Reviews the book "Return on Investment: Practical Theory and Innovative Applications," by Robert A. Peters

Journal Article A Three (or More) Factor Model of Growth with Induced Innovation Get access A. A. Brewer A. A. Brewer University of Bristol Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 42, Issue 2, April 1975, Pages 285–292, https://doi.org/10.2307/2296536 Published: 01 April 1975

RECENT publications have underscored the priority being given by government officials to policies promoting more rapid technological change in Canadian manufacturing industries.' While major emphasis is being placed on encouraging the indigenous commercial development of new production techniques and products, i.e., innovation, relatively little concern has been paid to the subsequent diffusion of process and product innovations. Since the potential benefits of any innovation will remain largely unexploited by slow subsequent rates of adoption, policies fostering rapid adoption of existing technology are complements to policies encouraging innovation. Furthermore, quick imitation is an effective (and frequently necessary) means of blunting competitive disadvantages created by rival innovation.2 In view of the high costs usually associated with innovation, and the relatively small size of the domestic economy, imitative-rather than innovative-excellence might be a more feasible objective for many Canadian industries. Although an implicit presumption exists that geographical, cultural and economic ties with the United States insure that best practice technology in Canada will be close to that in other countries, the limited empirical evidence is inconclusive. Hufbauer (1966) found that production of a new synthetic material first took place in Canada approximately fourteen years, on average, after its initial production by the innovating country. Globerman's study (1974) comparing the adoption patterns of special presses in the paper industries of Canada and several Western European countries found that the rate of diffusion was faster among European firms, although the presses were initially introduced at approximately the same time as in Canada. Studies by Ault (1973) and Baumann (1973) of diffusion in the iron and steel industry provide evidence that Canadian firms, on average, adopted new technology as quickly as major Western European companies, and in the early stages, more quickly than their U.S. counterparts. In the light of limited research on an important policy issue, this study attempts to provide additional evidence on two related questions: 1. Do firms in Canada adopt innovations as quickly as their foreign counterparts? 2. What important factors influence industrial diffusion patterns in Canada? Analysis is focused on the diffusion of a major manufacturing innovation, numerical control, within comparable sets of potential users in Canada and the United States.3

ONE of the most important stages of the process of technological change is diffusion. Since the rate of diffusion is the rate at which a new technique is actually put into use, it is a critical determinant of the rate of growth of productivity. If certain types of firms and industries are quicker to diffuse a new, more efficient technique, they are quicker to attain the resulting increases in productivity. It would certainly seem useful, particularly from the point of view of public policy, to develop convincing empirical evidence concerning the characteristics of such firms and industries. Previous studies have provided a sound foundation for studying diffusion.' This article attempts to build on this foundation by observing the diffusion of one of the twentieth century's most important manufacturing innovations numerically controlled machine tools in ten industries. One purpose of this study is to provide a further test of the usefulness of the model of the imitation process developed by Mansfield (1961, 1968). In particular, we are interested in seeing how well his model can explain the increase over time in the percentage of new machine tools purchased that have numerical controls. This involves a different measure of the rate of diffusion than the measures investigated to date by other researchers. Also, we look at the effects on the rate of diffusion of an industry's market structure and the extent of its investment in R&D. Although previous studies have touched on these factors, this study goes further in measuring their effects than any previous work. Further, we investigate how the characteristics of the early users of numerical control (NC) differed from those that were slower to use it, and we study the determinants of the intrafirm rate of diffusion

In a recent article in this journal, Professors Sinai and Stokes (1972) presented a very interesting test of the hypothesis that money enters the production function, and they suggest that real balances could be a missing variable that has contributed to the unexplained 'residual' being attributed to technological The theory of induced innovation, as presented by Fellner (1961) and Schmookler (1966), suggests that market conditions affect the demand for innovation and the realized technological changes. Since money may be regarded as a proxy for short-run fluctuations in the aggregate demand, this theory suggests that money affects output and technological changes as a demand factor rather than as a factor of production. In this note, we suggest the appropriate tests to distinguish between the two alternative hypotheses, and present some empirical results

ln Q -0.1988 + 0.6922 ln L (2.8) (4.7) + 0.5896 In K 0.0223 In MF (4.3) (0.2) + 0.2106InMc + 0.0018T. (3.7) (0.4) R = 0.986 D.W. = 1.03 The results indicate that the real money balances held by firms seem to have no significant effect on output. The level of money held by consumers retains its significance. These results are again consistent with induced innovation approach but not with the production factor approach

This paper evaluates the effects of inflationary expectations within an extended inventory model of the determination of optimal money holdings and commodity inventories. One important innovation is to introduce into the consumption bundle a commodity which is purchased less frequently than income is received. A second innovation is to consider household use of earning assets as a store of savings balances rather than working balances. The analysis shows that the effects of inflationary expectations on optimal commodity inventories and money holdings depend critically on whether the household holds part of its savings balance as earning assets. For example, if the household holds its savings balance only as money, and if the real rate of return on earning assets is constant, an increase in the expected rate of inflation would induce a reduction in total money holdings and also, somewhat surprisingly, a reduction in total commodity inventories

This article discusses the role of accounting history in the study of modern business enterprise. It is well known, of course, that typical manufacturing firms of the mid-nineteenth century specialized mainly in one activity: that of transforming raw materials into finished products. These manufacturing firms necessarily relied for non-manufacturing services upon outside companies that specialized, as did they, primarily in one operation. For example, the manufacturer depended upon wholesale suppliers and commission merchants to provide raw materials and to sell finished goods to the final customer. One new method for controlling and coordinating company procedure was an innovation commonly called "the unitary form of organization." The unitary form of organization also involved the design of complex accounting systems to carry out assessment, operations, and planning throughout the firm. Du Pont Powder Co. exemplifies the early use of accounting data for management control in vertically integrated industrial firms

Part 1 The basics: introducing money money, the economy and inflation financial instruments and markets financial institutions - purposes and profile calculating interest rates the level of interest rates. Part 2 Intermediaries and banks: the regulation and structure of depository institutions commercial bank asset and liability management nondeposit financial institutions international banking financial innovation the payments system. Part 3 The art of central banking: who's in charge here? bank reserves and the money supply the instruments of central banking understanding movements in bank reserves hitting the monetary targets budget deficits and the money supply. Part 4 Monetary theory: the foundations of monetarism the Keynesian framework the ISLM world monetarists and Keynesians in the ISLM world monetarists and Keynesians - an aggregate supply and demand perspective rational expectations - theory and policy implications empirical evidence on the effectiveness of monetary policy. Part 5 Financial markets and interest rates: risk and portfolio choice flow of funds accounting - a framework for financial analysis the structure of interest rates the structure and performance of securities markets the government securities market other fixed-income markets - corporate bonds, municipals, and mortgages equities, the stock market and interest rates financial futures and options. Part 6 International finance: foreign exchange rates fixed versus floating exchange rates balance of payments accounting the gold standard epilogue - careers in banking and financial markets