This paper estimates the effects of the 1991 breakups of Czechoslovak state-owned enterprises (SOEs) on subsequent performance of the master enterprises and the spin-off units. The analysis is based on quarterly and annual data of Czechoslovak industrial enterprises. We estimate the performance...

The economic slowdown in the 70s in Latin America and Japan in the late 90s, generated a growing skepticism about the role of industrial policy in the process of economic development. Yet, new considerations have emerged over the recent period, which invite us to revisit the issue. This paper...

This paper examines the rationale for multilateral agreements to limit investment subsidies. The welfare ranking of symmetric multilateral subsidy games is shown to depend on whether or not investment levels are "friendly", raising rival profits in total, and/or strategic complements, raising...

The outcome of technological competition between firms (or countries) depends on the resolution of two forces: the profit incentive and the competitive threat. This is illustrated using a simple duopoly model. This model is then used to analyze two policy issues: subsidizing R & D and...

This Paper describes and analyses the evolution of industrial competitiveness in Sweden and Finland in a long-term perspective. One part of the Paper looks at the foundations for industrial take-off in Sweden, with some focus on the development of institutions for the creation and dissemination...

Empirical evidence strongly suggests that R&D increases a firm’s ‘absorptive capacity’ (its ability to absorb spillovers from other firms) as well as contributing directly to profitability. We explore the theoretical implications of this. We specify a general model of the absorptive...

We evaluate the social welfare loss (WL) that arises in an oligopolistic industry under technological competition and product differentiation. The main novelty of our approach concerns the decomposition of the WL into `dynamic' losses (from too little cost reduction and an inappropriate number...

The purpose of this paper is to suggest how institutions can be created and modified to devise and implement industrial policy in the emerging market economies. Two main issues confronting industrial policy institutions are how to avoid regulatory capture, that is, having those policy-makers...

Our concern is about a firm-specific industrial policy. When R&D subsidies or taxes are differentiated among firms, the question arises which firms in an industry should receive such support. We analyse a situation where firms differ in their R&D technologies in two distinct ways: they differ...