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on Economics of Strategic Management |
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Issue of 2008‒04‒04
nine papers chosen by Joao Jose de Matos Ferreira University of the Beira Interior |
| By: | R. LAMADRID; A. HEENE; X. GELLYNCK |
| Abstract: | Strategic entrepreneurship which merges strategic management and entrepreneurship is an essential formula for a good business. An entrepreneurial mindset (opportunity seeking) augurs well for effective strategy making (advantage seeking) to caution against uncertainty. Hence, companies must align their business along strategic entrepreneurship. Companies can sustain their business by plotting a strategy making that pays off on their entrepreneurial orientation. This research aims to provide answer to such by looking at strategy making along 5Ps: plan, position, pattern, perspective and ploy and mapping them out with the dimensions of entrepreneurial orientation to wit: innovativeness, proactiveness, risk taking, competitive aggressiveness, and autonomy. Thereby, propositions of relational constructs that stand on a firm grounding of literature are presented. |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:08/499&r=cse |
| By: | Eleonora Di Maria (University of Padua); Stefano Micelli (University of Bari) |
| Abstract: | Global economy is transforming the sources of the competitive advantages of firms, especially for firms embedded in local manufacturing systems. Based on the theoretical contributions to knowledge management and industrial districts, this paper describes alternative firm's strategies and upgrading options by exploring the relationships among innovation, marketing and network technologies. Starting from the analysis of the Global Competitiveness Report and the European Innovation Scoreboard, this paper focuses on the case of firms specializing in the "Made in Italy" industries (fashion, furniture, home products) to outline a framework explaining the new competitive opportunities for SMEs. Through a qualitative analysis,this paper presents four case studies of Italian firms that promote successful strategies based on a coherent mix of R&D-based innovation, experienced marketing and design, by leveraging on ICT. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:pad:wpaper:0070&r=cse |
| By: | Abe de Jong (RSM Erasmus University); Thuy Thu Nguyen (RSM Erasmus University); Mathijs A. van Dijk (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 |
| JEL: | G32 L10 L60 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:dpc:wpaper:1108&r=cse |
| By: | Lal, Kaushalesh (UNU-MERIT); Dunnewijk, Theo (UNU-MERIT, Maastricht University) |
| Abstract: | Innovation strategies of entrepreneurs are mapped with growth and performance of their firms in this study. Findings of the study are based on the data collected from 1238 small ICT firms located in 25 member states of European Union. The survey was conducted during October 2006 and March 2007. Results of Logit analysis suggest that firms that pursued continuous innovation strategies experienced more employment growth, higher profitability, and better sales dynamics than those that adopted occasional innovation approach. Market growth of continuous innovating firms realized faster pace than other type of firms. Another distinguishing characteristic of two types of firms emerged is market preference. Target market of continuous innovating firms has been European or global markets while innovative activities of other firms targeted domestic market. The study concludes that European innovation policies should be focused towards continuous innovation activities with due attention at human resource development policies. |
| Keywords: | dynamic capabilities, continuous innovation, occasional innovation, competitiveness, human resources, internationalization |
| JEL: | O31 O32 O38 L25 L63 O15 J24 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2008016&r=cse |
| By: | Wendy Dobson (Institute for International Business, Rotman School of Management); A.E. Safarian (Rotman School of Management) |
| Abstract: | How is the Chinese economy making the transition from imitation to innovation as the source of sustained long term growth? We address this question using the evolutionary approach to growth in which institutions support technical advance and enterprises develop capabilities to learn and innovate. Growth is seen as a series of disequilibria in which obstacles to innovation such as outdated institutions and weak incentive systems can cause growth to slow. We review existing literatures on institutions and firm behavior in China and compare these findings with those of our survey of Chinese firms in 2006. Industry and firm studies in the literature show how productivity is rising because of firm entry and exit rather than the adoption of new technologies. A striking feature both of the studies in the literature and our survey is the increasing competitive pressures on firms that encourage learning. Our survey of privately owned small and medium enterprises in five high tech industries in Zhejiang province found a market-based innovation system and evidence of much process and some product innovations. These enterprises respond to growing product competition and demanding customers with intensive internal learning, investment in R&D and a variety of international and research linkages. |
| JEL: | O23 H20 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:ttp:iibwps:08&r=cse |
| By: | Subhash Ray (University of Connecticut) |
| Abstract: | In this paper we use the 2004-05 Annual Survey of Industries data to estimate the levels of cost efficiency of Indian manufacturing firms in the various states and also get state level measures of industrial organization (IO) efficiency. The empirical results show the presence of considerable cost inefficiency in a majority of the states. Further, we also find that, on average, Indian firms are too small. Consolidating them to attain the optimal scale would further enhance efficiency and lower average cost. |
| Keywords: | Data Envelopment Analysis; Efficient Production Scale; Industry Efficiency |
| JEL: | C61 D21 L60 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2008-10&r=cse |
| By: | Cuong Le Van (Centre d'Economie de la Sorbonne, Université Paris-1, CNRS - Paris School of Economics); Manh-Hung Nguyen (THEMA, Université Cergy-Pontoise); Thai Bao Luong (CEPN Université Paris 13); Tu Anh Nguyen (Centre d'Economie de la Sorbonne, Université Paris-1, CNRS) |
| Abstract: | We consider a transitional country with three sectors in economy: con- sumption goods, new technology, and education. Productivity of the con- sumption goods sector depends on new technology and skilled labor used for production of the new technology. Then there might be three stages of economic growth. In the first stage the country concentrates on produc- tion of consumption goods; in the second stage the country imports both physical capital and new technology capital; in the last stage the country imports new technology capital and invests in training and education of high skilled labor in the same time. |
| Keywords: | Optimal growth model, New technology capital, Human Capital, Developing country. |
| JEL: | D51 E13 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ema:worpap:2008-07&r=cse |
| By: | Jeanne Hagenbach; Frédéric Koessler |
| Abstract: | In this paper, we consider situations in which individuals want to choose an action close to others' actions as well as close to a payoff relevant state of nature with the ideal proximity to the common state varying across the agents. Before this coordination game with heterogeneous preferences is played, a cheap talk communication stage is offered to players who decide to whom they reveal the private information they hold about the state. The strategic information transmission taking place in the communication stage is characterized by a "strategic communication network". We provide a direct link between players' preferences and the strategic communication network emerging at equilibrium, depending on the strength of the coordination motive and the prior information structure. Equilibrium strategic communication networks are characterized in a very tractable way and compared in term of efficiency. In general, a maximal strategic communication network may not exist and communication networks cannot be ordered in the sense of Pareto. However, expected social welfare always increases when the communication network expands. Strategic information transmission can be improved when group or public communication is allowed, and/or when information is certifiable. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2008-10&r=cse |
| By: | Koskela, Erkki (University of Helsinki); König, Jan (Free University of Berlin) |
| Abstract: | We analyze the following questions associated with outsourcing and profit sharing under imperfect labour markets. How does strategic outsourcing influence wage formation, profit sharing and employee effort when firms commit to optimal profit sharing before wage formation or decide for profit sharing after wage formation? What is the relationship between outsourcing, profit sharing, and equilibrium unemployment when profit sharing is also a part of a compensation scheme in all industries? We find that if firms will decide on profit sharing before the wage formation, higher outsourcing decreases wage whereas profit sharing has an ambiguous effect. Under flexible profit sharing wage is smaller than in the case of committed profit sharing. For equilibrium unemployment, we find that if there is also profit sharing in other industries, the effects of outsourcing and profit sharing on the unemployment rate is ambiguous both in the committed and flexible case. |
| Keywords: | outsourcing, profit sharing, labour market imperfection, employee effort, equilibrium unemployment |
| JEL: | E23 E24 J23 J33 J82 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3413&r=cse |