Andy Cosh and Alan Hughes
Examines changes in the pattern of CEO and Executive Directors' pay and the extent of non-executives' and financial institution involvement in the governance structure of giant UK companies over the period 1980-1996. It demonstrates that corporate boards, especially at CEO level, remain dominated by 'insider' directors who have spent most of their careers with the same firm. Yet there has also been a marked widening of the pay differential between CEOs and other directors.
Andy Cosh, Alan Hughes and Eric Wood
Using a specially-constructed panel database of UK firms, the paper analyses the links between business innovation, survival and selected aspects of business performance in terms of a Downie-type model. The latter postulates that innovativeness is a key determinant of subsequent performance, but also that performance may influence subsequent innovativeness. Innovation is shown significantly to reduce the probability of firm failure, and to increase the probability of firm acquisition.
WP47 (no longer available): Acquisition & Growth of Technology-Based Firms
Reports empirical findings on the acquisition and growth of small technology-based firms in Sweden, with particular reference to the role of large Swedish companies, growth patterns of acquired and non-acquired STBFs, and factors explaining STBF growth. STBFs are increasingly important for the sourcing of technology among large firms, while acquired STBFs recorded higher growth both before and after acquisition. Acquisition also positively influenced growth, with technological synergies being important.
WP46 (no longer available): Evolutionary & 'New' Institutional Economics: Some Implications for Industrial Policy
Explores the potential of evolutionary and new institutional economics for an enhanced understanding of how industrial policy may promote economic growth, and discusses constraints of bounded rationality and uncertainty, the evolutionary forces driving economic growth, the inherent inefficiencies of economic evolution, the role of institutions and organisations as co-ordination mechanisms, and the problem of selective intervention.
Simon Deakin and Keith Ewing
Considers recent trends in collective bargaining in Britain and other European Union countries, and argues that multi-employer bargaining can play an important role in reducing inflationary pressures, encouraging labour-management cooperation, and promoting social cohesion. Reconstruction of collective bargaining in Britain would require restoration of dialogue and negotiation at sector level.
Ron Martin and Peter Sunley
Reviews recent research on long-run regional convergence in per capita incomes and output in advanced countries, and the extent to which this may be explained by endogenous growth theory, with its focus on key industrial inputs such as technological change and human capital. Advocates an exchange of ideas between endogenous growth theorists and economic geographers concerned with 'indigenous' regional development processes.
WP43 (no longer available): Economic Functioning, Self Sufficiency & Full Employment
Roger Tarling and Frank Wilkinson
Sustainable full employment requires individual self-sufficiency which depends on social and economic equality. Keynesian and welfare state policies promoted equality, but monetarist economic policy and labour market deregulation reversed this tendency. The paper argues that this has resulted in major labour market and social problems in Britain, and that economic re-education is necessary for economic and social regeneration.
Analyses regional variations in Britain in growth, innovativeness, competitive environments and collaborative activity of small and medium-sized manufacturing and business service enterprises during the 1990s. South East firms generated more original innovations and grew faster than peripheral region firms, as well as experiencing greater competition and reporting more frequent collaboration.
WP41 (no longer available): Competition & Competitive Advantage
Jonathan Michie and Renee Prendergast
Reviews and criticises on theoretical grounds the view that government intervention and industrial policy to overcome market failure is rarely justified, with particular reference to issues of competition, industrial change, technology and innovation, and competitive advantage in production.
Sergio Cesaratto and Antonella Stirati
Reviews different approaches to analysing the macro-economic impact of innovations introduced at the individual firm level, and investigates the economic performance during the early 1990s of six thousand Italian innovating manufacturing firms participating in the ECs Innovation Survey. The results underline the promising performance of small firms, and the importance of innovation for firm exports.
Analyses differences in institutionalised rule systems, particularly of technical standards, in Britain and Germany and their impact on business supplier relations. It shows that a higher degree of stability and consistency in the social regulatory framework in Germany than in Britain leads to more consensual and predictable relations between firms, encouraging more long-term and closer technical collaboration.
WP38 (no longer available): Unemployment, Wage Bargaining & Capital-Labour Substitution
The widely-held view that capital accumulation, technical progress and labour force expansion have no long-run effect on unemployment rests on the empirically doubtful assumption that the elasticity of substitution between labour and capital is equal to unity. The paper uses a simple mathematical model based on the work of Layard, Nickell and Jackman to show that the equilibrium unemployment rate may in fact be affected by all these factors, with consequent major implications for understanding recent economic history and for current employment and investment policy.
WP37 (no longer available): The Fiscal & Distributional Implications of Job Generation
Jonathan Michie, Michael Kitson and Holly Sutherland
Estimates the costs of a public investment-led job creation programme for the UK, and concludes that the net cost to the Treasury of creating an additional one million jobs would be far less (£7 billion) than the gross cost (£17 billion). Partial restoration of progressive taxation, to help pay for this, would thus enable improved living standards for many households.
Alessandro Arrighetti, Reinhard Bachmann and Simon Deakin
Analyses the influence of the institutional framework, in terms of contract law and less formal social norms, on inter-firm relationships and cooperation, using evidence from a two-sector, three-country (Britain, Germany, Italy) survey of contracting practice by businesses.
Frank Wilkinson and Brendan Burchell
Examines the nature of trust between businesses in relation to social norms and legal systems, and analyses and compares business managers' perceptions of the role of trust in their trading environments, their strategies to foster trust, and their reactions to the breakdown of trust, in samples of firms in Britain, Germany and Italy.
Argues that Schumpeter's theory of economic evolution is still highly relevant to evolutionary economics, because it sheds light on the usefulness of Darwinian theory for economics, on the precise nature of evolutionary forces at work in economic systems, and on the relationship between evolutionary theory and equilibrium analysis.
Proposes an 'extended systems approach' based on Swedish empirical research and Williamson's 'systems solution by classical specialisation' for understanding how small technology-based firm spin-offs from an acquisitions by larger firms can be conducive to overall national innovativeness and growth.
Andy Cosh, Alan Hughes, Hyehoon Lee and Stephen Pudney
Illustrates the potential of semi-parametric estimators for analysing the relationship between firm growth, mortality and size, with the analysis conditioned by age and industry dummies. These estimators suggest a quite serious misspecification of conventional firm mortality probit models, and yield a significantly different estimate of the joint mortality/growth distribution conditional on initial size, age and industry.
This paper analyses a model in which two upstream firms compete to offer price contracts to two downstream firms, demonstrating that different equilibrium outcomes may be achieved depending on the presence or absence of first-mover advantages.
Andy Cosh, Alan Hughes, Kevin Lee and Ajit Singh
Examines via econometric analysis of UK company data the inter-relationship between the shareownership characteristics of companies, their takeover activity and the impact upon them of competitive forces affecting the persistence of profits, paying particular attention to the role of institutions as shareholders and their impact upon the outcome of the merger/takeover process.
WP29 (no longer available): Insurance Markets & Long-Run Equilibrium with Systemic Risks: The Case of the US Federal Crop Insurance Programme
This study considers the effects of systemic risks on the current US federal programme to deliver crop insurance through reinsurance, on the basis of a definition of competitive equilibrium as a function of reservation preference levels for firm entry and exit. High systemic risks may render reinsurance schemes unrealistic.
WP28 (no longer available): The Remarkable Resilience of the Industrial Districts of Tuscany
Gabbi Dei Ottati
Analyses the different ways - product diversification and innovation, quality upgrading, commercial specialisation - in which small firms in the industrial districts of Tuscany, Italy, have been successfully restructuring their activities in the face of intensified competition, with consequent changes in internal and external divisions of labour. The growth of 'enterprise groups' and collective action has been essential to this successful adaptation.
WP27 (no longer available): The European Dynamics of Computer Services
This paper examines the dynamics of the rapidly growing European computer services industry, focusing especially on key technological and industrial changes affecting its recent development, organisation and locational evolution. It also considers the changing policy context for computer services within the European Union.
Reviews the wide range of non-neoclassical theoretical approaches which have been developed to understand the growth of firms. It stresses the need for theory to analyse the internal functioning of complex organisations, deals with both supply and demand issues, and reviews the role played by technological, financial and organisational determinants of growth, as well as entrepreneurial motivation.
WP25 (no longer available): Financing the Industrial Cooperatives of the Mondragon Group
Analyses the effects of and recent changes in, the system of cooperative credit and financing developed by the Mondragon industrial cooperatives of the Basque region of Spain. Cooperative credit provided by the Caja Laboral has reduced risk and facilitated external management intervention, but external pressures are now reducing its effectiveness.