It is well-documented that international enterprises are more productive. Only few studies have explored the effect of internationalization on productivity and innovation at the firm-level. Using propensity score matching we analyze the causal effects of internationalization on innovation in 10 transition economies. We distinguish between three types of internationalization: exporting, FDI, and international outsourcing. We find that internationalization causes higher levels of innovation. More specifically, we show that (i) exporting results in more R&D, higher sales from product innovation, and an increase in the number of international patents (ii) outward FDI increases R&D and international patents (iii) international outsourcing leads to higher sales from product innovation. The paper provides empirical support to the theoretical literature on heterogeneous firms in international trade that argues that middle income countries gain from trade liberalization through increases in firm productivity and innovative capabilities.
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The authors describe why and how different types of simulations can be used to understand and support the challenges of utility deregulation. They present an overview of liberalization and deregulation efforts in three utility markets - electricity, natural gas, and drinking water - and describe the main challenges and opportunities for regulators and business managers. A general classification of seven different types of simulation is presented, including market simulations, policy simulations, dynamic business simulations, capability simulations, day-in-a-life simulations, performance simulations, and gaming simulations. The authors reflect on the role of these simulations for utility deregulation and give examples.
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The authors used the INFRASTRATEGO simulation game to examine strategic behavior in a liberalizing electricity market and the effectiveness of different regulatory regimes in dealing with this strategic behavior. The game simulates the Dutch electricity market in the years 2002 to 2006. The game was played eight times with about 400 players, both professionals and students. Two regulatory regimes defined by (a) the policy-making model and (b) the regulation by negotiation model were evaluated. The authors found several patterns of strategic behavior such as regulatory capture, sometimes with rather disturbing effects with regard to the settlement of rates and long-term capacity planning.
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