Knowledge Capital and the New Economy

According to its proponents, the new economy' is associated with sustainable growth, increased demand for labor and zero inflation. On the micro-level, this bright avenue into the future is propelled by knowledge capital, flexibility and new ways of organizing production, such as clusters and networks. Progress in information technology, together with massive deregulation on the national and the international levels, have been credited with setting this development into motion. The concept of thenew economy' has been rapidly embraced by politicians, as it seems to offer a way out of the traditional trade-off between unemployment and wage inflation. However, empirical evidence regarding the microeconomic mechanisms of the new economy' is scarce. *Knowledge Capital and theNew Economy': Firm Size, *Performance and Network Production intends to narrow this gap by empirically analyzing the composition of knowledge capital and how knowledge capital is distributed across firms of different size. Moreover, the impact of knowledge capital on firms' profitability and international competitiveness is also examined. Finally, we compare cluster dynamics and the institutional set-up in Europe and the U.S., with the purpose of identifying regulations that seem to hinder a conducive environment for expanding and dynamic European clusters.
The results of this study emphasize the role of knowledge capital and flexibility. Thus, irrespective of how sustainable the `new economy' turns out to be, the policy implications in terms of providing institutions that facilitate knowledge-enhancing economic activities, flexible markets and transparent incentive structures are undeniable. Countries that fail in this respect may find themselves trailing in the international growth and welfare rankings.

Inhalt
1 Introduction.- 1.1 Background.- 1.2 Industrial Organization and the Role of SMEs.- 1.3 Purpose, Methodology and Limitations.- 1.4 Theoretical Background.- 1.5 Internationalization.- 1.6 Organization of the Book.- 2 The Size Distribution of Firms: Some Stylized Facts.- 2.1 Introduction.- 2.2 The Shift Toward SME-Production in Industrialized Countries.- 2.3 Evidence after 1980 on the Size Distribution of Firms in Industrialized Countries.- 2.4 Internationalization, Knowledge and Specialization; Evidence from a Sample of Swedish Firms.- 2.5 Concluding Remarks.- 3 Does Knowledge Investment Increase Profitability? Empirical Evidence from Swedish Firms in the Engineering Industry.- 3.1 Introduction.- 3.2 Knowledge Capital.- 3.3 Model, Data and Hypotheses.- 3.4 Econometric Specifications and Results.- 3.5 Concluding Remarks.- 4 How is Knowledge Capital Related to Firm Size and Internationalization?.- 4.1 Introduction.- 4.2 Data and Hypotheses.- 4.3 Results.- 4.4 Concluding Remarks.- 5 Clusters, Venture Capital and Growth.- 5.1 Introduction.- 5.2 Industrial Dynamics in Sweden and the United States: A Concise Background.- 5.3 Venture Capital Firms and Business Angels.- 5.4 Concluding Remarks.- 6 The Influence of Agglomeration on Large Firms' Investments Evidence from Swedish Foreign Direct Investment.- 6.1 Introduction.- 6.2 Foreign Direct Investment and Agglomeration Patterns.- 6.3 The Database and Sample Selection.- 6.4 Hypotheses for Empirical Testing.- 6.5 Results of the Estimations.- 6.6 Concluding Remarks.- 7 Conclusion.- 7.1 Introduction.- 7.2 Policy Implications and Future Research.