Managerial Culture and the Capacity Stance of Firms.
This paper begins by highlighting the autonomous nature of the firm’s investment decision. Given this, it argues, there is no reason to expect that capacity formation – a crucial vehicle for innovation and an essential element in the competitive process - will be at the level that would be considere...
| Main Authors: | , |
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| Format: | Working paper |
| Language: | English |
| Published: |
ESRC Centre for Research on Innovation and Competition
1998
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| Summary: | This paper begins by highlighting the autonomous nature of the firm’s investment decision. Given this, it argues, there is no reason to expect that capacity formation – a crucial vehicle for innovation and an essential element in the competitive process - will be at the level that would be considered economically optimal in aggregate. Indeed, the paper suggests that there has been a trend tightening of the capacity stance over the last two decades in many countries and estimates the extent of this for the UK. The paper discusses how elements of managerial culture and the institutional framework might complement standard models of investment; in particular it draws on Lazonick’s insights on organisational capital. |
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