nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2008‒05‒24
five papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. Global Management and the Strategic Role of Brands By Teresa da Silva Lopes
  2. Pharmaceutical Research Strategies By Sandra Phlippen; An Vermeersch
  3. The Internationalisation of Production Activities of Italian Industrial Districts By Giuseppe Tattara
  4. Environmental Regulation as a Coordination Device for the Introduction of a Green Product: The Porter’s Hypothesis Revisited By Philippe Barla; Christos Constantatos; Markus Herrmann
  5. Strategic Manipulation of Empirical Tests By Alvaro Sandroni; Wojciech Olszewski

  1. By: Teresa da Silva Lopes
    Abstract: This study analyses the strategic role of brands, in explaining the management of business in the global alcoholic beverages industry and also the techniques used by firms to exploit economies of scale and scope in the international marketplace. It explains the different ways in which brands have been traded, what were the strategies of enterprises behind the creation of global brands, and how their operations have been affected by this increased importance of brands in firms’ everyday lives. It argues that the increase in the trade of brands has been led by the need for brands to be managed by entrepreneurs and firms with different levels and kinds of knowledge, and that this knowledge is greatly determined by the stages in the lives of brands, and the types of markets in which the brand is sold.
    Date: 2008–05
  2. By: Sandra Phlippen (Erasmus University Rotterdam); An Vermeersch (McKinsey and Company)
    Abstract: This study analyses 1400 research projects of the top 20 R&D-spending pharmaceuticals to identify the determinants of successful research projects. We provide clear evidence that externally sourced projects and projects involving biotechnologies perform better than internal projects and chemical projects, respectively. Controlling for these effects, we find that big pharma should either build a critical mass of disease area knowledge or diversify projects over different DA’s in order to obtain higher success probabilities. Projects in which a firm has built a critical mass of disease knowledge (through at least 10 projects per DA) are significantly more likely to reach clinical testing. Moreover, within large disease areas, the success probabilities of internal projects increases when a few (less than 20%) externally sourced projects are involved. We interpret this finding as knowledge spillovers from external to internal projects, as the limited number of external projects enables the same people to be involved in both external and internal research projects and apply externally generated knowledge internally.
    Keywords: research strategies; pharmaceutical industry; innovation; external collaborations; make-or-buy
    JEL: L65 L25 L21 D21 D83
    Date: 2008–03–03
  3. By: Giuseppe Tattara (Department of Economics, University Of Venice Cà Foscari)
    Abstract: This paper studies the evolution of the Italia industrial districts in the era of globalization. Italian districts are no longer self-contained systems of small firms where firms' competitiveness is the result of physical proximity, connected to foreign markets at the initial and the final stage of the production and distribution activity. Internationalization is analysed in the three classical forms of trade flows, foreign direct investments and foreign subcontracting. The conclusion discusses the consequences of sourcing production abroad for industrial districts. The loss of productive competences and practical knowledge, the reduction of employment and the change in the social climate that characterize the district. As a result of internationalization the final firms make profits in far away territories and the firm’s profitability is no more linked to the workers well being
    Keywords: Globalization, Industrial districts, Sub-contractiong, Direct Foreign Investments
    JEL: F23 L16 L25 L33
  4. By: Philippe Barla (Department of Economics, Universite Laval); Christos Constantatos (Department of Economics, University of Macedonia); Markus Herrmann (Department of Economics, Universite Laval)
    Abstract: According to Porter’s hypothesis, environmental regulation increases the regulated firms’ profits. However, if a “greener” strategy is more profitable why does it need regulatory intervention in order to be implemented? Let a greener product increase the adopter’s marginal cost while providing no additional benefits during the first period. In the second period, when the product's environmental attributes become known and appreciated by consumers, the adopter enjoys higher demand. By adopting the green product alone, a firm loses profits in the first period due to a) its increased costs, and b) its reduced market share; in the second period, it enjoys additional profits due to c) its increased quality, and d) its increased market share. If both firms adopt the green product market shares remain unaffected, therefore b) and d) disappear. While simultaneously adopting the green product can be profitable for both firms, for a single firm to pioneer adoption may not be so. Environmental regulation acts, therefore, as a co-ordination device reducing market inertia. By inducing both firms to act simultaneously it allows them to pass from one Nash equilibrium to another one with higher profits.
    Keywords: Porter’s hypothesis, environmental regulation, differentiated products, coordination
    JEL: Q20 Q28 L13 L50
    Date: 2008–05
  5. By: Alvaro Sandroni (Department of Economics, University of Pennsylvania); Wojciech Olszewski (Department of Economics, Northwestern University)
    Abstract: Theories can be produced by experts seeking a reputation for having knowledge. Hence, a tester could anticipate that theories may have been strategically produced by uninformed experts who want to pass an empirical test. We show that, with no restriction on the domain of permissible theories, strategic experts cannot be discredited for an arbitrary but given number of periods, no matter which test is used (provided that the test does not reject the actual data-generating process). Natural ways around this impossibility result include 1) assuming that unbounded data sets are available and 2) restricting the domain of permissible theories (opening the possibility that the actual data-generating process is rejected out of hand). In both cases, it is possible to dismiss strategic experts, but only to a limited extent. These results show significant limits on what data can accomplish when experts produce theories strategically.
    Keywords: Testing Strategic Experts
    JEL: D81 C11
    Date: 2008–04–01

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