This module on “Industrial Dynamics: theory and Empirical Applications will develop students’ ability to understand theories of industrial dynamics in a fast evolving literature by allowing to explore the role of innovation and productivity in economic growth, based on theory and empirical testing. Critically evaluating the vast literature on neoclassical Industrial Organisation (I.O.), the module will challenge its paradigm. In fact, it’ll bridge the gap between Micro and Macro Theories by looking at the role of micro-foundations of macro theories and it will proficiently connect “Theory” and “Empirics” in a unified setting.

The module will cover the following topics, which may be subject to variation depending on developments in academic research and the interests of the class:

Beyond SCP and new I.O. postulates: a critical approach
	Industrial dynamics: beyond TFP or augmented production function approach, model 1: G Dosi, M Grazzi, L Marengo, S Settepanella The Journal of Industrial Economics 64 (4), 875-907, “Production Theory: Accounting for Firm Heterogeneity and Technical Change”
	Industrial dynamics: beyond TFP or augmented production function approach, model 2: Jovanovic 1982 “Selection and the Evolution of Industry”, Econometrica, 50.
	Industrial dynamics: beyond TFP or augmented production function approach, model 3: Ericson and Pakes 1995 “Markov-Perfect Industry Dynamics: A framework for empirical work”, Review of Economic Studies, 62.
	Firms’ demography and industrial dynamics using STATA ©: testing evolution as a model of dis-equilibrium and patterns of productivity distribution at odds with the new I.O. theory.:
	Estimation of production Functions with Micro data: Olley and Pakes (1996); Levinsohn and Petrin (2003)
		TFP vs. Labour productivity estimation: why they differ and why it matters.
		The role of unobserved heterogeneity in micro-data: main longitudinal datasets on micro data available to researchers (e.g. ORBIS, BEEPs, Community Innovation Survey, etc.)
		The micro-econometrics of catching-up: Stochastic frontier modelling
		The micro-foundations of macro-economic modelling via Empirical Modelling: toward a research agenda
	
	Revision
Teaching Delivery

10 lectures of 1 hour

1 hour tutorial each week focusing on theoretical problems in the first five weeks, and empirical modelling on firm level data (e.g. productivity, production function, catch-up, firms’ demography, etc.) using STATA in the latter five.

Tutorial based exercises will develop the capability to solve standard and more complex exercises (individually and/or in groups) both on theoretical problems (e.g. how to derive the share of resources allocated to each input from a production function) and empirical (e.g. what are the different ways we could take “unobserved heterogeneity” in panel into account) in order to give confidence to the students about their knowledge and increased skills acquisition.
	Team-based Presentations in class will develop an accurate capability to present in front of an audience and to be able to cope with questions, they will be part of formative “assessment”, with full set of feedback and peer-reviewing.
By the end of the module, you should be able to:

To develop an advanced toolkit on analysis including basic strategic management analysis, strategic game theory and evolutionary industrial organisation in a broader context of the business environment and competition/cooperation scenario;
	To develop an advanced toolkit on applied econometrics, especially on estimation of firm’s performance and production function specification;
	To critically apply the theoretical underpinning to advanced econometrics modules;
	To acquire skills of work individually but also cooperatively to solve complex exercises on I.O., applied econometrics and to communicate the results effectively.