nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2006‒11‒12
seven papers chosen by
Bernardo Batiz-Lazo
Bristol Business School

  1. A case for non-globalization? The organisation of r&d in the wireless telecommunications industry By Alberto Di Minin; Christopher Palmberg
  2. How Do Mobile Information Technology Networks Affect Firm Strategy and Performance? Firm-Level Evidence from Taxicab Fleets By Evan Rawley
  3. Discriminatory Competition and Local competition By Jack Ochs; S.K. Han
  4. The role of Entrepreneurial Universities in interfacing Competitive Advantages: The Case of Beira Interior region (Portugal) By Ferreira, Joao; Leitao, Joao; Raposo, Mario
  5. Heterogeneity and the Dynamics of Technology Adoption By Stephen Ryan; Catherine Tucker
  6. The Impact of the Number of Performance Measures and Incentive Framing on Performance in a Multidimensional Task Environment By P. VAN DE WEGHE; W. BRUGGEMAN
  7. Strategic Incompatibility in ATM Markets By Christopher R. Knittel; Victor Stango

  1. By: Alberto Di Minin; Christopher Palmberg
    Keywords: globalization, R&D, wireless telecommunications, essential patents
    JEL: O32 O34 F23
    Date: 2006–10–27
  2. By: Evan Rawley (University of California, Berkeley)
    Abstract: This paper examines how the adoption of mobile information technology networks impact firm strategy and performance in the U.S. taxicab industry. Using a rich, novel firm-level data set from the Economic Census, I test transaction cost economics’ prediction that adoption of mobile IT networks leads to shifts in the boundary of the firm toward increased fleet ownership of vehicles. I then exploit the homogeneity of the industry’s production function and exogenous variation in local market conditions to precisely measure the impact of adoption of mobile IT networks on productivity. I find strong evidence that firms respond to adoption of mobile IT networks by changing their organizational structure, shifting toward owning a greater fraction of vehicles in their fleets (as opposed to contracting with independent driver-owners for vehicles). I then use a precise and economically meaningful measure of firm performance to show that adoption of mobile IT networks causes firms to become more productive. The results suggest that adoption of mobile IT networks increases asset utilization by improving within-firm coordination but that firms must simultaneously shift toward a more highly vertically integrated structure to fully capture the benefits of mobile IT networks.
    Date: 2006–10
  3. By: Jack Ochs; S.K. Han
    Date: 2006–01
  4. By: Ferreira, Joao; Leitao, Joao; Raposo, Mario
    Abstract: This paper reveals the importance of a local entrepreneurial university in interfacing competitive advantages, by assuming the condition of most influent and dynamic engine of regional development. The strategic diagnosis provides the identification of a dominant quadrant in the TOWS matrix application to the Beira Interior region, which is dominated by Mini-Maxi strategies. For improving the competitive positioning of that region, the transition from the dominant quadrant (Mini-Maxi) to the most desirable quadrant (Maxi-Maxi) is also proposed. In this sense, the University assumes a fundamental role in the design and in the promotion of the proposed set of strategic actions, which should be implemented in two critical areas: traditional activities and tourism; and entrepreneurship and innovation. In terms of future research, the same analytical tool could be applied to other regions with a similar competitive profile, in order to obtain comparative analyses and to better calibrate the TOWS Matrix.
    Keywords: Entrepreneurship; Regional Development; Strategy.
    JEL: M13 R11
    Date: 2006–10–10
  5. By: Stephen Ryan (MIT and NBER); Catherine Tucker (MIT Sloan School of Business)
    Abstract: This paper analyzes the role of heterogeneity and forward-looking expectations in the diffusion of network technologies. Using a detailed dataset on the adoption of a new videoconferencing technology within a firm, we estimate a structural model of technology adoption and communications choice. We allow for heterogeneity in network benefits and adoption costs across agents. We find that ignoring heterogeneity in the interplay between adoption costs and network effects will underpredict the size of the steady-state network size by almost 50 percent. We develop a new “simulated sequence estimator” to measure the extent to which agents seek diversity in their calling behavior, and characterize the patterns of communication as a function of geography, job function, and rank within the firm. We find that agents have significant welfare gains from having access to a diverse network, and that a policy of strategically targeting the right subtype for initial adoption can lead to a faster-growing and larger network than a policy of uncoordinated or diffuse adoption.
    Date: 2006–10
    Abstract: This paper reports on the results of a 2x2 experiment, examining the impact of multiple performance measures (PM) and incentive framing on performance in a multidimensional environment. A comparison is made between the performance of people working under one PM and those working under three PM. Additionally, the performance of participants working under a bonus scheme is compared with a penalty-framed incentive scheme. The results indicate that it is better to use multiple PM, because it inspires higher effort intensity and better effort allocation. Furthermore, it is better to frame incentives as a penalty scheme, instead of as a bonus scheme, because loss aversion has a higher performance impact than perceived fairness. However, the difference between bonus and penalty schemes is not larger with multiple versus a single PM, because loss aversion under multiple PM is higher for bonuses than for penalties. Consequently, no additive effects were identified.
    Date: 2006–08
  7. By: Christopher R. Knittel (University of California, Davis); Victor Stango (Tuck School, Dartmouth)
    Abstract: We test whether firms use incompatibility strategically, using data from ATM markets. High ATM fees degrade the value of competitors’ deposit accounts, and can in principle serve as a mechanism for siphoning depositors away from competitors or for creating deposit account differentiation. Our empirical framework can empirically distinguish surcharging motivated by this strategic concern from surcharging that simply maximizes ATM profit considered as a standalone operation. The results are consistent with such behavior by large banks, but not by small banks. For large banks, the effect of incompatibility seems to operate through higher deposit account fees rather than increased deposit account base.
    Date: 2006–09

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