1. Absorptive Capacity, Knowledge Spillovers and Incentive Contracts
- Author
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Luis Aguiar, Philippe Gagnepain, Universität Zürich [Zürich] = University of Zurich (UZH), Paris School of Economics (PSE), École des Ponts ParisTech (ENPC)-École normale supérieure - Paris (ENS Paris), Université Paris sciences et lettres (PSL)-Université Paris sciences et lettres (PSL)-Université Paris 1 Panthéon-Sorbonne (UP1)-Centre National de la Recherche Scientifique (CNRS)-École des hautes études en sciences sociales (EHESS)-Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement (INRAE), Paris Jourdan Sciences Economiques (PJSE), Université Paris 1 Panthéon-Sorbonne (UP1)-École normale supérieure - Paris (ENS Paris), Université Paris sciences et lettres (PSL)-Université Paris sciences et lettres (PSL)-École des hautes études en sciences sociales (EHESS)-École des Ponts ParisTech (ENPC)-Centre National de la Recherche Scientifique (CNRS)-Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement (INRAE), University of Zurich, and Gagnepain, Philippe
- Subjects
Knowledge spillovers ,Cost incentives ,Economics and Econometrics ,1410 Industrial Relations ,Strategy and Management ,JEL: L - Industrial Organization/L.L5 - Regulation and Industrial Policy/L.L5.L51 - Economics of Regulation ,JEL: L - Industrial Organization/L.L9 - Industry Studies: Transportation and Utilities/L.L9.L92 - Railroads and Other Surface Transportation ,Economics, Econometrics and Finance (miscellaneous) ,2002 Economics and Econometrics ,2001 Economics, Econometrics and Finance (miscellaneous) ,[SHS.ECO]Humanities and Social Sciences/Economics and Finance ,330 Economics ,10004 Department of Business Administration ,JEL: L - Industrial Organization/L.L2 - Firm Objectives, Organization, and Behavior/L.L2.L25 - Firm Performance: Size, Diversification, and Scope ,2202 Aerospace Engineering ,Industrial relations ,Effort ,1408 Strategy and Management ,2209 Industrial and Manufacturing Engineering ,Absorptive capacity ,Public transport ,Diversity of knowledge - Abstract
We attempt to identify and measure potential knowledge spillovers in the French urban transport sector, which is strongly regulated and where a few large corporations are in charge of operating several urban networks simultaneously. We build and estimate a structural cost model where the service is regulated by a local government and is provided by a single operator. Knowledge spillovers are directly linked to the know-how of a specific corporation, but they also depend on the incentive power of the regulatory contract which shapes the effort of the local managers. Exerting an effort in a specific network allows a cost reduction in this network, but it also benefit other networks that are members of the same corporation. Our model provides us with estimates of the operators' absorptive capacity, which is their in-house knowledge power in order to optimally benefit from spillovers. We find that diversity of knowledge across operators of a same corporation improves absorptive capacity and increases the flow of spillovers. Simulation exercises provide evidence of significant reductions in total operating cost following the enlargement of industrial groups.
- Published
- 2021