nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2006‒10‒07
six papers chosen by
Bernardo Batiz-Lazo
Bristol Business School

  1. Towards a Dynamic Resource-Based View: Insights from Austrian Capital and Entrepreneurship Theory By Nicolai J. Foss; Ibuki Ishikawa
  2. Strategy-Proof Coalition Formation By Carmelo Rodríguez Álvarez
  3. Strategic Choice of Celibacy in the Catholic Church By Men-Andri Benz; Egon Franck; Urs Meister
  4. Selection and Comparative Advantage in Technology Adoption By Tavneet Suri
  5. The Growth Opportunities for SMEs? By Bentzen, Jan; Madsen, Erik Strøjer; Smith, Valdemar
  6. Regional growth strategies: fiscal versus institutional governmental policies By Ingrid Ott; Susanne Soretz

  1. By: Nicolai J. Foss; Ibuki Ishikawa
    Abstract: Over the last two decades the resource-based view (“RBV”) has become dominant in the strategic management field. It has often been observed that the RBV is lacking in the dynamic dimension. For example, processes of building competitive advantages by means of combining existing complementary resources in novel ways are not inquired into. We argue that the RBV may profitably draw on insights in entrepreneurship and capital theory, drawn from Austrian economists as well as Frank Knight, in order to strengthen its dynamic dimension. We link the RBV and Austrian ideas in the context of the theory of complex systems pioneered by Herbert Simon. We draw a number of implications for strategic management from this synthesis, notably into resource value and sustainability of competitive advantage.
    Keywords: Resource-based view; Austrian capital theory; complexity theory; entrepreneurs competitive advantage
    JEL: B53 D21 L23 M1
    Date: 2006
  2. By: Carmelo Rodríguez Álvarez (Universidad de Málaga)
    Abstract: We analyze coalition formation problems in which a group of agents is partitioned into coalitions and agents' preferences only depend on the coalition they belong to. We study rules that associate to each profile of agents' preferences a partition of the society. We focus on strategy-proof rules on restricted domains of preferences, as the domains of additively representable or separable preferences. In such domains, the only strategy-proof and individually rational rules that satisfy either Pareto efficiency or non-bossiness and flexibility are single-lapping rules. Single-lapping rules are characterized by severe restrictions on the set of feasible coalitions that are consisitent with hierarchical organizations. These restrictions are necessary and sufficient for the existence of a unique core-stable partition. This fact implies that single-lapping rules always select the associated unique core-stable partition. Thus, our results highlight the relation between the non-cooperative concept of strategy-proofness and the cooperative concept of uniqueness of core-stable partitions.
    Keywords: Coalition Formation; Strategy-Proofness; Single-Lapping Property; Core-Stability; Matching Problems.
    JEL: C71 C78 D71
    Date: 2006
  3. By: Men-Andri Benz; Egon Franck; Urs Meister (Institute for Strategy and Business Economics, University of Zurich; Institute for Strategy and Business Economics, University of Zurich; Institute for Strategy and Business Economics, University of Zurich)
    Abstract: Since the middle ages celibacy is a necessary commitment when considering becoming a priest in the Roman Catholic Church. In the ongoing discussions about reforms, a wide range of church members ask for the abolishment of celibacy in order to meet believers? changed social and moral standards and to increase the quality and the quantity of priests. However, this paper shows that from a rational point of view, there are good reasons for the Catholic Church to keep or even to increase the role of celibacy for its priests. Using celibacy as a resource selection device, it allows the church to signal credibly its religious orientation to believers. Based on a game theoretic model this paper analyses the optimal use of celibacy in the market for religious services. Additionally we discuss the relevant impacts of higher income levels, higher opportunity costs, increasing aging or changed moral standards related to homosexuality.
    Keywords: Religion, celibacy, strategic positioning
    JEL: D23 D83 L89
    Date: 2005
  4. By: Tavneet Suri (Sloan School, MIT)
    Abstract: This paper examines a well known empirical puzzle in the literature on technology adoption: despite the potential of technologies to increase returns dramatically, a significant fraction of households do not use these technologies. I study the use of hybrid maize and fertilizer in Kenya, where there are persistent cross-sectional differences in aggregate adoption rates with a large fraction of households switching in and out of adoption. By allowing for selection of farmers into technology use via comparative advantage differences, I examine whether the yield returns to adopting hybrid maize vary across farmers. If so, high average returns can coexist with low returns for the marginal farmer. My findings indicate the existence of two interesting subgroups in the population. A small group of farmers has potentially high returns from adopting the technologies. Yet, they do not adopt. This lack of adoption appears to stem from supply and infrastructure constraints, such as the distance to fertilizer distributors. In addition, a larger group of farmers faces very low returns to adopting hybrid maize, but chooses to adopt. This latter group might benefit substantially from the development of newer hybrid strains to increase yields. On the whole, the stagnation in hybrid adoption does not appear to be due to constraints or irrationalities.
    Keywords: Technology, Heterogeneity, Comparative Advantage
    JEL: C33 O12 Q12
    Date: 2006–09
  5. By: Bentzen, Jan (Department of Economics, Aarhus School of Business); Madsen, Erik Strøjer (Department of Economics, Aarhus School of Business); Smith, Valdemar (Department of Economics, Aarhus School of Business)
    Abstract: The extensive empirical literature on the validity of Gibrat’s law does not in general verify the law as it finds that firms’ growth rates are negatively correlated with both firm size and age. However, some studies find that Gibrat’s law holds for sub-samples of firms such as large firms or firms belonging to special industries. It has been pointed out that these results are due to the fact that the likelihood of firm survival for natural reasons is positively related to firm size and age. This study uses a relatively large and representative sample of Danish firms to evaluate the validity of Gibrat’s law for different kinds of firms over the period 1990 - 2003. In contrast to the majority of earlier studies our analysis corrects for the bias in the estimations by using variables related to the survival of small firms.
    Keywords: Market Structure; Firm Strategy; Market Performance;
    JEL: L10
    Date: 2006–09–27
  6. By: Ingrid Ott (Institute of Economics, University of Lüneburg); Susanne Soretz (Institute of Economics, Leibnitz University of Hannover)
    Abstract: This paper analyzes the growth impact of fiscal and institutional governmental policies in a regional context. The government provides a productive input that is complementary to private capital. Institutional policies include the decision about the type of public input as well as on the size of the region as determined by the number of firms. Fiscal policies decide on the extent of the public input. Private capital accumulation incurs adjustment costs that depend upon the ratio between private and public investment. After deriving the decentralized equilibrium, fiscal and institutional policies as well as their interdependencies and welfare implications are discussed. Due to the feedback effects both policies may not be determined interdependently. It is also shown that depending on the region`s size different types of the public input maximize growth.
    Keywords: Fiscal and institutional policy, regional growth, adjustment costs, congested public inputs
    JEL: O41 H40 H54 R13
    Date: 2006–09–22

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