The diffusion of technological knowledge is key to industry growth. But not all knowledge is created equal. I use a nanoeconomic approach to examine knowledge-diffusion based growth in the Meiji-era Japanese cotton spinning industry, which enjoyed remarkable success after a decade of initial...

In this paper we develop a new insight into the infant industry argument for protection, in the setting where entrepreneurs are differentiated by talent. The speed of technological progress depends on the quality of ideas and the incentives to innovate, not on the scale of the industry, and...

We explore how changes in ownership and managerial control affect the productivity and profitability of producers. Using detailed operational, financial, and ownership data from the Japanese cotton spinning industry at the turn of the last century, we find a more nuanced picture than the...

We solve a long-term contracting problem with symmetric uncertainty about the agent's quality, and a hidden action of the agent. As information about quality accumulates, incentives become easier to provide because the agent has less room to manipulate the principal's beliefs. This result is...

We analyze a long-term contracting problem involving common uncertainty about a parameter capturing the productivity of the relationship, and featuring a hidden action for the agent. We develop an approach that works for any utility function when the parameter and noise are normally distributed...