Location: University of Bologna
Teachers: Giulio Ecchia, Stefano Bolatto
Duration: 20 hours
Content: The course will provide an outline of some of the main concepts of industrial economics in order to describe competion between firms in markets. This will provide the students with the knowledge necessary to understand the success of firms, with emphasis on those with the highest probability of being innovative, fast-growing companies able to profitably operate across borders and contribute to fuel economic growth. Accordingly, the course aims at giving students the ability to understand the theory and apply empirical models to the analysis of the role of firms in real world situations. These topics include firm organization and incentives; strategic interaction and relations among firms; product differentiation strategies; firm entry, survival, growth; innovation activities; and participation in international markets. The strategic behavior of firms and the main policy measures put into practice by governments will be analyzed by using a combination of theoretical tools (e.g., basic microeconomics and game theory) as well as relevant case studies.
The second part of the course will be devoted to the analysis of how firms typically organize their overseas operations. After a brief introduction of the classical models of international trade, explaining the pattern of comparative advantages and specialization at country-level, the analysis will focus on firm-level decisions, such as participartion in the export market, or the choice of the entry mode in overseas markets (traditional export vs. foreign direct investment). This part will be completed by an assessment of the most relevant decisions that firms have to make in regard to their supply chains, related to their backward or forward participation in the global production network, their sourcing strategy, the best location for the various production stages, and the choice between vertical integration and outsourcing for every stage.