|
on Economics of Strategic Management |
|
Issue of 2007‒07‒07
seventeen papers chosen by Joao Jose de Matos Ferreira University of the Beira Interior |
| By: | Singer, Bas P. (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics); Bossink, Bart A.G.; Van de Putte, J.M. |
| Abstract: | Purpose. The purpose of his paper is to investigate how organisations use a corporate real estate strategy to support their competitive strategy. It provides a theoretical and empirical overview and analysis of effective combinations of firms' real estate- and competitive strategies. Design/methodology/approach. The paper constructs a model that integrates three real estate strategies and three types of competitive strategies. Case studies in ten multinational firms in the Netherlands apply the model, and describe and analyse the combinations of the firms' real estate- and competitive strategies. Findings. A standardisation real estate strategy supports all three competitive strategies: lowest costs, differentiation, and focus. A value-based real estate strategy supports a competitive strategy of differentiation and differentiation-focus, and does not contribute to a competitive strategy of lowest costs, or lowest costs-focus. Finally, an incremental real estate strategy is ambiguous, and does not support any of the three competitive strategies. Originality/value – The paper constructs a literature-based model that combines real estate strategy and competitive strategy. It applies the model in a study of ten cases. Practitioners can use the model to analyse and reconsider the combination of their organisation's real estate strategy and competitive strategy. Academics can use the qualitative research results to design further research that qualifies and quantifies the relationship between various elements of real estate- and competitive strategy. |
| Keywords: | Corporate real estate; Real estate strategy; Corporate strategy; Competitive strategy |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:vuarem:2007-5&r=cse |
| By: | Ruiz-Porras, Antonio; Steinwascher, William |
| Abstract: | We study the empirical relationships among corporate governance, strategic diversification and financial performance in Mexico. The study uses data from 99 non-financial firms listed in the BMV (Mexican Stock Market) during 2004. The main relationships found are: Firms which property is concentrated use to focus on the domestic market. Family businesses diversify their productive activities and their sources of income. There are no trends, regarding strategies and performance, related to the separation between ownership and control. When independent committees exist in the board of directors, firms diversify on a mean-narrow-spectrum sense. |
| Keywords: | corporate governance; strategic diversification; performance; family ownership; boards of directors |
| JEL: | M21 G34 L20 |
| Date: | 2007–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:3819&r=cse |
| By: | Roberto Antonietti (University of Bologna); Giulio Cainelli (University of Bari) |
| Abstract: | Aim of this paper is to study whether and how the firm’s decision to outsource production activities affects its technological performance. In particular, we look at how the alignment between the firm’s governance strategy and the underlying attributes of the transactions affects the capacity of the firm to introduce new products and processes. Using microeconomic data on a repeated cross-section of Italian manufacturing firms for the period 1998-2003, we develop a two-stage approach: first, we estimate the determinants of the firm’s organizational governance (production outsourcing); second, we incorporate a measure of governance misalignment into a technological performance relation. We find (i) that firms not aligned with the optimal organizational governance perform less well in terms of process innovation than more aligned competitors, but (ii) that misalignment has a positive effect on product innovation. However, this counterintuitive result is strongly characterized by non-linear effects that reverse the latter correlation for high values of governance misfit. |
| Keywords: | Production Outsourcing, Organizational Governance, Misalignment, Technological Performance, Non-Linearity |
| JEL: | L23 L24 L25 O31 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2007.58&r=cse |
| By: | Duysters, Geert (UNU-MERIT); Vanhaverbeke, Wim (ECIS, Technical University Eindhoven); Beerkens, Bonnie (ECIS, Technical University Eindhoven); Gilsing, Victor (ECIS, Technical University Eindhoven) |
| Abstract: | Although the literature converges regarding the reasons why and how networks of technology alliances are formed, there is still lack of agreement on what constitutes an optimal network structure, once it has been formed. The aim of this paper is to fill this void and to determine what constitutes an optimal network structure for exploration and exploitation within the context of technological innovation. We differentiate among a firm's direct ties, indirect ties and degree of redundancy and analyze their role in the pharmaceutical, chemical and automotive industry. Regarding the role of direct ties, in combination with indirect ties, we find two alternative alliance network structures that are effective for both exploitation and exploration. We also find that redundancy in a firm's alliance network has a positive effect on exploitation. This is not the case for exploration, however, which seems to reveal a new insight into the role of redundancy when firms explore new technological fields. A final point is that our findings remain largely invariant across the three industries, enhancing the generalisability of our results. |
| Keywords: | Networks, Strategic Alliances, Innovation, Learning |
| JEL: | O32 O31 D85 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2007020&r=cse |
| By: | Duysters, Geert (UNU-MERIT); Vanhaverbeke, Wim (Technical University Eindhoven); Beerkens, Bonnie (Technical University Eindhoven) |
| Abstract: | Learning through networks has been considered as an important research topic for several years now. Technological learning is more and more based on a combination of internal and external learning and firms need to develop both technological and social capital for that purpose. This paper analyses the relationship between both types of capital and their impact on the technological performance of companies in high-tech industries. We claim and find empirical evidence for decreasing marginal returns on social capital. Technological capital and social capital mutually reinforce each other's effect on the rate of innovation for companies with small patent and alliance portfolios. However, when the patent portfolio and network of alliances are extensive, companies risk to over-invest since optimal levels of social capital become smaller at higher levels of technological capital and the marginal benefits of investing in technological capital decreases the higher the levels of social capital. Finally, we find empirical evidence that companies that explore novel and pioneering technologies have higher levels of innovation performance in subsequent years than companies that solely invest in incremental innovations. |
| Keywords: | Strategic Alliances, Networks, Innovation |
| JEL: | O32 O31 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2007018&r=cse |
| By: | Alejandro Cuñat; Marc J. Melitz |
| Abstract: | This paper studies the link between volatility, labor market flexibility, and international trade.International differences in labor market regulations affect how firms can adjust to idiosyncraticshocks. These institutional differences interact with sector specific differences in volatility (thevariance of the firm-specific shocks in a sector) to generate a new source of comparative advantage.Other things equal, countries with more flexible labor markets specialize in sectors with highervolatility. Empirical evidence for a large sample of countries strongly supports this theory: the exportsof countries with more flexible labor markets are biased towards high-volatility sectors. We show howdifferences in labor market institutions can be parsimoniously integrated into the workhorse model ofRicardian comparative advantage of Dornbush, Fisher and Samuelson (1977). We also show how ourmodel can be extended to multiple factors of production. |
| Keywords: | comparative advantage |
| JEL: | F1 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0799&r=cse |
| By: | Martin Wörter (KOF Swiss Economic Institute, ETH Zurich) |
| Abstract: | This paper investigates empirically the impact of diversity on the innovation performance of a firm. We created a measure for diversity that mirrors differences in the resource base of firms within an industry and tested its impact on innovation in addition to more traditional factors like technology-push, demand-pull, and firm-size, based on panel data stemming from three representative cross sectional surveys carried out in the years 1996, 1999, and 2002 respectively. In fact, diversity has a significant positive impact on the innovation intensity of firms and thus supports more theoretical findings in this area. We also find empirical evidence for the technology push and the demand pull hypotheses as well as the importance of competition for innovation. |
| Keywords: | Diversity, Innovation Performance, Evolution of Industries, Jacobs Externalities, Panel data, |
| JEL: | O30 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:07-165&r=cse |
| By: | Svein Erik Moen (Centre for Technology, Innovation and Culture, University of Oslo) |
| Abstract: | The paper analyses the path of the Norwegian primary aluminium industry. From the industry’s initiation in 1908 it has relied upon the close interaction with foreign aluminium MNEs with regard to knowledge, technological innovation and market access. After 1945 it has also been strongly supported by Norwegian institutions. The case gives important insights to the innovation system literature regarding how the drivers of innovation are influenced by the interaction between the national and the sectoral level; this also necessitates an international perspective of the industry’s innovation and production system. The character of these linkages has change through time. |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:tik:inowpp:20070604&r=cse |
| By: | Huang, Can (UNU-MERIT); Qu, Zhe (College of Management, Georgia Institute of Technology); Zhang, Mingqian (School of Economics, Hebei University of China); Zhao, Yanyun (Center for Applied Statistic and School of Statistics, Renmin University of China) |
| Abstract: | This paper studies the impact of the R&D offshoring of multinational enterprises on the firms in host emerging economies. We develop a two-stage non-cooperative game to analyze the strategic interaction between multinational and host country enterprises engaged in R&D investment. An empirical analysis of 12,309 manufacturing firms in the ICT industry in China shows that R&D offshoring has a positive effect on the intensity of the R&D of host country firms. However, the magnitude of the impact depends on both the technological and geographical distance between the multinational and host country firms. The policy implications of these findings are that the governments of host country should be cautious about allowing advanced multinational R&D investment in under-developed sectors, but they should encourage such investment in developed sectors; and that local governments should be involved in R&D policy making because the positive impact of multinational R&D offshoring diminishes as the geographical distance between the multinational and host country firms increases. |
| Keywords: | Research and Development, Offshoring, Spillovers, Emerging Economies |
| JEL: | F23 L23 O32 O33 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2007023&r=cse |
| By: | Claudio A. Piga (Dept of Economics, Loughborough University); Giuseppe Medda (DEIR, University of Sassari, Italy.) |
| Abstract: | We study whether a firm’s total factor productivity dynamics is positively influenced by its own R&D activity and by the technological spillovers generated at the intra- and inter-sectorial level. Our approach corrects simultaneously for the endogeneity and the selectivity biases introduced by the use of a firm’s own R&D as a regressor. A firm’s involvement in R&D activities accounts for significant productivity gains. Firms also benefit from spillovers originating from their own industries, as well as from innovative upstream sectors. |
| Keywords: | R&D, TFP, selectivity, treatment effect |
| JEL: | C21 C80 D24 O30 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:lbo:lbowps:2007_17&r=cse |
| By: | Evert-Jan Visser; Oedzge Atzema |
| Abstract: | Over the past decades, economic and innovation policy across Europe moved in the direction of creating regional clusters of related firms and institutions. Creating clusters through public policy is risky, complex and costly, however. Moreover, it is not necessary to rely on clusters to stimulate innovation. A differentiated and combined network approach to enhancing innovation and stimulating economic growth may be more efficient and effective, especially though not exclusively in regions lacking clusters. The challenge of such a policy is to mitigate the bottlenecks associated with ‘global pipeline’, ‘local buzz’ and ‘stand alone’ strategies used by innovative firms (cf. Bathelt et al. 2004; Atzema & Visser 2005b), and to combine these strategies with a view to their complementarity in terms of knowledge effects. Private and semi-public brokers will be key in the evolving policy, as timely organizational change is crucial for continued innovation, while brokers also need to mitigate governance problems. This requires region-specific knowledge in terms of sectors, life cycles, institutional and socio-cultural factors, and yields spatially differentiated and differentiating adjustment strategies. The role of public policy is to assist in recruiting, provide start-up funding and monitor brokers. With this, policy moves towards a decentralized, process-based, region-specific, spatially diverging and multi-level system of innovation that is geared towards the evolving innovation strategies of firms. |
| Keywords: | innovation policy, clusters, networks, governance, regionalization |
| JEL: | R11 R58 O12 O31 O38 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:0705&r=cse |
| By: | Miguel Hidalgo, Alberto de (Departamento de Administración y Economía de la Empresa, Facultad de Economía y Empresa, Universidad de Salamanca); Ríos Rodríguez, Diana M. (Departamento de Administración y Economía de la Empresa, Facultad de Economía y Empresa, Universidad de Salamanca) |
| Abstract: | El objetivo principal del presente trabajo es verificar si la existencia de diferencias en oportunidades de crecimiento entre las empresas diversificadas y no diversificadas influye en el impacto de la estrategia de diversificación sobre el valor de la empresa. Con un panel de de datos completo para 67 empresas españolas no financieras para el periodo comprendido entre 1986 a 2003 analizamos esta influencia. Los resultados obtenidos permiten concluir que las empresas españolas diversificadas presentan un descuento antes de controlar las oportunidades de crecimiento, sin embargo este descuento desaparece cuando tomamos en consideración estas diferencias. Los resultados son robustos a la inclusión de diferentes variables de diversificación. |
| Keywords: | estrategia de diversificación, oportunidades de crecimiento y valor de la empresa |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:ntd:wpaper:2007-02&r=cse |
| By: | Staley, Mark |
| Abstract: | This paper presents a scale-invariant model of endogenous growth built on the premise that delays in the diffusion of technologies allow innovators to capture temporary rents. The economy consists of two sectors: a final goods sector that follows constant returns to scale, and an innovative capital sector consisting of a large number of price-taking firms that make incremental improvements to embodied technologies. The model has the property that as one increases the rate of diffusion of innovations, the growth rate of the economy increases even though the level of R&D spending decreases. A process of selection, mathematically similar to Darwinian selection, drives both the diffusion of innovations and the accumulation of capital. The paper shows that by reversing the roles of capital and labour the model can also be used to describe the pre-industrial economy. |
| Keywords: | creative destruction; competitive innovation; endogenous growth; Schumpeterian; selection; Darwinism; diffusion |
| JEL: | O40 O30 N00 |
| Date: | 2007–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:3799&r=cse |
| By: | Sanjeev Goyal (University of Cambridge); Andrea Galeotti (University of Essex) |
| Abstract: | The important role of friends, neighbors and colleagues in shaping individual choices has been brought out in a number of studies over the years. The presence of significant ‘local’ influence in shaping individual behavior suggests that firms, governments and developmental agencies should explicitly incorporate it in the design of their marketing and developmental strategies. This paper develops a framework for the study of optimal strategies in the presence of social interaction. We focus on the case of a single player who exerts costly effort to get a set of individuals – engaged in social interaction – to choose a certain action. Our formulation allows for different types of social interaction (ranging from sharing of information to direct adoption externalities) and also allows for the player to have incomplete information concerning the connections among individuals. The analysis starts by showing that incorporating information on social interaction can have large effects on the profits of a player. We then show that an increase in the level and dispersion of social interaction can raise or lower the optimal strategy and profits of the player, depending on the content of the interaction. We then study the value of social network information for the player and find that it depends on the dispersion in social connections. The economic interest of these results is illustrated via a discussion of two economic applications: advertising in the presence of word of mouth communication and seeding a network. |
| Keywords: | Social Interaction, Seeding the Network, Word of Mouth Communication, Diffusion Strategy |
| JEL: | D8 L15 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2007.70&r=cse |
| By: | Kox, Henk L.M.; Rubalcaba, Luis |
| Abstract: | A pervasive trend that characterised the past two decades of European economic growth is that the share in the economy of commercial services, and particularly business services, grows monotonically, and this mainly to the expense of the manufacturing sector. The structural shift reflects a changing and increasingly complex social division of labour between economic sectors. The fabric of inter-industry relations is being woven in a new way due to the growing specialisation in knowledge services, the exploitation of scale economies for human capital, lowered costs of outsourcing in-house services, and the growing encapsulation of manufacturing products in a ‘service jacket’. Business services, which inter alia includes the software industry and other knowledge-intensive business services (KIBS), play a key role in many of these processes. We argue that in recent decades business services contributed heavily to European economic growth, in terms of employment, productivity and innovation. A direct growth contribution stems from the business-services sector’s own remarkably fast growth, while an indirect growth contribution was caused by the positive knowledge and productivity spill-overs from business services to other industries. The spill-overs come in three forms: from original innovations, from speeding up knowledge diffusion, and from the reduction of human capital indivisibilities at firm level. The external supply of knowledge and skill inputs exploits positive external scale economies and reduces the role of internal (firm-level) scale (dis)economies associated with these inputs. The relatively low productivity growth that characterises some business-services sectors may be a drag on the sector's direct contribution to overall economic growth. The paper argues that there is no reason to expect a “Baumol disease” effect as long as the productivity and growth spill-overs from KIBS to other economic sectors are large enough. Finally, the paper pinpoints some policy 'handles' that could be instrumental in boosting the future contribution of business services to overall European economic growth. |
| Keywords: | economic growth; human capital; specialisation; business services; Europe |
| JEL: | L8 O52 O4 O3 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:3750&r=cse |
| By: | Queiroz, Valdoceu de (Ministerio de Hacienda de Brasil); Pindado, Julio (Departamento de Administración y Economía de la Empresa, Facultad de Economía y Empresa, Universidad de Salamanca); Torre, Chabela de la (Departamento de Administración y Economía de la Empresa, Facultad de Economía y Empresa, Universidad de Salamanca) |
| Abstract: | This paper focuses on how a firm’s characteristics affect the market valuation of its research and development (R&D) spending. We derive a valuation model based on the capital market arbitrage condition. The estimation of this model by using the Generalized Method of Moments and data from the eurozone countries yields interesting results. Several firm characteristics (namely, size, firm growth and market share) are found to positively affect the relationship between firm value and R&D spending, while others (specifically, free cash flow, dependence on external finance, labour intensity and capital intensity) exert a negative effect. Therefore, the effectiveness of the R&D spending depends on the firm characteristics. |
| Keywords: | Research and development, valuation model, firm characteristics. |
| JEL: | G30 O32 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:ntd:wpaper:2006-09&r=cse |
| By: | Young-Ro Yoon (Indiana University Bloomington) |
| Abstract: | In this article, we deal with the topic of intentional information spillover using a model in which both informational- and payoff-externalities are present and the timing of agents' actions is endogenous. In this model, three players, who are heterogeneous in the quality of their information, compete with one another in a common task. According to the results, the weakly-informed players may voluntarily relinquish an option to wait, although no cost is imposed for a delay of action. When acting without a delay, they reveal their information with the hope that others will imitate them. This type of information spillover is due to their incentive, which is to make use of the relative performance evaluation structure under which a bad reputation can be shared if others are also wrong. |
| Keywords: | Blame sharing, Endogenous timing of actions, Herding, Information spillover, Informational externalities, Payoff externalities |
| JEL: | D81 D82 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:inu:caeprp:2007011&r=cse |