Giuseppe Garofalo

R&D Cooperation in Regular Networks with Endogenous Absorptive Capacity

Abstract In this paper we analyze how firms’ R&D investment decisions, firms’ profits and social welfare are affected by absorptive capacity; that is, the ability of a firm to learn from other collaborating firms. The model developed is a strategic regular network where firms have the opportunity to form pair-wise collaborative links with other firms and then compete à la Cournot. Different to the existing literature, we find that firms’ R&D efforts could increase or decrease with the degree of the network, depending on the level of absorptive capacity, the market size and the network dimension. In particular, in the case of small market size and low learning effect, the connection between firms drives up research investments. Moreover, if absorptive capacity is sufficiently low, the research collaboration between firms turns out not to be desirable from a private point of view while, in line with the existing literature, social efficiency requires a complete or intermediate level of collaborative activity. We also show that the complete network is pair-wise stable and socially optimal for an intermediate level of spillover intensity, while the empty network maximizes firms’ profits when absorptive capacity is small, yet it is not pair-wise stable.

Culture, economic development and social mobility in Italy: the territorial gaps

Our dataset consists of 20 years (1992-2012) information for Italy from Multiscopo ISTAT surveys, that we have reworked to conform. After describing the cultural variables, comparing Italy with Europe and showing the gap between the Centre-North and the South of Italy, we present some econometric estimates to ensure both the effect of the variable «accumulated over the years» reading on income per capita, and the effect of education on employment. The results prove that the idea of a virtuous circle between culture, economic development and social mobility, that we set in the point of view of Smiths approach as reformulated by the Sens capability approach, is fruitful. The territorial variable strengthens the results, highlighting the structural deficit of our South. All this is enhanced by the crisis.

International Technology Gap and Technology Transmission: The Policy Implications

Income per capita differences have increased dramatically over the last fifty years. Many economists seem to recognize knowledge differences as the main factor in this worldwide economic performance divergence. Developing countries suffer significantly from lagging labour productivity and managerial efficiency related in part to the failure to adopt the latest technology or to update their labour force, and such an evidence has recently led to a huge debate about which channel is most effective in stimulating technology transfer and acquisition. In this paper we will review the policy tools that have been effective in reducing the international knowledge-gap between Developed and Developing countries, and the role played by institutional factors in accomplishing such an issue.

The Credibility of the Exchange Rate Regime: An Analysis Trough 'Derivatives' of the September 1992 Crisis

This paper argues that, in the September 1992 European currency crisis, market trends in derivatives, in terms of price volatility and change in volumes traded, might have represented an early indicator, in reference to the spot market, of the lack of confidence in the ability of the Italian Lira and the Sterling Pound to maintain their parities within the ERM. The assessment is made by comparing the daily data on Italian/English interbank rates with the implicit yield on short-term interest rate futures and with a maximum compatible with the ERM band created by means of German interbank rates and changes in the exchange rates