Unfolding the Industry Dynamics
Empirical research has made progress in developing indicators for the measurement oftechnological competences. A so far unmet challenge, however, is to trace the patterns ofrelationships among key variables at the firm level as they unfold in the context of theindustry dynamics. The aim of the present paper is therefore to develop the methodologyrequired to search for patterns of relationships among such key variables (R&D investments,technology and performance), to trace these patterns over time and thereby unfold theunderlying industry dynamics. We are here referring to the possibility of using statisticalmethods such as Multidimensional Scaling (MDS) to trace similarities and dissimilaritiesamong a set of variables - as opposed to testing simple linear and non-linear causal relations.We extend the previous use of MDS to further include what is known as "external unfolding."Using this proposed methodology, we derive an "industry space" that allows identification ofthe tendency to form groups, and to infer the stability of such groups of firms sharing similarconditions.
Mette Praest Knudsen, Thorbjørn Knudsen
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