nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2007‒08‒08
ten papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. A Comparative Analysis of Japanese, U.S., and Korean Firms on IT and Management By MOTOHASHI Kazuyuki
  2. Innovation Networks of High Tech SMES: Creation of Knowledge but no Creation of Value By Rob Winters; Erik Stam
  3. Strategic Assortment Reduction by a Dominant Retailer Strategic Assortment Reduction by a Dominant Retailer By Anthony Dukes; Tansev Geylani; Kannan Srinivasan
  4. Between Internationalisation and Proximity: the internationalisation process of automotive first tier suppliers By Vincent FRIGANT (GREThA)
  5. University-industry relations in Norway By Magnus Gulbrandsen; Lars Nerdrum
  6. Complementary research strategies, first-mover advantage and the inefficiency of patents By Luigi Bonatti
  7. Globalisation and Technology Intensity as Determinants of Exports By Ray Barrell; Olga Pomerantz
  8. Dynamic price competition with capacity constraints and strategic buyers By Gary Biglaiser; Nikolaos Vettas
  9. Turbulence in High Growth and Declining Industries By Rui Baptista; Murat Karaoez
  10. Globalisation and Technology Intensity as Determinants of Exports By James Mitchell

  1. By: MOTOHASHI Kazuyuki
    Abstract: In this paper, the contribution of information technology (IT) use to management performance is compared between Japanese, U.S., and Korean firms, based on an analysis using data from the "International Comparative Survey of Firms' IT Strategies" (RIETI). The results reveal that Japanese firms have received positive effects from "mission critical systems," which include routine business activities such as personnel management, accounting information systems, and ordering, whereas U.S. firms are effectively using "informational systems;" systems that perform intricate analyses of a firm's data, such as supporting management strategies or developing new customers. The results also show that Korean firms trail Japanese firms in deploying IT systems, with the exception of enterprise resource planning (ERP) systems. The section on the internal IT organization of the firm, which reveals the importance placed by firms on using IT as a tool to accomplish corporate strategy, indicates that U.S. firms place the highest importance, followed by Japanese firms, and finally by Korean firms. With regard to the relation with outsourcing firms of IT systems, U.S. firms are treating outsourcing firms as partners for consulting on technology trends whereas a large number of Japanese firms perceive them as a means of cost reduction.
    Date: 2007–08
  2. By: Rob Winters (Netherlands Ministry of the Interior and Kingdom Relations); Erik Stam (University of Cambridge, Utrecht University; Max Planck Institute of Economics)
    Abstract: This paper analyses the effects of innovation networks on product and process innovation and sales growth of high technology SMEs. Innovation net- works are positively related to both product and process innovation, i.e. knowledge creation. One exception is the negative effect of innovation networks with suppliers on product innovation. Older SMEs are more product innovative than young SMEs. The positive relation between firm size and (process) innovation, disappears when networks are introduced into the analyses. The general conclusion is that vertical innovation networks remove the effect of firm size on process innovation. In other words, high-tech SMEs can ‘borrow’ size if they co-operate with customers, but especially with suppliers for process innovation. So smallness is not necessarily a disadvantage for innovation, as long as firms cooperate with other organisations. Innovation and networks do not seem to effect value creation, measured as sales growth.
    Keywords: innovation, innovation networks, high tech SMEs, firm growth
    JEL: D21 D83 D85 L25 O31 O32
    Date: 2007–07–31
  3. By: Anthony Dukes (University of Aarhus); Tansev Geylani (University of Pittsburgh); Kannan Srinivasan (Tepper School of Business, Carnegie Mellon University)
    Abstract: In certain product categories, large discount retailers are known to offer shallower assortments than traditional retailers. In this paper, we investigate the competitive incentives for such assortment decisions and the implications for manufacturers’ distribution strategies. Our results show that if one retailer has the channel power to determine its assortment first, then it can strategically reduce its assortment by carrying only the popular variety while simultaneously inducing the rival retailer to carry both the specialty and popular varieties. The rival retailer then bears higher assortment costs, which leads to relaxed price competition for the commonly carried popular variety. We also show that when the manufacturer has relative channel power, it chooses alternatively to distribute both product varieties through both retailers. Our analysis suggests, therefore, that when a retailer becomes dominant in the distribution channel, it facilitates retail segmentation into discount shops, carrying limited product lines, and specialty shops carrying wider assortments. We also illustrate how retailer power leading to strategic assortment reduction can lead to lower consumer surplus.
    Keywords: channels of distribution; channel power; assortment; retailing; game theory
    Date: 2006–12
  4. By: Vincent FRIGANT (GREThA)
    Abstract: The paper analyses the strategies of internationalization pursued by first tier automotive suppliers (FTS). The advent of modular production in this sector implies many changes in vertical relationships, which can in turn be used to explain the causes and forms of suppliers’ internationalization. The paper tries to explain internationalization patterns via an analytical grid wherein proximity needs are portrayed as a function of the complexity and exclusivity of inter-firm interactions. The argument applied in this article is broken down into three sections: the first reconsiders the transformations induced by modularization; the second presents some stylized facts about the internationalization of FTS; and the third part both presents an analytical grid and derives its implications in terms of location of suppliers.
    Keywords: Internationalisation; Modularity; Industrial Geography; Vertical Relationships; First Tier Suppliers; Automotive
    JEL: L62 R3 F23
    Date: 2007
  5. By: Magnus Gulbrandsen (Norwegian Institute for Studies in Research and Education - Centre for Innovation Research); Lars Nerdrum (Norwegian Institute for Studies in Research and Education - Centre for Innovation Research)
    Abstract: This paper analyses the relationship between universities and industry in Norway. Funding figures, publication and patent data, surveys and interviews all indicate that there has been a slow and steady increase in university-industry relations the last 20 years. In the 1980s we notice an increase in the share of industry funding of university R&D, and the 1990s saw a strong growth in PhD students finding work in firms. Many of these trends are seen all over the OECD areas, although there are large variations across disciplines, institutions and industries. Some evidence exists to suggest that Norwegian firms may be particularly collaborative when it comes to R&D and innovation. There are, however, also barriers to how close the cross-sector relations may become. For example, data on graduates’ transition to work indicate how the shorter-term expectations and needs of firms may be difficult to meet by the universities and colleges.
    Date: 2007–07
  6. By: Luigi Bonatti
    Abstract: In a realistic framework where the potential innovators’ research lines are imperfectly correlated and imitation takes some time, this paper studies an industry regulated by an authority which can tax (subsidize) the firms’ pure profits (R&D expenditures). By comparing the market equilibrium emerging when there is patent protection with the market equilibrium emerging without patents, the paper finds that social welfare is higher in the absence of patents. This result is driven by the fact that—without patents--more than one successful inventor may implement its discovery and enter the market, thus reducing the deadweight loss due to imperfect competition.
    Keywords: Innovation, temporary monopoly, lead time, market regulation, patents.
    JEL: H21 H25 L10 L51 O31
    Date: 2007
  7. By: Ray Barrell; Olga Pomerantz
    Abstract: This paper augments traditional equations for estimating export demand with a measure of technology intensity of output, and several variables capturing the impact of regional integration and global trade liberalisation programmes. Using data for a panel of 20 OECD countries it is shown that the augmented long run relationships cointegrate and can be embedded into equilibrium correction form. The effects of technology and trade liberalisation were found to be stronger at times than the impact of competitiveness and together these variables help explain large changes in export shares in the presence of relatively little shifts in competitiveness.
    Date: 2007–05
  8. By: Gary Biglaiser (University of North Carolina); Nikolaos Vettas (Athens University of Economics and Business)
    Abstract: We analyze a dynamic durable good oligopoly model where sellers are capacity constrained over the length of the game. Buyers act strategically in the market, knowing that their purchases may affect future prices. The model is examined when there is one and multiple buyers. Sellers choose their capacities at the start of the game. We find that there are only mixed strategy equilibria. Buyers may split orders, preferring to buy a unit from both high and low price sellers to buying all units from the low price seller. Sellers enjoy a rent above the amount needed to satisfy the market demand that the other seller cannot meet. Buyers would like to commit not to buy in the future or hire agents with instructions to always buy from the lowest priced seller. Further, sellers’ market shares tend to be asymmetric with high probability, even though they are ex ante identical.
    Keywords: Strategic buyers, capacity constraints, bilateral oligopoly, dynamic competition
    JEL: D4 L1
    Date: 2007–06
  9. By: Rui Baptista (IN+, Instituto Superior Tecnico, Technical University of Lisbon; Max Planck Institute of Economics); Murat Karaoez (IN+, Instituto Superior Tecnico, Technical University of Lisbon; IIBF, Department of Economics, Sueleyman Demirel University, Isparta, Turkey)
    Abstract: We examine turbulence over the product life cycle using the lowest possible level of industry aggregation, allowing for the use of panel data to study the evolution of single product markets. We find that replacement of exiting firms by subsequent entry plays a primary role in generating turbulence in high growth markets, while displacement of incumbents by recent entrants is the main selection force in declining markets. As product life cycles progress, trial-and-error entry subsides, and turbulence decreases.
    Keywords: Entry, Exit, Selection, Product life cycle, Replacement, Displacement
    JEL: L11
    Date: 2007–07–31
  10. By: James Mitchell
    Abstract: We seek to understand what can be inferred from the movement of and revisions to fixed-event density forecasts. This involves extending efficiency tests used to examine fixed-event forecasts from the point to density case. The extension requires the revision to a density forecast to be reduced to a revision to an event forecast; this is because revisions to the density forecasts themselves, as measured by the KLIC, need not be unpredictable even when the forecast is rational. We consider an application to inflation and output growth density forecasts from the Survey of Professional Forecasters. We find that while fixed-event density forecasts for inflation appear inefficient, there is greater evidence that those for GDP growth are efficient. We also extract information from the fixed-event density forecasts about the SPF's perceptions of the persistence of inflation and output growth. These perceptions are related to the decline in macroeconomic volatility observed in the United States.
    Date: 2007–05

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