Ciarli, Tommaso ;
Leoncini, Riccardo ;
Montresor, Sandro ;
Valente, Marco
(2006)
Organisation of industry and innovation dynamics.
Bologna:
Dipartimento di Scienze economiche DSE,
p. 34.
DOI
10.6092/unibo/amsacta/4663.
In: Quaderni - Working Paper DSE
(609).
ISSN 2282-6483.
Full text available as:
Abstract
The paper aims at investigating how the organization of a certain industry evolves once the competition among its firms, producing a ‘com-plex’ (i.e. non-modular) product, is modeled as the intertwining of innovative search and organizational change. In order to take the full roster of
participants into account, and to retain the inner complexity of their decisions, a Pseudo–NK model is built–up in which a population of firms is
called to match a technological frontier. By evolving along different stages
of the sector’s life-cycle, such a kind of technological calls for a trade–off
between two strategies of cost–reduction through either outsourcing or
technological search. Overall, the simulation results confirm previous literature as, for example, in the introductory stage of the industry life–cycle,
marked by frequent and intense jumps of the technological frontier, firms
need to vertically integrate in order to have higher chances to win the
competition for a new standard. On the contrary, in the decline stage,
in which the technological frontier almost stabilizes, deverticalization allows firms to better compete on costs. These results change if suppliers
are allowed to innovate, as they are more likely to lock the market in
sub–optimal configurations.
Abstract
The paper aims at investigating how the organization of a certain industry evolves once the competition among its firms, producing a ‘com-plex’ (i.e. non-modular) product, is modeled as the intertwining of innovative search and organizational change. In order to take the full roster of
participants into account, and to retain the inner complexity of their decisions, a Pseudo–NK model is built–up in which a population of firms is
called to match a technological frontier. By evolving along different stages
of the sector’s life-cycle, such a kind of technological calls for a trade–off
between two strategies of cost–reduction through either outsourcing or
technological search. Overall, the simulation results confirm previous literature as, for example, in the introductory stage of the industry life–cycle,
marked by frequent and intense jumps of the technological frontier, firms
need to vertically integrate in order to have higher chances to win the
competition for a new standard. On the contrary, in the decline stage,
in which the technological frontier almost stabilizes, deverticalization allows firms to better compete on costs. These results change if suppliers
are allowed to innovate, as they are more likely to lock the market in
sub–optimal configurations.
Document type
Monograph
(Working Paper)
Creators
Subjects
ISSN
2282-6483
DOI
Deposit date
25 Feb 2016 13:57
Last modified
25 Feb 2016 14:01
URI
Other metadata
Document type
Monograph
(Working Paper)
Creators
Subjects
ISSN
2282-6483
DOI
Deposit date
25 Feb 2016 13:57
Last modified
25 Feb 2016 14:01
URI
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