nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2008‒03‒25
sixteen papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. Realities and perspectives of Romanian knowledge-based economy in the context of EU integration By Burja , Camelia; Burja, Vasile
  2. Value Creation in Marketing: Can Sales-Turnover turn to be a Competitive Advantage to the Marketer and Customer? By Md.Bakhtiar Rana, Saeed Alamgir Jafar, Shah Md. Al-Emran Sarker
  3. Strengthening SMEs to make export competitive By Das, Bhagaban; Shil, Nikhil Chandra; Pramanik, Alok Kumar
  4. Competition for Scarce Resources By Peter Eso; Volker Nocke; Lucy White
  5. Evolution of the knowledge base in knowledge intensive sectors By Jackie Krafft; Francesco Quatraro; Paolo Saviotti
  6. Diversification strategies and scope economies evidence from a sample of Italian bus transport providers By Ottoz Elisabetta; Di Giacomo Marina
  7. Competing Communications Networks and International Trade By Fukushima, Marcelo; Kikuchi, Toru
  8. The Need of Knowledge Management Strategy for the Successfully Implementation of Reengineering Projects By Stefanescu, Laura; Stefanescu, Andy
  9. An investigation of the competitiveness hypothesis of the resource curse. By Leandro Antonio Serino
  10. The Relationship between Knowledge Intensity and Market Concentration in European Industries: An inverted U-Shape By Niels Krap; Johannes Stephan
  11. Do side payments help? Collective decisions and strategic delegation By Bard Harstad
  12. Competing for Contacts: Network Competition, Trade Intermediation and Fragmented Duopoly By Dimitra Petropoulou
  13. Entrepreneurial Innovation and Sustained Long-Run Growth without Weak or Strong Scale Effects By Grossmann, Volker
  14. Penetrating the Knowledge Filter in "Rust Belt" Economies By Zoltan Acs; Lawrence A. Plummer; Ryan Sutter
  15. The Role of the Local Business Environment in Banking Consolidation By Luca Colombo; Gilberto Turati
  16. An Empirical Analysis of the Relationship Between Inequality and Innovation in a Schumpeterian Framework By Hatipoglu, Ozan

  1. By: Burja , Camelia; Burja, Vasile
    Abstract: Developing the knowledge-based economy constitutes one of the strategic priorities of the European Union which aims the increase of the performance and economic competitiveness, and Romania like membership country has assumed this important objective. In the paper are carry out the general features of the knowledge-based economy, the competitiveness of Romania within the European Union from this perspective and there are formulated some directions of action in order to achieve the mentioned objective.
    Keywords: knowledge-based economy; economic competitiveness; European integration; policy innovation; knowledge management
    JEL: O1 O11
    Date: 2008–03–19
  2. By: Md.Bakhtiar Rana, Saeed Alamgir Jafar, Shah Md. Al-Emran Sarker (Jagannath University, Dhaka; American International University-Bangladesh (AIUB); ASA University, Dhaka)
    Abstract: Doing business based on value delivered gives companies the means to get an equitable return for their efforts. Once markers/suppliers truly understand value, they will be able to realize the benefits of measuring and monitoring it for their customers. In this highly competitive circumstance all the firms regardless of the local or multinational tend to focus on value creation in marketing, by any means, in order to make their customers satisfied. Value is usually made with a target to satisfy the ultimate customer, but value creation in sales-turnover also affects the channel members and cost function, as a result impacts on the volume of sales and customer satisfaction as well. This formulation integrates value management, brand management, and relationship management within a customer-centered focus. Companies can decide which driver(s) strengthen for the best payoff. In this paper an effort has been made to develop an integrated value model composed of different strategies with different value concept, which ultimately impact on the sales turnover and thus create a value throughout the marketing functions and achieve its ultimate target. The paper moves step by step, from discussion of the concepts evolved in relation to value creation in marketing, then induction and development of the conceptual value creation model with special focus on the minimization of duration of the Sales-Turnover for competitive advantage vis-à-vis value creation for consumers. Finally, a rigorous theoretical analysis is given with an experimentation of the value model on a company- Abul Khair Co. Ltd.- partially practicing this concept in their marketing functions. This inductive model can be a solid basis for further research of strategic marketing application.
    Date: 2008–03
  3. By: Das, Bhagaban; Shil, Nikhil Chandra; Pramanik, Alok Kumar
    Abstract: The importance of SMEs in any economy cannot be overlooked as they form a major chunk in the economic activity of nations. India has nearly three million SMEs, which account for almost 50 per cent of industrial output. However, SMEs which form the backbone of industrial development in India are not export competitive and contribute only about 34 percent of exports. It is this feature of the SMEs that make it an ideal target to realize its potential export competitive. Drawing from the experiences of countries that have successfully promoted the export competitiveness of SMEs, this paper has identified ways in which SMEs in India can have an access to external markets through exports, which include simplification of procedures, incentives for higher production, preferential treatments to SMEs in the market development fund, linking up SMEs with Transnational Companies or large domestic exporting firms; and formation of clusters and networks in order to reinforce their external competitiveness.
    Keywords: Small and Medium Enterprises (SMEs); SWOT Analysis; Export; India
    JEL: F2
    Date: 2007–12–31
  4. By: Peter Eso; Volker Nocke; Lucy White
    Abstract: We show that the efficient allocation of production capacity can turn a competitive industry and downstream market into an imperfectly competitive one. Even though downstream firms have symmetric production technologies, the downstream industry structure will be symmmetric only if capacity is sufficiently scarce. Otherwise it will be asymmetric, with one large "fat" capacity-hoarding firm and a fringe of smaller "lean and fit" firms, so that Tobin`s Q varies inversely with firm size. This is so even if the number of firms is infinitely large. As demand or input quantity varies, the industry may switch between symmetric and asymmetric phases, generating predictions for firm size and costs across the business cycle. Surprisingly, an increase in available capacity resulting in such a switch can cause a reduction in total output and consumer surplus.
    Keywords: Multiproduct Firms, Firm Size Distribution, Trade Liberalization, Size Discount, Firm heterogeneity, Productivity
    JEL: F12 F15 L11 L25
    Date: 2007
  5. By: Jackie Krafft (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR6227 - Université de Nice Sophia-Antipolis); Francesco Quatraro (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR6227 - Université de Nice Sophia-Antipolis); Paolo Saviotti (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR6227 - Université de Nice Sophia-Antipolis)
    Abstract: In a knowledge based society the creation and utilisation of knowledge become the key factors determining the competitiveness of firms, regions and countries. In this perspective a considerable effort is today dedicated to characterise the knowledge base of different sectors in the economy and to detect its impact on firm performance and on industrial organization (Breschi, Lissoni, and Malerba, 2003; Krafft, 2004; Nesta and Saviotti, 2005). Although all sectors in modern economies are affected by a growing knowledge intensity, some sectors are influenced more than the average. We call these Knowledge Intensive Sectors (KISs). In this paper we map the dynamics of knowledge generation within three KISs: biotechnology, telecommunications and electronics. The first question which is addressed is how to characterize a KIS. Typically we would expect KISs to have a high R&D intensity, to produce more patents and publications than less knowledge intensive sectors and to have a greater impact of knowledge production on firm performance and on sectoral growth. A further and important aspect of KISs is the presence of discontinuity in knowledge. Not that such discontinuities are present only in KISs: other sectors are going to be affected, although often less directly, by these discontinuities. However, KISs are likely to be the first ones to start exploring new forms of knowledge and to move them towards exploitation. Thus, we can expect the dynamics of knowledge generation and utilization in KISs to be affected by both (i) the rate of knowledge creation and (ii) the presence of discontinuities in new knowledge. It follows that in order to be able to link the dynamics of knowledge creation and utilization to firm performance and to industrial organization we need to detect a number of properties of the knowledge base (KB) of KISs. Properties such as the diversity/variety of the KB, its coherence and its cognitive distance (or conversely its similarity) between different KBs have already been shown to be potential determinants of firm performance. The aim of this paper is to contribute to this new literature by characterizing the evolution of the KB in three KISs, namely biotechnology, telecommunications and electronics. We use data from the European Patent Office database (EPO database) to see whether we can find common trends in the evolution of the KB of these three KISs.
    Date: 2008–03–14
  6. By: Ottoz Elisabetta (University of Turin); Di Giacomo Marina (University of Turin)
    Abstract: A growing number of local public transport (LPT) companies diversify their production lines by providing a large set of services. We investigate the cost structure of a sample of LPT companies operating in Italy in order to assess the presence and the magnitude of scope economies. We split thewhole sample of firms according to the diversification strategy: private firms, mainly diversifying in competitive transport-related services and public firms providing non-transport services in regulated markets. Regardless of the functional form and the method used, scope economies appear sizeable for both groups but higher for firms pursuing a transport related strategy, suggesting it should be preferable to the multi-utility development pursued by public LPT firms.
    Date: 2008–02
  7. By: Fukushima, Marcelo; Kikuchi, Toru
    Abstract: This paper investigates the effects of competing communication networks on trade patterns in a Chamberlinian-Ricardian model of monopolistically competitive firms with a continuum of industries that require communication services in production. We conclude that intraindustry trade between different networks is determined by the relative size of networks and technological differences, and that a network will not have an incentive to expand indefi- nitely, despite network externalities.
    JEL: F12
    Date: 2008
  8. By: Stefanescu, Laura; Stefanescu, Andy
    Abstract: This paper want to shown that current knowledge management approaches do not emphasise enough on knowledge sharing from reengineering project perspective. To achieve success with reengineering project, an organisation must possess and share knowledge about many different facets of this process. While many reengineering projects have resulted in improve performance, we believe that higher levels of performance improvement are possible by coupling IT capabilities with KM strategy. To explain these results it was assumed that the key to implementing with success reengineering project is having a wide knowledge management strategy. Our objective for the paper reported here was to understand the factors that motivate to share knowledge before implementing any knowledge management strategy to sustain the successfully implementation of reengineering projects.
    Keywords: Information Technologies; knowledge; knowledge management; strategy; reengineering; project
    JEL: M21
    Date: 2008–03–16
  9. By: Leandro Antonio Serino
    Keywords: economic growth, resource curse, pattern of trade specialization, returns to scale.
    JEL: F43 O13 O47
    Date: 2008–02
  10. By: Niels Krap; Johannes Stephan
    Abstract: This paper is motivated by the European Union strategy to secure competitiveness for Europe in the globalising world by focussing on technological supremacy (the Lisbon - agenda). Parallel to that, the EU Commission is trying to take a more economic approach to competition policy in general and anti-trust policy in particular. Our analysis tries to establish the relationship between increasing knowledge intensity and the resulting market concentration: if the European Union economy is gradually shifting to a pattern of sectoral specialisation that features a bias on knowledge intensive sectors, then this may well have some influence on market concentration and competition policy would have to adjust not to counterfeit the Lisbon-agenda. Following a review of the available theoretical and empirical literature on the relationship between knowledge intensity and market structure, we use a larger Eurostat database to test the shape of this relationship. Assuming a causality that runs from knowledge to concentration, we show that the relationship between knowledge intensity and market structures is in fact different for knowledge intensive industries and we establish a non-linear, inverted U-curve shape.
    Keywords: market structure, knowledge intensity, competition policy
    JEL: L16 L40 O33
    Date: 2008–03
  11. By: Bard Harstad
    Abstract: I investigate when a exible bargaining agenda, where side payments are possible, facilitates cooperation in a context with strategic delegation. On the one hand, allowing side payments may be necessary when one partys participation constraint otherwise would be violated. On the other, with side payments each principal appoints a delegate that values the project less, since this increases her bargaining power. Reluctant agents, in turn, implement too few projects. I show that side payments are bad if the heterogeneity is small while the uncertainty and the typical value of the project are large. With a larger number of parties there may be a stalemate without side payments, but delegation becomes more strategic as well, and cooperation decreases in either case.
    Keywords: Collective action, side transfers, bargaining agenda, strategic delegation, issue linkages
    JEL: C78 D78 F53 H77
    Date: 2007–09
  12. By: Dimitra Petropoulou
    Abstract: A two-sided, pair-wise matching model is developed to analyse the strategic interaction between two information intermediaries who compete in commission rates and network size, giving rise to a fragmented duopoly market structure. The model suggests that network competition between information intermediaries has a distinctive market structure, where intermediaries are monopolist service providers to some contacts but duopolists over contacts they share in their network overlap. The intermediaries` inability to price discriminate between the competitive and non-competitive market segments, gives rise to an undercutting game, which has no pure strategy Nash equilibrium. The incentive to randomise commission rates yields a mixed strategy Nash equilibrium. Finally, competition is affected by the technology of network development. The analysis shows that either a monopoly or a fragmented duopoly can prevail in equilibrium, depending on the network-building technology. Under convexity assumptions, both intermediaries invest in a network and compete over common matches, while randomising commission rates. In contrast, linear network development costs can only give rise to a monopolistic outcome.
    Keywords: International Trade, Pairwise Matching, Information Cost, Intermediation, Networks
    JEL: F10 C78 D43 D82 D83 L10
    Date: 2007
  13. By: Grossmann, Volker (University of Fribourg)
    Abstract: R&D-based growth theory suggests that a larger population size raises either the long-run rate of economic growth (“strong scale effect”) or the level of per capita income (“weak scale effect”), with far-reaching policy implications. However, for modern times there is little empirical support for strong scale effects and evidence in favor of weak scale effects is mixed, at best. This paper develops a simple overlapping-generations framework with endogenous occupational choice of heterogeneous agents and entrepreneurial innovations in which any form of scale effect is absent. A higher population growth rate has a negligible, possibly negative effect on the long-run growth rate of per capita income. Long-run growth is sustained also in absence of population growth and generally is policy-dependent.
    Keywords: economic growth, endogenous technical change, entrepreneurial skills, population growth, scale effects
    JEL: O10 O30 O40
    Date: 2008–03
  14. By: Zoltan Acs (George Mason University; Max Planck Institute of Economics, Jena); Lawrence A. Plummer (Clemson University); Ryan Sutter (George Mason University)
    Abstract: A new model of economic growth introduces the knowledge filter between new generic knowledge and economically-useful knowledge. It identifies both the formation of new ventures and the absorptive capacity of incumbent firms as the mechanisms that penetrate the knowledge filter. Recent empirical work has shown that new firms are more proficient at penetrating the knowledge filter than are incumbent firms; however, the analysis has only examined expanding economies and has relied on purely cross-sectional regression methodologies. This study explores the role of new and incumbent firms in penetrating the knowledge filter utilizing recent developments in spatial panel estimation techniques to provide a more robust set of findings. The results suggest that new firms are more proficient at penetrating the knowledge filter in declining and growing regions alike.
    Keywords: Entrepreneurship, Knowledge, Regional Growth, Endogenous Growth
    JEL: L26 O1 O18 O3 R1
    Date: 2008–03–14
  15. By: Luca Colombo (DISCE, Università Cattolica); Gilberto Turati (DISCE, Università Cattolica)
    Abstract: We study whether local economic conditions in different areas have an impact on the magnitude and direction of the concentration process of a banking industry. By using probit and count data (ZIP) models to study the consolidation of the Italian banking sector in the second half of the 1990s, we document a significant direct impact of the local ‘business environment’ on the concentration of the industry at the regional level. This effect complements the well known indirect effect of macroeconomic characteristics on the profitability and efficiency of banks. We also show that institutional and organizational variables affect the likelihood and number of M&A deals, and help explaining differences in performance. Our results appear to be robust to different specifications, and to a number of robustness checks, including alternative sets of variables defining local ‘business environment conditions’.
    Keywords: Banking M&As, local business environment, profitability, efficiency, credit policies, count data models
    JEL: G21 G34 L16
    Date: 2007–11
  16. By: Hatipoglu, Ozan
    Abstract: I empirically investigate the non-linear relationship between inequality and innovation in a Schumpeterian setup where growth is expressed by the rate of innovations. In this framework income distribution plays a role in determining the dynamic market sizes for innovators and therefore is a major determinant of growth. By using two new cross-country inequality data sets, I find support for an inverted U-shaped relationship between inequality and innovative activities. This result is robust to two common inequality definitions and several parametric and non-parametric estimation procedures.
    Keywords: inequality; innovation; patents
    JEL: O15 O31
    Date: 2008–03–20

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