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on Economics of Strategic Management |
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Issue of 2007‒05‒19
twelve papers chosen by Joao Jose de Matos Ferreira University of the Beira Interior |
| By: | Francisco Comín |
| Abstract: | This paper explores the relationship between the nature of Spanish Savings banks and the extent of their market success during the twentieth century. It deals with the key factors that have made so good a performance possible, such as: their ability to promote private saving, to cooperate with government economic policy, to adapt to changing circumstances, to operate in particular geographical areas, and to cooperate with one another. Finally, the paper deals with this last factor in depth. The competitive cooperation model is used to explain the outstanding role of the Spanish Confederation of Savings Banks in making the strategic alliance among the Spanish savings banks possible. |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:cte:whrepe:wp07-09&r=cse |
| By: | Jiawei Chen; Ulrich Doraszelski; Joseph E. Harrington, Jr. |
| Abstract: | As is well-recognized, market dominance is a typical outcome in markets with network effects. A firm with a larger installed base offers a more attractive product which induces more consumers to buy its product which produces a yet bigger installed base advantage. Such a setting is investigated here but where firms have the option of making their products compatible. When firms have similar installed bases, they make their products compatible in order to expand the market. Nevertheless, random forces could result in one firm having a bigger installed base in which case the larger firm may make its product incompatible. We find that strategic pricing tends to prevent the installed base differential from expanding to the point that incompatibility occurs. This dynamic is able to neutralize increasing returns and avoid the emergence of market dominance. |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:jhu:papers:537&r=cse |
| By: | Simon J. Evenett |
| Abstract: | The European Union is the world's largest trader, a fact that on the face of it ought to convert into considerable clout in international commercial negotiations. Yet, since the World Trade Organization's (WTO's) creation in 1995, it is difficult to point to a string of successes for the European Commission's (EC's) often beleaguered trade negotiators. Even the enthusiasm associated with the launch of the Doha Round in 2001 has dissipated as these negotiations have repeatedly stalled, with many questioning what can feasibly be accomplished at the WTO in the near to medium term. A 2006 EC decision to abandon its moratorium on negotiating new free trade agreements seems more of a stop-gap measure to maintain some negotiating momentum than a systematic strategy to leverage European clout. Worse, it carries the risk of seriously undermining the multilateral trading system if EC negotiations with Korea tempt Japan, and in turn possibly even the United States, to eventually seek preferential access to the European Union's markets. With so little to show for the last 10 years and the future of the multilateral trading system decidedly uncertain, a fundamental rethink of the ends and means of European trade policy is in order. That rethink needs to take account of the following realities: a shift away from a bipolar towards a multi-polar WTO; recognition of the fact that the principal liberalising accomplishment to date of the multilateral trading system has been the freeing of manufactured goods trade between industrialised countries and that many other potential reforms have either stalled or proved, on implementation, to be highly controversial; substantial opposition among many prominent groups in the leading trading powers to further trade reform (even in countries experiencing fast economic growth or export growth); and a greater emphasis on signing bilateral and regional free trade agreements (whose liberalising intent and impact is often highly circumscribed). Once the superficial attractions associated with the scramble for preferential market access in Asia fade, European trade policymakers ought to confront these realities. At a minimum, the search will then be on for a modus vivendi with the new trading powers. This will require thought to be given to the likely future offensive and defensive commercial interests of all concerned, bearing in mind the differences in level of development and overseas corporate exposure and organisation. The ultimate goal should be to identify the potential basis for future multilateral trade accords. Properly conceived, future European trade strategy could contribute significantly to the renewal of one of the most successful post-war international economic institutions. |
| Keywords: | European Union, commercial policy, trade policy, WTO |
| JEL: | F13 F15 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:usg:dp2007:2007-14&r=cse |
| By: | Peter Abel; Teppo Felin; Nicolai Foss |
| Abstract: | Micro-foundations have become an important emerging theme in strategic management. This paper addresses micro-foundations in two related ways. First, we argue that the kind of macro (or “collectivist”) explanation that is utilized in the capabilities view in strategic management - which implies a neglect of micro-foundations - is incomplete. There are no mechanisms that work solely on the macro-level, directly connecting routines and capabilities to firm-level outcomes. While routines and capabilities are useful shorthand for complicated patterns of individual action and interaction, ultimately they are best understood at the micro-level. Second, we provide a formal model that shows precisely why macro explanation is incomplete and which exemplifies how explicit micro-foundations may be built for notions of routines and capabilities and for how these impact firm performance. |
| Keywords: | Routines; Capabilities; Micro-foundations; Production function |
| JEL: | L2 M1 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:07-02&r=cse |
| By: | Pousttchi, Key; Thurnher, Bettina |
| Abstract: | The integration of mobile workplaces in the (electronically mapped) intra-enterprise value chain is a major and still increasing corporate IT issue. Although the usage of mobile technologies for this purpose is far behind expectations and numerous failures can be observed,still little work has been done on theory building in this area. In this contribution we identify and compare existing frameworks for adoption and impact of mobile technology to support mobile business processes. The hypotheses underlying these frameworks are challenged with experiences from three long-term case studies which are diverse in industry, company size and other factors in order to scrutinize their potential for generalization. The outcome is a set of hypotheses that show robustness against variation of major parameters and thus may be suitable to serve as a basis for a generalized and unified framework on mobile-integrated business processes. |
| JEL: | M21 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:3243&r=cse |
| By: | Mark Lorenzen; Florian Arun Taeube |
| Abstract: | In the context of an emerging economy, the paper analyzes indigenous growth and internationalization. Using novel and original data, the paper studies the Indian film cluster in Mumbai, Bollywood. It argues that as the world’s biggest commercial film cluster and a conspicuous growth phenomenon in an emerging economy context, Bollywood can be seen as a paradigmatic case for adding to our understanding of the development of film clusters outside the USA, as well as suggesting more general insights into the growth and internationalization of industries in emerging economies. The empirical analysis of the paper points to the importance of home market, government regulation, and industry structure for Bollywood’s recent export growth. The paper discusses how the existence of a well-defined and geographically centered social network among producers, directors and other key roles in filmmaking in Mumbai supports the development of a ‘Bollywood model’ of filmmaking with a industry structure remarkably different from Hollywood’s. |
| Keywords: | Film industry; India; Bollywood; networks; home market; industry structure; exports; institutional change; emerging economies |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:07-06&r=cse |
| By: | Cuñat, Alejandro; Melitz, Marc J |
| Abstract: | This paper studies the link between volatility, labour market flexibility, and international trade. International differences in labour market regulations affect how firms can adjust to idiosyncratic shocks. These institutional differences interact with sector specific differences in volatility (the variance of the firm-specific shocks in a sector) to generate a new source of comparative advantage. Other things equal, countries with more flexible labour markets specialize in sectors with higher volatility. Empirical evidence for a large sample of countries strongly supports this theory: the exports of countries with more flexible labor markets are biased towards high-volatility sectors. We show how differences in labour market institutions can be parsimoniously integrated into the workhorse model of Ricardian comparative advantage of Dornbusch, Fischer, and Samuelson (1977). We also show how our model can be extended to multiple factors of production. |
| Keywords: | comparative advantage; labour market flexibility |
| JEL: | F1 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6297&r=cse |
| By: | Nguyen, Ngoc Anh; Pham, Quang Ngoc; Nguyen, Dinh Chuc; Nguyen, Duc Nhat |
| Abstract: | Innovation has long been considered an important factor for creating and maintaining the competitiveness of nations and firms. The relationship between innovation and exporting has been investigated for many countries. However, there is a paucity of research in Vietnam with respect to this issue. In this paper we examine whether innovation performed by Vietnam’s small and medium enterprises (SMEs) enhances their exporting likelihood. Using the recently released Vietnam Small and Medium Enterprise Survey 2005, we find that innovation as measured directly by ‘new products’, ‘new production process’ and ‘improvement of existing products’ are important determinants of exports by Vietnamese SMEs. |
| Keywords: | Vietnam; Export; Innovation; Small and Medium Enterprise |
| JEL: | F10 O3 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:3256&r=cse |
| By: | Jan Fagerberg (Centre for Technology, Innovation and Culture, University of Oslo); Bart Verspagen (Centre for Technology, Innovation and Culture, University of Oslo) |
| Abstract: | Although innovation is not a new topic for scholarly research, the academic literature on innovation was, for a long time, not very voluminous. However, more recently innovation has become a major focus among scholars of different backgrounds, and this change is also reflected in an increasing number of academic publications in this area. In parallel with this we have seen the emergence of a number of new journals and professional associations devoted to the subject. The research reported in this paper is motivated by these trends. We wish to find an answer to the question to what extent it now exists a unified community of innovation scholars that identify themselves with innovation studies as a field rather than particular sub-fields within other, more traditional disciplines. Moreover, we want to explore the factors (sources of inspiration, academic leadership, professional societies, publishing outlets etc.) that bind scholars together or - alternatively - continue to keep them divided. The research reported in this paper is based on a web-survey carried out in during 2004 and 2005. The results suggest that a global innovation studies community exists as a collection of a large number of relatively small groups (characterized dense internal relationships) defined along geographical and disciplinary lines. Although the field has spread over many countries and disciplines, it is particularly developed in Europe and among scholars with a background in economics. These smaller groups, however, are embedded in larger transnational groups or clusters that are kept together by what is commonly referred to as "weak ties". Leading scholars, professional associations and journals all play an important role in keeping these larger groups together (as well as distinguishing them from each other). |
| Keywords: | Innovation, Networks |
| JEL: | O10 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:tik:inowpp:20060911&r=cse |
| By: | Elena Cefis; Orietta Marsili; Hans Schenk |
| Abstract: | This paper provides new empirical evidence on the effects of mergers and acquisitions on the shape of the firm size distribution (FSD), by using data of the population of manufacturing firms in the Netherlands. Our analysis shows that M&As do not affect the size distribution when we consider the entire population of firms. When we focus on the firms involved in a M&A event, we observed a shift of the FSD towards larger sizes. FSD becomes more concentrated around the mean size, less skewed to the right hand side, and thinner at the tails as a whole. The shift toward higher sizes due to M&A is not uniform but affects firms of different sizes in different ways. While the number of firms in the lower tail decreased, the number of firms in the central size classes increased substantially and outweighed the increase in the number (and mean size) of firms in the upper tail of the distribution (consequently the overall market concentration measured by the Herfindhal index declines). M&As leads to a departure from log-normality of the FSD, suggesting that external growth does not follow a Gibrat’s law. Our counterfactual analysis highlights that only internal growth does not affect the shape of the size distribution of firms. On the contrary, it suggests that the change in the size distribution is almost entirely due to the external growth of the firms. |
| Keywords: | Firms Size Distribution, Mergers and Acquisitions, Firm Entry and Exit, Industry Concentration |
| JEL: | L11 L25 D21 C14 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:0617&r=cse |
| By: | Nick D. Paulson; Roger G. Ginder |
| Abstract: | The biodiesel industry in the United States has realized significant growth over the past decade through large increases in annual production and production capacity and a transition from smaller batch plants to larger-scale continuous producers. The larger, continuous-flow plants provide operating cost advantages over the smaller batch plants through their ability to capture co-products and reuse certain components in the production process. This paper uses a simple capital budgeting model developed by the authors along with production data supplied by industry sources to estimate production costs, return-on-investment levels, and break-even conditions for two common plant sizes (30 and 60 million gallon annual capacities) over a range of biodiesel and feedstock price levels. The analysis shows that the larger plant realizes returns to scale in both labor and capital costs, enabling the larger plant to pay up to $0.015 more per pound for the feedstock to achieve equivalent return levels as the smaller plant under the same conditions. The paper contributes to the growing literature on the biodiesel industry by using the most current conversion rates for the production technology and current price levels to estimate biodiesel production costs and potential plant performance, providing a useful follow-up to previous studies. |
| Keywords: | biodiesel, biofuels, feedstock, production costs, return on investment. |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:07-wp448&r=cse |
| By: | Ural, Beyza P.; Mitra, Devashish |
| Abstract: | This paper investigates the determinants of productivity in Indian manufacturing industries during the period 1988-2000. Using two-digit industry level data for the Indian states, we find evidence of imperfect interindustry and interstate labor mobility as well as misallocation of resources across industries and states. Trade liberalization increases productivity in all industries across all states, and productivity is higher in the less protected industries. These effects of protection and trade liberalizat ion are more pronounced in states that have relatively more flexible labor markets. Similar effects are also found in the case of employment, capital stock and investment. Furthermore, labor market flexibility, independent of other policies, has a positive effect on productivity. Importantly, per capita state development expenditure seems to be the strongest and the most robust predictor of productivity, employment, capital stock and investment. Industrial delicensing increases both labor productivity and employment but only in the states with flexible labor market institutions. Even after controlling for delicensing, the analysis shows that trade liberalization has a productivity-enhancing effect. Finally, trade liberalization benefits most the export-oriented industries located in states with flexible labor-market institutions. |
| Keywords: | Economic Theory & Research,Labor Markets,Markets and Market Access,Free Trade,Economic Growth |
| Date: | 2007–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4233&r=cse |