Ph.D. Qualifying Examination in
Seminar on Industry Strategies and Development
Institute of Business Management, Asia University
Friday, 2017.4.21. - 18:00~21:00pm
Candidate: Student ID:
Part 1: (Answer the following questions in English or in Chinese. Your answer must include both the main theory of the questions and personal response.)
1. (25 points) Higher education scale and scope economies estimated from multi-product cost functions were first provided by Cohn et al. (1989) using 1981–1982 academic year data. Their pioneering work focused on public versus private sector cost differences in producing three outputs, under-graduate teaching, graduate teaching, and research, based on samples of 1,195 public and 695 private institutions. Groot et al. (1991) followed suite with a similar study using 1982–83 data in examining 147 doctoral granting research universities. Subsequently, Koshal (1998) selected 329 master’s level colleges from 1990–91. On a very micro level, other studies have investigated departmental cost structures, e.g. Dundar and Lewis (1995) did so for 18 public research universities, whereas King (1997) concentrated on 61 departments housed in a single university. Sav (2004) extends previous research in several directions and attempts to further understanding of higher education cost structures.
(a) Please discuss how Koshal & Koshal (1998) treat these problems in terms of data and model specification.
(b) What main findings on economies of scale, product-specific economies of scale, ray economies of scale and global economies of scope in Koshals’ study?
(c) Please comment the differences between the Koshal & Koshal (1998) and Sav(2004) studies in terms of model specification, estimation methodology and findings.
Sources:
1. Koshal, Rajindar K., Manjulika Koshal, 1998, “Economies of scale and scope in higher education: a case of comprehensive universities”, Economics of Education Review 18 (1999) 269–277.
2. Sav, G. Thomas, 2004. “Higher Education Costs and Scale and Scope Economies,” Applied Economics 36(6): 607 – 614.
2. (25 points) We examine the patenting behavior of firms in an industry characterized by rapid technological change and cumulative innovation. A survey evidence suggests that semiconductor firms do not rely heavily on patents to appropriate returns to R&D. Yet the propensity of semiconductor firms to patent has risen dramatically since the mid-1980s in US. According to the study of Hall & Ziedonis (2001) explore this apparent paradox by conducting interviews with industry representatives and analyzing the patenting behavior of 95 U.S. semiconductor firms during 1979-1995. The results suggest that the 1980s strengthening of U.S. patent rights spawned "patent portfolio races" among capital-intensive firms, but it also facilitated entry by specialized design firms.
(a) Please highlight the multifaceted effects of strengthening patent rights on firms even within one cumulative technological setting?
(b) Please briefly discuss the findings in Hall & Ziedonis (2001) and comment on his arguments.
(c) According Sakakibara & Branstetter (2001) study, do stronger patents Induce more innovations in Japan? Why? Or why not?
Sources:
1. Bronwyn H. Hall and Rosemarie Ham Ziedonis, 2001, “The Patent Paradox Revisited: An Empirical Study of Patenting in the U.S. Semiconductor Industry, 1979-1995”. The RAND Journal of Economics, 32(1): 101-128.
2. Sakakibara, M. and L. Branstetter. 2001, ”Do Stronger Patents Induce More Innovations? Evidence from the 1998 Japanese Patent Law Reforms.” The Rand J. of Econ. 32(Spring): 77-100.
Part 2:
WILL THE SHARING ECONOMY END CAPITALISM AS WE KNOW IT?
By James Watkins, THE DAILY DOSE, OZY.com, APR 14 2017
We’re selling out.
Uber and Lyft let us sell our rides and our tolerance for traffic. We can sell the spare bedroom on Airbnb. On TaskRabbit we can sell our ability to assemble Ikea furniture; on Etsy our knitting skills; on Lugg our brawn. The list goes on and on — and it will continue to lengthen.
These small transactions will have a giant cumulative effect, argues Arun Sundararajan, a leading expert on the sharing economy and a professor at NYU’s Stern School of Business. He predicts no less than a transformation of capitalism as we know it, and the end of employment, too. “Crowd-based capitalism” will usurp the corporation now at the center of the economy.
Only recently have people been able to earn money by sharing with strangers. YouTube was perhaps the first example of crowd-based industry (in this case, in the creation of videos) replacing big corporations at the heart of video media, says Sundararajan. Since then, eBay facilitated the peer-to-peer exchange of secondhand goods, but it took some time before the sharing economy got a lot more … personal. “It’s one thing to trust someone enough for them to ship you a package, but it’s a completely different thing to have a stranger sleep in your spare bedroom,” says Sundararajan. The establishment of “more robust digital trust networks” — automatic vetting of drivers, connection with hosts’ Facebook profiles, ratings and comment systems — allowed platforms likeLyft, Couchsurfing and meal-sharing app EatWith to take off.
The most high-profile sharing platforms, like Uber and Airbnb, monetize the most expensive assets that most consumers own: homes and cars. Several crowd-based platforms also exist in business lending and philanthropy, through platforms like Kickstarter,Kivaand Funding Circle. But other than money, accommodation and transportation, will people ever care to shareother stuff?
Sundararajan expects the energy and health care industries to be ripe for platform-based disruption, especially in developing countries where existing infrastructures are less reliable. Distributed networks of solar-energy generation and storage allowing us to swap, trade and share electricity with each other could bring an end to “centralized power production and distribution,” he says; meanwhile, “a lot that we go to the hospital for today could very effectively be delivered through an app” that calls a nurse to your house. “That said, I don’t expect open-heart surgery is going to be crowd-based anytime soon.”
With even nursing at risk of becoming an on-call gig-working Uber-like profession, the model could bring about the end of employment and become the main way of organizing labor in the new economy, thinks Sundararajan. But problems arise when casualside hustlesturn into full-time gigs. We have “painstakingly” built a system of worker protections, minimum wages, regulations and pension schemes that “transformed full-time employment from something that was pretty reprehensible 100 years ago to something that looks pretty good in many countries today,” says Sundararajan. How will a crowd-based economy look after its workers?
Sundararajan is pretty optimistic about the potential for sharing to be a force for good in the economy: It could make it easier for independent workers to operate as small-scale entrepreneurs and so democratize economic opportunity, he says. In addition, it could bring about a revolution in the efficiency of the economy, as resources that usually lie unused, like spare rooms and idle cars, can become much more productive. But how will crowd-based capitalism affect theinequalityand inclusivity of economic growth, and how do we ensure that the new economy works for everybody?
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The above article talks about the pros and cons of “crowd-sharing economy”. Please just pick any crowd-sharing business as an illustrative example and answer the following questions:
1. Provide fundamental company background introduction, e.g., services/products provided, annual sales, customers profile, etc. (10pts) (Note: All the following gradings are based on the information you provided for this question.)
2. What are the most challenging problems that this company is facing? (10pts)
3. What are the strategies you will use to solve these problems? Explain how and why you come up with these strategies. To what extent these problems will be solved? (15pts)
4. Justify the practicality of your strategies, i.e. explain why your strategies can actually be implemented. (15pts)
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