Instructional goals
This class introduces advanced management students to selected contributions in modern economic theory that deals with market structure and industrial dynamics. Seminal papers will be presented and discussed during classes.
Prerequisites
Basic principles of Industrial Economics and Statistics are required.
In more detail,
Industrial Economics:
i) consumer and firm theory; ii) competition and efficiency; iii) monopoly and regulation; iv) oligopoly competition; v) collusion; vi) market structure.
Textbook
Cabral L. (2017) Introduction to Industrial Organization, MIT Press
Statistics:
i) sample and population; ii) variables grouped data and histograms; iii) measures of central tendency; iv) measures of dispersion; v) correlation.
Textbook
Newbold P., Carlson, W.L., Thorne, B., Statistics, Chapter 2.
Intended learning outcomes
1) Knowledge and Understanding:
At the end of the course students will be able :
- to understand market structure and dynamics of the main industries.
- to understand the firm behaviour and its evolution over time.
- to understand the framework for European industrial policies
- to develop capabilities for the strategic analysis.
2) Applying knowledge and understanding:
The student will be able:
- to perform empirical analyses on structure and evolution of industries, on firm heterogeneities within and between industrie ;
- to perform policy evaluation studies of industrial policies and regulation;
These goals will be achieved by means of class exercises and work group evaluation.
3) Making judgements:
We expect students to be able to make judgements upon the validity and effectiveness of the industrial policies.
4) Communications Skills
Through classes exercises and work group presentations the students will be able to communicate their ideas, proposals, analysis and critical reasoning.
5) Learning skills
The complementarity between the theoretical knowledge and the know-how students accumulate during the class excercises and work group allow them to acquire those dynamic capabilities useful for their career.
Course Contents
This course deals with market structure and industrial dynamics. Gibrat Law, market structure, determinants of entry and exit, and industry life-cycle will be discussed in the first part of the course. Afterwards, we turn to entrepreneurial theories, and innovation taxonomies. Many of these topics will be complemented by class exercises.
Reference Books
Dinamiche Industriali di Francesca Lotti e Valentina Meliciani, Il Mulino editore.
Other material used during the lectures and summarized in the slides
Reading material indicated below is for deepening your knowledge but it is not compulsory
Teaching Methods
Lectures, data exercises, class discussions, group work presentations.
Assessment Method
1/3 group work
2/3 oral examination
Thesis assignment criteria
Interest for the course
Coherence between the proposal and the content of the course
Week 1
Introduction. Firm size distribution and Gibrat law
References:
Rossi-Hansberg, E., and M. L. J. Wright,(2007). "Establishment Size
Dynamics in the Aggregate Economy." American Economic Review, 97(5):
1639-1666.
* Lotti, F., E. Santarelli and M. Vivarelli, (2003). "Does Gibrat's Law hold among young, small firms?," Journal of Evolutionary Economics, Springer, vol. 13(3), pages 213-235, August.
* D.B. Audretsch& L. Klomp& E. Santarelli& A.R. Thurik, 2004. "Gibrat's Law: Are the Services Different?," Review of Industrial Organization,
Springer, vol. 24(3), pages 301-324, 05.
Lotti, F., E. Santarelli and M. Vivarelli (2009), Defending Gibrat’s Law as a long-run regularity, Small Business Economic Journal, 32, 31-44.
* Lotti, F. (2007), "Firm dynamics in manufacturing and services: a broken mirror?," Industrial and Corporate Change, Oxford University Press, vol. 16(3), pages 347-369, June.
Week 2
Profit-driven entry theory
Practical session
Methodologies, data and case studies for group work (interactive session with evaluation). Gibrat.
References:
*Capitolo 12, Cabral, Economia Industriale (2018), Entrata, uscita e comportamento strategico
*Garavaglia,(2014), Analisi delle determinanti dell’entrata di nuove imprese nei settori industriali: una rassegna, LIUC Papers n. 144
Week 3
Innovation and the industry-life cycle
Shake-out of industrial sectors
References:
*Garavaglia,(2014), Analisi delle determinanti dell’entrata di nuove imprese nei settori industriali: una rassegna, LIUC Papers n. 144
* Klepper, S, 1996. "Entry, Exit, Growth, and Innovation over the Product Life Cycle," American Economic Review, American Economic Association, vol. 86(3), pages 562-83, June.
Klepper, S. & Miller, J. H., 1995. "Entry, exit, and shakeouts in the United States in new manufactured products," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 567-591, December.
Week 4
Break out
Methodologies, data and case studies for group work (interactive session with evaluation). Entrata
Competing technologies and increasing returns to adoption
Letture:
Lissoni, F. (2014) “Tecnologie concorrenti e rendimenti crescenti da adozione” in Economia dell’innovazione, a cura di F. Malerba.
Week 5
Energy Transition and Sustainability Dynamics
Pavitt taxonomy
References:
*Pavitt, K. (1984), ‘Sectoral Patterns of Technical Change: Towards a
Taxonomy and a Theory’, Research Policy, vol. 13, pp. 343–73.
Week 6
The Italian economy
Group work
Technological regimes
Regimi tecnologici e pattern
settoriali di innovazione, in Economia dell’innovazione, a cura di F.
Malerba.
* Malerba, Franco & Orsenigo, Luigi, 2014.
Week 7
Competition and tech giants
Group work
Week 8
Global value chains
Week 9
Entrepreneurship and external environment
Ardagna, S. and Lusardi, A., 2008. Explaining international differences in entrepreneurship: The role of individual characteristics and regulatory constraints (No. w14012). National Bureau of Economic Research.
References:
Lotti e Meliciani, Dinamiche industriali, capitolo 7.
Week 10
Entrepreneurship. Facts, trends and historical background
References:
Lotti e Meliciani, Dinamiche industriali, capitolo 7.
Entrepreneurship and territory
References:
Fritsch e Mueller (2008); the effect of new business formation on regional development over time, Small Business Economics, 30
Fritsch e Schroeter (2011), Why Does the Effect of New Business Formation Differ Across Regions? (November 2007). Jena Economic Research Paper No. 2007-077, http://dx.doi.org/10.2139/ssrn.1026601
Entrepreneurship, age and population structure
References:
Pierre Azoulay, Benjamin F. Jones, J. Daniel Kim, and Javier Mirand, Age and High-Growth Entrepreneurship, AER: Insights 2020, 2(1): 65–82, https://doi.org/10.1257/aeri.20180582
Xavier Ordenana, Paul Vera-Gilces, Jack Zambrano-Vera, Alfredo Jimenez, The effect of high-growth and innovative entrepreneurship on economic growth, Journal of Business Research 171 (2024) 114243
Liang J, Wang H., Lazear Edward P., (2018) Demographics and Entrepreneurship, Journal of Political Economy, 2018, vol. 126, no. S1]
Week 11
Group work
Week 12
Group work