Trade marks and performance in UK firms:evidence of Schumpeterian competition through innovation

This paper uses novel data on trade mark activity of UK manufacturing and service sector firms to investigate whether trade marks improve the profitability and productivity of firms. We first analyse Tobin`s q, the ratio of stock market value to book value of tangible assets. We then investigate the relationship between trade mark activity and productivity, using a value added production function. Finally we examine interactions between firms IP activity, to explore creative destruction and growth via innovation. We find trade marks are positively related to both Tobin`s q and to productivity. Also in the short run greater IP activity by other firms in the industry reduces the value added of the firm, but this same competitive pressure has later benefits via productivity growth, also reflected in higher stock market value. This describes the Schumpeterian process of competition through innovation, restraining profit margins while increasing product variety and quality.

The creative instability hypothesis

This paper provides an analysis of why many ‘stars’ tend to fade away rather than enjoying ongoing branding advantages from their reputations. We propose a theory of market overshooting in creative industries that is based on Schumpeterian competition between producers to maintain the interest of boundedly rational fans. As creative producers compete by offering further artistic novelty, this escalation of product complexity eventually leads to overshooting. We propose this as a theory of endogenous cycles in the creative industries.

Cross–Sectoral Variation in Firm–Level Idiosyncratic Risk

We estimate firm–level idiosyncratic risk in the U.S. manufacturing sector. Our proxy for risk is the volatility of the portion of growth in sales or TFP which is not explained by either industry– or economy–wide factors, or firm characteristics systematically associated with growth itself. We find that idiosyncratic risk accounts for about 90% of the overall uncertainty faced by firms. The extent of cross–sectoral variation in idiosyncratic risk is remarkable. Firms in the most volatile sector are subject to at least three times as much uncertainty as firms in the least volatile. Our evidence indicates that idiosyncratic risk is higher in industries where the extent of creative destruction is likely to be greater.

Cross-sectoral variation in the volatility of plant-level idiosyncratic shocks

We estimate the volatility of plant–level idiosyncratic shocks in the U.S. manufacturing sector. Our measure of volatility is the variation in Revenue Total Factor Productivity which is not explained by either industry– or economy–wide factors, or by establishments’ characteristics. Consistent with previous studies, we find that idiosyncratic shocks are much larger than aggregate random disturbances, accounting for about 80% of the overall uncertainty faced by plants. The extent of cross–sectoral variation in the volatility of shocks is remarkable. Plants in the most volatile sector are subject to about six times as much idiosyncratic uncertainty as plants in the least volatile. We provide evidence suggesting that idiosyncratic risk is higher in industries where the extent of creative destruction is likely to be greater.

Competition, agency and productivity

This article tests a set of hypotheses relating to agency and Schumpeterian views on how competition affects performance. A survey data set of Australian workplaces is used, with the change in labour productivity as the dependent variable. The results show strong support for the idea that intense competition raises productivity growth in managerial workplaces, but not in non-managerial workplaces (i.e. where the principal owner also works). Testing the agency theories in more detail, we find no evidence that the number of competitors, the price elasticity of demand or a proxy for bankruptcy (pre-tax losses) are the mechanisms behind the process. For non-managerial workplaces the results indicate support for the idea that greater demand uncertainty reduces productivity growth. In contrast, for managerial workplaces, greater demand uncertainty tends to raise productivity growth.

The Get Marketer Challenge Innovation: Challenging students using a tournament style competition

This paper presents an assessment innovation which used a tournament style competition to challenge and engage first year marketing students. The course-wide competition required student teams to solve real-world marketing problems for industry sponsors. Student feedback reflects enjoyment of the task and the competition, with students welcoming the opportunity to put theory into practice. Student attendance in the lectures and tutorials involving team presentations was improved. This structure can be adapted for any course with large enrolments. We recommend that instructors adopting a tournament structure consider grading mechanisms that promote equal effort and additional rewards, such as bonus marks, for teams progressing in subsequent rounds.

Synopolies: The use of cryptographic technologies to impede competition in multiple jurisdictions

Many jurisdictions have developed mature infrastructures, both administratively and legislatively, to promote competition. Substantial funds have been expended to monitor activities that are anticompetitive and many jurisdictions also have adopted a form of "Cartel Leniency Program", first developed by the US Federal Trade Commission, to assist in cartel detection. Further, some jurisdictions are now criminalizing cartel behaviour so that cartel participants can be held criminally liable with substantial custodial penalties imposed. Notwithstanding these multijurisdictional approaches, a new form of possibly anticompetitive behaviour is looming. Synergistic monopolies („synopolies‟) involve not competitors within a horizontal market but complimentors within separate vertical markets. Where two complimentary corporations are monopolists in their own market they can, through various technologies, assist each other to expand their respective monopolies thus creating a barrier to new entrants and/or blocking existing participants from further participation in that market. The nature of the technologies involved means that it is easy for this potentially anti-competitive activity to enter and affect the global marketplace. Competition regulators need to be aware of this potential for abuse and ensure that their respective competition frameworks appropriately address this activity. This paper discusses how new technologies can be used to create a synopoly.

Competition laws and policies in China and Hong Kong : a tale of two regulatory journeys

Reviews the background to China's enactment of the Anti-Monopoly Law in 2007 and compares the debate surrounding the proposed introduction of similar legislation in Hong Kong. Examines the main issues arising during the Law's 13 year drafting stage, its key provisions and the remaining areas of uncertainty concerning its enforcement. Discusses ongoing efforts to introduce competition law regulations in Hong Kong, the main features of the draft General Competition Law and the shortcomings of its approach to penalties and exemptions.

The economics of credence goods: An experimental investigation of the role of verifiability, liability, competition and reputation in credence goods markets

Credence goods markets are characterized by asymmetric information between sellers and consumers that may give rise to inefficiencies, such as under- and overtreatment or market break-down. We study in a large experiment with 936 participants the determinants for efficiency in credence goods markets. While theory predicts that either liability or verifiability yields efficiency, we find that liability has a crucial, but verifiability only a minor effect. Allowing sellers to build up reputation has little influence, as predicted. Seller competition drives down prices and yields maximal trade, but does not lead to higher efficiency as long as liability is violated.

Post-WTO China : competition and technology transfer laws in the 'new' socialist market economy

China has been the focus of much academic and business scrutiny of late. Its economic climate is changing and its huge new market opportunities seem quite tantalizing to the would-be 'technology entrepreneur'. But China's market is a relatively immature one; it is still in the process of being opened up to real competition. The corollary of this is that, at this stage of the transitional process, there is still significant State control of market function. This article discusses Chinese competition law, the technology transfer system, how the laws are being reformed and how the technology entrepreneur fares under them. The bottom line is that while opportunities beckon, the wise entrepreneur will nevertheless continue to exercise caution.

The nine lives of Vietnam's new competition law

Vietnam's present draft of the proposed new Law on Competition is currently in its ninth version. Although there is a need to enact legislation as quickly as possible, Vietnam cannot rush the drafting process. Under its Bilateral Trade Agreement with the USA, Vietnam has committed to improve the quality of its laws and consistency of its legislative framework. Since the Law on Competition will be fundamental in establishing the legal framework for a more coherent and effective competition regime, and will have profound influences on Vietnam's objective of becoming a socialist-oriented market economy, its provisions must be well constructed and well considered, and this takes time. This article shows how the proposed Law is being crafted as compared to older drafts which sheds light on changes in policy during the drafting process. Where possible, the Draft is also compared with the laws in other jurisdictions for any assistance they might lend. In this author's opinion not all the changes are positive but any defects in the draft are not intractable and can be remedied prior to promulgation.