nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2007‒11‒17
twenty papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  2. Strategic Foresight in multinational enterprises – a case study on the Deutsche Telekom Laboratories By Rohrbeck, Rene; Arnold, Heinrich M.; Heuer, Jörg
  5. Entrepreneurial Orientation as a main Resource and Capability on Small Firm’s Growth By Ferreira, João; Azevedo, Susana
  6. Strategic Debt: Evidence from Bertrand and Cournot Competition By Jong, A. de; Nguyen, T.T.; Dijk, M.A. van
  7. Why New Business Development Projects Fail: Coping with the Differences of Technological versus Market Knowledge By Burgers, J.H.; Bosch, F.A.J. van den; Volberda, H.W.
  8. Cost Hetrogeneity and Strategic Divisionalization By Kazumichi, Iwasa; Toru , Kikuchi
  9. The Impact of Corporate Venturing on a Firm?s Competence Modes By Burgers, J.H.; Bosch, F.A.J. van den; Volberda, H.W.
  11. Impacts of Competitive Position on Export Propensity and Intensity: An Empirical Study of Manufacturing Firms in China By Fung, Hung-gay; Gao, Gerald Yong; Lu, Jiangyong; Mano, Haim
  13. The Role and Development of Technology-Intensive Suppliers in Resource-Based Economies: A Literature Review By Carlos Torres Fuchslocher
  14. Competition and Growth in an Endogenous Growth model with Expanding Product Variety without Scale Effects By Bianco, Dominique
  15. Sectoral patterns of innovation in a developing country: The Tunisian case By Murat YILDIZOGLU (GREThA); Mohamed AYADI (UAQUAP, Université de Tunis); Mohieddine RAHMOUNI (UAQUAP et GREThA)
  16. The Logistics Sector in India: Overview and Challenges By Chandra Pankaj; Jain Nimit
  17. Assessing the Competitiveness of International Financial Services in Particular Locations: A Survey of Methods and Perspectives By George von Furstenberg
  18. Size, Structure, and Strategies: Insolvency and "The Nature of the Firm" in Italy, 1920S-1970S By Paolo Di Martino; Michelangelo Vasta
  19. International R&D spillovers in the multi-country Schumpeterian growth model By KOCH, Wilfried; ERTUR, Cem
  20. Resource abundance and regional development in China: By Zhang, Xiaobo; Xing, Li; Fan, Shenggen; Luo, Xiaopeng

  1. By: Celeste Amorim Varum (Universidade de Aveiro); Carlos Pinho (Universidade de Aveiro)
    Abstract: The present paper is conducted under the research project “Enterprise of the Future: Trends and Scenarios towards Competitiveness” which attempts to disclosure determinants of future enterprise competitiveness. Innovation is not only a must today but also an imperative in future competitiveness scenarios. In modern evolutionary economics it is argued that sector-specific factors are one of the key factors explaining innovative behaviour and performance of firms. Several contributions have pointed that industries largely differ in terms of knowledge base and technological sources, opportunities and appropriation of innovative activities, technological trajectories and firms’ strategies. Using as background Pavitt’s taxonomy, this paper explores the nature, extent and sources of variety of innovation in the manufacturing industry, aiming at identifying common patterns across industries, and sectoral patterns across countries. This paper presents evidence based on the aggregated results of the last IV Community Innovation Survey released by EUROSTAT (CIS4), for which data is available for a number of industries and countries.
    Keywords: innovation, manufacturing industry, Community Innovation survey CIS
    JEL: L6 O3
    Date: 2007–11
  2. By: Rohrbeck, Rene; Arnold, Heinrich M.; Heuer, Jörg
    Abstract: Strategic Foresight activities enable companies to use weak signals to identify opportunities and threats. Research on Strategic Foresight proposes different methods, discusses their implementation and gives recommendations on how to link Strategic Foresight with other functions in an organization. Based on a literature review, we define a generic framework for the management of Strategic Foresight activities on the strategic, tactical and operational level and identify and discuss actors, methods and systems of Strategic Foresight. Building on an in-depth case study of the Deutsche Telekom Laboratories we shed light on the implementation of Strategic Foresight activities. In the discussion we focus on the interaction of methods from Consumer Foresight and Technology Intelligence. Taking an example project, we explore how Strategic Foresight is used on the operational level of innovation management. We conclude that Strategic Foresight can successfully contribute to coping with uncertainty and complexity and can feed the front-end of innovation from the market (customer needs) and technology (realization opportunities) perspective.
    Keywords: strategic foresight; consumer foresight; technology foresight; technology intelligence; market foresight; trend analysis; future studies; future analysis; telecommunication industry
    JEL: M0 M19 M10
    Date: 2007–01–12
  3. By: Ana Villar (Universitat Jaume I); César Camisón (Universitat Jaume I); Montserrat Boronat (Universitat Jaume I)
    Abstract: This study provides an empirical evidence of the relationship that exists between participation in technological strategic alliances and business performance by considering the knowledge-based distinctive competencies that the alliance is capable of generating as a mediating variable. The generation of knowledge in technological strategic alliances explains the contradictory results that emerge from the direct effect of strategic alliances on economic performance. The study uses a sample of Spanish industrial firms. The results findings prove that the relationship between R&D and innovation strategic alliances, and performance is mediated by the generation of knowledge-based distinctive competencies; and that the contribution of the participation in alliances to the growth of the firm¿s knowledge stock depends on its creation of innovation competencies. R&D managers should enhance the development of this kind of competencies in order to achieve superior performance. El presente trabajo provee evidencia empírica de la relación existente entre la participación en alianzas estratégicas tecnológicas y el desempeño organizativo, introduciendo como variable mediadora las competencias distintivas basadas en conocimiento que la alianza es capaz de generar. En la literatura existen resultados contradictorios en cuanto al efecto directo de las alianzas estratégicas en el desempeño organizativo. La generación de conocimiento en las alianzas estratégicas tecnológicas explica estos resultados contradictorios. A través de una muestra compuesta por empresas industriales españolas, nuestros resultados demuestran que la relación entre alianzas estratégicas en I+D y el desempeño, está mediada por la generación de competencias distintivas basadas en conocimiento; y que la contribución de la participación en las alianzas en el crecimiento del stock de conocimiento de la empresa depende de la creación de competencias en innovación. Los directivos de I+D deben alentar el desarrollo de este tipo de competencias para conseguir un desempeño organizativo superior.
    Keywords: Alianzas estratégicas, cooperación tecnológica, competencias basadas en conocimiento e innovación, desempeño organizativo. Strategic alliances, technological cooperation, knowledge-based and innovation competencies, performance
    JEL: C61 G31
    Date: 2007–10
  4. By: Azevedo, Susana; Ferreira, João
    Abstract: An important factor that guarantees a persistent competitive advantage is the sustainability of the firm’s capabilities or their core competences. These capabilities should form the basic support of firm’s strategy. Several authors point out the importance of the information systems (IS) for firm competitive advantage. The main tenet of this paper is to define a coherent theoretical framework of reference which will lead to a broader understanding of the relationship between Logistics Information Systems (LIS) and RBV in an integrating conceptual model for gaining and sustaining competitive advantages of firms. The paper argues that most failures of firms can be attributed to the fact that resources and capabilities of firms were either not existing or not addresses correctly. Neglecting IS linkage to resources and capabilities is one main reason for the failure. In this sense, a precondition for a sustained competitive advantage is to admit LIS as specific source of firms’ distinctive competences.
    Keywords: Information Systems; Logistics Information Systems; Resource-Based View (RBV); Competitive Advantage
    JEL: L10 M21
    Date: 2007–11–07
  5. By: Ferreira, João; Azevedo, Susana
    Abstract: This research provides a useful framework for identifying a small firms’ propensity to engage in entrepreneurial orientation. We examine the impact of the Entrepreneurial Orientation (EO) as a main resource and capability on small firm' growth. The growth seems to come out as an important demonstration of the entrepreneurial orientation of small firms (Davidsson, 1989; Green and Brown, 1997; Janney and Gregory, 2006). Thus, this research builds on prior conceptual research that suggests a positive integration between entrepreneurial orientation and resource-based view. In the first instance, the research will focus on reviewing literature in the emerging area of entrepreneurial orientation as it applies to growth oriented small firms and resource-based view of the firm. Secondly, an empirical study was developed based on a stratified sample of small firms of manufacturing industry. Data were submitted to a multivariate statistical analysis and a linear regression model was performed in order to predict the influence of the resources and capabilities on small firms' growth. In this sense, we consider the construct growth as a dependent variable and the ones relates with resources and capabilities (entrepreneur resources, firm resources, networks and EO) as independent variables. The research results suggest a set of resources and capabilities that promote the growth of the small firms. Also, the EO seems to have a predictive value on growth. Explaining variables related with resources and capabilities and EO were identified as essential in growth oriented small firms. It was still possible to conclude that the entrepreneurial firms which grew seem to have resources and develop more capabilities and take advantage in the search for those competences. This attitude reflects on the EO of the firm. This study has important implication for both researchers and practitioners. It highlights the necessity of firms to develop superior EO of all their members and also to invest on better resources and consequently superior capabilities as a way of reaching higher levels of growth. While previous authors have attempted to analyse certain aspects of this process (linkage between entrepreneurial orientation and growth), this research developed a framework that combines these and others factors (resource-based view) pertinent to growth oriented small firms. The results support the necessity to identify explicative variables of multiple levels to explain the growth of small firms. The adoption of an entrepreneurial orientation as an indispensable variable to the growth oriented small firms seems pertinent.
    Keywords: Resources-Based View; Entrepreneurial orientation; Growth of Small Firms
    JEL: M13 L1
    Date: 2007–11–09
  6. By: Jong, A. de; Nguyen, T.T.; Dijk, M.A. van (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: We investigate how competitive behavior affects the capital structure of a firm. Theory predicts that the impact of different types of output market uncertainty (in particular, unanticipated shocks in demand and costs) on a firm?s leverage depends on the type of competition in an industry. We test these predictions in a sample of U.S. manufacturing firms by classifying firms into Cournot competition (strategic substitutes), and Bertrand competition (strategic complements). We show that demand uncertainty is positively related to leverage for firms in both the Cournot and the Bertrand sample. Cost uncertainty has a significantly positive impact on the leverage of Cournot firms, but plays a negligible role for Bertrand firms. Our results support the strategic use of debt and highlight the role of firms? competitive behavior in the product market in their capital structure decisions.
    Keywords: Strategic debt;Cournot competition;Bertrand competition;demand and cost uncertainty;leverage;
    Date: 2007–09–11
  7. By: Burgers, J.H.; Bosch, F.A.J. van den; Volberda, H.W. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: Managing through projects has become important for generating new knowledge to cope with technological and market discontinuities. This paper examines how the fit between the creation of technological and market knowledge and important project management characteristics, i.e. project autonomy and completion criteria, influences the success of new business development (NBD) projects. In-depth longitudinal case research on NBD-projects commercialised during the period 1993-2003 in the consumer electronics industry highlights that project management characteristics focusing only on the creation of technological knowledge contributed to the failure of those NBD-projects that required new market knowledge as well. The findings indicate that senior management support and engaging in an alliance with partners possessing complementary market knowledge can offset this misalignment of the organisation of NBD-projects.
    Keywords: project management;new business development;exploitation-exploration;knowledge;new product development;strategic alliances;sales force;
    Date: 2007–10–30
  8. By: Kazumichi, Iwasa; Toru , Kikuchi
    Abstract: In this note, we consider a simple duopoly environment in which two parent firms compete in a market. We assume that there are cost differentials between these two parent firms. The parent firms' choices of divisionalization are modeled as a two-stage game. It will be shown that the number of divisions of a parent firm with a cost advantage (i.e., lower marginal costs) is relatively large. The results imply that the cost advantage of one parent firm will be magnified through divisionalization decisions.
    JEL: L11
    Date: 2007
  9. By: Burgers, J.H.; Bosch, F.A.J. van den; Volberda, H.W. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: In this conceptual paper we investigate how corporate venturing influences an organization?s competences. The impact of various types of corporate ventures on the portfolio of strategic options of a firm?s competence modes (Sanchez, 2004a; Sanchez and Heene, 2002) will be assessed by distinguishing two fundamentally different dimensions of corporate venturing, technology and product (Block & MacMillan, 1993). We argue that the level of product and factor market dynamism mediates the effect of corporate venturing on a firm?s competence modes. Corporate ventures that significantly increase the level of product or factor market dynamics will lead to an increased flexibility in all five competence modes. These ventures will have a direct effect on the lower-order competence modes and an indirect, lagged effect on higher-order competence modes through feedback loops. The developed framework and the propositions contribute to managing the ability of a firm to change its coordination-, resource and operating flexibility in order to sustain value creation.
    Keywords: competence-based management;corporate venturing;product and factor market dynamism;flexibility;
    Date: 2007–09–11
  10. By: Celeste Amorim Varum (Universidade de Aveiro); Leonildo Monteiro (Universidade de Aveiro)
    Abstract: Product innovation is a subtle process, frequently leading to shifts in the competitiveness of firms. Developing products in an environment undergoing technological change is given to frequent failure, even in well-established and sophisticated organizations. In order to tackle competitiveness and to deal with innovation uncertainty, firms develop diverse innovation processes. Two modes of innovation are suggested in recent literature: 1) Science, Technology and Innovation (STI) mode, which is based on the production and use of codified scientific and technical knowledge; and 2) Doing, Using and Interacting (DUI) mode, which relies on informal processes of learning and experience-based know-how. In this paper we analyse product innovation at firm level. We perform an exploratory analysis in four leading equipment and machinery producers from the Aveiro region, in Portugal. Doing so, we explore the main features of the capital goods’ industry with implications for innovation, and analyse the dominant uncertainties associated to the innovation process. and modes of innovation. Key findings include the complete absence of DUI mode in the cases studied, and even a low learning characteristic in one company. The paper concludes by considering the implications for firms’ competitiveness and for innovation policy.
    Keywords: modes of innovation, uncertainties, R&D, capital goods, SME
    JEL: O32 L6
    Date: 2007–11
  11. By: Fung, Hung-gay; Gao, Gerald Yong; Lu, Jiangyong; Mano, Haim
    Abstract: We examine the impacts of competitive industry position on firms’ export propensity and intensity in China. Drawing on the resource-based view and the structure-conduct-performance paradigm of firm behavior, we investigate whether firms with competitive industry position through cost leadership or differentiation strategy have different export behaviors. We use a longitudinal data of 213,662 manufacturing firms in China from 1998 to 2005 to show that firms that have developed competitive advantages in the domestic market are more likely to export and have higher levels of export intensity. Indigenous and foreign manufacturing firms exhibit different patterns of export behaviors. Foreign firms with differentiation advantages focus on local market expansion instead of seeking opportunity in export markets.
    JEL: F18
    Date: 2007–07
  12. By: Annette Bongardt (Universidade Moderna and IEEI); Isabel Cabrita (Universidade Moderna and INETI)
    Abstract: This paper considers the prerequisites for implementing a competitive low-carbon economy in the European Union from the point of view of firms’ incentives, the role of policy and the contribution of public research. It suggests that the reduction of the environmental impact of energy can be a new competitiveness factor. Rather than being treated as a constraint and cost-aggravating factor, addressing climate change can offer economic opportunity and contribute to growth. The paper looks at both static (energy efficiency) and dynamic (innovation – new products, processes, technologies or sectors and consumption patterns) dimensions of competitiveness.
    Keywords: Economic competitiveness; low-carbon economy; energy; technology; and public research.
    JEL: M21 H23 H44
    Date: 2007–11
  13. By: Carlos Torres Fuchslocher (GIGA Institute of Latin American Studies)
    Abstract: Although primary industries are important to developing countries, they have been largely unable to contribute to rapid growth. Systematically strengthening the development of local technology-intensive suppliers (t-suppliers), however, may contribute to both reinforcing the industrial base and supporting the competitiveness of primary production. Indeed, the development of t-suppliers has been common in those resource-based economies which achieved a high level of development (Scandinavia, Canada, Australia). This paper explores the role of t-suppliers in natural resource-based economies. It outlines a theoretical framework for the analysis of the factors which foster or constrain their development and defines areas for an effective promotion of t-suppliers. The proposed model of analysis distinguishes between factors influencing the development of t-suppliers on the level of the main industry (MI), the level of supplier firms or firm-level and the level of external determinants with special reference to industrial policy factors.
    Keywords: Technology-intensive suppliers, resource-based economies, developing countries, SME promotion, economic growth
    JEL: O14 Q22 R11
    Date: 2007–11
  14. By: Bianco, Dominique
    Abstract: The aim of this paper is to analyse the relationship between competition and growth in an endogenous growth model with expanding product variety without scale effects. In order to do this, we develop an extension of the Bucci (2005) model in which we eliminate the scale effects. We find that the relationship between competition and growth is always inverted U shaped. We explain this result by the composition of two effects on growth : resource allocation and profit incentive effects. For low values of product market competition, an increase of competition has an positive effect on growth. For large values of competition, we have a negative relationship between competition and growth.
    Keywords: Endogenous Growth; Horizontal Differentiation; Technolo- gical Change; Imperfect Competition
    JEL: O41 O31
    Date: 2007–11–10
  15. By: Murat YILDIZOGLU (GREThA); Mohamed AYADI (UAQUAP, Université de Tunis); Mohieddine RAHMOUNI (UAQUAP et GREThA)
    Abstract: We analyze in this article main determinants of technology dynamics in Tunisian manufacturing sectors. The data from the industrial survey provided by Ministry of Scientific Research, Technology and Competency Development (MSRTCD) for the period 2002-2004 is explored using regression trees and Probit models in order to discover main factors that favor the innovative capacity of Tunisian firms. Our results show that we must distinguish process and product innovations because they are driven by different mechanisms. Moreover, we observe that sectoral heterogeneity should not be neglected and we study more in detail fours sectors that are particularly well represented in our sample. This analysis allows us to suggest some differentiated policy indications for fostering innovative capacity in these sectors.
    Keywords: Industry dynamics; Innovation systems; Development economics; Sectoral systems of innovation
    JEL: O12 O30
    Date: 2007
  16. By: Chandra Pankaj; Jain Nimit
    Abstract: The logistics industry in India is evolving rapidly and it is the interplay of infrastructure, technology and new types of service providers that will define whether the industry is able to help its customers reduce their logistics costs and provide effective services (which are also growing). Changing government policies on taxation and regulation of service providers are going to play an important role in this process. Coordination across various government agencies requires approval from multiple ministries and is a road block for multi modal transport in India. At the firm level, the logistics focus is moving towards reducing cycle times in order to add value to their customers. Consequently, better tools and strategies are being sought by firms in order to enhance their decision making. In this paper, we provide a perspective on these issues, outline some of the key challenges with the help of secondary information, and describe some interesting initiatives that some firms & industries are taking to compete through excellence in managing their logistics.
    Date: 2007–03–30
  17. By: George von Furstenberg (National Science Foundation and Indiana University Bloomington)
    Abstract: The International Financial Services (IFS) industry is restructuring internally and by location. This paper outlines the economic forces and analytical methods that may be applied to examine the economic drivers of these processes as ever more cities, particularly in East Asia, are vying to attract IFS providers and their clients. The ICT revolution has made those IFS that can be commoditized footloose in search of cost efficiency. High value-added financial services, however, will continue to be developed and coordinated in a few major IFS centers that have invested in, or capitalized on, regional or global advantages for themselves and their clients. The resulting pattern of functional fragmentation and geographic dispersal may facilitate analyses of the competitiveness of different lines of the financial services business in a particular location by methods such as Data Envelopment and Stochastic Frontier Analysis. These forms of comparative efficiency analysis have recently been questioned and their results reinterpreted.
    Keywords: offshore centers, international financial services, Data Envelopment Analysis, Stochastic Frontier Analysis
    JEL: E44 F30 G20
    Date: 2007–11
  18. By: Paolo Di Martino; Michelangelo Vasta
    Abstract: During the Twentieth century, Italian joint-stock companies remained relatively small and tended to die young. This fact constrained the development of the full potential of the Italian industry, as small-dimensioned companies struggled to implement the most efficient technologies and managerial techniques. This paper analyses this problem by looking at the functioning of insolvency procedures. Using quantitative and qualitative evidence, we show how various devices that progressively appeared on the scene failed in providing efficient solutions to re-start worthy companies. Insolvency procedures thus remained liquidation-prone, a factor that contributes to explain the peculiarity and the limits of Italian industrial capitalism.
    JEL: N44 N84
    Date: 2007–10
  19. By: KOCH, Wilfried (LEG - CNRS UMR 5118 - Université de Bourgogne); ERTUR, Cem (LEO - Université d'Orléans)
    Abstract: This paper reconsiders the multi-country Schumpeterian growth model and its empirical implications. We first show that the model implies a spatial econometric reduced form. Indeed, the global interdependance implied by international R&D spillovers needs to be taken into account in the theoretical model as well as in the empirical model. The spatial econometric model we propose includes the neoclassical growth model as a particular case. We can therefore test explicitly the role of R&D investment in the long run growth model. Finally, the proprieties of our spatial econometric specification allow evaluating explicitly the impact of home and foreign R&D spillovers.
    Keywords: multi-country model, Schumpeterian growth, R&D spillovers, spatial econometrics
    JEL: C31 O3 O4
    Date: 2007–11
  20. By: Zhang, Xiaobo; Xing, Li; Fan, Shenggen; Luo, Xiaopeng
    Abstract: "Over the past several decades, China has made tremendous progress in market integration and infrastructure development. Demand for natural resources has increased from the booming coastal economies, causing the terms of trade to favor the resource sector, which is predominantly based in the interior regions of the country. However, the gap in economic development level between the coastal and inland regions has widened significantly. In this paper, using a panel data set at the provincial level, we show that Chinese provinces with abundant resources perform worse than their resource-poor counterparts in terms of per capita consumption growth. This trend that resource-poor areas are better off than resource-rich areas is particularly prominent in rural areas. Because of the institutional arrangements regarding property rights of natural resources, most gains from the resource boom have been captured either by the government or state owned enterprises. Thus, the windfall of natural resources has more to do with government consumption than household consumption. Moreover, in resource-rich areas, greater revenues accrued from natural resources bid up the price of non-tradable goods and hurt the competitiveness of the local economy." from Authors' Abstract
    Keywords: Regional inequality, Resource curse, Dutch disease, Property rights,
    Date: 2007

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