nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2008‒06‒07
nine papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. Knowledge Management through the Lens of Innovation and Labour Productivity in a Knowledge Based Economy By Constantinescu, Madalina
  2. Cluster Development and Knowledge Exchange in Supply Chain By Pradorn Sureephong; Nopasit Chakpitak; Laurent Buzon; Abdelaziz Bouras
  3. Foreign Subsidiaries in the East German Innovation System – Evidence from Manufacturing Industries By Jutta Günther; Björn Jindra; Johannes Stephan
  4. Competing for Contacts: Network Competition, Trade Intermediation and Fragmented Duopoly By Dimitra Petropoulou
  5. Investment decisions in Liberalized Electricity Markets: A framework of Peak Load Pricing with strategic firms By Gregor Zoettl
  6. Defensive strategies in the quality ladders By Ivan Ledezma
  7. Intensity of Competition and Market Structure in the Italian Banking Industry By Giannetti, C.
  8. Monopolistic Competition, International Trade and Firm Heterogeneity - a Life Cycle Perspective By Hansen, Jørgen Drud; Kvedaras, Virmantas; Nielsen, Jørgen Ulff-Møller
  9. Towards A Competitive Manufacturing Sector By Rajiv Kumar; Abhijit Sen Gupta

  1. By: Constantinescu, Madalina
    Abstract: The 21st century brings along the recognition for the necessity to understand and measure the activity of knowledge management, for which reason organizations and system organizations, together with decisional governmental factors, do their best in order to develop policies that would promote these benefits. Knowledge management (KM) implies any activity regarding the capture and the diffusion of knowledge within the organization. In our study we analyze the impacts and dimensions of KM upon the innovation and labour productivity within the organization, and how KM affects the firm’s innovative performance. A key component of knowledge management is to provide access to stored knowledge components to improve decision making and to facilitate knowledge acquisition by the user.
    Keywords: knowledge-based economy; knowledge management; knowledge; explicit and implicit knowledge; innovation; productivity; diffusion of knowledge.
    JEL: A12 N00 O32 O31 D24 L60
    Date: 2008–06–02
  2. By: Pradorn Sureephong (LIESP - Laboratoire d'Informatique pour l'Entreprise et les Systèmes de Production - Université Claude Bernard - Lyon I - Université Lumière - Lyon II - Institut National des Sciences Appliquées de Lyon, CAMT - College of Arts, Media and Technology - Chiang Mai University); Nopasit Chakpitak (CAMT - College of Arts, Media and Technology - Chiang Mai University); Laurent Buzon (LIESP - Laboratoire d'Informatique pour l'Entreprise et les Systèmes de Production - Université Claude Bernard - Lyon I - Université Lumière - Lyon II - Institut National des Sciences Appliquées de Lyon); Abdelaziz Bouras (LIESP - Laboratoire d'Informatique pour l'Entreprise et les Systèmes de Production - Université Claude Bernard - Lyon I - Université Lumière - Lyon II - Institut National des Sciences Appliquées de Lyon)
    Abstract: Industry cluster and supply chain are in focus of every countries which rely on knowledge-based economy. Both focus on improving the competitiveness of firm in the industry in the different aspect. This paper tries to illustrate how the industry cluster can increase the supply chain performance. Then, the proposed methodology concentrates on the collaboration and knowledge exchange in supply chain. For improving the capability of the proposed methodology, information technology is applied to facilitate the communication and the exchange of knowledge between the actors of the supply chain within the cluster. The supply chain of French stool producer was used as a case study to validate the methodology and to demonstrate the result of the study.
    Keywords: Knowledge engineering, Logistics, Knowledge Exchange
    Date: 2008–03–18
  3. By: Jutta Günther; Björn Jindra; Johannes Stephan
    Abstract: This paper analyses the extent of technological capability of foreign subsidiaries located in East Germany, and looks at the determinants of foreign subsidiaries’ technological sourcing behaviour. The theory of international production underlines the importance of strategic and regional level variables. However, existing empirical approaches omit by and large regional level factors. We employ survey evidence from the “FDI micro data- base” of the IWH, that was only recently made available, to conduct our analyses. We find that foreign subsidiaries are above average technologically active in comparison to the whole East German manufacturing. This can be partially explained by the industrial structure of foreign direct investment. However, only a limited share of foreign subsidiaries with R&D and/or innovation activity source technological knowledge from the East German innovation system. If a subsidiary follows a competence augmenting strategy or does local trade, it is more likely to source technological knowledge locally. The endowment of a region with human capital and a scientific infrastructure has a positive effect too. The findings suggest that foreign subsidiaries in East Germany are only partially linked with the regional innovation system. Policy implications are discussed.
    Keywords: East Germany, Regional Innovation System, Foreign Direct Investment
    JEL: O30 O38 F20
    Date: 2008–06
  4. 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 monopolistic 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: 2008–02
  5. By: Gregor Zoettl
    Abstract: In this article we analyze firms investment incentives in liberalized electricity markets. Since electricity is economically non storable, it is optimal for firms to invest in a differentiated portfolio of technologies in order to serve strongly fluctuating demand. Prior to the Liberalization of electricity markets, for regulated monopolists, optimal investment and pricing strategies haven been analyzed in the peak load pricing literature (compare Crew and Kleindorfer (1986)). In restructured electricity markets regulated monopolistic generators have often been replaced by competing and potentially strategic firms. This article aims to respond to the changed reality and model investment decisions of strategic firms in those markets. We derive equilibrium investment for strategic firms and compare to the benchmark cases of perfect competition and monopoly outcomes. We find that strategic firms have an incentive to overinvest in base-load technologies but choose total capacities too low from a welfare point of view. By fitting the framework to a specific electricity market (Germany) we are able to empirically analyze Investment choices of strategic firms, and quantify the potential for market power and its impact on generation portfolios in restructured electricity markets in the long run.
    Keywords: Investment Decisions, Technology Choice, Restructured Electricity Markets, Peak Load Pricing, Strategic Firms
    Date: 2008–05–26
  6. By: Ivan Ledezma
    Abstract: This paper studies theoretically and empirically the consequences of defensive strategies in R&D races. Using a quality ladders model we allow for endogeneous incumbent R&D advantages explained by strategies seeking to limit knowledge diffusion. Market institutions appear to be crucial to foster aggregate R&D intensity and to determine who innovates. Regulatory provisions reducing the possibilites of defensive strategies in the process of production may indeed increase the incentives to carry out R&D. This effect is more likely to be observed when the size of innovation is high. Using time-series cross-section data of manufacturing industries among 17 OECD countries we test the relationship between regulation and R&D expenditure over value added. We allow for a differentiated effect of regulation for industries producing and using ICT. The evidence is consistent with the model's predictions.
    Date: 2008
  7. By: Giannetti, C. (Tilburg University, Center for Economic Research)
    Abstract: This work tests the predictions of Sutton?s model of independent submarkets for the Italian retail banking industry. In the first part of this paper, I develop a model of endogenous mergers to evidence the relationship between firms? conduct, market entry and market structure. In the second part, I identify the submarket dimension and estimate the relationship between market size and market structure using data on bank branches. The size of the submarkets turned out to be at most provincial whereas the limiting concentration index - as argued by Sutton for industries with exogenous sunk costs - goes to zero as the market becomes larger.
    Keywords: Concentration;Truncated Poisson and Negative Binomial models;quantile regressions
    JEL: C24 D43 L11 L89
    Date: 2008
  8. By: Hansen, Jørgen Drud (Department of Economics, Aarhus School of Business); Kvedaras, Virmantas (Department of Econometric Analysis); Nielsen, Jørgen Ulff-Møller (Department of Economics, Aarhus School of Business)
    Abstract: This paper presents a dynamic international trade model based on monopolistic competition, where observed intra-industry differences at a given point in time reflect different stages of the firm’s life cycle. New product varieties of still higher quality enter the market every period rendering old varieties obsolescent in a process of creative destruction. For given technology (variety) production costs decrease after an infant period due to learning. It is shown that several patterns of exports may arise depending primarily on the size of fixed trade costs. At a given point in time firms therefore differ due to different age, although all firms are symmetric in a life cycle perspective. The paper thus offers an alternative view on firm heterogeneity compared with other recent papers, where productivity differences appear as an outcome of a stochastic process.
    Keywords: Product innovations; learning; creative destruction; firm heterogeneity; export performance
    JEL: F12 F13
    Date: 2008–05–01
  9. By: Rajiv Kumar (Indian Council for Research on International Economic Rela); Abhijit Sen Gupta (Indian Council for Research on International Economic Rela)
    Abstract: The Indian manufacturing sector has grown at an impressive average rate of 9.5 per cent annually since 2003-04. Its sustained growth is crucial for generating employment opportunities needed to absorb the rapidly expanding workforce. In this context, this paper reviews the current state of the sector and focuses on determinants of its competitiveness. The paper finds that Indian manufacturing sector exhibits a great deal of regional variation and a marked dualism between the organized and the unorganized segments in terms of both productivity and wage levels. The level of labour absorption in the organized manufacturing sector has been weak as reflected in the declining labour intensity in this sector. This does not augur well for achieving inclusive growth. We also find that although there have been significant changes in the composition of exports in the last 20 years; India is still a very small player at the global level, especially in knowledge intensive and advanced technology products. Finally, the paper explores India's potential for transforming itself into a hub of mass manufacturing. We find that the main constraints in doing so have been the low level of R&D, relative lack of skilled personnel and relatively low FDI levels.
    Keywords: manufacturing, competitiveness, mass manufacturing
    JEL: L60 O11
    Date: 2008–01

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