nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2007‒10‒20
seventeen papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. Investigating New Technology Based Firm (NTBF) Internationalization: the Impact on Performance, the Process and the Antecedents By Kiederich A.
  2. A multilevel approach to geography of innovation By Martin Srholec
  3. Protecting the Domestic Market: Industrial Policy and Strategic Firm Behaviour By Jens Metge
  4. Cooperation in Innovation Practices among Portuguese Firms: Do Universities Interface Innovative Advances? By Silva, Maria José; Leitão, João
  5. Director Independence as Strategic Behavior By Alexander F. WAGNER
  6. Do Stylised Facts of Order Book Markets Need Strategic Behaviour? By Dan Ladley; Klaus Reiner Schenk-Hoppe
  7. Distribution of Resources in a Competitive Environment By Yaakov Kareev; Judith Avrahami
  8. Comparative advantage patterns and domestic determinants in emerging countries: an analysis with a focus on technology By Daniela Marconi; Valeria Rolli
  9. Hard and Soft Locational Factors, Innovativeness and Firm Performance : An Empirical Test of Porter's Diamond Model at the Micro-Level By Alexander Eickelpasch; Anna Lejpras; Andreas Stephan
  11. Learning to Grow: A Comparative Analysis of the Wind Energy Sector in Denmark and India By Kari Kristinsson; Rekha Rao
  12. Intra-industry benchmarking of SG&A expenses: A neo-institutional perspective By Aerts W.; Van caneghem T.
  13. Family ownership and growth: The case of French SMEs By Anaïs Hamelin; Joseph Trojman
  14. Determinants of Economic Growth: Will Data Tell? By Antonio Ciccone; Marek Jarocinski
  15. Levels of education, growth and policy complementarities By Marta Simões; Adelaide Duarte
  16. Education and growth: an industry-level analysis of the Portuguese manufacturing By Marta Simões; Adelaide Duarte
  17. The producer service sector in Italy: Long-term growth and its local determinants By Valter Di Giacinto; Giacinto Micucci

  1. By: Kiederich A.
    Abstract: While researchers have extensively studied the born global and international new venture phenomena, the related field of NTBF internationalization has been left untouched, giving rise to an investigation aimed at filling this gap in the international business literature. The investigation covers the impact that internationalization has on performance, the process of internationalization and the antecedents of successful internationalization. Being conceptual in nature, this paper lays the theoretical foundation for future empirical research on NTBF internationalization. The theory development is based on an analysis of several factors, including organizational and environmental characteristics, founders, financing, ownership and network ties of NTBFs.
    Date: 2007–04
  2. By: Martin Srholec (Centre for Technology, Innovation and Culture, University of Oslo)
    Abstract: The aim of this paper is to demonstrate how research on geography of innovation can benefit from multilevel modeling. Using explanatory factors operating at different levels of the analysis, we assess the hypothesis that regional innovation systems influence the firm’s likelihood to innovate. We estimate a logit multilevel model of innovation on micro data from the third Community Innovation Survey in the Czech Republic. The results indicate that the quality of the regional innovation system directly determines firm’s likelihood to innovate and mediates the effect of some firm-level factors. Also structural problems in the region influence innovation in firms.
    Keywords: innovation, multilevel modeling, regional innovation system, Czech Republic.
    JEL: O32 R15 D21
    Date: 2007–10
  3. By: Jens Metge
    Date: 2007–10–15
  4. By: Silva, Maria José; Leitão, João
    Abstract: This paper aims to identify the nature of the relationships that are established amongst agents who co-operate in terms of innovation practices. It analyses whether the entrepreneurial innovation capability of firms is stimulated through the relationships developed with external partners. The data of 2nd Community Innovation Survey of EUROSTAT is used in a logistic model. In the estimation process of the Logit function, the entrepreneurial innovation capability is considered as the answer variable. The scientific agents who cooperate in terms of innovation activities impact, positively, on the propensity to engage in innovative advances revealed by the firms, at the level of product innovation. The paper presents policy implications, which may be used in the design of public policies for fostering open innovation networks between scientific agents and firms.
    Keywords: Innovation; Networks; Entrepreneurial Innovation Capability.
    JEL: O32 I28 O31 I23
    Date: 2007–10–15
  5. By: Alexander F. WAGNER (University of Zurich and Swiss Finance Institute)
    Abstract: This paper analyzes the independence of boards of directors as an optimally chosen, non-contractible behavior. A board behaves loyally to a CEO when it agrees to a negative NPV-project, giving the CEO private benefits. While the CEO benefits from competent directors because they help him make better decisions, the analysis reveals that loyalty is endogenously easier to obtain from a less competent board. The model implies that shareholders face a tradeoff between higher CEO pay and more inefficient board loyalty. It also holds predictions for how firm characteristics, other corporate governance features, and the business environment affect endogenous board competence.
    Keywords: Corporate governance, boards of directors, relational contracts
    JEL: D23 G34 M51
    Date: 2007–04
  6. By: Dan Ladley (University of Leeds, Business School); Klaus Reiner Schenk-Hoppe (University of Leeds, School of Mathematics)
    Abstract: This paper studies the role of strategy and the order book market mechanism in price dynamics and the order flow behaviour. To this end we analyse a zero-intelligence agent model of a dynamic limit order market. Stylised facts of limit order markets are shown to be influenced and, in some cases, governed by the market mechanism rather than strategic interaction. Positive correlation in order types, for instance, is the result of the market architecture, and price movements may be predicted in the short term from analysing the state of the order book. In contrast the absolute probabilities of order submission highlight the contribution of strategic behaviour.
    Keywords: Limit order book, stylised facts, order behaviour, price dynamics
    JEL: G12 G14
    Date: 2007–06
  7. By: Yaakov Kareev; Judith Avrahami
    Date: 2007–10–15
  8. By: Daniela Marconi (Bank of Italy, Economic Research Department); Valeria Rolli (Bank of Italy, Economic Research epartment)
    Abstract: During the last two decades a number of emerging economies have become deeply engaged in technology-intensive production. This has been reflected in a shift in their international trade specialization from labor-intensive towards capital-intensive goods and in rapid productivity gains across all manufacturing activities. The paper draws on a sample of sixteen emerging countries to investigate the linkages between the pattern of revealed comparative advantages (RCAs), captured by a modified version of the Lafay index of international trade specialization, and the competitiveness structure of the domestic manufacturing sector, measured by a set of industry and country-specific variables. Positive and large RCAs are found to be associated with low unit labor costs in both low-technology (labor-intensive) and medium-or-high tech sectors; on the other hand, domestic accumulation of physical capital is associated with positive and large RCAs in medium-or-high tech sectors. The international disadvantage (negative RCAs) in technology-intensive production tends to increase for countries with low human capital, whereas it diminishes for countries that have large domestic markets and import technology through foreign capital goods.
    Keywords: Revealed comparative advantages, technological up-grading
    JEL: F14 O10
    Date: 2007–09
  9. By: Alexander Eickelpasch; Anna Lejpras; Andreas Stephan
    Abstract: This paper investigates predictions of Porter's Diamond model regarding the impact of locational factors on innovativeness and performance at the firm level. We formulate a structural equation model based on the relationships between locational conditions, e.g., transportation infrastructure, proximity to universities and research institutes, qualified labour, on the one hand, and innovativeness measured by new product or process development, number of patents, and firm performance in terms of market growth or profit assessment, on the other hand. Based on a sample of about 2,100 East German firms, we apply the partial least squares path modelling approach to test the proposed relationships. We find that particularly cooperation intensity at the local level spurs the innovativeness of firms; whereas in contrast to Porter's predictions, our results indicate that strong local competition and a locally focused market appear to impede the innovativeness and performance of firms.
    Keywords: Hard and soft locational factors, innovativeness, firm performance, East German firms, structural equation modelling, partial least squares approach
    JEL: R30 L25 O30
    Date: 2007
    Abstract: This paper analyses the impact of the change in ownership after a management buyout on both post-buyout efficiency and growth. We contrast family firm buyouts with divisional buyouts, and private equity (PE) financed buyouts with non-PE financed buyouts. We analyse the four-year post-buyout growth and efficiency of 167 Belgian companies (of which 43 are transfers from family owned businesses) that did a buyout between 1996 and 2003. Results show that the source of a buyout (family owned buyout versus divisional buyout) has no impact on the post-buyout growth, but the presence of a PE has. PE-backed buyouts grow less in assets, but more in employees. Neither sales growth nor efficiency are different between different types of buyouts.
    Keywords: Buyout, Ownership, Private Equity, Performance
    Date: 2007–10
  11. By: Kari Kristinsson; Rekha Rao
    Abstract: This paper uses sectoral systems of innovation framework to examine the relationship between technology policy and industrial development by comparing the emergence of the wind energy sector in Denmark and India. Since the late 1970s Denmark has led the development of a global wind energy industry and in 2004 wind energy supplied 18,8% percent of Denmark’s electricity consumption. India was however a late entrant that managed in a few years to establish itself as the fifth largest producer of wind energy in the world. We suggest that India’s unique policy of ‘interactive learning’ with international and especially Danish actors, instead of imitation of foreign technology policies and institutions, was a substantial contributor to India’s success in developing their wind energy industry.
    Keywords: Wind energy industry; Denmark; India; sectoral systems of innovation
    JEL: O38 Q48
    Date: 2007
  12. By: Aerts W.; Van caneghem T.
    Abstract: In this paper we study conformity tendencies in SG&A (Selling, General and Administrative expenses) reporting from a mimetic imitation perspective. We explore intra-industry conformity tendencies in reported SG&A relative to sales over a ten-year period among a sample of US firms. We measure conformity by comparing a firm’s SG&A profile against a reference group of industry model firms. Results suggest that a firm’s imitation of successful firms’ SG&A profiles is determined by the tendency of other industry members to imitate those reference models. Moreover, results suggest that the mimetic process is strengthened with higher environmental uncertainty and that large auditor networks function as facilitators for this type of socially-based imitation behavior. Different modes of trait imitation in SG&A reporting seem to coexist as long as the reference groups are defined in terms of size and profitability.
    Date: 2006–12
  13. By: Anaïs Hamelin (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels and Université Robert Schuman, Strasbourg, France.); Joseph Trojman (Caisse Nationale des Caisses d’Epargne)
    Abstract: This article aims to analyse the relationship between family ownership and growth in a very large sample representative of French SMEs. Firms are differentiated from each other according to the degree of family ownership, ranging from total control by family members to minority control. The relationship between the degree of control and the firm’s growth takes into account the effect of firm’s size, age, sector, and financial solvency. The objective is to observe if family ownership has an impact on firm growth, and if this impact is not only due to a preference for financial independence. Results show that the more the family controls the firm, the less the firm is prone to sustain a high rate of sales growth, even if the availability of internal financial resources allows sustaining a larger growth rate.
    Date: 2007–08
  14. By: Antonio Ciccone; Marek Jarocinski
    Abstract: Many factors inhibiting and facilitating economic growth have been suggested. Will international income data tell which matter when all are treated symmetrically a priori? We find that growth determinants emerging from agnostic Bayesian model averaging and classical model selection procedures are sensitive to income differences across datasets. For example, many of the 1975-1996 growth determinants according to World Bank income data turn out to be irrelevant when using Penn World Table data instead (the WB adjusts for purchasing power using a slightly different methodology). And each revision of the 1960-1996 PWT income data brings substantial changes regarding growth determinants. We show that research based on stronger priors about potential growth determinants is more robust to imperfect international income data.
    Keywords: Growth regressions, robust growth determinants
    JEL: E01 O47
    Date: 2007–10
  15. By: Marta Simões (GEMF and Faculdade de Economia, Universidade de Coimbra); Adelaide Duarte (GEMF and Faculdade de Economia, Universidade de Coimbra)
    Abstract: Human capital acquired in the formal education sector is essential for knowledge creation and dissemination but the theoretical and empirical growth literature identifies other major determinants of innovation and imitation activities (R&D, international trade and FDI). This paper is an empirical investigation in a panel data framework of the effects of education and its sub-categories on economic growth emphasizing its complementarity with the other major determinants of technological change and growth. For this purpose we focus on a sample of OECD countries during the last decades of the twentieth century and use an extended and augmented version of the Benhabib and Spiegel (1994) growth specification that considers the role of education in innovation and imitation activities and that interacts education with the other major determinants of technological change. The results reveal the importance of education for growth through technology diffusion and domestic innovation activities. To fully exploit the benefits from R&D expenses in terms of growth the average OECD country needs a sufficient level of secondary and tertiary education and to benefit from the technology incorporated in imports of machinery countries need a sufficient level of overall education.
    Keywords: education, innovation, technological diffusion, panel data
    JEL: O33 O38 O47 C33
    Date: 2007
  16. By: Marta Simões (GEMF and Faculdade de Economia, Universidade de Coimbra); Adelaide Duarte (GEMF and Faculdade de Economia, Universidade de Coimbra)
    Abstract: TThis paper investigates the education–growth link at the more disaggregate industry level in the Portuguese manufacturing sector with a focus on different levels of education. The insights from new growth theory and a modified and augmented version of the Benhabib and Spiegel (1994) specification are the basis for the empirical analysis of the role of education in innovation and imitation activities highlighting a role for specific schooling levels across industries according to their technological characteristics and its interaction with international trade. We use data for the period 1986–1997, fourteen Portuguese manufacturing industries and panel data econometric techniques. Our most robust finding concerns the relevance of technology spillovers embodied in imports for productivity growth, as long as manufacturing industries employ workers with skills provided by secondary education. The Portuguese manufacturing industry cannot rely on automatic technological catch up for productivity growth so active trade and education policies are crucial to recover from the present bottom position in the rank of OECD productivity levels.
    Keywords: education, innovation, technology diffusion, productivity growth, panel data
    JEL: C23 I20 O30 O33
    Date: 2007
  17. By: Valter Di Giacinto (Bank of Italy, Branch of L'Aquila); Giacinto Micucci (Bank of Italy, Branch of Ancona)
    Abstract: This paper analyses the local determinants of producer service growth in Italy, focusing on agglomeration economies, and taking into account the particular features of this sector with respect to manufacturing. Using an OECD classification, we estimate a dynamic specification allowing for transitory dynamics around the long-run employment path derived from a model in which both demand and supply factors are considered. Compared with the prevailing modelling approach, the spatial scope of externalities is extended to include possible interactions across different urban areas. Our main findings are the following. Long-run employment growth is positively affected by Marshall-Arrow-Romer externalities, with a minor role played by urbanization externalities, a result similar to that obtained by more recent research on the Italian manufacturing sector and its industrial districts. Among the remaining supply factors, human capital exerts a positive influence on the long-run employment level in producer services industry; among demand factors, the size of the local market appears to be important, given the still incomplete tradability of service output. Significant interactions across urban areas are shown to occur; in particular, positive knowledge externalities on local productivity appear to be induced by location in urban areas contiguous to cities specializing in producer services.
    Keywords: agglomeration economies, human capital, producer services
    JEL: L80 R10 R12
    Date: 2007–09

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