R&D Collaboration Networks in Mixed Oligopoly

We develop a model of endogenous network formation in order to examine the incentives for R&D collaboration in a mixed oligopoly. Our analysis reveals that the complete network, where each firm collaborates with all others, is uniquely stable, industry-profit maximizing and efficient. This result is in contrast with earlier contributions in private oligopoly where under strong market rivalry a conflict between stable and efficient networks is likely to occur. A key finding of the paper is that state-owned enterprises may be used as policy instruments in tackling the potential conflict between individual and collective incentives for R&D collaboration.Networks, R&D Collaboration, Mixed Oligopoly

The Temporal Dimension of Wage Contracts in Oligopoly with Spillovers

This paper examines how the duration of wage contracts influences innovation incentives, wages and employment. We find that wages are non-monotone in the duration of wage contracts. Furthermore, a positive and one-to-one relation between innovation and union utility exists and both attain their highest value under a long-term contract. Profits may vary depending on the extent of R&D spillovers and the associated raising rivals' cost incentive, although they are highest when union/firms engage in a long-term contractual relation. Testable predictions to discriminate between short-term and long-term contracts are also discussed.Wage contracts; R&D; Spillovers; Raising rivals' cost.

Equilibrium and Optimal R&D Roles in a Mixed Market

This is the first paper to investigate the timing of the R&D decisions in a mixed market. Considering a model in which a public firm competes against a private one, we examine the desirable (welfare-maximizing) and the equilibrium R&D role of the public firm. Our results suggest that from a social point of view, the public firm should carry out its investment as a Stackelberg follower. Using the observable delay game of Hamilton and Slutsky [Games and Economic Behavior 2 (1990) 29], we show that the public firm may play this desirable role.Endogenous timing; R&D; Stackelberg; mixed market.

A Reappraisal of the Irrelevance result in mixed duopoly: A note on R&D competition

We characterize the optimal policy-mix towards R&D activity and output production in the simultaneous moves mixed and private duopolies, as well as in the Stackelberg mixed duopoly. Our findings suggest that the government will opt for implementing jointly a tax on R&D with a subsidy on output to tackle the underlying market failures. Moreover, the optimal output subsidy, R&D investment, output and welfare are identical irrespective of whether the public firm: (i) moves simultaneously with the private firm, (ii) is Stackelberg leader in R&D and/or output, or (iii) is privatized and acts simultaneously with the private firm to maximize profits. Privatization reduces the optimal tax on R&D, but leads to an increase in firms' profits. Finally, Stackelberg output leadership by the public firm induces an increase in R&D taxation, which is accompanied by a decrease in profits.mixed duopoly

Stackelberg mixed oligopoly with asymmetric subsidies

In a mixed oligopoly, when the public leader becomes a private leader and the government provides output subsidies, then privatization causes the optimal subsidy, profits and welfare to fall [Economics Letters 83 (2004) 411]. We show instead that if the leader and the followers receive asymmetric, rather than symmetric subsidies, the first-best optimum can be restored. In this case, privatization bears no consequences on the followers' subsidy, output and welfare.

Community involvement in the implementation of the WFD in Greece

The paper provides critical reflections beyond the mere rehearsal of existing arguments and theories of participation within the Water Framework Directive. Following a critical overview of the pilot river basin projects, originally aimed at testing in practice the provisions of the WFD, the paper addresses empirically questions related to participatory issues involved in the implementation of the directive in rigid top-down and strongly hierarchical settings. The paper argues that the participatory requirements of the directive may reach the actual stakeholders in a rather distorted way turning participation into an “ornamental” issue instead of a substantive element of the directive. Reflecting on the selected case, part of Pinios river basin project in Greece, the paper argues that only a distorted version of public participation is assessed on the official documents, questioning the very purpose of the pilot projects. The paper concentrates on how local stakeholders can learn to participate, overcome existing barriers of the water governance structure in Greece and following, by upscaling their “experience to participate” at regional level, contribute to the participation requirements of the WFD.El presente artículo ofrece una reflexión crítica más allá del simple ensayo de los argumentos de las teorías existentes y de la participación dentro de la Directiva Marco del Agua (DMA). Tras una revisión crítica de los proyectos piloto de la cuenca del río, originalmente destinados a comprobar en la práctica las disposiciones de la DMA, se abordan empíricamente cuestiones relacionadas con temas de participación concernientes a la implementación de la directiva con configuraciones rígidas de arriba hacia abajo y fuertemente jerárquicas. El documento sostiene que los requisitos de participación de la Directiva pueden llegar a los actores de una manera más bien distorsionada, convirtiendo la participación en una cuestión “ornamental” más que en un elemento sustantivo de la Directiva. Reflexionando sobre el caso seleccionado, que forma parte del proyecto cuenca del río Pinios en Grecia, el documento sostiene que en los documentos oficiales sólo se evalúa una versión distorsionada de la participación pública, lo que cuestiona la propia finalidad de los proyectos piloto. El documento se centra en cómo los actores locales pueden aprender a participar, a superar las barreras existentes en la estructura de gobernabilidad del agua en Grecia y, después, por la ampliación de su "experiencia de participación" a nivel regional, contribuir a los requisitos de participación de la DMA.Humboldt University Berlin, Department of Agricultural Economics, Division of Resource Economic

Firm dynamics in job growth - employment growth determinants

Understanding the determinants of employment growth is important in light of the concentration of population and employment in urban centres. As economic activity concentrates, smaller urban centres, and rural areas and towns find themselves at a growing disadvantage. Yet not all small urban or rural towns share the same experience. Moreover, not all urban centres grow significantly. It is thus of academic interest to discover more precisely what the employment growth determinants are.Another aspect of employment growth is the particular source of employment change. Employment growth is not single-dimensional, but it has four components (growth from firm births and business expansions; and decreases from firm deaths and business declines), each of which may have unique determinants. Thus, in investigating the determinants of employment change, it is important to recognize the businesses’ life cycle and test whether the key influences vary over that life cycle. This study empirically estimates the determinants of employment growth and assesses their role and relative importance in a community’s job growth. The major determinants include industrial composition, human capital, spatial variables and policy variables. The study is carried out at two levels: sub-provincial and provincial and covers the years 1983-1999. Two econometric methods of estimation are applied, random effects and fixed effects. An important finding is that there are significant differences among the four components of employment change. This implies that when we simply examine overall employment growth we are masking very different effects that the determinants of employment change have among the four components of job growth. At the community level industrial diversification assists the growth of expanding firms and boosts employment due to the establishment of new businesses. On the other side, communities that have high industrial concentration experience lower employment losses from declining and exiting firms. Regions with a higher share of population that has received some post secondary education have, ceteris paribus, higher job growth rates. Another finding is that the farther away a community is situated from a large Census Metropolitan Area, the less employment growth it has. These results offer significant refinements to undifferentiated employment change findings

The temporal dimension of wage contracts in oligopoly with spillovers

This paper examines how the duration of wage contracts influences innovation incentives, wages and employment. We find that wages are non-monotone in the duration of wage contracts. Furthermore, a positive and one-to-one relation between innovation and union utility exists and both attain their highest value under a long-term contract. Profits may vary depending on the extent of R&D spillovers and the associated raising rivals' cost incentive, although they are highest when union/firms engage in a long-term contractual relation. Testable predictions to discriminate between short-term and long-term contracts are also discussed

Equilibrium and optimal R&D roles in a mixed market

This is the first paper to investigate the timing of the R&D decisions in a mixed market. Considering a model in which a public firm competes against a private one, we examine the desirable (welfare-maximizing) and the equilibrium R&D role of the public firm. Our results suggest that from a social point of view, the public firm should carry out its investment as a Stackelberg follower. Using the observable delay game of Hamilton and Slutsky [Games and Economic Behavior 2 (1990) 29], we show that the public firm may play this desirable role