nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2006‒12‒16
23 papers chosen by

  1. The General Profile of the Outsourcing Firm: Evidence for a Local Production System of Emilia Romagna By Massimiliano Mazzanti; Sandro Montresor; Paolo Pini
  2. Convergence and Divergence among Technology Clubs By Fulvio Castellacci
  3. How Does Knowledge Transfer from Foreign Subsidiaries Affect Parent Companies' Innovative Capacity By Lucia Piscitello; Larissa Pabbiosi
  4. Micro-strategies of Contextualization: Cross-national Transfer of Socially Responsible Investment By Eva Boxenbaum; Jean-Pascal Gond
  5. The Jukebox Mode of Innovation - a Model of Commercial Open Source Development By Joachim Henkel
  6. Organizing Innovation: Complementarities Between Cross-Functional Teams By James H. Love; Stephen Roper; Giovanni Mangiarotti
  7. Outsourcing Induced by Strategic Competition By Yutian Chen; Pradeep Dubey; Debapriya Sen
  8. Competing for Customers in a Social Network By Pradeep Dubey; Rahul Garg; Bernard De Meyer
  9. Satisficing in sales competition: experimental evidence By Siegfried Berninghaus; Werner Güth; M. Vittoria Levati; Jianying Qiu
  10. Consolidation of Cooperative Banks (Shinkin) in Japan:Motives and Consequences By Kaoru Hosono; Koji Sakai; Kotaro Tsuru
  11. Strategic online-banking adoption By Roberto Fuentes; Rubén Hernández-Murillo; Gerard Llobet
  12. Knowledge and the diversity of innovation systems: a comparative analysis of European regions By Christophe CARRINCAZEAUX (E3I-IFReDE-GRES); Frédéric GASCHET (IERSO-IFReDE-GRES)
  13. Prospective analysis: residential choice and territorial attractiveness By Marie-Martine GERVAIS-AGUER (IERSO-IFReDE-GRES)
  14. Innovation and firm growth in "complex technology" sectors : a quantile regression approach By Alex Coad; Rekha Rao
  15. Understanding the processes of firm growth - a closer look at serial growth rate correlation By Alex Coad
  16. New technology, Human Capital and Growth for Developing Countries By Cuong Le Van; Manh-Hung Nguyen; Thai Bao Luong
  17. La atractividad económica de los territorios By Furio Elies
  18. Foreign direct investment and economic growth: Empirical evidence from Russian regions By Ledyaeva , Svetlana; Linden, Mikael
  19. Innovation and Productivity across Four European Countries By Rachel Griffith; Elena Huergo; Jacques Mairesse; Bettina Peters
  20. Science-Technology-Industry Links and the ”European Paradox”: Some Notes on the Dynamics of Scientific and Technological Research in Europe. By Giovanni Dosi; Patrick Llerena; Mauro Sylos Labin
  21. Coordination failures in network formation. By Nicolas Carayol; Pascale Roux; Murat Yıldızoglu
  22. Ressources, compétences et stratégie de la firme : Une discussion de l’opposition entre la vision Porterienne et la vision fondée sur les compétences. By Fernand AMESSE; Arman AVADIKYAN; Patrick COHENDET
  23. Justifying the Origin of Real Options and their Difficult Evaluation in Strategic Management. By Thierry Burger-Helmchen

  1. By: Massimiliano Mazzanti; Sandro Montresor; Paolo Pini
    Abstract: The paper aims at ‘embedding’ the outsourcing firm by considering it as a four-fold unit of analysis: i.e. as an organizational, production, industrial and innovation unit. Theoretical correlations between outsourcing decisions and outsourcing variables are formulated and then tested with respect to a representative cross-sectional sample of firms of a local production system in Emilia Romagna (that is, Reggio Emilia). The main result of the paper is that outsourcing decisions are indeed affected by the organizational and industrial relations typical of the context firms are embedded in. Furthermore, the general profile of the Reggio Emilia outsourcing firm is strategic rather than operative. In particular, tapping-into the provider’s resources and competences to eventually promote technological innovation seems more relevant than searching for lower costs by contracting out.
    Keywords: Outsourcing; transaction costs; industrial relations; innovation
    JEL: L22 D23 J53
    Date: 2006
  2. By: Fulvio Castellacci
    Abstract: The paper investigates cross-country differences in technology in a large sample of developed and developing economies over the 1990s. The empirical analysis indicates the existence of three technology clubs with markedly different levels of technological development: advanced, followers and marginalized countries. The technology clubs also differ with respect to their dynamics over the 1990s. While the club of followers is characterized by a process of gradual convergence towards the technological frontier, the group of marginalized has experienced an increase in its gap in terms of innovative capabilities.
    Keywords: Growth and development; technological change; convergence clubs; polarization
    JEL: O11 O33 O40
    Date: 2006
  3. By: Lucia Piscitello; Larissa Pabbiosi
    Abstract: The paper addresses reverse knowledge transfer (RKT) from foreign subsidiary to parent company. Specifically, it aims at investigating to what extent the effectiveness of such a transfer is influenced by: (i) the organizational mechanisms employed for transferring knowledge; (ii) the subsidiary’s role, its autonomy, and its relationships with the local context. The empirical analysis considers 162 transfers of best practices possessed by foreign subsidiaries and transferred back to their Italian parent companies. Results confirm that the impact of RKT on the parent company’s innovativeness is greater when: (i) person-based mechanisms are employed for transferring knowledge; (ii) subsidiaries are competence-creating; and (iii) knowledge developed by subsidiaries benefits from local external linkages.
    Keywords: External linkages; organizational mechanisms; parent company’s innovativeness; reverse knowledge transfer; subsidiary’s characteristics
    JEL: F23 O30
    Date: 2006
  4. By: Eva Boxenbaum; Jean-Pascal Gond
    Abstract: This paper examines how individuals select and mobilize local institutions when they transfer business practices across societies that are construed as dissimilar to one another. We investigate empirically how the American business practice of socially responsible investment (SRI) was transferred to France and Quebec. Our analysis identifies five micro-strategies that were employed to contextualize SRI, namely filtering, rerouting, stowing, defusing, and coupling. This repertoire of micro-strategies extends previous research on contextualization, translation, and institutional transfers and links them to one another. They may also help explain why some transfers succeed while others fail.
    Keywords: Contextualization; transfer; translation; institutional theory; socially responsible investment
    Date: 2006
  5. By: Joachim Henkel
    Abstract: In this paper, I describe and analyze the phenomenon of informal development collaboration between firms in the field of embedded Linux, a type of open source software. To explain the observed phenomenon of voluntary revealing, I develop a duopoly model of quality competition. The central assumptions are that firms require two complementary technologies as inputs, and differ with respect to the relative importance they attach to these technologies. The main results are, first, that a regime with compulsory revealing can lead not only to higher profits, but also to higher product qualities than a proprietary regime. Second, when the decision to reveal is endogenized equilibria arise with voluntary revealing by both players.
    Keywords: Innovation; development collaboration; open source software; embedded Linyx
    JEL: L11 L15 L86
    Date: 2006
  6. By: James H. Love; Stephen Roper; Giovanni Mangiarotti
    Abstract: Cross-functional teams play a potentially important part in the innovation process enabling knowledge sharing, the development of trust and overcoming spatial and organizational barriers. Using a supermodularity approach, we focus on potential complementarities which may arise when cross-functional teams are used in different elements of the innovation process in UK and German manufacturing plants. Using optimal combinations of cross-functional teams in the innovation process increases innovation success in the UK by 29.5 per cent compared to 9.5 per cent in Germany. Patterns of complementarity are complex, however, but are more uniform in the UK than in Germany. The most uniform complementarities are between product design and development and production engineering, with little synergy evident between the more technical phases of the innovation process and the development of marketing strategy. In strategic terms, our results suggest the value of using cross-functional teams for the more technical elements of the innovation process but that the development of marketing strategy should remain the domain of specialists.
    Keywords: Innovation; cross-functional terms; complementarities; UK; Germany
    JEL: O15 O31 O32
    Date: 2006
  7. By: Yutian Chen; Pradeep Dubey; Debapriya Sen
    Date: 2006–12–08
  8. By: Pradeep Dubey; Rahul Garg; Bernard De Meyer
    Date: 2006–12–08
  9. By: Siegfried Berninghaus; Werner Güth; M. Vittoria Levati; Jianying Qiu
    Abstract: In a stochastic duopoly market, sellers must form state-specific aspirations expressing how much they want to earn given their expectations about the other's behavior. We define individually and mutually satisficing sales behavior for given individual beliefs and aspiration profiles. In a first experimental phase, whenever satis¯cing is not possible, beliefs or aspirations have to be adapted, or other strategy profiles must be found. In a second phase, participants are free to select non-satisficing sales profiles. The results reveal that most people are satisficers who, either mandatorily or deliberately, tend to adjust aspiration levels if they cannot be satisfied.
    Keywords: Satisficing behavior, bounded rationality, duopoly
    JEL: C72 C92 D43
    Date: 2006–12
  10. By: Kaoru Hosono; Koji Sakai; Kotaro Tsuru
    Abstract: We investigate the motives and consequences of the consolidation of cooperative banks (Shinkin) in Japan during the period 1984-2002. Our major findings are as follows. First, less profitable and less cost efficient banks are more likely to be an acquirer and a target, though even less profitable and less cost efficient banks are more likely to be a target rather than an acquirer. In addition, a larger bank is more likely to be an acquirer and smaller one a target. These results are consistent with the regulators' motive for stabilizing the local banking system.¡¡Second, acquiring banks improved cost efficiency after the consolidation. M&As also raised the loan interest rate and improved profitability and X-efficiency particularly since the latter half of the 1990s. Nonetheless, the improvement of ROA after the merger was not sufficient to fill in the initial gap of the capital ratio between merging banks and peers, resulting in the deterioration of the capital ratio of consolidated banks relative to peers. M&As did not contribute to sufficiently stabilize the local banking system despite the regulators' motive. Third, the consolidation tended to improve the profitability of merging banks when the difference in profitability and healthiness between acquiring banks and target banks were large, which is consistent with the relative efficiency hypothesis (e.g., Akhavein, Berger, and Humphrey, 1997).Length: 48 pages
    Date: 2006–08
  11. By: Roberto Fuentes; Rubén Hernández-Murillo; Gerard Llobet
    Abstract: In this paper we study the determinants of the decision of U.S. banks to create a transactional website for their customers. We show that although bank-specific characteristics (such as the volume of deposits) are important, competition plays a prominent role. In more competitive markets banks are more likely to adopt earlier. Even more important, banks adopt earlier in markets where their competitors have already adopted. A contribution of this paper is to study the adoption decision over time using a panel of commercial banks. We also contribute to the literature by adapting a measure of competition related to the choices of competitors that a bank faces in each market.
    Keywords: Internet banking
    Date: 2006
    Abstract: The main goal of this paper is to shed some light on European regional diversity in terms of knowledge accumulation and socio-economic performances. Dynamic links between knowledge, innovation and performance are complex to address because they take place in different contexts, involving heterogeneous agents interacting through different institutions. Studies on national systems of innovation (Edquist, 1997) stressed the role of the institutional context in these dynamics and identify various configurations associated with these national systems. This conceptual framework, used at the regional level, leads to the identification of regional systems of innovation (Cooke, 2001) and thus underlines the limits of a regional scoreboard only based on high-tech indicators as it is usually proposed. This paper constitutes a first attempt to propose a more exhaustive effort in characterizing the diversity of \"regional knowledge an innovation systems \" within Europe. The study is performed through data analysis using the conceptual framework of \"social systems of innovation and production\" (SSIP) proposed by Amable, Barré and Boyer (1997). A Social System of Innovation and Production can be defined as a coherent combination of different components referring to Science-technology-industry (STI) configurations articulated with financial system, labour relations, education and training and economic performances. This framework can be adapted at the regional level by identifying specific arrangements of each part of the system even if the concept of system is questionable at this level. The analysis is performed combining data from three sources (Eurostat, the Cambridge Econometrics database and OST (Observatoire des Sciences et des Techniques)) over a sample of NUTS-II european regions and using multivariate data analysis (principal component analysis, hierarchical anova). Putting together the SSIP and local economic performances allows defining different regional configurations in order to identify regional trajectories and patterns of articulation between knowledge dynamics and performance. Our hypothesis is that regional growth in not a problem of best practice but of coherent knowledge combination: institutional differences may lead similar (or different) STI structures to different (respectively same) performances.
    Keywords: NARegional Innovation systems, Knowledge economy, Institutional diversity, European regions, Regional economic performances
    Date: 2006
    Abstract: A multitude of complex factors may affect the dynamics of where people choose to live yet little analysis has been done on the determinants of residential choice. With the help of a large on-line survey, the present paper will try to unscramble the criteria of choice used by British citizens with plans to establish their main, secondary or “secondary then main” residence in France within three years time. Such choices are all the more revealing due to this population’s preference for certain host regions over others. The study’s aims, purpose and foci will be presented in its first section, followed by a discussion of its theoretical underpinnings and modes of investigation. We will then examine some initial findings, comparing them with future migrants’ residential biography. We follow this with an in-depth analysis, with no pretence of being all-encompassing. The permanent, temporary or “mixed” nature of a move is a very important criterion in analysing migrants’ residential choice and in determining a typology thereof. Then the choices are examined once the various types of migrations and households have been neutralised. Subsequently we focus on territorial attractiveness by selecting five regions, based on future migrants’ expressed preferences for the first three, and the territorial specificities of the other two. One notable challenge will be to identify potential inter-area competition in light of various factors. These include the arbitrage that future migrants might make, the attractiveness that a region may possess (selective or not), the image they have of different areas, and the migratory imagination, whose not insignificant role requires some decoding.
    Keywords: British migration, Hedonic analysis, Residential choice, Territorial attractiveness, Selectivity, Inter-area competition and arbitrage, Migratory imagination
    Date: 2006
  14. By: Alex Coad (CES - Centre d'économie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I], LEM - Laboratory of Economics and Management - [Sant'Anna School of Advanced Studies]); Rekha Rao (LEM - Laboratory of Economics and Management - [Sant'Anna School of Advanced Studies])
    Abstract: Innovation is commonly seen as the principal engine of economic development. In this paper, we investigate the microfoundations of economic growth by relating innovation to sales growth at the firm-level, for incumbent firms in four «complex technology» sectors. The average firm, which experiences only modest growth, may grow for a number of reasons that may or may not be related to «innovativeness». However, given that firms are heterogeneous and that growth rates distributions are typically heavy-tailed, it may be misleading to use regression techniques that focus on the average firm. Using a quantile regression approach, we observe that innovativeness is of crucial importance for a handful of «superstar» fast-growth firms.
    Keywords: Innovation, firm growth, quantile regression.
    Date: 2006–12–06
  15. By: Alex Coad (CES - Centre d'économie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I], LEM - Laboratory of Economics and Management - [Sant'Anna School of Advanced Studies])
    Abstract: Serial correlation in annual growth rates carries a lot of information on growth processes - it allows us to directly observe firm performance as well as to test hypotheses. Using a 7-year balanced panel of 10 000 French manufacturing firms, we observe that small firms typically are subject to negative correlation of growth rates, whereas larger firms display positive correlation. Furthermore, we find that those small firms that experience extreme positive or negative growth in any one year are unlikely to repeat this performance in the following year.
    Keywords: Serial correlation, firm growth, quantile regression.
    Date: 2006–12–06
  16. By: Cuong Le Van (CES - Centre d'économie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I]); Manh-Hung Nguyen (CES - Centre d'économie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I]); Thai Bao Luong (CES - Centre d'économie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I], CEPN - Centre d'économie de l'Université de Paris Nord - [CNRS : UMR7115] - [Université Paris-Nord - Paris XIII])
    Abstract: We consider a developing country with three sectors in economy: consumption goods, new technology, and education. Productivity of the consumption goods sector depends on new technology and skilled labor used for production of the new technology. We show that there might be three stages of economic growth. In the first stage the country concentrates on production of consumption goods; in the second stage it requires the country to import both physical capital to produce consumption goods and new technology capital to produce new technology; and finally the last stage is one where the country needs to import new technology capital and invest in the training and education of high skilled labor in the same time.
    Keywords: Optimal growth model, New technology capital, Human Capital, Developing country.
    Date: 2006–12–07
  17. By: Furio Elies (ECONOMIA, TREBALL I TERRITORI - Economía Aplicada - Grup d'Investigació - Nº 19 Economia, treball i territori - [Universitat de Valencia])
    Abstract: El objetivo del presente trabajo es desarrollar las implicaciones analíticas y empírica del concepto de atractividad económica de los territorios. Para ello, se establecen las bases conceptuales y analíticas del mismo. La discusión se centra básicamente en el análisis de las variables y factores explicativos de la atractividad territorial. No obstante, la discusión teórica se contrasta con una serie de evidencias y estudios empíricos.
    Keywords: Atractividad; territorio; España; Francia;
    Date: 2006–12–11
  18. By: Ledyaeva , Svetlana (BOFIT); Linden, Mikael (BOFIT)
    Abstract: Barro and Sala-I-Martin empirical framework of neoclassical Solow-Swan model is specified to determine the FDI impact on per capita growth in 74 Russian regions during period of 1996-2003. The Arellano-Bond GMM-DIFF methodology, developed for dynamic panel data models, is used in estimations. Results imply that in general FDI (or related investment components) do not contribute significantly to economic growth in Russia in the analyzed period. Regional growth in 1996-2003 is explained by the initial level of region’s economic development, the 1998 financial crisis, domestic investments, and exports. However some evidence of positive aggregate FDI effects in higher-income regions is relevant. Another interesting result is that natural resource availability seems to be growth-inducing in rich regions, while in poor regions it is not significant. We also found convergence between poor and rich regions in Russia. However FDI seems not to play any significant role in the recent growth convergence process among Russian regions.
    Keywords: foreign direct investment (FDI); Russian regional economy; and economic growth
    JEL: E22 F21 P27
    Date: 2006–12–14
  19. By: Rachel Griffith; Elena Huergo; Jacques Mairesse; Bettina Peters
    Abstract: This paper compares the role innovation plays in productivity across the four European countries France, Germany, Spain and the UK using firm-level data from the internationally harmonized Community Innovation Surveys (CIS3). Despite a considerable number of national firm-level studies analysing this relationship, cross-country comparisons using micro data are still rare. We apply a structural model that describes the link between R&D expenditure, innovation output and productivity (CDM model). Our econometric results suggest that overall the systems driving innovation and productivity are remarkably similar across these four countries, although we also find interesting differences, particularly in the variation in productivity that is associated with more or less innovative activities.
    JEL: L1 L60 O31 O33 O47
    Date: 2006–12
  20. By: Giovanni Dosi; Patrick Llerena; Mauro Sylos Labin
    Abstract: This paper discusses, first, the properties of scientific and technological knowledge and the institutions supporting its generation and its economic applications. The evidence continues to support the broad interpretation which we call the ”Stanford-Yale-Sussex” synthesis. Second, such patterns bear important implications with respect to the so-called ”European Paradox”, i.e. the conjecture that EU countries play a leading global role in terms of top-level scientific output, but lag behind in the ability of converting this strength into wealth-generating innovations. Some descriptive evidence shows that, contrary to the ”paradox” conjecture, European weaknesses reside both in its system of scientific research and in a relatively weak industry. The final part of the work suggests a few normative implications: much less emphasis should be put on various types of ”networking” and much more on policy measures aimed to both strengthen ”frontier” research and strengthen European corporate actors.
    Keywords: Open Science, European Paradox, Science and Technology Policy.
    JEL: D80 O33 O38
    Date: 2005
  21. By: Nicolas Carayol; Pascale Roux; Murat Yıldızoglu
    Abstract: In this paper, we make an exploratory use of numerical techniques (genetic algorithms and Monte Carlo simulations) to compute efficient and emergent networks in a spatialized version of the connections model of Jackson and Wolinski (1996). This approach allows us to observe and discuss the coordination failures that arise in a strategic network formation context with link-mediated positive externalities to connections and geographically based connection costs. Our results highlight that, depending on the strength of the externalities, emergent and efficient networks may share several structural properties. Nevertheless, emergent networks have too few local and distant connections and are also too less “coordinated” around some central agents than they should.
    Keywords: Strategic Network Formation; Efficiency; Stability; Coordination; Small Worlds; Genetic Algorithms; Monte Carlo Simulations.
    Date: 2006
  22. By: Fernand AMESSE; Arman AVADIKYAN; Patrick COHENDET
    Abstract: En distinguant information et connaissance nous développons une approche de la firme fondée sur les compétences intégrant les perspectives stratégiques et évolutionnistes. Nous insistons particulièrement sur la dynamique de co-construction des compétences distinctives au niveau de la firme et des compétences communes au niveau de l’industrie. Nous illustrerons ce processus de co-construction à travers les cas de la modularité et de la gestion de plateforme s cognitives dans un contexte inter organisationnel.
    Keywords: information, connaissance, approche fondée sur les compétences, dynamique de coordination inter organisationnelle ; compétences distinctives et communes, modularité.
    JEL: L10 L22 O32 M10
    Date: 2006
  23. By: Thierry Burger-Helmchen
    Abstract: This work explores and reviews the introduction of real option in the strategic management literature. The aim is to contribute to a better understanding of the origin of the real option. By distinguishing between shadow and real option, and implementing entrepreneurship in the traditional option valuation framework we obtain a more exhaustive representation of the strategic decision processes in the firm. We explain the creation of a real option as an entrepreneurial process, which transforms inventive ideas into profitable innovation. This constitutes a step toward an option based-theory of the firm by describing the emergence of a firm’s options and the strategic building of new competences for exercising these options. In addition, this approach offers a parallel understanding of why the real option theory is less used in practice than in theory.
    Keywords: Real Option, Theory of the Firm, Entrepreneurship, Dynamic Capabilities.
    JEL: L29 D83 M13 M19
    Date: 2006

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