Perversity without complementarity∗
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Abstract:
It has been shown by Tatsuo Hatta that, in a Wicksellian or dated labour model of production, Hicksian input complementarity is a necessary condition for 'capital perversity'. It is shown here that Hicksian input complementarity at the more fundamental level of real industries is nota necessary condition for 'perversity'.Keywords:
Complementarity (molecular biology)
Capital (architecture)
A number of recent empirical studies of firm-level productivity (growth) have been concerned with establishing potential complementarity between multiple organizational design practices. These papers have drawn conclusions on basis of the effect of the interaction term between each possible pair of practices. In this paper we show that this approach may lead to misleading results in case more than two practices are considered. We develop a proper testing procedure for complementarity and substitutability in case there are multiple organizational practices that affect output. The testing methodology is illustrated by empirical examples of three and four innovation practices affecting productivity. The testing framework can easily be applied to test for supermodularity.
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The link between R&D and productivity has been widely analyzed. However, these innovation activities have been considered as a whole. This paper analyzes the differentiated effect of research and development on productivity and tests the existence of complementarity between these activities. We find evidence supporting the existence of a direct effect of both innovation activities. Most interesting, our results suggest that there is complementarity between research and development in determining productivity.
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This Paper is an empirical study on the existence of complementarity between product and process innovation. We present an econometrically feasible model that uses the information contained in the innovation profile of each firm to test for the existence of complementarity among production and innovation strategies. We apply the model to analyse the Spanish ceramic tiles industry where the adoption of the single firing furnace in the 1980s facilitated the introduction of new product designs as well as to opening new ways of organizing production. Our econometric results show that there is significant complementarity between product and process innovation. We are able to separate the nature of complementarity relationships and thus, our results show that both intrinsic – technologically driven – and induced complementarity – due to firms unobserved heterogeneity – are significant. Small firms tend to be more innovative overall.
Complementarity (molecular biology)
Product innovation
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Returns to scale
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Complementarity (molecular biology)
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The link between R&D and productivity has been widely analyzed. However, these innovation activities have been considered as a whole. This paper analyzes the differentiated effect of research and development on productivity and tests the existence of complementarity between these activities. We find evidence supporting the existence of a direct effect of both innovation activities. Most interesting, our results suggest that there is complementarity between research and development in determining productivity.
Complementarity (molecular biology)
Research development
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Complementarity (molecular biology)
Occupational Science
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In Search of Complementarity in Innovation Strategy: Internal R&D and External Knowledge Acquisition
Empirical research on complementarity between organizational design decisions has traditionally focused on the question of existence of complementarity. In this paper, we take a broader approach to the issue, combining a “productivity” and an “adoption” approach, while including a search for contextual variables in the firm’s strategy that affects complementarity. Analysis of contextual variables is not only interesting per se, but also improves the productivity test for the existence of complementarity. We use our empirical methodology to analyze complementarity between innovation activities: internal research and development (R&D) and external knowledge acquisition. Our results suggest that internal R&D and external knowledge acquisition are complementary innovation activities, but that the degree of complementarity is sensitive to other elements of the firm’s strategic environment. We identify reliance on basic R&D—the importance of universities and research centers as an information source for the innovation process—as an important contextual variable affecting complementarity between internal and external innovation activities.
Complementarity (molecular biology)
Empirical Research
Knowledge Acquisition
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Citations (2,387)
A number of recent empirical studies of firm-level productivity (growth) have been concerned with establishing potential complementarity between multiple organizational design practices. These papers have drawn conclusions on basis of the effect of the interaction term between each possible pair of practices. In this paper we show that this approach may lead to misleading results in case more than two practices are considered. We develop a proper testing procedure for complementarity and substitutability in case there are multiple organizational practices that affect output. The testing methodology is illustrated by empirical examples of three and four innovation practices affecting productivity. The testing framework can easily be applied to test for supermodularity.
Complementarity (molecular biology)
Cite
Citations (10)