Knowledge Capital and the “New Economy”: Firm Size, Performance And Network Production (Economics of Science, Technology and Innovation Book 20)

According to its proponents, the `new economy' is associated with sustainable growth, increased demand for labor and zero inflation. On the micro-level, this bright avenue into the future is propelled by knowledge capital, flexibility and new ways of organizing production, such as clusters and networks. Progress in information technology, together with massive deregulation on the national and the international levels, have been credited with setting this development into motion. The concept of the `new economy' has been rapidly embraced by politicians, as it seems to offer a way out of the traditional trade-off between unemployment and wage inflation. However, empirical evidence regarding the microeconomic mechanisms of the `new economy' is scarce. __Knowledge Capital and the `New Economy': Firm Size,____Performance and Network Production__ intends to narrow this gap by empirically analyzing the composition of knowledge capital and how knowledge capital is distributed across firms of different size. Moreover, the impact of knowledge capital on firms' profitability and international competitiveness is also examined. Finally, we compare cluster dynamics and the institutional set-up in Europe and the U.S., with the purpose of identifying regulations that seem to hinder a conducive environment for expanding and dynamic European clusters. The results of this study emphasize the role of knowledge capital and flexibility. Thus, irrespective of how sustainable the `new economy' turns out to be, the policy implications in terms of providing institutions that facilitate knowledge-enhancing economic activities, flexible markets and transparent incentive structures are undeniable. Countries that fail in this respect may find themselves trailing in the international growth and welfare rankings. According to its proponents, the 'snew economy' is associated with sustainable growth, increased demand for labor and zero inflation. On the micro-level, this bright avenue into the future is propelled by knowledge capital, flexibility and new ways of organizing production, such as clusters and networks. Progress in information technology, together with massive deregulation on the national and the international levels, have been credited with setting this development into motion. The concept of the 'snew economy' has been rapidly embraced by politicians, as it seems to offer a way out of the traditional trade-off between unemployment and wage inflation. However, empirical evidence regarding the microeconomic mechanisms of the 'snew economy' is scarce. Knowledge Capital and the 'sNew Economy': Firm Size, Performance and Network Production intends to narrow this gap by empirically analyzing the composition of knowledge capital and how knowledge capital is distributed across firms of different size. Moreover, the impact of knowledge capital on firms' profitability and international competitiveness is also examined. Finally, we compare cluster dynamics and the institutional set-up in Europe and the U.S., with the purpose of identifying regulations that seem to hinder a conducive environment for expanding and dynamic European clusters. The results of this study emphasize the role of knowledge capital and flexibility. Thus, irrespective of how sustainable the 'snew economy' turns out to be, the policy implications in terms of providing institutions that facilitate knowledge-enhancing economic activities, flexible markets and transparent incentive structures are undeniable. Countries that fail in this respect may find themselves trailing in the international growth and welfare rankings "The concept of the "new economy" has been rapidly embraced by politicians, as it seems to offer a way out of the traditional trade-off between unemployment and wage inflation. Still, empirical evidence regarding the microeconomic mechanisms of the "new economy" is scarce. Knowledge Capital and the "New Economy": Firm Size, Performance and Network Production intends to narrow this gap by empirically analyzing the composition of knowledge capital and how knowledge capital is distributed across firms of different size. Moreover, the impact of knowledge capital on firms' profitability and international competitiveness is also examined. Finally, we compare cluster dynamics and the institutional setup in Europe and the U.S., with the purpose of identifying regulations that seem to hinder a conducive environment for expanding and dynamic European clusters."--BOOK JACKET. Front Matter....Pages i-vii Introduction....Pages 1-15 The Size Distribution of Firms: Some Stylized Facts....Pages 17-35 Does Knowledge Investment Increase Profitability?....Pages 37-52 How is Knowledge Capital Related to Firm Size and Internationalization?....Pages 53-70 Clusters, Venture Capital and Growth....Pages 71-83 The Influence of Agglomeration on Large Firms’ Investments—Evidence From Swedish Foreign Direct Investment....Pages 85-105 Conclusion....Pages 107-111 Back Matter....Pages 113-118