Advertising and the evolution of market structure in the US car industry

This paper focuses on a single simple stylized fact which stands out from the post-war history of the US car industry, namely that industry concentration fell just at the same time as industry advertising expenditures rose sharply. Since both events were almost certainly caused by the entry and market penetration of (largely) foreign owned car producers, this stylized fact raises interesting questions about whether – and if so, how – advertising affects entry. We use a model of consumer switching behaviour to help interpret the facts. The model predicts a simple linear association between market and advertising shares (which we observe fairly clearly at two different levels of aggregation in the data), and provides the basis for arguing that advertising can facilitate entry, but only for finite periods of time

Collective value creation: a new approach to stakeholder value

The corporate community has rediscovered an old idea: stakeholder value. The concept’s history is rooted in the literature on varieties of capitalism. Within that scholarship it has served to delineate institutional and relational differences between capitalist systems and forms of corporate governance. Today, stakeholder value is being used to argue for the redirection of capitalism to deliver on key goals related to inclusion and sustainability. This paper argues that the concept–and thus the endeavour to change capitalism–will remain weak unless it goes to the centre of how we create value. Moralistic exhortations to business leaders are not enough to bring about a true stakeholder form of capitalism. For this we must have stronger theory and practice on how to restructure finance, production, and public-private partnerships in new ways that recognise the state’s market-shaping role and support equitable distribution of value across stakeholders

Mission-oriented research & innovation in the European: a problem-solving approach to fuel innovation-led growth

The European Commission, through Carlos Moedas, Commissioner for Research, Science and Innovation, invited Professor Mazzucato to draw up strategic recommendations to maximise the impact of the future EU Framework Programme for Research and Innovation through mission-oriented policy. This report is the result of Professor Mazzucato’s reflections based on her research, with inputs through a consultation process with internal and external stakeholders of the European Commission

Beyond market failures: the market creating and shaping roles of state investment banks

The paper develops a typological framework of the roles of state investment banks (SIBs) in the economy. The typology identifies four different roles: countercyclical; developmental; venture capitalist; and challenge-led. The paper conceptually elaborates the typology by first providing a historical overview of SIBs, and then discussing how the mainstream “market failure theory” justifies them. It then advances a different conceptualization based on insights from heterodox economics, showing that all roles of SIBs are more about market creating/shaping rather than market-failure fixing. The paper concludes with a proposal of a new agenda for research on SIBs based on our typological framework

COVID-19 and public-sector capacity

The paper argues that to govern a pandemic, governments require dynamic capabilities and capacity—too often missing. These include capacity to adapt and learn; capacity to align public services and citizen needs; capacity to govern resilient production systems; and capacity to govern data and digital platforms