Kenneth L. Simons

The Making of an Oligopoly: Firm Survival and Technological Change in the Evolution of the U.S. Tire Industry

The number of producers in the U.S. tire industry grew for 25 years and then declined sharply, and the industry evolved to be an oligopoly. The role of technological change in shaping the industrys market structure is explored. A model of industry evolution featuring technological change is used to derive predictions that are tested using a novel data set on firm entry, exit, size, location, distribution networks, and technological choices prior to the shakeout of producers. Consistent with the model, earlier-entering and larger firms survived longer, principally because of the influence of age and size on technological change.

Ownership Change, Productivity, and Human Capital: New Evidence from Matched Employer-Employee Data

Empirical studies of the impact of changes in ownership of manufacturing plants on productivity (e.g., Lichtenberg and Siegel (1987, 1990a, 1990b), McGuckin and Nguyen (1995, 2001), and Maksimovic and Phillips (2001)) have provided limited evidence on how such transactions affect investment in human capital and have been based strictly on U.S. and U.K. data. We attempt to fill these gaps, based on an analysis of matched employer-employee data from over 19,000 Swedish manufacturing plants for the years 1985-1998. The sample covers virtually the entire population of manufacturing plants with 20 or more employees and a probability-based sample of smaller plants. We assess whether there are differential effects on productivity for different types of ownership changes, such as partial and full acquisitions and divestitures, and related and unrelated acquisitions. Our results suggest that ownership change results in an increase in relative productivity. This pattern emerges most strongly for full acquisitions and divestitures and unrelated acquisitions. We also find that plants involved in these transactions experience increases in average employee age, experience, and the percentage of employees with a college education. Ownership change also leads to an increase in earnings and a reduction in the percentage of female workers.

Entrepreneurs Seeking Gains: Profit Motives and Risk Aversion in Inventors’ Commercialization Decisions

Direct evidence has been lacking on entrepreneurs response to individual-specific opportunities, and recent work suggests that entrepreneurship may be a non-profit-seeking activity and that entrepreneurs evaluate risk oddly. We model heterogeneous inventors and inventions, outside opportunities, sunk and nonsunk costs, and risk, to guide data analysis. We use assessment data from a center paid to assess the inventions economic potential. Inventors choices whether to commercialize their inventions and later whether to remain in production were consistent with profit-seeking motives and risk aversion.

Bodyshopping versus offshoring among Indian software and information technology firms

Investigations of offshore outsourcing of information systems have presented little evidence on developing country software and information technology (IT) industries. This study probes how Indian software and IT suppliers trade off work in India versus bodyshopping of employees. Worldwide clients view these practices as full offshoring versus on-shore temporary hiring from an Indian firm, but these practices are probed from suppliers’ perspective. Suppliers’ characteristics are theorized to affect their use of bodyshopping versus in-India work. A Reserve Bank of India survey of every Indian software and IT firm elicited suppliers’ use of bodyshopping to serve clients abroad. Consistent with theoretical rationales, suppliers that were larger, incorporated, public, and owned foreign subsidiaries most frequently provided bodyshopping among their international services. Bodyshopping was used frequently for IT purchasing and systems maintenance and infrequently for business process applications, and was infrequent to nations where bodyshopped labor costs were high. The evidence expands knowledge of the vibrant entrepreneurial IT industry in India and how it serves client firms abroad.

Predictable Cross-Industry Heterogeneity in Industry Dynamics

Technological change affects industry dynamics, by influencing whether an industry experiences a shakeout and attains a concentrated market structure. Decades-long competitive processes are similar for matched industries in different nations, indicating that competitive processes — not just eventual concentration levels — arise systematically from causes that might be traced. The television manufacturing industry in the United States and the United Kingdom is used to illustrate common processes at work.

GLOBAL TECHNOLOGY DEVELOPMENT IN SOLID STATE LIGHTING

The determinants of successful development, commercialization and diffusion of solid state lighting (SSL) are not well understood particularly in a global context. Patent data provide one means to gain insight into corporate and national research and development activities. However, existing SSL patent analyses have focused primarily on United States (US) patents. This study analyzes SSL patents granted worldwide to measure the strengths of US, Japan, Germany, the Netherlands, South Korea, Taiwan, and China, nations all poised to play a key role in SSLs future. It shows a strong and growing role of corporate patent portfolios for firms headquartered in Asian nations. The data cover patents that were applied for and issued from 1937 to March 2009. Our findings suggest a stronger role of non-US organizations and individuals than had been reported in previous studies that focused only on US patents.

Software to Communicate Global Models

Global simulation models can be powerful tools (1) to develop academics’ knowledge of the global socio-politico-environmental world and (2) to analyze possible policies. However, they require considerable knowledge about their workings and the types of questions they are designed to answer before one can use them. Hence it is useful for communication among academics, analysis, and education in schools and universities to develop descriptions of the models and accessible computerized versions of the models. This paper presents new tools for an interactive, adaptive, and user-friendly genre for presenting and using complex simulation models. This way to communicate simulation models has hitherto not been possible nor emphasized. The software should not only include the models, but also document them and guide people through a learning process. These issues apply to all kinds of simulation modeling, but illustrations in this paper come from global social and environmental models.

SSL technology development and commercialization in the global context

Multi-national patents and applications data, based on filings in patent authorities worldwide, are used as a means to probe corporate and national R&D roles in the emerging LED and SSL industries. The data are counts of patents, applications, or applications filed in at least two patent authorities, and do not have means to control for the importance of individual patents. Nonetheless they provide a helpful way to assess the companies and nations involved in LED and SSL research in general and in specific technological sub-domains. Some of the leading companies and nations are reported on. The data show Samsungs rapid rise to prominence in these technologies. They indicate a greater role of nations other than the U.S. than has been noted in previous patent analyses, since the tendency of applicants to file predominantly in their home countries has meant that counts based solely on U.S. patents have missed large numbers of non-U.S. applicants active in this technology while still counting U.S. applicants that filed solely in the U.S. They reveal growing activity in Asia, partly in Korea because of Samsungs role, and partly in Taiwan and mainland China.

IT AND COMPETITION (SYNOPSIS).

This article examines the reason behind the failure of the application of personal computers and the Internet to substantially benefit new information technology consultancies. Information technolo...

Technology requirements for population and economic growth

Summary form only given. This paper first demonstrates that policy conclusions based on the World3 model are robust to correction for key economic criticisms and to sensitivity analysis of model parameters. Changes to the model are introduced, making aggregate production a function of population as well as industrial capital, more realistically allocating industrial output to economic sectors, and allowing for irreversibility in the improvement of labor productivity. Resource-related criticisms are addressed by pointing out that resource constraints can be relaxed without affecting the nature of the conclusions, and technology-related concerns are addressed later through technological benchmark analyses. Next, the paper introduces the concept of technology benchmarks. Such benchmarks are estimated lower bounds to technology levels needed at each point in time to support a given growth path of world population and industry. Growth must be supported in terms of food, resource, and environmental requirements of world population and industry. The paper argues that, given the models detailed use of relevant scientific data and literature, the World3 model is an appropriate starting point to develop estimates of technology requirements. Results are presented as curves showing tradeoffs between technologies to enhance crop yields and to reduce pollutant impacts, and as a figure for requisite improvements in resource efficiency.