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Centre for Employment Studies
A
Generalised Computational Model of Firms Production and Interactions: Tommaso Ciarli * Abstract Given the centrality of firms as actors of industrial development and dynamics, our first aim has been to model their production process in a flexible and operational way. Secondly, given the importance of interactions in understanding economic phenomena, the following aim has been to model this process in order to be able to embed firms in an interacting system, and understand their changes as cause and consequences of the interaction patterns. Thus, we present here a first experimental version of a model of production that depends on firms features and resources, which on their own change according to changes in the system in which firms are embedded, provided that firms are central but certainly not the only actors of economic and industrial development. Our broad objective is to use an enhanced version of the described model to understand the processes of industrial development, in conditions in which firms interact both at local and international level. The main question we will try to address is on the role of the local system and the structure of the interactions, on the development of the same locality. This said, in the present work we basically show the structure of the production model, and the way in which we could represent firms vertical interaction under an input-output framework, and how its features affect their ‘performance’. We show that the way in which the process is modelled is both extremely flexible, and robust under standard basic economics assumptions. As discussed in a methodological section we argue that those characteristic will be of importance to understand the abovementioned broader dynamics. Keywords: production processes & industrial development; simulation model; local production system; JEL codes: C63; O14; L23 * PhD
student, Ferrara University, Economics Faculty & Birmingham
University
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