Industrial Organization Commons^™

Sources Of Productivity Spillovers: Panel Data Evidence From China, Badi H. Baltagi, Peter H. Egger, Michaela Kesina

Center for Policy Research

This paper assesses sources of productivity spillovers in China's electric and electronic manufacturing industry using a rich panel data-set of 25,360 firms observed over the period 2004-2007. This industry is characterized by its important reliance on technology. In particular, the paper focuses on the role of other firms' productivity as well as productivity shifters in affecting own firm-level total factor productivity. In addition, this paper examines the possible difference between spillovers from foreign-owned units and from units which participate at global markets through exporting in comparison to domestically-owned and non-exporting units. We find evidence of stronger spillovers from exporting firms …

Firm-Level Productivity Spillovers In China’S Chemical Industry: A Spatial Hausman-Taylor Approach, Peter H. Egger, Badi H. Baltagi, Michaela Kesina

Center for Policy Research

This paper assesses the role of intra-sectoral spillovers in total factor productivity across Chinese producers in the chemical industry. We use a rich panel data-set of 12,552 firms observed over the period 2004-2006 and model output by the firm as a function of skilled and unskilled labor, capital, materials, and total factor productivity, which is broadly defined. The latter is a composite of observable factors such as export market participation, foreign as well as public ownership, the extent of accumulated intangible assets, and unobservable total factor productivity. Despite the richness of our data-set, it suffers from the lack of time …

Endogenous Network Production Functions With Selectivity, William C. Horrace, Xiaodong Liu, Eleonora Patacchini

Center for Policy Research

We consider a production function model that transforms worker inputs into outputs through peer effect networks. The distinguishing features of this production model are that the network is formal and observable through worker scheduling, and selection into the network is done by a manager. We discuss identification and suggest a variety of estimation techniques. In particular, we tackle endogeneity issues arising from selection into groups and exposure to common group factors by employing a polychotomous Heckman-type selection correction. We illustrate our method using data from the Syracuse University Men’s Basketball team, where at any point in time the coach selects …

A Laplace Stochastic Frontier Model, William C. Horrace, Christopher F. Parmeter

Center for Policy Research

We propose a Laplace stochastic frontier model as an alternative to the traditional model with normal errors. An interesting feature of the Laplace model is that the distribution of inefficiency conditional on the composed error is constant for positive values of the composed error, but varies for negative values. Therefore, it may be ideally suited for analyzing industries with many forms on or close to the efficient frontier. A simulation study suggests that the model performs well relative to the normal-exponential model when the two-sided error is misspecified. A brief application to US Airlines is provided.

Universal Service: Competition, Interconnection And Monopoly In The Making Of The American Telephone System, Milton Mueller

Books

This book, based on years of archival research at the AT&T/Bell Labs in the aftermath of the divestiture, was originally published in 1997 as part of the MIT Press/AEI Series on Telecommunications Regulation. Acclaimed by reviewers such as Lawrence Lessig as “extraordinary” and “a crisply written mix of history and clear theory,” the small press run was sold out by 2002. Nevertheless, every year I encountered people who asked where they could get copies. The AEI series had long come to an end, its funds gone and its editorial team disbanded, making a new press run all but impossible.

It …

The Settlers Of Catan And A Study Of Trade In Non-Cooperative Games, Dmitriy Ioselevich

Renée Crown University Honors Thesis Projects - All

Free trade has long been hailed as the world’s answer to increased competitiveness, greater overall wealth and a higher standard of living. Adam Smith’s ideas on the foundations of capitalism assert that open market policies lead to global economic growth, and conversely that protectionist measures stunt growth and inflate prices. Critics argue that protectionism helps protect developing markets and industries and prevents unfair competition. But in the debate over trade which economic policy is actually best?

To answer this question I conducted an experiment using the board game, The Settlers of Catan, as an economic model. I isolated trade …