Political Economy of Firm Networks
This course aims to provide students with advanced knowledge and critical analysis skills on networks of firms, from a theoretical viewpoint as well as through case studies. Competences formed will find application, after the course, in the following domains:
− SWOT analysis applied to industrial districts and other networks of firms, towards policy evaluation goals;
− project design and management of firm networks at the domestic and international levels;
− academic research on the economics and policy of firm networks.
Basic knowledge of microeconomics is required, specifically concerning consumer theory, the theory of production, and imperfect competition. Initial gaps among students will be filled through an introductory lecture, if needed.
1. Introduction to network economics (6 h)
1.1 Network economics, Marshallian theory and industrial organization.
1.2 Business networks and the economics of information.
1.3 Business networks and transaction costs.
2. Business networks: economic analysis and case studies (24 h = 18 h lectures + 4 h exercises and discussion on case studies + 4 h group work on economic models)
2.1 Business networks: types and features.
2.2 Industrial districts: theory and the Italian experience.
2.3 Innovative clusters: Silicon Valley, migrant entrepreneurs and the new clusters in emerging countries.
2.4 Japanese keiretsu and the role of the “main bank”.
3. Business network support policies and their effects on industrial dynamics (18 h = 16 h lectures + 2 hours exercises and discussion on case studies)
3.1 The effects of business networks on industrial dynamics (entry, exit, and firm growth): empirical evidence.
3.2 National and international policies to support business networks, industrial districts and clusters.
3.3 A primer on empirical methods of policy evaluation, applied to cluster support policies.
1. Economics of networks: theoretical approaches (industrial organization, transaction cost economics, sociology).
2. Business networks; types and characteristics.
3. Industrial districts: the Marshallian theory and the Italian experience.
4. Innovative clusters: Silicon Valley, migrant entrepreneurs, and the new clusters in emerging countries.
5. The Japanese keiretsu and other bank-centered networks.
6. Growth, innovation, finance, and internationalization in clusters: empirical evidence.
7. Domestic and international policies in support of business networks.
The course will comprise 3 lectures per week, summing up to 48 hours (6 CFU), including ordinary classes (38 hours), plus exercise classes and group work (10 hours). Lectures will aim to stimulate the student skills in critical analysis and communication, possibly through group work wherein case studies from the literature or highlighted in the news will be analyzed. Moreover, “laboratories” of economic analysis will be held, in which students will be asked to build simple formal models starting from qualitative descriptions of case studies.
Cabral, Luis. "Introduction to Industrial Organisation", MIT Press, chapter 17.
Granovetter, Mark. "The impact of social structure on economic outcomes." The Journal of economic perspectives 19.1 (2005): 33-50.
Pyke, F., Becattini, G., Sengenberger W. (ed.), Industrial districts and inter-firm cooperation in Italy, International Institute for Labor Studies: chapters 2 and 4.
Saxenian, AnnaLee. "The origins and dynamics of production networks in Silicon Valley." Research policy 20.5 (1991): 423-437.
Bresnahan, Timothy, Alfonso Gambardella, and AnnaLee Saxenian. "‘Old economy’ inputs for ‘new economy’ outcomes: cluster formation in the new Silicon Valleys." Industrial and corporate change 10.4 (2001): 835-860.
Saxenian, AnnaLee. "From brain drain to brain circulation: Transnational communities and regional upgrading in India and China." Studies in comparative international development 40.2 (2005): 35-61.
Gilson, Ronald J., and Mark J. Roe. "Understanding the Japanese keiretsu: Overlaps between corporate governance and industrial organization." Yale Law Journal (1993): 871-906.
Frenken, Koen, Elena Cefis, and Erik Stam. "Industrial dynamics and clusters: a survey." Regional Studies 49.1 (2015): 10-27.
In order to assess the student learning, to test their critical thinking skills and to verify their communications abilities, the students will be required to make a presentation before an audience, centred on one of the topics explored during the course, and aided by multimedia tools. The presentation can also concern the interrelations among different topics. The talk will last 15 minutes, plus 5 minutes for questions.
Comments and questions from the professor will allow to ascertain the students’ ability to argue and to master the topics being presented, using an appropriate technical jargon and a clear communication style. Being a short presentation, students will need to exercise their ability to synthesise complex issues and to select the most relevant pieces of information vis-à-vis an effective communication of the knowledge they have acquired.
The final mark will take account of the following aspects:
• Knowledge and understanding: full grasp of the subject, as demonstrated by the ability to explain the basic and advanced concepts in a correct, concise and complete way (30%);
• Applying knowledge and understanding: Ability to apply knowledge to different domains and to explore the interrelations among topics (30%);
• Making judgments: ability to critically select, summarize and elaborate information in the presentation, as well as argue in response to questions and comments from the audience and the teacher (30%);
• Communication: clear, complete, correct use of an appropriate technical jargon, with reference to the slides, the talk and the debate (10%).