ECONOMICS AND POLICY OF BUSINESS NETWORKS
The course aims to provide students with knowledge and understanding about inter-firm networks, both in theory and through case studies, concerning the following topics and the associated economic policy implications:
• externalities, information asymmetries, strategic interaction and transaction costs as keys to understand the emergence of inter-firm networks and their competitive advantage, in light of strategic planning by international companies;
• the rise and fall of industrial districts and keiretsu in the face of globalization;
• research and development and “brain circulation” as drivers of innovative clusters;
• the impact of business networks and the associated support policies on entry, growth, and exit of firms, in the framework of the world-scale economic order.
As regards applying knowledge, the learned competences will find application, after the course, to the following domains:
• SWOT analysis of inter-firm networks, for economic policy evaluation and economic consultancy purposes, in context of global interdependence;
• Economic analysis and evaluation of policies and strategic choices concerning the global value chain, the entry of new firms and their effects on industrial dynamics, also through econometric methods;
• academic research on the economics and policy of inter-firm networks, drawing on industrial economics (strategic interaction models), industrial dynamics, and applied econometrics.
Specific teaching and evaluation methods will be applied with a view to stimulating the ability to making judgments and critical thinking on the above mentioned issues, encouraging students to independently search and select documents and data useful to deepen their understanding of the subject matter. Communication skills will be exercised through debates among students about case studies and by requiring students to make a presentation aided by multimedia tools. In terms of learning skills, students will develop the ability to approach divulgative and specialized publications on business networks, under the guidance of the teacher as concerns the appropriate learning and research methods.
Basic knowledge of microeconomics and economic policy is required; specifically:
• production theory;
• oligopoly and imperfect competition;
• asymmetric information;
Knowledge gaps among students, if any, shall be filled by means of a dedicated lecture.
1. Introduction to network economics (12 h)
2. Business networks: economic analysis and case studies (24 h)
3. Business network support policies and empirical analysis (12 h).
1. Introduction to network economics:
production theory; networks typologies; business networks.
2. Economic analysis and case studies of business networks: global value chains; industrial districts in theory and in the Italian experience; innovative clusters in the USA and in emerging countries; Japanese keiretsu and the role of the “main bank”.
3. Business network support policies, with a primer on empirical methods of policy evaluation.
The course will comprise 2 lectures per week, summing up to 48 hours (6 CFU), including ordinary classes, plus exercise classes and group work. 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.
Varian, Intermediate Microeconomics: A Modern Approach, Eighth
Jackson, M. O. (2010). Social and economic networks. Princeton
Economides, N. (1996), The Economics of Networks, International
Journal of Industrial Organization, vol. 14,n. 2.
Katz, M. and C. Shapiro (1985), Network Externalities, Competition
and Compatibility, American Economic Review 75 (3), 424-440.
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%).