previous studies on the measurement of learning-by-doing emphasize the importance of accounting for multi-vintage effects having an impact on firms’ production costs through economies of scope. This study shows that accounting for cannibalization effects on the demand side is equally important for the adequate measurement of learning. Since multi-vintage firms anticipate the demand-side cannibalization effects in their production optimization, a previously omitted incentive to decrease production is captured having an impact on the measurement of learning by doing. We derive an empirical model from a dynamic oligopoly game of learning-by-doing and allow cannibalization effects to enter from the demand side. Using quarterly firm-level data for the dynamic random access memory semiconductor industry, we find support for cannibalization effects entering firms’ pricing relations resulting in higher estimated learning effects.Dynamic Random Access Memory; Dynamics; Economies of Scale; Learning by Doing; Multiproduct Firms; Product Life Cycle; Semiconductors

Licensing in the Patent Thicket - Timing and Benefits

Licensing can be a solution for hold-up in patent thickets. In this paper we study whether licensing is an effective solution for hold-up. To do this we distinguish between ex ante and ex post licensing. A theoretical model shows that firms’ expectations of blocking in a patent thicket determine whether they license ex ante while ex post licensing arises if expected blocking was low but realized blocking turns out to be high. It can also be shown that ex ante licensing will allow firms to reduce their patenting efforts. A sample selection model of licensing is derived from the theoretical model. Applying this to data from the semiconductor industry we show that licensing does help firms to resolve blocking. However, the probability of observing licensing decreases as fragmentation of property rights increases and arises mainly between large firms with similar market shares. Licensing experience is also an important determinant of licensing. As expected ex ante licensing allows firms to reduce the level of patenting.Hold-Up Problem; Licensing; Innovation; Patent Race; Patent Thicket

Learning-by-Doing and Cannibalization Effects at Multi-Vintage Firms: Evidence from the Semiconductor Industry

Previous studies on the measurement of learning-by-doing emphasize the importance of accounting for multi-vintage effects having an impact on firms’ production costs through economies of scope. This study shows that accounting for cannibalization effects on the demand side is equally important for the adequate measurement of learning. Since multi-vintage firms anticipate the demand-side cannibalization effects in their production optimization, a previously omitted incentive to decrease production is captured having an impact on the measurement of learning by doing. We derive an empirical model from a dynamic oligopoly game of learning-by-doing and allow cannibalization effects to enter from the demand side. Using quarterly firm-level data for the dynamic random access memory semiconductor industry, we find support for cannibalization effects entering firms’ pricing relations resulting in higher estimated learning effects

Learning-by-Doing and Cannibalization Effects at Multi-Vintage Firms: Evidence from the Semiconductor Industry

Previous studies on the measurement of learning-by-doing emphasize the importance of accounting for multi-vintage effects having an impact on firms’ production costs through economies of scope. This study shows that accounting for cannibalization effects on the demand side is equally important for the adequate measurement of learning. Since multi-vintage firms anticipate the demand-side cannibalization effects in their production optimization, a previously omitted incentive to decrease production is captured having an impact on the measurement of learning by doing. We derive an empirical model from a dynamic oligopoly game of learning-by-doing and allow cannibalization effects to enter from the demand side. Using quarterly firm-level data for the dynamic random access memory semiconductor industry, we find support for cannibalization effects entering firms’ pricing relations resulting in higher estimated learning effects

Licensing in the Patent Thicket - Timing and Benefits

Licensing can be a solution for hold-up in patent thickets. In this paper we study whether licensing is an effective solution for hold-up. To do this we distinguish between ex ante and ex post licensing. A theoretical model shows that firms’ expectations of blocking in a patent thicket determine whether they license ex ante while ex post licensing arises if expected blocking was low but realized blocking turns out to be high. It can also be shown that ex ante licensing will allow firms to reduce their patenting efforts. A sample selection model of licensing is derived from the theoretical model. Applying this to data from the semiconductor industry we show that licensing does help firms to resolve blocking. However, the probability of observing licensing decreases as fragmentation of property rights increases and arises mainly between large firms with similar market shares. Licensing experience is also an important determinant of licensing. As expected ex ante licensing allows firms to reduce the level of patenting

Licensing in the Patent Thicket - Timing and Benefits

Licensing can be a solution for hold-up in patent thickets. In this paper we study whether licensing is an effective solution for hold-up. To do this we distinguish between ex ante and ex post licensing. A theoretical model shows that firms’ expectations of blocking in a patent thicket determine whether they license ex ante while ex post licensing arises if expected blocking was low but realized blocking turns out to be high. It can also be shown that ex ante licensing will allow firms to reduce their patenting efforts. A sample selection model of licensing is derived from the theoretical model. Applying this to data from the semiconductor industry we show that licensing does help firms to resolve blocking. However, the probability of observing licensing decreases as fragmentation of property rights increases and arises mainly between large firms with similar market shares. Licensing experience is also an important determinant of licensing. As expected ex ante licensing allows firms to reduce the level of patenting

Heterogeneous Merger Impacts on Competitive Outcomes

Mergers realize heterogeneous competitive effects on profits, production, and prices. To date, it is unclear whether differential merger outcomes are caused mostly by firms’ technology or product market attributes. Furthermore, empirical merger studies conventionally assume that, conditional on regressors, the impact of mergers on outcomes is the same for every firm. We allow the merger responses to vary across firms, even after controlling for regressors, and apply a random-coefficient or heterogeneous treatment effect model (in the context of Angrist and Krueger (1999), Heckman, Urzua, and Vytlacil (2006), and Cerulli (2012)). Based on a comprehensive dataset on the static random access memory industry, we find that firms’ postmerger output further increases (and postmerger price further declines) if merging firms are more efficient, operate in more elastic product markets, are more innovative, and acquire knowledge in technological areas that are relatively unexplored to themselves. A further interesting insight is that product market characteristics cause stronger postmerger outcome heterogeneities than do technology market characteristics. We also find that the postmerger effects accounting for heterogeneities differ greatly from those that consider homogeneous postmerger outcome effects. Our estimation results provide evidence that ignoring heterogeneous outcome effects can result in heterogeneity bias, just as ignoring premerger heterogeneities can lead to selectivity bias

Derepression of an endogenous long terminal repeat activates the CSF1R proto-oncogene in human lymphoma

Mammalian genomes contain many repetitive elements, including long terminal repeats (LTRs), which have long been suspected to have a role in tumorigenesis. Here we present evidence that aberrant LTR activation contributes to lineage-inappropriate gene expression in transformed human cells and that such gene expression is central for tumor cell survival. We show that B cell-derived Hodgkin's lymphoma cells depend on the activity of the non-B, myeloid-specific proto-oncogene colony-stimulating factor 1 receptor (CSF1R). In these cells, CSF1R transcription initiates at an aberrantly activated endogenous LTR of the MaLR family (THE1B). Derepression of the THE1 subfamily of MaLR LTRs is widespread in the genome of Hodgkin's lymphoma cells and is associated with impaired epigenetic control due to loss of expression of the corepressor CBFA2T3. Furthermore, we detect LTR-driven CSF1R transcripts in anaplastic large cell lymphoma, in which CSF1R is known to be expressed aberrantly. We conclude that LTR derepression is involved in the pathogenesis of human lymphomas, a finding that might have diagnostic, prognostic and therapeutic implications

Derepression of an endogenous long terminal repeat activates the CSF1R proto-oncogene in human lymphoma

Mammalian genomes contain many repetitive elements, including long terminal repeats (LTRs), which have long been suspected to have a role in tumorigenesis. Here we present evidence that aberrant LTR activation contributes to lineage-inappropriate gene expression in transformed human cells and that such gene expression is central for tumor cell survival. We show that B cell–derived Hodgkin's lymphoma cells depend on the activity of the non-B, myeloid-specific proto-oncogene colony-stimulating factor 1 receptor (CSF1R). In these cells, CSF1R transcription initiates at an aberrantly activated endogenous LTR of the MaLR family (THE1B). Derepression of the THE1 subfamily of MaLR LTRs is widespread in the genome of Hodgkin's lymphoma cells and is associated with impaired epigenetic control due to loss of expression of the corepressor CBFA2T3. Furthermore, we detect LTR-driven CSF1R transcripts in anaplastic large cell lymphoma, in which CSF1R is known to be expressed aberrantly. We conclude that LTR derepression is involved in the pathogenesis of human lymphomas, a finding that might have diagnostic, prognostic and therapeutic implications.Björn Lamprecht... Raman Kumar... David F. Callen... et al