This paper studies the evolution of a network of leading firms that are engaged in an active search to improve their technological capability through interaction with knowledge-heterogeneous firms. Through the simulation of a linear model of technological spillovers we show the emergence of paradigm setters and the impact of search routines on the system’s average performance

We investigate the effect of different channels through which input trade liberalization affects firms’ export decisions. We develop a trade model with heterogeneous firms and sectors of varying imported input intensity that reproduces different mechanisms through which the access to foreign inputs affects

This work provides a computational cobweb model with heterogeneous adaptive producers with endogenous market entry and exit. Firms face a borrowing constraint and so can go bankrupt. At the same time when average profits are positive there is an inflow of new firms in the market. Bounded dynamics and endogenous volatility are shown to follow without resorting to nonlinearities.

We derive the closed-form solution characterizing the equilibrium in a circular-city model with competing firms of heterogeneous production costs. Tractability issues in this setting are well known and have not been resolved in prior work. In this paper, the equilibrium solution illustrates effects of production costs on firms’ strategic decisions, their aggregate profit, and consumer surplus.

This paper investigates the effects of input-trade liberalization on firms’ decision to upgrade foreign technology embodied in imported capital goods. We develop a simple theoretical model of endogenous technology adoption, heterogeneous firms and imported inputs. Assuming that imported intermediate goods and high-technology are complementary and the existence of technology adoption fixed costs...

Firms' decisions about which goods to produce are often made at a more disaggregate level than the data observed by empirical researchers. When products differ according to production technique or the way in which they enter demand, this data aggregation problem introduces a bias into standard measures of firm productivity. We develop a theoretical model of heterogeneous firms endogenously self...

Entrepreneurship and the Process of Firms’ Entry, Survival and Growth This survey paper aims at critically discussing the recent literature on firm formation and survival and the growth of new-born firms. The basic purpose is to single out the microeconomic entrepreneurial foundations of industrial dynamics (entry and exit) and to characterise the founder’s ex-ante features in terms of likely e...