nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2007‒10‒13
seventeen papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. What Determines the Entrepreneurial Innovative Capability of Portuguese Industrial Firms? By Silva, Maria José; Leitão, João
  2. Mergers & Acquisitions and Innovation Performance in the Telecommunications Equipment Industry By Tseveen Gantumur; Andreas Stephan
  3. Competitiveness in the CFA Franc Zone By Charalambos G. Tsangarides; Gustavo Ramirez
  4. Assessing Competitiveness and Real Exchange Rate Misalignment in Low-Income Countries By Gabriel Di Bella; Aurelie Martin; Mark Lewis
  5. The Link between Environmental Innovation, Patents, and Environmental Management By Marcus Wagner
  6. Criticism and Counter-Criticism of Public Management: Strategy Models By Luis C. Ortigueira
  7. The role of clustering in rural industrialization: A Case Study of the Footwear Industry in Wenzhou By Huang, Zuhui; Zhang, Xiaobo; Zhu, Yunwei
  8. R&D-EXPERIENCE AND INNOVATION SUCCESS By Pilar Beneito; Amparo Sanchis Llopis; María Engracia. Rochina Barrachina
  9. Competitive Growth in a Life-cycle Model: Existence and Dynamics By D'ALBIS Hippolyte; AUGERAUD-VERON Emmannuelle
  10. A note on competitive toughness:;why it should be identified neither with product;substitutability, nor (inversely) with concentration.;Toward a unified theory of oligopoly. By Davide DOTTORI; Saul DESIDERIO
  11. Network Multipliers and the Optimality of Indirect Communication By Andrea Galeotti; Sanjeev Goyal
  12. Internationalization of NGOs and Competition on Markets for Development Donations By Aldashev, Gani; Verdier, Thierry
  13. Strategic Basins of Attraction, the Path Dominance Core, and Network Formation Games By Frank Page; Myrna Wooders
  14. R&D Internationalization, R&D Collaboration and Public Knowledge Institutions in Small Economies: Evidence from Finland and the Netherlands By Cees van Beers; Elina Berghäll; Tom Poot
  15. Innovation Clusters in Technological Systems: A Network Analysis of 15 OECD Countries for the Middle ‘90s By Sandro Montresor; Giuseppe Vittucci Marzetti
  17. Hedging Strategies in Forest Management By Brunette, Marielle; Couture, Stéphane; Langlais, Eric

  1. By: Silva, Maria José; Leitão, João
    Abstract: In the context of globalisation, innovation is considered as a key factor for enhancing the competitiveness of firms. Nowadays, it is widely accepted that Portuguese firms face an increasing competitive environment, which is characterised by internationalization and globalization. In this sense, it becomes important to analyse the determinant factors of innovation capability of firms. This paper aims to identify and analyse the degree of importance of the determinant factors of innovation capability of Portuguese industrial firms. The data obtained through the 2rd Community Innovation Survey (CIS II) conducted by EUROSTAT, is used in a linear regression model. The entrepreneurial innovative capability, measured as product innovation, is considered as the variable answer, in the estimation process of a Logit function. The paper presents an innovative contribution since it uses a set of five determinant factors of innovation capability of industrial firms, at a product innovation level. Technological capacity, dimension of the firm, activity sector, market orientation and location of the firm, are considered as determinants factors of innovation capability of the firms. The results of the joint analysis provide the identification of stimulating factors and restraining factors of the entrepreneurial innovative capability of a selected sample of Portuguese industrial firms. Under a Schumpeterian approach, the paper ratifies that large enterprises are more prone to innovate than small enterprises. The dimension plays a role, in terms of the strategic conduct implemented by small firms, which are not so prone to innovate, due to its small dimension. Benchmarking the Portuguese case is particularly important, because small industrial enterprises face restraining conditions imposed by outsourcing contracts that are established between small producers and leading international buyers. This restrains, broadly, the entrepreneurial innovative capability of small industrial enterprises.
    Keywords: Innovation; Entrepreneurial Innovative Capability.
    JEL: O32 O31
    Date: 2007–10–08
  2. By: Tseveen Gantumur; Andreas Stephan
    Abstract: The telecommunications in the 1990s witnessed an enormous worldwide round of Mergers & Acquisitions (M&A). This paper examines the innovation determinants of M&A activity and the consequences of M&A transactions on the technological potential and the innovation performance. We examine the telecommunications equipment industry over the period 1988-2002 using a newly constructed data set with firm-level data describing M&A and innovation activity as well as financial characteristics. Based on a matching propensity score procedure, the study provides evidence that M&A realize significantly positive changes to the firm's post-merger innovation performance.
    Keywords: Mergers & Acquisitions, Innovation Performance, Telecommunications Equipment Industry
    JEL: L63 O30 L10
    Date: 2007
  3. By: Charalambos G. Tsangarides; Gustavo Ramirez
    Abstract: This paper reviews the evolution of competitiveness in the CFA franc zone using a proposed comprehensive competitiveness framework. In particular, we examine competitiveness in the WAEMU and CEMAC regions by analyzing the "environment" and "policy" components of competitiveness and their quantifiable determinants, including indicators to measure productivity and labor market conditions, prices and costs, macroeconomic performance, business environment, governance, and technology and infrastructure. Our findings suggest that despite some recent improvements-particularly for the CEMAC-both regions face serious competitiveness challenges when compared to pier groups of countries. In order to become more competitive, raise growth, and improve the quality of life, there is a need for structural reform to improve productivity, reduce factor costs, and create the right business, legal, and political environment to attract economic activity.
    Keywords: Working Paper , Export competitiveness , CFA franc , Exports , West African Economic and Monetary Union , Central African Economic and Monetary Community ,
    Date: 2007–08–30
  4. By: Gabriel Di Bella; Aurelie Martin; Mark Lewis
    Abstract: Assessing a country's competitiveness routinely starts with an analysis of the real exchange rate. However, in low-income countries, empirical analysis of the real exchange rate is often subject to important limitations that seriously weaken the results. This paper summarizes the methodologies used to assess real exchange rate misalignments and discusses the range of obstacles common to low-income countries. Recognizing the importance of using a wide range of indicators for assessing competitiveness in low-income countries, the paper discusses alternative competitive measures and then proposes a template of indicators to allow for a systematic assessment of competitiveness in low-income countries. The template is then used to rank countries according to their competitiveness performance in 2006.
    Keywords: Export competitiveness , Real effective exchange rates , Low-income developing countries , Working Paper ,
    Date: 2007–08–17
  5. By: Marcus Wagner
    Abstract: This paper analyses empirically the relationship between environmental innovations, environmental management and patenting. In particular it tests a number of propositions on how environmental management systems and the interaction with environmentally more or less concerned stakeholders are associated with the probability of firms to pursue innovation in general (measured as patenting behaviour) and specifically environmental innovation (measured as firm self-assessment and based on patent data). In applying a negative binomial as well as binary discrete choice models the relationship is studied using data on German manufacturing firms. As a novel and important insight, the study finds that environmental innovation can be meaningfully identified using patent data and that environmental innovation defined this way is less ubiquitous than self-reported environmental innovation. It also reveals that the implementation level of environmental management systems has a positive effect exclusively on environmental process innovation, whereas it is negatively associated with the level of a firm’s general patenting activities. For environmental product innovation and patented environmental innovations a positive relationship with environ-mentally concerned and a negative link with environmentally neutral stakeholders is found.
    Keywords: Environmental innovations; patents
    JEL: O31 Q56
    Date: 2007
  6. By: Luis C. Ortigueira (Department of Business Administration, Universidad Pablo de Olavide)
    Abstract: Critical control is very important in scientific management. This paper presents models of critical and counter-critical public-management strategies, focusing on the types of criticism and counter-criticism manifested in parliamentary political debates. The paper includes: (i) a normative model showing how rational criticism can be carried out; (ii) a normative model for oral critical intervention; and (iii) a general motivational strategy model for criticisms and counter-criticisms. The paper also presents an example taken from everyday life.
    Keywords: criticism, counter-criticism, public management, public administration, public policies, innovation in communication, communicative innovation, debate.
    Date: 2007–10
  7. By: Huang, Zuhui; Zhang, Xiaobo; Zhu, Yunwei
    Abstract: "Wenzhou used to be one of the poorest regions in eastern China. With limited arable land, poor road access to major cities, and little support from the upper level governments, this region seemed to lack all the conditions necessary for economic growth. However, over the past several decades Wenzhou has developed the most dynamic private sector in China, and has accordingly achieved one of the fastest growth rates. In particular, the footwear industry in Wenzhou has grown from a negligible market share to the largest in China. Here, we report a survey of 140 Wenzhou-based footwear enterprises of various scales, and use this information to examine the driving forces behind the dramatic rural industrial growth seen in this region. Our results show that clustering deepens the division of labor in the production process and makes it possible for small entrepreneurial firms to enter the industry by focusing on a narrowly defined stage of production. Therefore, Wenzhou represents an example of how clustering plays a significant role in helping fledgling rural industries overcome the growth constraints of capital and technology in the incipient stage of industrialization." from Authors' Abstract
    Keywords: Cluster analysis, Industrialization, Finance, Economic development, Nonfarm economy,
    Date: 2007
  8. By: Pilar Beneito (Universitat de València); Amparo Sanchis Llopis (Universitat de València); María Engracia. Rochina Barrachina (Universitat de València)
    Abstract: This paper analyses the role of firms' R&D-experience in their innovative success using a representative sample of Spanish firms for the period 1990-2002. Using count data models and within an innovation production function approach, we investigate the influence of firms' R&D-experience in the achievement of innovative results. To estimate R&D-experience, partially unobserved, we estimate a duration model and use the obtained results and a non-parametric procedure to impute R&D-experience when unobserved. We obtain that R&D effectiveness increases along the R&D history of the firm. En este trabajo se analiza el papel de la experiencia en actividades de I+D sobre el éxito innovador de las empresas utilizando una muestra representativa de empresas españolas para el periodo 1990-2002. Mediante modelos de recuento (count-data models) y partiendo de la especificación de una función de producción de innovaciones, investigamos la influencia de la experiencia en I+D en la obtención de resultados innovadores. Para estimar la experiencia en I+D, que es parcialmente inobservable, estimamos un modelo de duración y utilizamos los resultados obtenidos en este modelo y un procedimiento no paramétrico para imputar la experiencia en I+D a aquellas empresas para las que no se observa. Nuestros resultados muestran que la efectividad de la inversión en I+D aumenta con el historial innovador de la empresa.
    Keywords: Innovación, acumulación del conocimiento, experiencia en I+D, modelos de duración, modelos de recuento innovation, accumulation of knowledge, R&D-experience, duration models, count data models.
    JEL: O30 O34 C23 C10
    Date: 2007–10
  9. By: D'ALBIS Hippolyte (LERNA, TSE); AUGERAUD-VERON Emmannuelle
    Date: 2007–10
  10. By: Davide DOTTORI (Universita' Politecnica delle Marche, Dipartimento di Economia); Saul DESIDERIO (Universita' Politecnica delle Marche, Dipartimento di Economia)
    Abstract: Often the intensity of competition has been measured through proxies like the degree of product substitutability or as the inverse;of the degree of concentration in an industry. Both visions are based on the implicit assumption that few competitors imply a less though competition, but puzzles arise as several counter-examples exist. Other puzzling issues arise from the lack of a unified approach to oligopolistic equilibria (e.g. Cournot vs Bertrand competition). In this paper the unified approach of competitive toughness proposed by D'Aspremont et al.(2007), offering a generalization of the traditional oligopoly theory encompassing all the possible oligopolistic regimes between the Cournot and the competitive outcome, is discussed, also with respect to its implication for economic growth and macro studies.
    Date: 2007–10
  11. By: Andrea Galeotti; Sanjeev Goyal
    Abstract: We study the problem of a firm M which wishes to inform a community of individuals about its product. Information travels within the community because of the social interactions between individuals. Our interest is in understanding how the firm can incorporate the network of social interactions in the design of its communication strategy. We study a model of undirected networks and start by showing that social interactions appear in the payoff of the firm in the form of a network multiplier. We establish that the network multiplier is an increasing function of both the mean and the variance in the distribution of connections of the network. This implies in particular that denser and more dispersed degree distributions are better for the firm. We then show that the degree distribution of the neighbour first order dominates the degree distribution of a node at large and so it is always better for a firm to use indirect communication, i.e., viz. picking the neighbour of a node rather than a node itself as the target of communication. Finally, we show that the advantages of indirect communication are increasing with dispersion in the degree distribution.
    Date: 2007–09–28
  12. By: Aldashev, Gani; Verdier, Thierry
    Abstract: What are the effects of the integration of markets for private donations for development on NGOs’ performance? How is the welfare of donors and beneficiaries affected? To answer these questions, we build a model of a market for development donations with horizontally differentiated NGOs competing by fundraising effort. We compare three regimes: autarky, full integration, and the regime of multinational NGOs (in which NGOs have to establish foreign affiliates to raise funds abroad). The welfare impact of market integration depends on the interplay between three factors: returns to scale in the NGO production technology, donors’ "taste for variety", and the effectiveness of aggregate fundraising in motivating new donors.
    Keywords: internationalization; monopolistic competition; NGOs; non-distribution constraint
    JEL: F12 F23 L31
    Date: 2007–10
  13. By: Frank Page (Indiana University Bloomington); Myrna Wooders (Vanderbilt University)
    Abstract: Given the preferences of players and the rules governing network formation, what networks are likely to emerge and persist? And how do individuals and coalitions evaluate possible consequences of their actions in forming networks? To address these questions we introduce a model of network formation whose primitives consist of a feasible set of networks, player preferences, the rules of network formation, and a dominance relation on feasible networks. The rules of network formation may range from non-cooperative, where players may only act unilaterally, to cooperative, where coalitions of players may act in concert. The dominance relation over feasible networks incorporates not only player preferences and the rules of network formation but also assumptions concerning the degree of farsightedness of players. A specification of the primitives induces an abstract game consisting of (i) a feasible set of networks, and (ii) a path dominance relation defined on the feasible set of networks. Using this induced game we characterize sets of network outcomes that are likely to emerge and persist. Finally, we apply our approach and results to characterize the equilibrium of well known models and their rules of network formation, such as those of Jackson and Wolinsky (1996) and Jackson and van den Nouweland (2005).
    Keywords: basins of attraction, network formation games, stable sets, path dominance core, Nash networks
    JEL: A14 C71 C72
    Date: 2007–10
  14. By: Cees van Beers; Elina Berghäll; Tom Poot
    Abstract: This paper investigates innovating firms’ determinants of R&D collaboration with domestic universities and public knowledge institutes in Finland and the Netherlands. Three questions – relevant for innovation policies - constitute the central part of this paper. First, are innovating foreign firms less or more involved in R&D co-operation with domestic public knowledge institutions than innovating domestic firms? Second, do innovating firms that are open to their external knowledge environment have a higher probability to co-operate with public partners than firms that are not or less open? Third, are public knowledge institutions in Finland and the Netherlands attractive R&D partners to innovative firms? Based on data from Community Innovation Surveys we find that foreign firms in the Netherlands are less likely to co-operate with domestic public knowledge institutions than domestic firms, while in Finland no significant difference can be detected. With regard to the second question our findings show that openness of innovating firms is an important determinant of R&D collaboration in both countries. Finally, the empirical results show that knowledge of public partners is considered useful by innovating firms to transform own ideas into concrete innovations in Finland, but not in the Netherlands. However, the type of knowledge – fundamental or applied - is important for R&D collaboration with Dutch public partners, but not for co-operating with Finnish public partners. This raises the issue whether Finnish innovation policies with a strong focus on R&D co-operation provide incentives for domestic public partners to put more emphasis on applied research.
    Keywords: Multinational enterprises; innovation; R&D collaboration; public knowledge institutions; national innovation systems
    JEL: O32 O38
    Date: 2007
  15. By: Sandro Montresor; Giuseppe Vittucci Marzetti
    Abstract: The paper aims at investigating how innovations cluster in different technological systems (TSs) when their “techno-economic", rather than “territorial" space is considered. Innovation clusters of economic sectors are identified by applying network analysis to the intersectoral R&D flows matrices of 15 OECD countries in the middle '90s. Different clusterization models are first tested in order to detect the way sectors group on the basis of the embodied R&D flows they exchange. Actual clusters are then mapped in the different TSs by looking for intersectoral relationships which can be qualified to constitute “reduced-TSs" (ReTSs). In all the 15 TSs investigated the techno-economic space appears organized in hierarchies, along which its constitutive sectors group into clusters with different density and composition. Once ReTSs are looked for, the 15 TSs display highly heterogeneous structures, but with some interesting similarity on the basis of which different clusters of TSs can be identified in turn.
    Keywords: Innovation clusters; technological systems; R&D expenditure; embodied innovation flows
    JEL: O33 O38 O39
    Date: 2007
  16. By: Anneli Kaasa; Helje Kaldaru; Eve Parts
    Abstract: This paper investigates how different dimensions of social capital and institutional quality are related to innovation activity and its utilisation. For reasons of data availability, previous studies have included mainly patenting data. This study complements the previous studies by analysing smaller sample, but including more indicators of innovation. Data for 29 European countries are analysed. As an alternative to usual analysing methods, cluster analysis is used to overcome the problem of small sample. First, cluster analysis is conducted to examine the similarities and differences in various aspects of innovation activity and utilisation of innovations. Next, the social capital and institutional quality are considered as possible factors of innovation next to the R&D and human capital. The findings supported the idea that different dimensions of social capital have a different impact on innovation activity; the results concerning the utilisation of innovations were mixed.
    Keywords: innovation, social capital, institutional quality, Europe
    JEL: A12 A13 O31 O4
    Date: 2007
  17. By: Brunette, Marielle; Couture, Stéphane; Langlais, Eric
    Abstract: The paper focuses on forests management strategies for natural hazards of nonindustrial owners, in the case where the forest provides nontimber services. We introduce a basic two-period model where the private owner manages natural hazards on his forest thanks to the accumulation of savings on his individual income, or to the adoption of sylvicultural practices. We show that: 1/ the harvesting rule, in the presence of amenity services and a random growth rate for forest, is smaller than the one predicted under the Faustmann's rule; 2/ savings and sylvicultural pratices may be seen as perfectly substitutable tools for the management of natural hazards. However, our analysis predicts that the harvesting rule displays a specific sensibility to price effects and/or changes in the distribution of natural hazards, depending on whether forest owners opt for the financial strategy or undertake sylvicultural practices.
    Keywords: Risk; Forest; Amenities; Savings and Sylvicultural Practices
    JEL: D20 Q0 Q19 Q14 Q10
    Date: 2007–09–29

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