nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2008‒01‒26
twelve papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. Competition and innovative intentions: A study of Dutch SMEs By Jeroen de Jong
  2. The relationship between knowledge management, innovation and firm performance: evidence from Dutch SMEs By André van Stel; Mickey Folkeringa; Joris Meijaard; Lorraine Uhlaner
  3. Knowledge management, innovation orientation and innovation performance By Lorraine Uhlaner; Haibo Zhou; Sita Tan
  4. Antecedents to Organizational Learning as a Determinant of Business Performance: The Role of the Organizational Size as a Moderator Variable By Juan C. Real
  5. Family orientation, strategy and organizational learning as predictors of knowledge management in Dutch SMEs By Lorraine Uhlaner; Haibo Zhou; Sita Tan
  6. Drivers of entrepreneurial aspirations at the country lever: the role of start-up motivations and social security By Marco van Gelderen; Roy Thurik; Jolanda Hessels
  7. Corporate governance, industry dynamics and firms performance on the stock market By Jackie Krafft; Yiping Qu; Jacques Laurent Ravix
  8. Intra-Industry Trade and Revealed Comparative Advantage: An Inverted-U Relationship By Horácio Faustino
  9. The firm and its governance along the industry life cycle By Jackie Krafft; Jacques Laurent Ravix
  10. Family Orientation, Strategic Orientation and Innovation Performance in SMEs: A Test of Lagged Effects By Joris Meijaard; Lorraine Uhlaner; Sita Tan
  11. Determinants of Corporate Performance of Listed Companies in Indonesia By Agustinus, Prasetyantoko; Rachmadi, Parmono
  12. Employment Growth of New Firms By Elisabeth Garnsey; Petra Gibcus; Erik Stam; Jennifer Telussa

  1. By: Jeroen de Jong
    Abstract: This paper explores the complex relationship between competition and innovation. Traditional measures of competition using industry statistics are often challenged andfound wanting. This paper distinguishes between three types of competitive forces: internal rivalry among incumbent firms in an industry, bargaining power of suppliers,and bargaining power of buyers. Using survey data from 2,281 Dutch firms, we apply new perception-based measures for these competitive forces to explore how competition relates to firms innovative intentions. We also investigate the influence of innovation strategy as a contingency variable. Results show that specific innovative intentions, i.e. to invest in product and process innovation, are related to different competitive forces. Process innovation is correlated with the bargaining power of suppliers, while intentions to invest in product innovation are associated with buyer power. Finally, intended product innovation is related to internal rivalry, but only when firms have no innovation strategy.
    Date: 2007–05–30
  2. By: André van Stel; Mickey Folkeringa; Joris Meijaard; Lorraine Uhlaner
    Abstract: This article investigates the relationship between knowledge management (KM), innovation and firm performance of smaller firms (less than 100 employees), based on a panel of more than 400 Dutch firms. Regression analyses explain the variations in sales turnover growth from various measures of KM strategies. We distinguish between KM input, throughput and output (or innovation) strategies. We find that KM input strategies related to knowledge acquisition are positively related to sales turnover growth. In contrast, we do not find a relation between KM throughput and KM output (innovation) measures and firm performance. The results emphasize the importance of both knowledge absorption and knowledge creation to the success of innovative efforts in small firms. This is an updated version of Scales-paper N200322.
    Date: 2007–01–24
  3. By: Lorraine Uhlaner; Haibo Zhou; Sita Tan
    Abstract: Western economies are increasingly viewed as knowledge-driven (Audretch and Thurik, 2001, 2004). Knowledge plays a crucial role in determining firm innovation capability and in enhancing working life quality of knowledge workers (Corso, Martini, Pelligrini, and Paolucci, 2001). Previous studies show that knowledge is managed in a different manner in SMEs. It is identified that knowledge is created, shared, transferred and applied via people based mechanisms in SMEs. Although research and policy interest in knowledge management is beginning to grow for SMEs (Sparrow, 2001; Wong, & Radcliffe, 2000), still relatively limited attention has been paid to understand the specifics of knowledge management issues for SMEs and to KM’s contribution to innovation performance in particular. Furthermore, most of studies are conducted by using methods on either qualitative case studies or very small samples. The aim of this study is to provide a quantitative insight of the relationship between KM and innovation performance of SMEs based on a large sample of Dutch SMEs, as well as the role of innovation orientation in this relationship. Our findings indicate that knowledge management- external acquisition and internal sharing- contribute positively to exploratory innovation performance of a firm. A full mediated effect of innovation orientation is identified in the relationship between external acquisition and exploratory innovation performance. We discuss how KM contributes to innovation performance, using the perspective of absorptive capacity. Based on a literature review on absorptive capacity, an implicit relationship between knowledge management practices and building a firm’s absorptive capacity is identified.
    Date: 2007–12–21
  4. By: Juan C. Real (Department of Business Administration, Universidad Pablo de Olavide)
    Abstract: This paper analyzes the influence of key organizational variables on organizational learning, considering the latter as a process of knowledge creation determining organizational performance. It is showed that both the entrepreneurial orientation of the organization and its learning orientation positively influence on organizational learning, and this has a significant effect on organizational performance. The results also reveal that the relationship established between entrepreneurial orientation and organizational learning is more intense for the large firms. Besides, learning orientation’s influence on organizational learning is greater in small and medium-sized enterprises, whereas organizational learning is positively linked to organizational performance in both types of firm.
    Keywords: Organizational learning, knowledge creation, learning orientation, entrepreneurial orientation, Partial Least Squares (PLS).
    Date: 2008–01
  5. By: Lorraine Uhlaner; Haibo Zhou; Sita Tan
    Abstract: Knowledge management (KM) is becoming a growing concern in management research and practice because of its role in determining firm innovation capability and in enhancing working life quality of knowledge workers. Although research and policy interest in KM is beginning to grow for small and medium-sized suppliers, still relatively limited attention has been paid to understand the specifics of KM issues of SMEs in particular. Previous studies rely on either qualitative case studies or very small samples. In this study, we will investigate KM among SMEs using empirical data from about 2000 SMEs. The aim of this study is to investigate the prevalence of different KM techniques and the determinants of KM. We found that SMEs are most likely to acquire knowledge by staying in touch with professionals and experts outside the company. Also, SMEs are most likely to share knowledge and experience by talking to each other and to store knowledge in formal repositories. Furthermore, we found a significant positive relationship between organizational learning and strategy and knowledge management, as well as a significant negative relationship between family orientation and knowledge management. In conclusion, knowledge management practices are not independent from other resources and processes inside SMEs. Therefore, there is no all-in-one knowledge management practices package for all types of SMEs across industries.
    Date: 2007–01–26
  6. By: Marco van Gelderen; Roy Thurik; Jolanda Hessels
    Abstract: This paper investigates whether start-up motivations and the level of social security can explain entrepreneurial aspirations. We use country-level data from the Global Entrepreneurship Monitor (GEM) for the year 2005. We distinguish between the necessity motive, independence motive and increase wealth motive and look at entrepreneurial aspirations in terms of innovativeness, job growth expectations and export orientation. As an indicator of a country?s level of social security we take the social security contribution rate (for employer?s and employees) from the World Competitiveness Yearbook. Previous research has found a negative relationship between the level of entrepreneurial activity and social security contributions, suggesting that social security increases the opportunity costs for entrepreneurship. The results of this study complement these previous findings by indicating that social security contributions have a negative influence on the supply of ambitious entrepreneurship in terms of new product or service introductions, job growth and export orientation. Furthermore, our findings indicate that entrepreneurialaspirations in terms of job growth and export relate positively to the increase wealth motive, whereas no significant relationship is found between our aspiration variables and the independence and necessity motives. On the basis of our findings policy directions are presented for an entrepreneurial economy. This is an update of paper H200627.
    Date: 2007–10–16
  7. By: Jackie Krafft (GREDEG - Groupe de recherche en Droit Economie Gestion - Université de Nice Sophia-Antipolis); Yiping Qu (GREDEG - Groupe de recherche en Droit Economie Gestion - Université de Nice Sophia-Antipolis); Jacques Laurent Ravix (GREDEG - Groupe de recherche en Droit Economie Gestion - Université de Nice Sophia-Antipolis)
    Abstract: This paper intends to relate more closely corporate governance, industry dynamics and firms performance. In that perspective, it focuses on the impact of applying the normative, best practice model of corporate governance on industry dynamics and related stock market performances. At a theoretical level, it presents an integrated framework based on the connection between corporate governance and industry dynamics issues. But the core of the paper is to advance that the combination of corporate governance and industry dynamics also requires important investigations into empirical aspects. At a case study level, our major finding is that the adoption of the best practice model of corporate governance in the telecoms equipment supplier industry contributed to create large ups and downs in the industry dynamics. At a more general level, combining CGQ with DATASTREAM data sets, we show the variegated impact of the normative model on industry dynamics and firms stock market performances, and confirm the observed phenomenon of ups and downs amplifications formerly emphasized.
    Date: 2008–01–10
  8. By: Horácio Faustino
    Abstract: This paper investigates the relationship between all types of intra-industry trade (IIT) and comparative advantage. The paper finds strong evidence of an inverted-U relationship.The results also suggest that relative autarky costs is a common determinant for any type of IIT, which contradicts the prediction made by theory for separating the determinants of horizontal and vertical IIT.
    Keywords: intra-industry trade; horizontal intra-industry trade; vertical intra-industry trade; comparative advantage.
    JEL: F1 C0 C2
    Date: 2008–01
  9. By: Jackie Krafft (GREDEG - Groupe de recherche en Droit Economie Gestion - Université de Nice Sophia-Antipolis); Jacques Laurent Ravix (GREDEG - Groupe de recherche en Droit Economie Gestion - Université de Nice Sophia-Antipolis)
    Abstract: The paper explores this issue by reconciling two trends of literature that are generally disconnected – the industry life cycle (ILC) on the one hand and the governance of large and small firms on the other – to generate results on how the governance of the firm may look like over the industry life cycle. When the two bodies of literature are connected, the immediate result is that the governance of small, young and innovative firms in the early stages of the life cycle should be different from the governance of large, mature and routinized firms. Small young and innovative firms should benefit of a mode of governance based on cooperation and assistance to stimulate innovation, while large mature and routinized firms should be imposed a mode of governance based on control of the manager’s action in the interests of shareholders. We argue that this immediate result can only be but preliminary, since age and size are not necessarily the key determinants of innovative behaviours of firms. In the ILC, small new firms engage product innovations, while large mature firms continue the process of innovation by investing in process capacities . In that perspective, imposing these firms a governance based on control may not be the optimal solution, since we know that this mode of governance favours short term choices that may be detrimental to the development of innovation. What is more important is thus to consider how the innovative behaviour of firms can be maintained in phases of growth and decline of the industry. In the paper, we advance the idea that new principles of governance should be proposed for innovative corporations (large or small) as a distinctive category.
    Date: 2008
  10. By: Joris Meijaard; Lorraine Uhlaner; Sita Tan
    Abstract: Past research suggests a negative effect of family orientation on innovation performance. However, many past studies have certain limitations that this study is designed to overcome. In particular,this study estimates lagged effects of family orientation on innovation performance while controlling for organization context variables and the mediating effect of strategic orientation. It also uses a multidimensional approach to measure family orientation while testing for common method bias. This study makes use of a sample of 343 Dutch small and medium size firms. Innovation performance, being the dependent variable, was collected in 2005. All independent variables, i.e. strategy, family orientation and context variables, are collected in previous time periods, with lags ranging between 3 and 4 years. Family orientation is measured according to five independent dimensions including family power, family culture,overlap of ownership and management and intentions to keep the firm in the family.
    Date: 2007–10–24
  11. By: Agustinus, Prasetyantoko; Rachmadi, Parmono
    Abstract: This paper is basically concerned with the factors determining corporate performance of listed companies in Indonesia, especially due to the 1997 financial crisis. The main results are fairly interesting in which firm size is positively related to firm profitability, but it is not related to market capitalization. It means that firm size is matter on the fundamental value of the firms, but it should not be important variable for market value of the firms. By employing panel data of 238 listed companies in Jakarta Stock Exchange (JSX) in the period 1994 – 2004 as the sample, we also find that macro factors are more important variables inducing firm performance, rather than firm-specific factors. It could be due to the 1997 great crisis. Our results also show that ownership factor matters on firm performance by the evidence that firms with majority foreign ownership have much higher performance in both measurements namely return on asset (ROA) and market capitalization growth than domestically-owned firms. Ordinary Least Square (OLS) is employed for the estimation procedure in this paper.
    Keywords: firm performance; firm strategy and financial crisis
    JEL: E32 L2
    Date: 2008–01
  12. By: Elisabeth Garnsey; Petra Gibcus; Erik Stam; Jennifer Telussa
    Abstract: This paper provides an overview of empirical studies on employment growth in new firms and offers a systematic analysis of new empirical data to address the methodological issues identified. Using a longitudinal database of 354 firms over their first ten years, we examine factors associated with new firm growth in terms of R&D, inter-firm alliancing, new product development, and exporting; these are activities that have been identified as denoting dynamic capabilities. The empirical evidence gives some evidence for the positive association between dynamic capabilities and new firm growth. Inter-firm alliancing is the only indicator of dynamic capabilities that has a positive effect on new firm growth. No moderating effect on dynamic capabilities and growth could be seen to be exerted by the level of human capital and/or firm resources. Environmental dynamism – assumed to be highly relevant in the dynamic capability approach – is not revealed to be a moderating factor affecting the relationship between dynamic capabilities and new firm growth.
    Date: 2007–12–20

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