Internal versus external R&D:a study of R&D choice with sample selection

This paper extends previous analyses of the choice between internal and external R&D to consider the costs of internal R&D. The Heckman two-stage estimator is used to estimate the determinants of internal R&D unit cost (i.e. cost per product innovation) allowing for sample selection effects. Theory indicates that R&D unit cost will be influenced by scale issues and by the technological opportunities faced by the firm. Transaction costs encountered in research activities are allowed for and, in addition, consideration is given to issues of market structure which influence the choice of R&D mode without affecting the unit cost of internal or external R&D. The model is tested on data from a sample of over 500 UK manufacturing plants which have engaged in product innovation. The key determinants of R&D mode are the scale of plant and R&D input, and market structure conditions. In terms of the R&D cost equation, scale factors are again important and have a non-linear relationship with R&D unit cost. Specificities in physical and human capital also affect unit cost, but have no clear impact on the choice of R&D mode. There is no evidence of technological opportunity affecting either R&D cost or the internal/external decision.

Innovation, productivity and growth in US business services:a firm-level analysis

This paper examines the impact of innovation on the performance of US business service firms. We distinguish between different levels of innovation (new-to-market and new-to-firm) in our analysis, and allow explicitly for sample selection issues. Reflecting the literature, which highlights the importance of external interaction in service innovation, we pay particular attention to the role of external innovation linkages and their effect on business performance. We find that the presence of service innovation and its extent has a consistently positive effect on growth, but no effect on productivity. There is evidence that the growth effect of innovation can be attributed, at least in part, to the external linkages maintained by innovators in the process of innovation. External linkages have an overwhelmingly positive effect on (innovator) firm performance, regardless of whether innovation is measured as a discrete or continuous variable, and regardless of the level of innovation considered.

Assessing the effectiveness of business support services in England:evidence from a theory based evaluation

In England, publicly supported advice to small firms is organized primarily through the Business Link (BL) network. Using the programme theory underlying this business support, we develop four propositions and test these empirically using data from a new survey of over 3000 English SMEs. We find strong support for the value to BL operators of a high profile to boost take-up. We find support for the BL’s market segmentation that targets intensive assistance to younger firms and those with limited liability. Allowing for sample selection, we find no significant effects on growth from ‘other’ assistance but find a significant employment boost from intensive assistance. This partially supports the programme theory assertion that BL improves business growth and strongly supports the proposition that there are differential outcomes from intensive and other assistance. This suggests an improvement in the BL network, compared with earlier studies, notably Roper et al. (2001), Roper and Hart (2005).

Placements and degree performance:do placements lead to better marks, or do better students choose placements?

There has been a strong move recently to make degrees more applicable to employment; including work placements as part of the programme is one way of achieving this. Such placements are advocated to increase employability, but also for improving academic performance. This paper examines the relationship between undertaking a work placement and the class of degree achieved. It challenges earlier findings that undertaking a placement increases degree results. Studying seven cohorts of students, a well tested approach was employed that allows for sample selection – i.e. whether better students do placements rather than whether placements produce better students. The paper concludes that the sample selection is much stronger, i.e. placement students do better because they are better students. The results highlight that it is not merely doing a placement that matters, but a successful placement adds significantly to subsequent performance. The paper concludes with advice to students and policy makers.

Firm growth and firm size

This article analyses the growth rates of the complete population of UK-registered firms for the period 2001 to 2005. We estimate Gibrat's law – that growth rates are independent of firm size – by deciles of the firm size distribution. Whether we are able to reject Gibrat's law varies across deciles. We also show how estimates vary according to the measure of firm size, time period and sample selection.

Does patenting help high-tech start-ups?

Abstract: Using data on all high- and medium-tech start-ups in the UK in 2000, this paper assesses the effect associated with a firm's decision to patent on a firm's subsequent growth between 2001 and 2005. We propose a new approach to addressing well known issues challenging identification of any patent effect: firm heterogeneity, simultaneity between firm performance and patenting, and sample selection. Our findings suggest that patentees have higher asset growth than non-patentees of between 8% and 27% per annum. © 2011 Elsevier B.V. All rights reserved.

The adverse selection component of exchange traded funds

The aim of our paper is to examine whether Exchange Traded Funds (ETFs) diversify away the private information of informed traders. We apply the spread decomposition models of Glosten and Harris (1998) and Madhavan, Richardson and Roomans (1997) to a sample of ETFs and their control securities. Our results indicate that ETFs have significantly lower adverse selection costs than their control securities. This suggests that private information is diversified away for these securities. Our results therefore offer one explanation for the rapid growth in the ETF market.

A survey of UK selection practices across different organization sizes and industry sectors

This paper presents results of a study examining the methods used to select employees in 579 UK organizations representing a range of different organization sizes and industry sectors. Overall, a smaller proportion of organizations in this sample reported using formalized methods (e.g., assessment centres) than informal methods (e.g., unstructured interviews). The curriculum vitae (CVs) was the most commonly used selection method, followed by the traditional triad of application form, interviews, and references. Findings also indicated that the use of different selection methods was similar in both large organizations and small-to-medium-sized enterprises. Differences were found across industry sector with public and voluntary sectors being more likely to use formalized techniques (e.g., application forms rather than CVs and structured rather than unstructured interviews). The results are discussed in relation to their implications, both in terms of practice and future research.

Information theoretic prototype selection for unattributed graphs

In this paper we propose a prototype size selection method for a set of sample graphs. Our first contribution is to show how approximate set coding can be extended from the vector to graph domain. With this framework to hand we show how prototype selection can be posed as optimizing the mutual information between two partitioned sets of sample graphs. We show how the resulting method can be used for prototype graph size selection. In our experiments, we apply our method to a real-world dataset and investigate its performance on prototype size selection tasks. © 2012 Springer-Verlag Berlin Heidelberg.