Growing like mushrooms? Sectoral evidence from four large European economies

Castaldi, Carolina; Sapio, Sandro

doi:10.1007/978-3-540-93777-7_14

Cited by 3 publications

(3 citation statements)

References 22 publications

(14 reference statements)

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“…Castaldi and Sapio (2008) analyze the distributional properties of industry growth rates finding evidence supporting fat-tailed densities in line with what observed at the country level.…”

Section: Industrial Dynamicssupporting

confidence: 72%

Endogenous Growth and Global Divergence in a Multi-Country Agent-Based Model

2017

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In this paper we present a multi-country, multi-industry agent-based model investigating the different growth patterns of interdependent economies. Each country features a Schumpeterian engine of endogenous technical change which interacts with Keyneasian/Kaldorian demand generation mechanisms. National growth trajectories are driven by firms' accumulation of technological knowledge, which in turn also leads to emergent specialization patterns in different industries. Interactions among economies occur via trade flows, stemming from the competition of firms in international markets. Simulation results show the emergence of persistent income divergence among countries leading to polarization and club formation. Moreover, each country experiences a structural transformation of its productive structure during the development process. Such dynamics results from firm-level virtuous (or vicious) cycles between knowledge accumulation, trade performances, and growth dynamics. The model accounts for a rich ensemble of empirical regularities at macro, meso and micro levels of aggregation. KEY WORDSEndogenous growth, structural change, technology-gaps, global divergence, absolute advantages, agentbased models. JEL F41, F43, O4, O3.

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“…Castaldi and Sapio (2008) analyze the distributional properties of industry growth rates finding evidence supporting fat-tailed densities in line with what observed at the country level.…”

Section: Industrial Dynamicssupporting

confidence: 72%

Endogenous Growth and Global Divergence in a Multi-Country Agent-Based Model

2017

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“…Obviously, such an approach would require to find an appropriate distributions for the exogenous shocks. Following Fagiolo et al (2008), we suggest below that EP densities 1 Interestingly, fat-tail output growth-rate distributions emerge also for cross-section data, both at the level of countries Lee et al, 1998;Castaldi and Dosi, 2009), industries (Castaldi and Sapio, 2008) and firms (Bottazzi and Secchi, 2003;Fu et al, 2005).…”

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confidence: 71%

Fat-Tail Distributions and Business-Cycle Models

2012

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Recent empirical findings suggest that macroeconomic variables are seldom normally distributed. For example, the distributions of aggregate output growth-rate time series of many OECD countries are well approximated by symmetric exponential-power (EP) densities, with Laplace fat tails. In this work, we assess whether Real Business Cycle (RBC) and standard medium-scale New-Keynesian (NK) models are able to replicate this statistical regularity. We simulate both models drawing Gaussian-vs Laplace-distributed shocks and we explore the statistical properties of simulated time series. Our results cast doubts on whether RBC and NK models are able to provide a satisfactory representation of the transmission mechanisms linking exogenous shocks to macroeconomic dynamics.

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“…Examples include the automotive, aerospace, mechanical engineering, metal producing, paper, pharmaceutical, textile, and wood industries (Castaldi and Sapio 2006). Moreover, studies have shown that firms in mature industries are no less innovative than those in emerging industries (McGahan and Silverman 2001).…”

Section: Background and Thesis Focusmentioning

confidence: 99%

Enabled by the past: understanding endogenous innovation in mature industries

Onufrey¹

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Mature industries have played and still play a crucial role in national and world economies. To survive and retain competitiveness, they need to innovate, as innovation is the driver of economics growth and industrial transformation. However, existing research does not provide sufficient explanation of how innovation in mature industries can be enabled based on resources and internal development logic of those industries, i.e. endogenously. Some previous studies focused on incremental innovation patterns, which led to an underestimation of innovation potential of mature industries. Other studies acknowledged a high innovation potential of mature industries, but failed to explain how, through what mechanisms, industry-endogenous logic can bring about major innovations.Therefore, the purpose of this thesis is to systematically address, explain and conceptualize industry-endogenous innovation and its driving mechanisms in mature industries. To achieve this purpose, three main issues are addressed. First, the thesis investigates and conceptualizes the notion of industry endogenous innovation mechanisms based on the path dependency theory. Second, the thesis addresses strategic choices and actions by established companies that are rooted in the industry endogenous mechanisms and result in highly innovative outcomes. Third, the thesis systematically analyses different aspects of radicalness of innovations resulting from industry endogenous mechanisms.The thesis represents a qualitative, embedded case study with two main industry cases, i.e. the global lighting industry and the Swedish pulp and paper industry. The lighting industry and its subcases in the form of specific lighting technologies have been studied via the analysis of patents of leading lighting manufacturers, archival and secondary data sources as well as interviews with different types of actors in the industry. The pulp and paper industry and its sub-cases in the form of innovation initiatives have been studied with the help of interviews with leading manufacturers and research institutes, as well the analysis of annual reports and secondary data sources. The outcomes of the study are presented in the form of the thesis cover paper and five appended papers.The results show that innovations of any magnitude can be endogenously developed in mature industries. At the industry level, endogenous innovation is driven by innovation mechanisms that can be conceptualized as reactive sequences and self-reinforcing mechanisms. At the level of individual companies, the exploitation strategy corresponds to the logic of endogenous innovation mechanisms by enabling highly innovative outcomes and building on a wide range of resources available in the industry. The endogenous character of innovation mechanisms imposes certain limitations on the radicalness of the outcomes in the form of trade-offs in terms of how many and what particular aspects can be radically new at once.With these results, the thesis contributes to a more balanced overall understanding of in...

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Growing like mushrooms? Sectoral evidence from four large European economies

Cited by 3 publications

References 22 publications

Endogenous Growth and Global Divergence in a Multi-Country Agent-Based Model

Endogenous Growth and Global Divergence in a Multi-Country Agent-Based Model

Fat-Tail Distributions and Business-Cycle Models

Enabled by the past: understanding endogenous innovation in mature industries

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