nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2007‒03‒24
seventeen papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. Globalization: How strategic alliances bring production and market advantages. The case of Renault/Nissan By Jean-Jacques Chanarron
  2. Identifying key determinants of effective boards of directors By Levrau, A.; Van den Berghe, L.
  3. Towards a Re-Definition of Technology Management By Jean-Jacques Chanarron; Thierry Grange
  4. Why do some firms contract out production? By Angela Triguero,; Carmen Díaz Mora
  5. Business School-Industry Cooperation: Lessons from Case Studies By Jean-Jacques Chanarron; David Birchall
  6. Do Institutions, Ownership, Exporting and Competition Explain Firm Performance? Evidence from 26 Transition Countries By Simon Commander; Jan Svejnar
  7. What Determines Overseas R&D Activities? The Case of Japanese Multinational Firms By SHIMIZUTANI Satoshi; TODO Yasuyuki
  8. PERFORMANCE MANAGEMENT IN THE PUBLIC SECTOR: By Guillaume Biot-Paquerot; Jean-Luc Rossignol
  9. Airline Competition and Network Structure By Ricardo Flores-Fillol
  10. Network Effects in R&D Partnership Evidence from the European Collaborations in Micro and Nanotechnologies By Corinne Autant-Bernard; Pascal Billand; Christophe Bravard; Nadine Massard
  11. Power Relationships along the Value Chain: Multinational Firms, Global Buyers, and Local Suppliers’ Performance By Carlo Pietrobelli; Federica Saliola
  12. Strategies for Fiscal Consolidation in Japan By Hali J. Edison; Papa M'B. P. N'Diaye; Dennis P. J. Botman
  13. Role of the Egyptian securities market on saving development By Alasrag, Hussien
  14. An Insight into the Growth of New Retail Formats in India By Sinha Piyush Kumar; Kar Sanjay Kumar
  15. Outsourcing and Competition Policy By Cosimo Beverelli Kornel Mahlstein
  16. Information Technology and Economic Growth: Comparison between Japan and Korea By KANAMORI Takahito; MOTOHASHI Kazuyuki
  17. The Role of Trade Barriers in SME Internationalisation By Barbara Fliess; Carlos Busquets

  1. By: Jean-Jacques Chanarron (GATE - Groupe d'analyse et de théorie économique - [CNRS : UMR5824] - [Université Lumière - Lyon II] - [Ecole Normale Supérieure Lettres et Sciences Humaines], EMSI - Ecole de Management des Systèmes d'Information - [Ecole de Management de Grenoble])
    Abstract: This contribution is based on a previous review (Chanaron, 1999) and a critical analysis of various literature: academic articles and books, corporate documents, consultancy reports and interviews of key industry representatives.
    Keywords: globalization ; strategic alliances ; Renault/Nissan
    Date: 2007–03–19
  2. By: Levrau, A.; Van den Berghe, L.
    Abstract: Mainstream research on boards of directors has been focusing on a direct relationship between board characteristics and firm performance, but up till now the results are inconclusive. Although these studies revealed interesting and useful insights, little is known about the factors that shape board effectiveness. This paper aims to reduce this gap by exploring the variety of indicators that contribute to the effectiveness of boards. The paper derives from an interview-based investigation among 104 directors of Belgian listed companies. The findings are further elaborated with quantitative data from two written questionnaires, involving directors of non-listed companies and experts in the field of corporate governance. The results point to three major issues. First, there appears to be a gap between a limited number of structural board measures consistently found in literature and the systematic occurrence of a set of behavioural criteria of board effectiveness in the perceptions of (Belgian) directors. Second, the findings suggest that the value of independence may be overemphasized at the cost of the broader issue of diversity. Third, it appears that mainstream board research ignores to a large extent two additional conditions (the information flow and the leadership style of the chairman) under which a board of directors can make an effective contribution to the strategic direction and control of a company. Our findings suggest that the ambiguity found in current research evidence can to some extent be attributed to the ignorance of a wide range of interconnected structural (such as diversity and competence) and behavioural factors (such as trust, attitude, norms and conduct) which actually shape the effectiveness of boards in performing their roles.
    Date: 2007–03–15
  3. By: Jean-Jacques Chanarron (GATE - Groupe d'analyse et de théorie économique - [CNRS : UMR5824] - [Université Lumière - Lyon II] - [Ecole Normale Supérieure Lettres et Sciences Humaines], EMSI - Ecole de Management des Systèmes d'Information - [Ecole de Management de Grenoble]); Thierry Grange (EMSI - Ecole de Management des Systèmes d'Information - [Ecole de Management de Grenoble])
    Abstract: The paper is proposing an historical approach of the definition and constitution of technology management as a discipline leading to a re-visited approach more in line with contemporary issues and problems facing businesses. It is suggested to expand its scope to the strategic management of technology and innovation.
    Keywords: technology management
    Date: 2007–03–16
  4. By: Angela Triguero,; Carmen Díaz Mora
    Abstract: The present paper examines which factors determine outsourcing decision using firm-level panel data for Spanish manufacturing industries. Outsourcing is measured as the manufacture of custom-made finished products or parts and components which have been contracted out to third parties. Moreover, we distinguish whether the main contractor provides the materials to the external supplier or not. Following the theoretical framework of Grossman and Helpman (2002), we take into account the persistence of outsourcing decision as well as other firm, industry and market characteristics that influence the likelihood of contracting out. Using a dynamic panel data probit model, our results show that previous subcontracting decision, wages, market changes, R&D activities, product and process innovation, product differentiation, industry-size and exporter status affect positively the current subcontracting decision.
  5. By: Jean-Jacques Chanarron (GATE - Groupe d'analyse et de théorie économique - [CNRS : UMR5824] - [Université Lumière - Lyon II] - [Ecole Normale Supérieure Lettres et Sciences Humaines], EMSI - Ecole de Management des Systèmes d'Information - [Ecole de Management de Grenoble]); David Birchall (Henley Management College - [Henley Management College])
    Abstract: There is evidence to suggest that firms wish to work with universities to gain access to new technologies, to knowledge of future technologies and their possible impact and to thechnical problem-solving capability. There is much less evidence to support the proposition that firms work with business models and new processes. The barriers identified include those concerning management and leadership.<br />Following an overview of relevant literature, the research here reported is the outcome of investigations carried out by a network of academics and practitioners from the automotive industry. Though the examination of a number of case studiesof joint efforts, a model for cooperation is developed. Critical success factors for sustainable networks, relating to the different modes of collaboration, are put forward. Finally, areas for further research are identified.
    Keywords: business-school ; universities ; cooperation ; knowledge transfer ; automotive industry ; case studies ; key success factors
    Date: 2007–03–16
  6. By: Simon Commander (EBRD, London Business School and IZA); Jan Svejnar (University of Michigan, CERGE-EI, CEPR and IZA)
    Abstract: We analyze a large stratified random sample of firms that provide us with measures of performance and each firm’s top manager’s perception of the severity of business environment constraints faced by his/her firm. Unlike most existing studies that rely on external and aggregated proxy measures of the business environment, defined to include legal and institutional features, we have information from each surveyed firm. Specifically, we use the 2005 and 2002 Business Environment and Enterprise Performance Survey (BEEPS) to assess the effect on performance of ownership, competition, export orientation and the business environment of the firm. We employ a variety of approaches to deal with the problem of omitted variables, errors in variables and endogeneity that plague studies in this area. We find that foreign ownership and competition have an impact on performance – measured as the level of sales controlling for inputs. Export orientation of the firm does not have an effect on performance once ownership is taken into account. When we analyze the impact of perceived constraints, we show that few retain explanatory power once they are introduced jointly rather than one at a time, or when country, industry and year fixed effects are introduced. Indeed, country fixed effects largely absorb the explanatory power of the constraints faced by individual firms. Replicating the analysis with commonly used countrylevel indicators of the business environment, we do not find much of a relationship between constraints and performance. Our analysis brings into question an important part of the conventional wisdom in this area. It indicates that country fixed effects, reflecting timeinvariant differences in the business environment but also other factors, matter for firm performance, but that differences in the business environment observed across firms within countries do not. Moreover, the limited firm- and country-level variations in the business environment over time do not appear to affect performance either. This suggests that the effect of business environment on performance and the analysts’ ability to identify this effect are more limited than has been assumed to date.
    Keywords: firm performance, productivity, competition, institutions, business environment, export orientation, firm ownership, subjective data
    JEL: D24 L21 O12 O57
    Date: 2007–02
  7. By: SHIMIZUTANI Satoshi; TODO Yasuyuki
    Abstract: This paper explores what factors determine the nature, extent, and location of Japanese multinationals' R&D activities abroad. Taking advantage of a rich micro-level dataset from the survey on Japanese overseas subsidiaries, the study distinguishes between two types of overseas R&D: innovative and adaptive. We find several differences between the determinants of overseas innovative and adaptive R&D. These differences confirm the view that overseas innovative R&D aims at the exploitation of foreign advanced knowledge, whereas overseas adaptive R&D is mostly influenced by the market size of the host country. Our results provide a convincing and comprehensive explanation of the geographical distribution of overseas R&D by Japanese MNEs.
    Date: 2007–03
  8. By: Guillaume Biot-Paquerot (CEREGE - CEntre de REcherche en sciences de GEstion - [CNRS : EA1722] - [Groupe Sup de Co La Rochelle]); Jean-Luc Rossignol (CUREGE - Centre universitaire de recherche en gestion - [Université de Franche-Comté])
    Abstract: Education supply in universities of most European countries has for the last ten years become a strategic matter. At present, French universities consider education supply as an investment. But they do not utilize all incentive mechanisms in order to drive their strategies. At the beginning of the year 2006, the public sector reform will tend to impose performance measurements of research and educational activities, in order to improve organizational efficiency. The aim of this reform in the French context is to provide driving elements to increase internal efficiency, social and economic impact of higher education system and to reinforce international attractiveness of public education institutions. The substitution of resources management by result management involves an agent's performance responsibility measurement. Evaluation becomes a central factor and is articulated with incentives system. The weakening of the property right system drives project bearers to maximize their utility instead of their incomes. In such a context, the understanding of individual strategies permits to understand constraints of management within universities, and to take into account the impact of stakeholders who take part in the value generation process. The major risk is to constraint the utility function of projects bearers by increasing their burden and their motivation. The result could be the limitation of the number of projects, and as well, the decreasing of university investments.
    Keywords: performance, public sector, universities, efficiency, value generation
    Date: 2007–03–17
  9. By: Ricardo Flores-Fillol
    Abstract: This paper characterizes the equilibria in airline networks and their welfare implications in an unregulated environment. Competing airlines may adopt either fully-connected (FC) or hub-and-spoke (HS) network structures; and passengers exhibiting low brand loyalty to their preferred carrier choose an outside option to travel so that markets are partially served by airlines. In this context, carriers adopt hubbing strategies when costs are sufficiently low, and asymmetric equilibria where one carrier chooses a FC strategy and the other chooses a HS strategy may arise. Quite interestingly, flight frequency can become excessive under HS network configurations.
    Keywords: fully-connected networks; hub-and-spoke networks; brand loyalty; fully-served markets; partially-served markets
    JEL: L13 L2 L93
    Date: 2007–03–19
  10. By: Corinne Autant-Bernard (CREUSET - Centre de Recherche Economique de l'Université de Saint-Etienne - [CNRS : FRE2938] - [Université Jean Monnet - Saint-Etienne]); Pascal Billand (CREUSET - Centre de Recherche Economique de l'Université de Saint-Etienne - [CNRS : FRE2938] - [Université Jean Monnet - Saint-Etienne]); Christophe Bravard (CREUSET - Centre de Recherche Economique de l'Université de Saint-Etienne - [CNRS : FRE2938] - [Université Jean Monnet - Saint-Etienne]); Nadine Massard (CREUSET - Centre de Recherche Economique de l'Université de Saint-Etienne - [CNRS : FRE2938] - [Université Jean Monnet - Saint-Etienne])
    Abstract: Based on the research projects submitted to the 6th Framework Program of the European Union, this paper studies cooperative networks in micro and nanotechnologies. Our objective is twofold. First, using the statistical tools of the social network analysis, we characterise the structure of the R&D collaborations established between firms. Second, we investigate the determinants of this structure, by analysing the individual choices of cooperation. A binary choice model is used to put forward the existence of network effects alongside other microeconomic determinants of cooperation. Our findings suggest that network effects are present, so that probability of collaboration is influenced by each individual's position within the network. It seems that social distance matters more than geographical distance. We also provide some evidence that similar firms (in terms of research potential) are more likely to collaborate together
    Keywords: Network formation; R&D collaboration; Knowledge externalities; nanotechnologies
    Date: 2007–03–19
  11. By: Carlo Pietrobelli; Federica Saliola (Department of Law, Università degli Studi Roma Tre)
    Abstract: There is an growing literature exploring the increasing fragmentation of production processes and the evolution of internationally-dispersed but functionally-integrated economic activities. However, most of this literature appears to neglect an important part of the story, that is the form and the organization of the relationships (the governance) among the various actors involved in these activities, and their implications for development. We develop this analysis in this paper, and explore it empirically with a new dataset on Thailand. In order to address this issue, we study global and domestic value chains in Thailand, and develop a quantitative measure of their governance, which takes into account different levels and types of buyers’ involvement with suppliers’ activities. We then use this measure to explore econometrically its relationship with suppliers’ performance. An important finding is that the relationships MNCs have with their suppliers is multifold and generally more intense than for domestic value chains. Our estimates suggest that more intense buyers’ involvement with local suppliers, not only in the definition of products’ characteristics, design and quality, but also in technology dissemination and R&D is generally associated with higher suppliers’ productivity. However, the governance of the value chain appears to affect the productivity of domestic value chains’ suppliers to a greater extent than for firms supplying MNCs or for exporters. We suggest that this result may be explained by the different nature of the information and knowledge being exchanged, and by the gaps between the leader and its suppliers.
    Keywords: North-South, Keywords: Global Value Chains, Multinational Corporations, Foreign Direct Investment, Upgrading, Productivity
    JEL: F23 O14 O33
    Date: 2007–01
  12. By: Hali J. Edison; Papa M'B. P. N'Diaye; Dennis P. J. Botman
    Abstract: Japan's key fiscal challenge is to put public finances on a more sustainable footing. This paper investigates the macroeconomic implications of alternative fiscal strategies for Japan using the IMF's Global Fiscal Model. The results suggest that: (i) an adjustment package that achieves primary balance through lower social transfers and government spending and a higher VAT is the most viable option and has a smaller negative impact on growth than other fiscal measures; (ii) achieving primary balance is not sufficient to stabilize the net debt ratio; (iii) prefunding future aging costs provides greater long-term benefits compared with less front-loaded strategies; (iv) tax reform involving shifting from corporate taxation to consumption taxation could mitigate the short-term output losses associated with fiscal consolidation; and (v) the spillovers to the rest of the world from consolidation in Japan are positive in the medium term, but modest.
    Keywords: Fiscal adjustment , aging , debt sustainability , tax reform , spillover effects , GFM , Fiscal policy , Japan , Tax reforms , Aging , Adjustment policy , Debt sustainability analysis , Public finance , Economic models ,
    Date: 2007–02–23
  13. By: Alasrag, Hussien
    Abstract: This thesis studies the role of the Egyptian securities market on saving development.It`s divided into two sections.section one studies the natural and importance of securities market through defining both the capital and securities markets ,determining the requirements of setting up stock market.then its studies the relation between securities market and some aggregate variables in the economy and its position in both the classical and the modern theory.the thesis goes on to studies the factors affecting the stock market performance. the importance of this market and the relation between saving and securities market.then it sheds lights on the securities in both the Egyptian and the global capital markets .section two focuses on the role of the Egyptian securities market on saving development during (1982-2000).so it studies the Egyptian securities market development.then it evaluate the role of both the primary and secondary markets on saving development during the period under review. Finally the thesis explains and recommends some policies in order to activate the Egyptian market. it also analyzes more particularly some guiding principles to develop and activate the role of both the primary and secondary markets on saving development .
    JEL: G1 E01 G18 G15 E24 E00
    Date: 2002–03
  14. By: Sinha Piyush Kumar; Kar Sanjay Kumar
    Abstract: The Indian retail sector is going through a transformation and this emerging market is witnessing a significant change in its growth and investment pattern. Both existing and new players are experimenting with new retail formats. Currently two popular formats -hypermarkets and supermarkets are growing very fast. Apart from the brick -mortar formats, brick -click and click-click formats are also increasingly visible on the Indian retail landscape. Consumer dynamics in India is changing and the retailers need to take note of this and formulate their strategies and tactics to deliver value to the consumer. This paper investigates modern retail developments and growth of modern formats in this country. We also discuss the challenges and opportunities available to the retailers to succeed in this country.
    Date: 2007–03–20
  15. By: Cosimo Beverelli Kornel Mahlstein (Graduate Institute of International Studies, Geneva)
    Abstract: We analyze optimal competition policy by a Competition Agency (CA) in a model with two countries, North and South, where a final good is produced by Northern oligopolistic firms using an input that can either be produced within the firm (vertical integration) or outsourced to Southern oligopolistic producers with lower labor costs (outsourcing). In the case where the final good is only consumed in the North and there is free entry in the South, we find that optimal competition policy in the North is the adoption of a tougher stance. However, with a CA in the South, the Southern CA would optimally appropriate outsourcing rents through restrictions on the degree of competition among domestic firms. In this case the optimal response of the Northern CA would be inaction. In the case where the final good is consumed in both countries, we find that optimal competition policy is marginally affected by the share of Southern consumption, leaving relatively important incentives to engage in rent-shifting. However, for a high enough share of Southern consumption, the interaction between the Northern and Southern CA is shown to be of the Prisoner's Dilemma type, whereby the Nash equilibrium is Pareto-suboptimal and mutual cooperation on competition policy is globally desirable.
    Keywords: Competition policy, outsourcing, vertical integration
  16. By: KANAMORI Takahito; MOTOHASHI Kazuyuki
    Abstract: In this paper we compare sources of economic growth in Japan and Korea from 1985 to 2004, focusing on the role of information technology (IT), based on the framework of Jorgenson and Motohashi (2005). In both countries, the information technology industry is an important source of economic and productivity growth from the output side. In addition, active IT investments are supposed to lead to substantial IT capital service contribution to economic growth from the input side.
    Date: 2007–03
  17. By: Barbara Fliess; Carlos Busquets
    Abstract: This paper discusses trade barriers that SMEs are likely to encounter in export markets and available policy tools aimed at their reduction or elimination. Drawing on recent work in the Trade Directorate and elsewhere, key types of barriers are identified based on a review of business surveys and other studies recently undertaken. The paper also explores how governments deal with trade barriers and how SME participation in the trade policy process...
    Keywords: OECD, trade policy, exports, non-tariff barriers, trade barriers, tariffs
    Date: 2006–12

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