Sidney Winter

Sidney Winter
University of Pennsylvania | UP · Management Department

Ph. D. Yale University, 1964

About

148
Publications
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46,488
Citations
Citations since 2016
12 Research Items
14048 Citations
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201620172018201920202021202205001,0001,5002,000

Publications

Publications (148)
Article
In some economics textbooks production theory is developed axiomatically. The “divisibility axiom” presents a bold affront to realism. It distorts the static theory and forecloses some potential encounters with technological change. The article reviews propositions about geometrical scaling that have long been recognized as relevant to the realitie...
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This paper reviews the case for an evolutionary approach to problems of economic analysis, ranging from the details of individual firm behavior in the short run through industrial dynamics to the historical evolution of institutions and technologies. We draw upon a substantial body of recent research contributions. We characterize micro behavior as...
Article
Twenty years ago, we introduced the history friendly modeling approach to formally study industrial dynamics. In this paper, we look retrospectively at the results that the history friendly literature has achieved so far and what are the challenges ahead of us. We present the main principles, methods, and building blocks of the approach, and then w...
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Business firms and other organizations have various sorts of competence at dealing with change. Dynamic capability is a particular sort of competence that goes largely unrecognized in mainstream economics, but has been much illuminated in the strategic management literature. Pisano extends this illumination and restores the grounding of the discuss...
Chapter
What can a behavioral approach contribute to the understanding of strategizing? Assuming that “strategizing” is a deliberative process typically engaged in by small groups in the leadership of a large organization, the most promising targets for behavioral studies may not be that process itself. Attention could well go instead to the organizational...
Article
Regarding your Free exchange column purporting to review how economists understand growth (April 14th), we also share serious misgivings about the adequacy of the analysis of economic growth that one sees in the standard textbooks and in much of the current literature. Granting the legitimacy of that target, however, we found that you fell short wh...
Book
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Cambridge Core - Entrepreneurship and Innovation - Modern Evolutionary Economics - by Richard R. Nelson
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A fundamental premise of the strategy field is the existence of persistent firm-level differences in resources and capabilities. This property of heterogeneity should express itself in a variety of empirical “signatures,” such as firm performance and arguably systematic and persistent differences in firm-level growth rates, with low cost firms outp...
Article
This essay first reviews what Nelson and Winter were trying to accomplish when they put forward An Evolutionary Theory of Economic Change (Belknap Press, Harvard, 1982). It then does a fast-forward to controversies and contributions in the recent past, and speculates on where the intellectual enterprise might be headed from here. The issues involve...
Book
The disruptive impacts of technological innovation on established industrial structures has been one of the distinguishing features of modern capitalism. In this book, four leading figures in the field of Schumpeterian and evolutionary economic theory draw on decades of research to offer a new, 'history-friendly' perspective on the process of creat...
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It is a familiar observation that entrepreneurship is not easily accommodated within the framework of neoclassical economic theory. Drawing inspiration from an ancient critique of neoclassicism by Veblen (Q J Econ 12(4):373–397, 1898), this paper attributes the difficulty to the tension between normative accounts of decision making (as in mainstrea...
Chapter
This entry discusses the meaning and influence of the satisficing concept, with particular attention to the seminal contributions of Herbert Simon. The contrast between satisficing and optimizing behaviour is addressed, with attention to satisficing’s superior claim to behavioral realism as well as to the idea that satisficing is itself a sort of (...
Chapter
As emphasized by Michael Polanyi, there are types of knowledge that cannot be conveyed effectively by means of language. The validity of this observation is particularly apparent in the case of the knowledge required to execute psychomotor skills, such as riding a bicycle. In strategic management, tacitness is generally seen as a barrier to the imi...
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This essay contemplates the possible futures of evolutionary economics in terms of two contrasting images. In the first, the primary research emphasis of the future will continue to be on the topics that have interested evolutionary economists in the past, such as technological change, business behavior, and the role of institutions. Research contr...
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While much is understood about the general pattern of industry dynamics, a critical element underlying these dynamics, the rate of the expansion of individual firms, has been largely overlooked. We argue that the rate at which firms can reliably increase their scale of operations is a critical factor in understanding the structure of industries. Fu...
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With sectors like telecommunications, media, entertainment but also financial services changing, there is an increasing appreciation of the role of “ecosystems”, sets of collaborating and competing firms which are putting forth value propositions. The upsurge in interest in “ecosystems”, in “multi-sided platforms” and more broadly in the “architect...
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This Comment is an in-depth exploration of the neoclassical commitment to the idea that economic actors are appropriately modeled as optimizers—of profit, utility, or whatever. The robustness of this commitment is a major feature of the intellectual landscape surveyed by Mazzoleni and Nelson (2013, Industrial and Corporate Change, 22, 6), and the c...
Article
Dan Raff offers a proposal for reform of the practice of business history. Since I am not a business historian, and also because my view of the field is strongly influenced by interactions with Dan, I will largely abstain from commenting on the interesting questions about the relationship of his proposal to recent practice in the field. How sharp i...
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The proponents of the "microfoundations project" have advanced a number of criticisms of theories of organizational routines and capabilities. While the criticisms derive in part from philosophical or methodological premises that are open to serious question, and tend to ignore the empirical research on the subject, there remains a valid core conce...
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This paper shows how idiosyncratic resources can be the basis of sustained profitability and persistent heterogeneity under competitive conditions: Generic inputs purchased in the market become idiosyncratic resources by investments in customization. Analytically, we show how heterogeneous firms co-exist in equilibrium. Computationally, we show tha...
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This paper aims to further the alignment among different theoretical approaches and future scholarship on the complex themes related to the micro‐foundational processes characterizing the emergence and development of organizational routines and capabilities. It has been constructed with a typical Hegelian structure represented by a thesis, an antit...
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This paper examines conceptual issues and reviews empirical results bearing on the relationship between research approaches emphasizing organizational capabilities and those based in transaction cost economics (TCE)—or in organizational economics more generally. Following a review of conceptual fundamentals—what capability is and why organizations...
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The recognition that better use of existing knowledge can enhance performance has spawned substantial interest in the replication of productive knowledge within organizations. An enduring belief is that when expanding by replication, organizations can and should strive to adapt to fit the salient characteristics of new environments. Yet some have a...
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This article comments on the behavioral theory of strategy advanced in Gavetti [Gavetti, G. 2012. Toward a behavioral theory of strategy. Organ. Sci.23(1) 267–285]. His proposal offers valuable insights into the cognitive aspects of strategy when leaders are trying for big wins. It provides less guidance for understanding the actual achievement of...
Article
This article comments on the behavioral theory of strategy advanced in Gavetti [Gavetti, G. 2012. Toward a behavioral theory of strategy. Organ. Sei. 23(1) 267-285]. His proposal offers valuable insights into the cognitive aspects of strategy when leaders are trying for big wins. It provides less guidance for understanding the actual achievement of...
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We explain why the line between dynamic and operational (or ordinary) capabilities is unavoidably blurry, draw implications for capabilities that promote economically important but seemingly gradual change, and provide recommendations for future research that takes these issues into account.
Article
This paper reviews the assessment of the routines and capabilities literature provided by T. Felin and N. J. Foss, ‘The Endogenous Origins of Experience, Routines and Organizational Capabilities: The Poverty of Stimulus’, published by the Journal of Institutional Economics. Although valuable points are raised, the assessment is largely off target b...
Chapter
Replication is the process of creating, in new geographical locales, productive units that operate in a manner highly similar to existing units elsewhere – a type of effort typically undertaken in an attempt to realize economic benefits in the new sites that are comparable to those already achieved in existing sites. The transfer of knowledge to th...
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David J. Teece discusses with Sidney G. Winter some of the major contributions of Alfred D. Chandler, Jr. Topics discussed include path dependence and the organizational embeddedness of competences and capabilities, the recent financial crisis, and the electronic century in terms of Chandler’s priorities. Teece and Winter also consider both the pro...
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This paper examines conceptual issues and reviews empirical results bearing on the relationship between research approaches emphasizing organizational capabilities and analyses based in transaction cost economics (TCE) or in organizational economics more generally. Following a review of conceptual fundamentals what is capability and why do organiza...
Article
For empirical work in the resource-based view of the firm, characterizing the resources that are responsible for firm growth is difficult because valuable resources are often tacit, ambiguous, or difficult to identify. This is a particular problem for empirical assessments that rely upon the concept of relatedness between resources to characterize...
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Editor's note The authors of this paper presented an All-academy session at the 2008 Academy of Management annual meeting in Anaheim, California. We were excited by the dynamic nature of the debate and felt that it related closely to critical issues in the areas of operations management, strategy, product development and international business. We...
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In this paper, we explore the effects of alternative policies, ranging from antitrust to public procurement, open standards, information diffusion and basic research support on the dynamics of two vertically related industries in changing and uncertain technological and market environments. The two industries are a system industry and a component i...
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This chapter examines the concept of dynamic capability as it has developed in the strategic management field, taking primarily the 'learned competence' perspective and emphasizing the proactive uses of dynamic capabilities by business firms. It seeks to clarify how apparent opposites-novelty and familiarity, creativity, and learned routine-come in...
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In this article, we present a history-friendly model of the changing vertical scope of computer firms during the evolution of the computer and semiconductor industries. The model is “history-friendly,” in that it attempts at replicating some basic, stylized qualitative features of the evolution of vertical integration on the basis of the causal mec...
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The claim that a business firm must maximize profit if it is to survive serves as an informal statement of the common conclusion of a class of theorems characterizing explicit models of economic selection processes. Such models, by making explicit the strong assumptions needed to generate this sort of result, are the basis for a critique of standar...
Article
This paper clarifies how idiosyncratic resources can be the economic basis of sustained profitability and persistent heterogeneity under competitive conditions. The key point is, generic inputs purchased in the market become idiosyncratic firm resources by virtue of sunk investments in costly customization. This is illustrated in a computational mo...
Article
The article discusses business model replication, citing examples such as Starbucks, Wal-Mart and McDonalds, and noting that such organizational structures may succeed without adapting to local conditions. A study focusing on the degree to which accuracy of replication affects franchise survival is discussed, using measures such as deviation from t...
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This paper sets forth an evolutionary model in which diverse businesses, with diverse offerings, compete in a stylized physical space. When a business firm attempts to expand its activity, so as to profit further from the capabilities it has developed, it necessarily does so in a "new location" – sometimes close-by existing activity, but often not....
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This study presents a new model of search on a “rugged landscape,” which employs modeling techniques from fractal geometry rather than the now-familiar NK modeling technique. In our simulations,firms search locally in a two-dimensional fitness landscape, choosing moves in a way that responds both to local payoff considerations and to a more global...
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The history of a number of industries is marked by a succession of eras, associated with different dominant technologies. Within any era, industry concentration tends to grow. Particular eras are broken by the introduction of a new technology which, while initially inferior to the established one in the prominent uses, has the potential to become c...
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In this paper, we consider how a better understanding of entrepreneurial activities can help explain how firm and industry boundaries change over time and how a more comprehensive understanding of boundary setting can explain where entrepreneurial activities are directed. We start from the premise that while entrepreneurs believe themselves to have...
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Firm growth and expansion is widely believed to be guided by the desire to leverage existing resources. But which resources? The answer depends largely on context.the peculiarities of industries, firms, technologies, production, customers, and a host of other dimensions. This fact makes pointing to any particular set of resources as the source of e...
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Australian and New Zealand environmental economists have played a significant role in the development of concepts and their application across three fields within their subdiscipline: non-market valuation, institutional economics and bioeconomic modelling. These contributions have been spurred on by debates within and outside the discipline. Much o...
Chapter
This chapter analyzes the changing boundaries of firms in terms of vertical integration and dis-integration (specialization) in dynamic and uncertain technological and market environments. In particular, it addresses the question of stability and change in firms' decisions to 'make or buy' in contexts characterized by periods of technological revol...
Article
This article offers a sketch of what an economic theory of the firm would look like if it were founded on the thought of Joseph Schumpeter, particularly on Chapters 1 and 2 of his Theory of Economic Development. Schumpeterian analysis requires an intuitively appealing and realistic conceptualization of the distinction between routine and innovative...
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The debate on software intellectual property rights (IPRs) has not only highlighted fundamental issues regarding the scheme of protection that software enjoys, it has also pointed out major gaps in the representation of computer programs as economic goods. In this respect, various interpretations of software propose a limited outlook by referring o...
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We discuss how firms can replicate practices and knowledge embedded in practices by following principles, with no direct reference to an extant working example (template). Definitions are provided for the key concepts of templates, principles, and background knowledge. We address the challenges of providing operational measures for successful repli...
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This paper proposes that transaction costs and capabilities are fundamentally intertwined in the determination of vertical scope, and identifies the key mechanisms of their co-evolution. Specifically, we argue that capability differences are a necessary condition for vertical specialization; and that transaction cost reductions only lead to special...
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Organizational routines are considered basic components of organizational behavior and repositories of organizational capabilities (Nelson & Winter, 1982). They do, therefore, hold one of the keys to understanding organizational change. The article focuses on how the concept of organizational routines can be applied in empirical research to underst...
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This paper draws on comparisons between organisations and organisms to illustrate how peripheral vision can influence behaviour. Like biological organisms, organisations have sensors to inform them of threats and opportunities. The process by which these sensors are developed is ‘selection, adaptation and learning’, or SAL. While SAL’s influence is...
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Defining ordinary or ‘zero-level’ capabilities as those that permit a firm to ‘make a living’ in the short term, one can define dynamic capabilities as those that operate to extend, modify or create ordinary capabilities. Logically, one can then proceed to elaborate a hierarchy of higher-order capabilities. However, it is argued here that the strat...
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The paper analyses some general dynamic properties of industries characterized by heterogeneous firms and continuing stochastic entry. After a brief critical assessment of some significant drawbacks of recent contributions to modeling of stochastic industrial dynamics, we propose a novel analytical apparatus able to derive some generic properties o...
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As emphasized by Barney (1986), any explanation of superior profitability must account for why the resources supporting such profitability could have been acquired for a price below their rent generating capacity. Building upon the literature in economics on coordination failures and incomplete markets, we suggest a framework for analyzing such str...
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Mezias and Starbuck (2003) review previous work and report striking new evidence indicating that managers can be quite mistaken in their perceptions regarding some matters, even matters quite close to their jobs. This is reminiscent of much evidence on politicians and ordinary citizens that generally show a weak grip on basic facts. In assessing ho...
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The beginning of a new millennium provides a welcome opportunity to take stock of the accomplishments, open questions, and most promising research avenues of evolutionary models in management and organization theory. Johann Peter Murmann has invited Howard Aldrich, Daniel Levinthal, and Sidney Winter to appraise the state of the art in evolutionary...
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This work is an attempt, first, to outline the basic building blocks of evolutionary theory in economics and, second, to offer a comparative assessment of different strands of literature which call upon evolutionary ideas of some sort. We sketch out what we consider to be the main results achieved so far by a few different approaches that invoke, e...
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The primary aim of the paper is to place current methodological discussions in macroeconometric modeling contrasting the ‘theory first’ versus the ‘data first’ perspectives in the context of a broader methodological framework with a view to constructively appraise them. In particular, the paper focuses on Colander’s argument in his paper “Economist...
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disclaimer applies. 1 A revised version of this essay will appear in the new (“Millenium”) edition of Historical Statistics of the United States, a standard reference work prepared in previous editions by the staff of the U.S. Department of Commerce Bureau of the Census but now to be edited by a consortium of American economic historians and publis...
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This paper investigates the mechanisms through which organizations develop dynamic capabilities, defined as routinized activities directed to the development and adaptation of operating routines. It addresses the role of (1) experience accumulation, (2) knowledge articulation, and (3) knowledge codification processes in the evolution of dynamic, as...
Article
Once a business performs a complex activity well, the parent organization often wants to replicate that success. But doing that is surprisingly difficult, and businesses nearly always fail when they try to reproduce a best practice. The reason? People approaching best-practice replication are overly optimistic and overconfident. They try to perfect...
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The growth of young, technology-based firms has received considerable attention in the literature given their importance for the generation and creation of economic wealth. Taking a strategic management perspective, we link the entrepreneurial strategy deployed by young, technology-based firms with firm growth. In line with recent research, we cons...
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Replication, a familiar phenomenon sometimes referred to as the “McDonalds approach,” entails the creation and operation of a large number of similar outlets that deliver a product or perform a service. Companies pursuing this strategy are now active in over 60 industries. Although replicators are becoming one of the dominant organizational forms o...
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This paper presents and discusses the methodological rationale, the basic structure and some first results of a new approach to the analysis of processes of industry evolution: "history-friendly" models, concerning the history of the computer industry. The specific purpose of this paper is to evaluate in more general terms the potential and limits...
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In this paper, we explore some problems that industrial policy faces in industries characterized by dynamic increasing returns on the basis of a ‘history friendly model’ of the evolution of the computer industry. How does policy affect industry structure over the course of industry evolution? Is the timing of the intervention important? Do policy i...
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Whether an organization has a certain capability is often a matter of degree. Thus, in the context of initial learning of a capability, there is generally no clear-cut or automatic answer to the question of when an organization should be expected to cut back its learning efforts and affirm that the desired capability has been achieved. This paper o...
Book
Introduction: The Nature and Dynamics of Organizational Capabilities PART I: INTRODUCTION TO PART I. ORGANIZATIONAL CAPABILITIES 1. Talking about Routines in the Field 2. Repositories of Knowledge in Franchise Organizations 3. Appropriability and the Challenge of Scope 4. Limited Enquiry and Intelligent Adaptation in Semiconductor Manufacturing PAR...
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Con este artículo clásico, los profesores Nelson Y Winter dieron inicio a la corriente evolutiva de estirpe schumpeteriana para el análisis de los procesos de innovación tecnológica. Su propuesta metodológica mostró la necesidad de abordar el cambio tecnológico con un enfoque menos formal -como el que aún predomina en la economía y de elaborar una...
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This paper investigates the mechanisms through which organizations develop capabilities in a dynamic sense (Teece, Pisano & Shuen, 1997) and reflects upon the role of (1) experience accumulation, (2) knowledge articulation and (3) knowledge codification processes in creating and constantly reshaping organizational routines. The argument is made tha...
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The paper analyzes some generic features of industrial dynamics whereby innovative change is carried, stochastically, by new entrants. Relying on the formal representation suggested in Winter et al. (1997), it studies both the asymptotic properties of such processes and their finite time dynamics to account for a few empirical stylized facts, inclu...
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This paper analyses the properties and outcomes of competitive dynamics in industries characterized by heterogeneous firms and continuing stochastic entry. In that setting aggregate economic variables -- such as prices, quantities and indirectly distributive shares -- are interpreted as stemming from an explicitly dynamic process combining persiste...
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This paper reports and extends discussions carried out during a workshop held at the Santa Fe Institute in August 1995 by the authors. It treats eight major topics: (i) the importance of carefully examining research on routine, (ii) the concept of ‘action patterns’ in general and in terms of routine, (iii) the useful categorization of routines and...
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The World Bank's most important long-term advantage in promoting development, says the author, may lie in opportunities to address related obstacles simultaneously. It could mount concurrent efforts to address the problems of small and medium-size enterprises in a particular sector, region, or economy, for example. It could address the conditions o...
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The set of technological opportunities in a given industry is one of the fundamental determinants of technical advance in that line of business. We examine the concept of technological opportunity and discuss three categories of sources of those opportunities: advances in scientific understanding and technique, technological advances originating in...
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According to the advocates of a "Generalized Darwinism" (GD), the three core Darwinian principles of variation, selection and retention (or inheritance) can be used as a general framework for the development of theories explaining evolutionary processes in the socio­economic domain. Even though these are originally biological terms, GD argues that...
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This paper seeks to connect related strands of thought in evolutionary economics and the resource-based view of the firm. Although conceived primarily as an approach to the descriptive analysis of the firm and industry, evolutionary economics offers a distinctive view of the firm that is adaptable for the purposes of normative analysis (Winter 1987...
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Multiproduct firms are perceived to be coherent in their scope, yet there is no strong theoretical foundations to explain coherence in modern industrial organization theory. This paper shows that as U.S. manufacturing firms grow more diverse, they maintain a constant level of coherence between neighboring activities. This finding runs counter to th...
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This essay presents an overview of the prevailing theoretical literature on innovation, probes the adequacy of existing theory to guide policy regarding innovation, and sketches some directions for more fruitful theorizing. The focus is on the vast interindustry differences in rates of productivity growth, and other manifestations of differential r...
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This chapter inquires into the role of patents and the appropriate duration of patent protection with regard to defining property rights in productive knowledge. Utilizing the formal model of inventive opportunity drawn from Nelson and Winter (1982), the chapter argues that R&D performed higher on average without patents, and best practice producti...
Chapter
Under competitive conditions, a business firm must maximize profit if it is to survive — or so it is often claimed. This purported analogue of biological natural selection has had substantial influence in economic thinking, and the proposition remains influential today. In general, its role has been to serve as an informal auxiliary defence, or cru...
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Important theoretical concepts tend to resist satisfactory definition (cf. Stigler, 1957). Such concepts are in the service of the expansive ambitions of the theories in which they occur, and must accordingly respond flexibly to the changing requirements for maintaining order in a changing intellectual empire. The term ‘evolution’ — obviously impor...