INDUSTRIAL ECONOMICS

The course provides an understanding of the degree of complexity of the business logic and to put them in a position to be able to build an interpretative key of the evolutionary logic of economic production processes worldwide and in the Italian context. The course will start from the imperfect market structures, looking at monopoly, oligopoly, market concentration and pricing strategies. We will then discuss different theories of the firm and how they relate to our understanding of firms’ behaviour across different market structures. Finally, we will discuss key contemporary issues that affect firms’ behaviour such as global value chains, the return of industrial policy in the current debate, and how input-output analysis can be used to understand inter-industry relationships and the propagation of shocks. Economics is not only a body of knowledge and concepts, but it also relies on a methodological framework to examine social and economic outcomes, largely based on statistical and quantitative concepts. These concepts and methods are often at the centre of both business and policy decisions. Against this backdrop, the course will also provide students with the ability to critically study and interpret economic data. To achieve this, the course takes an “applied” twist to the topic of industrial economics and students will be assisted in using real word data for their final presentation, as discussed further down in the syllabus.

Basic knowledge of economic concepts, such as labour, employment, capital, productivity and perfect competition, as well as an introductory level of statistical analysis.

Knowledge and understanding: Students will receive a vast overview of ideas and theories to understand industrial dynamics and the key features of economic sectors. Students will also learn key concepts to better understand and assess technological change brought about by innovation. Finally, students will gain familiarity with the use of economic data and quantitative methodologies commonly used to carry out empirical analysis within the field of industrial economics. Applying knowledge and understanding: Students will be able to apply the knowledge in the following ways: - Appreciate the importance of market structure and production factors and costs and how these shape firms’ behaviour. - Ability to assess the importance of different kinds of innovation for businesses. - Evaluate and understand the implications of the international fragmentation of labour in shaping firms’ behaviour. - Accurately select variables and data to measure industrial dynamics. Making judgements: Students will be able to analyse the implications of market structure and industrial dynamics on key economic variables. They will do so by relying on different understandings of these phenomena, that will be discussed extensively throughout the course. Finally, throughout the course student will develop the ability to critically assess economic arguments. Communications Skills: The course will provide students with accurate and correct terms to understand and discuss issues relating to industrial dynamics, technological change and its relationship with economic variables. Oral presentations will be a crucial aspect of the course, providing students with the confidence to clearly discuss in public key economic aspects relating to the digital transformation. Learning skills: The course will empower students with the confidence and competence to critically discuss economic concepts and empirical facts related to market structure, industrial dynamics, international trade and innovation.

The course focuses on 3 key areas: - An overview of the microeconomic mechanisms underpinning production costs, demand and profit maximisation. - Theories of the firm, from neoclassical to resource based view of the firm and boundaries of firm. - Contemporary issues around industrial economics: the emergence of intangible assets, global value chains and industrial policy

The main handbook is Lipczynski J., Wilson J.O.S., and Goddard J., 2017 Industrial Organization: Competition, Strategy and Policy, 5th edition, Person. In addition, lecture slides, research papers and articles will be made available during the course on the e-learning platform.

The course will rely on frontal lecture blending more traditional lectures with more applied ones involving students in group discussions and debates.

Proficiency and attainment of the learning outcomes will be assessed in the following ways: 1. Multiple Choice Questions – 20% of the final mark. 2. End-of-term group project with real world data – 50% of the final mark. 3. Oral examination – 30% of the final mark. Multiple choice questions will consist of a timed test including 30 questions to be completed in 30 minutes. Each question will provide three possible answers, of which only one is correct. The questions are designed to assess students’ understanding of key concepts, theories and empirical evidence covered in the module, as well as their ability to distinguish between correct and incorrect applications of such concepts. This component primarily evaluates knowledge and understanding of the course content. The group project will provide students with the opportunity to apply the knowledge and skills acquired during the module to a topic of their choosing that interests them. Students will present an applied, data-driven exploration of an industry, its structure, integration with the global economy and innovation performance. This can be based on any source of data or case study. While students are encouraged to come up with their own specific topic for this project, possible topics can be: 1. Analyse an industry’s structure across countries. 2. Analyse innovation performance of industries within the same country 3. Analysis innovation performance of an industry across countries. 4. Analyse economic integration across countries and industries. In carrying out this project students will be expected to: 1. Present the topic the students have chosen and its relevance (Making judgements and Communication skills). 2. Discuss the key concepts that are relevant to study the topic (Applying knowledge and understanding). 3. Discuss the key issue and implications around the chosen topic (Applying knowledge and understanding and Learning skills). 4. Present in a clear and concise manner the main results of their analysis (Learning skills and Communication skills). The oral exam will ask students to answer a few general questions over the whole programme: 1. Show an understanding of the topic they are asked to discuss (Knowledge and understanding). 2. Discuss the main issues concerning the topic (Applying knowledge and understanding). 3. Present their arguments in a clear and concise manner, using appropriate vocabulary and concepts (Communication skills). Non-compliant students will be assessed through a longer version of the oral exam. In order for attending students to pass the exam it is necessary to obtain a pass in each of the three assessments.

A final mark of at least 29 out of 30. Having shown interest throughtout the course and providing a topic of analysis in line with the teacher's expertise and research activity