LICENSING BY OUTSIDE INNOVATOR IN HOTELLING MODEL REVISITED

This paper extends Banerjee and Poddar [Banerjee, S and S Poddar (2019). ‘To sell or not to sell’: Licensing versus selling by an outside innovator. Economic Modelling, 76, 293–304] by lifting the cap on per unit royalty rates in the cases of royalty licensing and two-part tariff licensing. We reconsider the optimal technology licensing contract by an outside innovator facing two heterogeneous licensees in a standard Hotelling framework. Our findings show that the optimal licensing policy could be fixed fee to the efficient firm, or two-part tariff to both firms (pure royalty to both firms), or two-part tariff to the efficient firm, depending upon the cost differentials between the firms and the size of innovation.

Wages and Firm Performance: Evidence from the 2008 Financial Crisis

We examine the effect of higher wages on firm performance during the 2008 financial crisis. To identify variation in wages, we rely on heterogeneity in the timing of long-term wage agreements for a sample of U.K. firms. We instrument for firms signing long-term agreements overlapping with the crisis by the presence of a contract signed in 2006 or earlier and expiring before September 2008. Treated firms not only paid higher wages but also realized greater labor productivity relative to control firms. These findings are consistent with the intuition that opportunity cost differentials between treated and control firms induce employees to exert higher effort.

Education, Birth Order and Family Size

This article introduces a framework to study parental investments in the presence of birth order preferences and/or human capital cost differentials across children. The framework yields canonical models as special cases and delivers sharp testable predictions concerning how parental investments respond to an exogenous change in family size in the presence of birth order effects. These predictions characterize a generalised quantity–quality trade-off. Danish administrative data confirm our theory’s predictions. We find that for any given parity, the human capital profile of children in smaller families dominates that of large families, and that the average child’s education decreases as family size increases, even after taking birth order effects into consideration.

Consequences of sustainable innovations on the reshoring drivers’ framework

PurposeThe purpose of this paper is to illustrate how the introduction of new technologies can lead to reconsidering the division of the production process as well as the location of each stage, which may mean reshoring some of them.Design/methodology/approachThe research is based on the analysis of the consequences of new technologies developed and introduced in the market to be applied in the final stage of jeans manufacturing. The paper presents the relevance of this technology, based on an in-depth interview with the representatives of the firm as well as firm and press reports, specialised websites and so on. The information of the reshoring company has been confirmed by its press releases.FindingsThe results show that a new technology justifies the reconsideration of the stages in which the production process can be divided and, once this division is considered viable, the drivers for reshoring can become more/less important in the reshoring decision.Practical implicationsFirms that previously offshored should consider that new technological processes may lead them to slice their value chains differently, causing them to seek the optimal location for each of the stages.Originality/valueMost of the reshoring literature is based on a static framework where the production process is considered stable and the reasons for reshoring must reside in the change of relevant parameters (such as cost differentials, need to be more flexible, monitoring costs higher than expected, etc.). This paper reveals that changes in the production process, even in traditional sectors, may lead to reshoring/backshoring.

Solar PV Cost Reduction Potential in Japan

One of the key areas of the International Renewable Energy Agency’s (IRENA) programme of work is the analysis of renewable technology costs and performance and the dissemination of these results to as wide an audience as possible. In addition to analysis, IRENA seeks to engage a broad range of stakeholders in the context of this work through the Renewable Costing Alliance. The Costing Alliance brings together companies, industry association, governments and researchers to share, confidentially, data for real-world renewable energy project cost and performance, helping to build further on IRENA’s costing work to date. In this context the authors analyse the current cost differentials and cost reduction potentials for solar PV in Japan compared to best practice levels and identify the reasons for higher costs in Japan and how to reduce them. This study analyses the current installed cost differentials for utility-scale, commercial and residential rooftop solar PV systems. In addition to identifying the reasons for the cost differentials, potential policy recommendations to reduce the cost differential are identified.

Economies of Scale and Network Economies in Industry 4.0. Theoretical Analysis and Future Directions of Research

This paper analyses the role of cost differentials in the fourth industrial revolution. It uses a literature review in order to identify origins, definitions, enabling technologies and changes in company productivity. Research results show how certain Industry 4.0 enabling technologies help obtain better economic results in mass production and others that support new production models in mass production: mass customization and mass personalization. This paper is of a theoretical nature and identifies certain reflections concerning Industry 4.0’s role in managerial literature by providing interesting lines to be developed in future directions of research.

Hybrid Input-Output Analysis of Embodied Carbon and Construction Cost Differences between New-Build and Refurbished Projects

Refurbishing buildings helps reduce waste, and limiting the amount of embodied carbon in buildings helps minimize the damaging impacts of climate change through lower CO2 emissions. The analysis of embodied carbon is based on the concept of life cycle assessment (LCA). LCA is a systematic tool to evaluate the environmental impacts of a product, technology, or service through all stages of its life cycle. This study investigates the embodied carbon footprint of both new-build and refurbished buildings to determine the embodied carbon profile and its relationship to both embodied energy and construction cost. It recognizes that changes in the fuel mix for electricity generation play an important role in embodied carbon impacts in different countries. The empirical findings for Hong Kong suggest that mean embodied carbon for refurbished buildings is 33–39% lower than new-build projects, and the cost for refurbished buildings is 22–50% lower than new-build projects (per square meter of floor area). Embodied carbon ranges from 645–1059 kgCO2e/m2 for new-build and 294–655 kgCO2e/m2 for refurbished projects, which is in keeping with other studies outside Hong Kong. However, values of embodied carbon and cost for refurbished projects in this study have a higher coefficient of variation than their new-build counterparts. It is argued that it is preferable to estimate embodied energy and then convert to embodied carbon (rather than estimate embodied carbon directly), as carbon is both time and location specific. A very strong linear relationship is also observed between embodied energy and construction cost that can be used to predict the former, given the latter. This study provides a framework whereby comparisons can be made between new-build and refurbished projects on the basis of embodied carbon and related construction cost differentials into the future, helping to make informed decisions about which strategy to pursue.

From Urban Core to Wealthy Towns

Fiscal disparities occur when economic resources and public service needs are not evenly distributed across localities. There are equity concerns associated with fiscal disparities. Using a cost-capacity gap framework and a newly assembled data set, this article is the first study to quantify nonschool fiscal disparities across Connecticut municipalities. It finds significant nonschool fiscal disparities, driven primarily by the uneven distribution of the property tax base while cost differentials also play an important role. State nonschool grants are found to have a relatively small effect in offsetting municipal fiscal disparities. Unlike previous research focused on a single state, this article also conducts a cross-state comparison. It finds that nonschool fiscal disparities in Connecticut are more severe than those in Massachusetts, and nonschool grants in Connecticut are less equalizing than those in Massachusetts. This article’s conceptual framework and empirical approach are generalizable to other states and other countries.

ReCAP: Cost Differential of Chemotherapy for Solid Tumors

QUESTION ASKED: The objective of the present study is to determine the cost differentials between chemotherapeutic regimens (of similar or acceptable effectiveness) for common solid tumors in the metastatic and adjuvant settings. SUMMARY ANSWER: Of the 62 regimens included, the 6-month mean cost of chemotherapy was $26,989, and the median cost was $9,611. Mean cost of metastatic cancer therapy regimens was $35,315 compared with $18,107 for curative therapy. Regimens using biologics had higher mean costs than regimens not using biologics ($77,278 v $13,646). Cost differential between extremes of costs for regimens with presumed similar efficacy was Δ$90,843; $79,165 in the curative therapy arms and $90,210 in the metastatic cancer therapy arms. The highest cost differential was noted in breast cancer regimens (Δ$71,041 for metastatic v Δ$63,926 for curative). METHODS: Chemotherapy regimens—curative (adjuvant/neoadjuvant) and metastatic—and dosages outlined in National Comprehensive Cancer Network guidelines (2013) were acquired for four common cancers: bladder, breast, colon, and lung. Baseline drug and treatment costs were calculated for the average US adult male using the payment allowance for Medicare part B drugs database (2013). Costs were extrapolated for a treatment period of 6 months. BIAS, CONFOUNDING FACTOR(S), DRAWBACKS: The calculations used payer perspective for the drug and the reimbursement, which may not truly reflect the actual costs incurred by the individual or society. However, the simplicity provides the strength of inferences which are fairly robust across the sensitivity analysis. REAL-LIFE IMPLICATIONS: A significant cost differential exists between chemotherapeutic regimens for the commonest solid tumors. In the absence of existing cost-effectiveness guidelines, cost differentials can help practicing oncologists in financially sound decision making regarding choosing therapy. Incorporation of costs and incremental effectiveness in currently established guidelines may encourage socially responsible practice patterns.