The Peer review has evaluated this group as Excellent
The research interests of the Industrial and Innovation Economics group cover three major fields.
1. International business
The group has been active in the area of international business since the mid ‘80s. Specifically, our contribution to the international debate on multinational enterprises (MNEs) and foreign direct investment (FDI) spans from the determinants of international growth and FDI by MNEs, to the effects on host and home countries, to the international aspects of technological change. As far as the former, we have investigated the relationship between forms of internationalization, the MNEs’ locational and entry mode choice, and the relationships between FDI in manufacturing and financial services. The bulk of the empirical evidence provided relies on the Reprint database (ie a census of Italian FDI since 1986). Likewise, concerning the effects of MNEs on the host and the home country, we participated to the international debate on the existence of intra- and inter-industry spillovers and their impact on productivity, and on employment and skill upgrading. Finally, the long-lasting relationship with the University of Reading-UK (Centre for International Business and Strategy), and with the Rutgers University has fostered increasing involvement in the area of globalisation of R&D and innovation: the location of MNEs’ innovative activities within Europe, the influence of the interaction between subsidiaries and local networks on the location of technological development efforts, the geographical pattern of technological knowledge sourcing by subsidiaries, and the knowledge transfer from the subsidiaries to the parent company, on the other. The latter, in particular, has led to the development of an original database, RITMO-Research on Innovation and Technology in Multinational Organizations (on best practices and knowledge transfer in Italian multinationals). Around such a database we have developed strong collaboration with the Copenhagen Business School and the Fox School of Business at Temple University.
2. Economics of innovation
In this field, the group has first focused attention on entrepreneurship in high-tech industries. First, we have studied the determinants of growth of new technologybased firms (NTBFs). Second, we have analysed the existence of capital market imperfections suffered from NTBFs in accessing both bank debt and venture capital. Third, we have examined the heterogeneity among research-based spinoffs and the differences between these firms and other NTBFs. Fourth, we have analysed the effectiveness of technology policy measures towards Italian NTBFs. The second research stream is concerned with mergers and acquisitions (M&A) and alliances. As to M&As, we have studied at micro level the effects of M&A on the innovation activity of the merging companies as a function of their technological and market relatedness. As to alliances, we have first examined the 5 determinants of the alliance likelihood and the choice of the alliance governance structure for a sample of large ICT companies. Then we have studied the determinants of NTBFs’ propensity to establish cooperative agreements and the choice of the alliance organizational form. The third reseach stream regards the diffusion and economic impact of technological and organizational innovations. In this stream we have analyzed the economic determinants of firms’ organizational design, the evolution of organizational variables over time and their impact on firms’ profitability. Second, we have examined the determinants of the adoption of technological innovations and the interactions with organizational variables. A fourth research stream is concerned with Open Source Software (OSS). In particular, we have empirically investigated the business models of software firms doing business out of OSS.
3. Economics of network industries
The group is also active in the applied research on network industries. A primary research interest is the economics of telecommunications. First, we have analysed the effects of regulatory reforms and privatization on research activities and fixed investments at the firm level. Second, we have investigated the determinants of the diffusion of the Internet, and have estimated the adoption by Italian firms. Third, we have proposed special universal service tariffs. More recently, substantial research efforts have been devoted to electrical utilities and electrical markets. First, we have extensively written on quality regulation in the electricity industry, by proposing an incentive regulation scheme and empirically analysing the quality degradation costs suffered by customers. Second, we have developed game-theoretic models of the wholesale electricity markets with and without transmission constraints; this allows to analyse the firm’s strategic conducts and their implications for social welfare. Third, we are empirically exploring the location choice for locally-unwanted investments (i.e. NIMBY effect), by developing a novel dataset for the Italian power investment projects and plants. Finally, we have recently carried out a firm-level econometric analysis of the relationship between privatization and quality delivery.
Massimo G. Colombo