nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2008‒09‒20
seventeen papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. Internationalization trajectories - a crosscountry comparison: Are large Chinese and Indian companies different? By Fortanier, Fabienne; Tulder, Rob van
  2. Entrepreneurship and Innovation in Functional Regions By Karlsson, Charlie; Johansson, Börje; Stough, Roger
  3. Cluster Innovation Along the Industry Lifecycle By Andreas Eisingerich; Oliver Falck; Stephan Heblich; Tobias Kretschmer
  4. India's Outward Foreign Direct Investments in Steel Industry in a Chinese Comparative Perspective By Kumar, Nagesh; Chadha, Alka
  5. Intellectual Property Rights and the Knowledge Spillover Theory of Entrepreneurship By Zoltan J. Acs; Mark Sanders
  6. Internationalization and Technological Catching Up of Emerging Multinationals: A Case Study of China's Haier Group By Duysters, Geert; Jacob, Jojo; Lemmens, Charmianne; Hu, Jintian
  7. Ergonomics Contributions to Company Strategies By Dul, J.; Neumann, W.P.
  8. Locational Conditions, Cooperation, and Innovativeness: evidence from research and company spin-offs By Lejpras, Anna; Stephan, Andreas
  9. Getting Pole Position - Pre reform research strategies in the humanities at Swedish universities By Geschwind, Lars; Larsson, Karin
  10. From Trait and context to creativity at work: feedback-seeking behavior as a self regulation strategy for creative performance By De Stobbeleir, K.; Ashford, S.; Buyens, D.
  11. Strategic Interaction Among Heterogeneous Price-Setters In An Estimated DSGE Model By Olivier Coibion; Yuriy Gorodnichenko
  12. Science and Technology-based Regional Entrepreneurship in the Netherlands: Building Support Structures for Business Creation and Growth Entrepreneurship By Hulsink, W.; Suddle, K.; Hessels, S.J.A.
  13. Technological and geographical proximity effects on knowledge spillovers:evidence from us patent citations By Luigi Aldieri
  14. What does it Mean Conceptually that Universities Compete? By Deiaco, Enrico; Homén, Magnus; McKelvey, Maureen
  15. Strategic Play and Risk Aversion in One-Shot Normal-Form Games: An Experimental Study By Asen Ivanov
  16. Applying Revenue Management to the Reverse Supply Chain By Ferguson, M.; Fleischmann, M.; Souza, G.C.
  17. Vertical Integration and Costly Network Industries By Nigel Driffield; Sarmistha Pal

  1. By: Fortanier, Fabienne (University of Amsterdam Business School); Tulder, Rob van (Rotterdam School of Management, Erasmus University Rotterdam)
    Abstract: This paper explores whether the internationalization trajectories - patterns over time in the level, pace, variability and temporal concentration of international expansion - of large firms from China and India are fundamentally different from those of developed country firms. A longitudinal cross-country comparative study of 256 large firms for the 1990-2004 period shows that, although internationalization trajectories of large and leading Chinese and Indian firms are indeed different, there are also considerable similarities between established developed country firms and the new firms from emerging markets, not in the least because they often interact within the same sector
    Keywords: Internationalization trajectories, Transnationality Index (TNI), longitudinal research, crosscountry comparison
    JEL: F21 F23 M19
    Date: 2008
  2. By: Karlsson, Charlie (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Johansson, Börje (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Stough, Roger (George Mason University)
    Abstract: The purpose of this paper is to discuss the role of entrepreneurship and innovations for economic development in functional regions and in doing that highlighting the different conditions offered for entrepreneurship and innovations in functional regions of various sizes. In conclusion, the conditions for entrepreneurship and innovations vary substantially between functional regions, since the necessary knowledge resources tend to be local and to cluster in certain regions and not others. Functional regions with a high capacity to generate new ideas, create knowledge, organizational learning and innovations are characterized as learning regions. Large functional regions offer a large market potential and a superior accessibility to knowledge and knowledge resources and they will further develop their creative capabilities due to an accumulation of innovative and entrepreneurial knowledge.
    Keywords: Entrepreneurship; Innovations; Regional development; R&D; Knowledge Sources; Knowledge Flows; Knowledge Creation
    JEL: D21 M13 R10
    Date: 2008–09–09
  3. By: Andreas Eisingerich (Tanaka Business School, Imperial College London); Oliver Falck (Ifo Institute for Economic Research and CESifo); Stephan Heblich (Max Planck Institute of Economics); Tobias Kretschmer (Institute for Communication Economics, LMU Munich)
    Abstract: Industrial clusters develop regionally along the industry's lifecycle and typically exist over many product generations. In order to maintain their innovativeness, they have to develop and adjust along the industry lifecycle. We conduct 142 depth face-to-face interviews in clusters across two continents to examine the drivers of a cluster's innovativeness along the industry lifecycle. The results from our interviews suggest that the impact of key drivers of cluster innovativeness change depending on the stage of a cluster's underlying industry lifecycle. Classifying clusters as either being adolescent (information technology, biotechnology) or mature (automotive, chemicals), our regression analyses show a changing influence of cluster patterns along the industry lifecycle on a firm's innovativeness. Specifically, we analyze the impact of interorganizational network strength, openness, university collaboration, and intrapreneurship on radical innovation across adolescent and mature clusters. Implications for research and policy makers are discussed.
    Keywords: Cluster, Industry Lifecycle, Innovation
    JEL: O18 R12 L6
    Date: 2008–09–11
  4. By: Kumar, Nagesh (Research and Information Systems); Chadha, Alka (Department of South Asian Studies, National University of Singapore)
    Abstract: Indian and Chinese enterprises have emerged as important outward investors in recent times with their involvement in a number of prominent Greenfield investments and acquisitions. The theory of international business posits that the ownership of some unique advantages having a revenue generating potential abroad combined with the presence of internalization and locational advantages leads to outward FDI. Conventional MNEs based in the industrialized countries have grown on the strength of ownership advantages derived from innovatory activity that is largely concentrated in these countries. It examines the case of steel industry that has become an important sector of overseas activity for Chinese and Indian companies with a string of major acquisitions of foreign MNEs for acquiring footprints and natural resources in order to identify the sources of ownership advantages and strategies of outward investments from emerging countries.
    Keywords: FDI outflows, steel, India
    JEL: O1 L61
    Date: 2008
  5. By: Zoltan J. Acs (George Mason University and Max Planck Institute of Economics); Mark Sanders (Utrecht School of Economics and Max Planck Institute of Economics)
    Abstract: We develop a model in which stronger protection of intellectual property rights has an inverted U-shaped effect on innovation. Intellectual property rights protection allows the incumbent firms to capture part of the rents of commercial exploration that would otherwise accrue to the entrepreneurs. Stronger patent protection will increase the incentive to do R+D and generate new knowledge. This has a positive impact on entrepreneurship and innovation. However, after some point, further strengthening patent protection will reduce the returns to entrepreneurship sufficiently to reduce overall economic growth.
    Keywords: Intellectual Property Rights, Endogenous Growth, Entrepreneurship, Incentives, Knowledge Spillovers, Rents
    JEL: J24 L26 M13 O3
    Date: 2008–09–11
  6. By: Duysters, Geert (UNU-MERIT); Jacob, Jojo (UNU-MERIT); Lemmens, Charmianne (UNU-MERIT); Hu, Jintian (Wuhan University of Technology)
    Abstract: In recent years, a number of firms from Asia and Latin America have been internationalizing their businesses to access new markets and to acquire new technology. This follows similar attempts only a few years earlier by leading firms from countries such as Korea and Taiwan. Much research has gone during the last two decades into understanding the success of Korean and Taiwanese firms. In this paper we carry out a case study of the Haier group—one of the most promising global enterprises emerging out of mainland China. We explain the need for recognizing some important differences in the early stages of growth between emerging MNCs today and MNCs from Korea and Taiwan. Unlike firms from the latter countries, globalizing firms of recent times during their early years of existence had little incentives to improve their technological competence. Furthermore, they generally had a one-off relationship with international technology suppliers that further prevented the regular upgrading of their technological base. Nevertheless these firms have shown themselves to be adept in facing up to the challenges of globalization by adopting innovative technological and business strategies. What are the distinctive features of these strategies? How useful are these strategies for long-run growth? What lessons can other firms and governments learn from these experiences? We hope to offer some preliminary answers to these important questions. Case studies like ours can also contribute towards developing newer frameworks for a better understanding of the internationalization of businesses in modern times.
    Keywords: emerging MNCs, internationalization, technology strategies, alliances, technological catching up, Haier group, China, MNEs
    JEL: L24 L25 O19 O32 M13
    Date: 2008
  7. By: Dul, J.; Neumann, W.P. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: Managers usually associate ergonomics with occupational health and safety and related legislation, not with business performance. In many companies, these decision makers seem not to be positively motivated to apply ergonomics for reasons of improving health and safety. In order to strengthen the position of ergonomics and ergonomists in the business and management world, we discuss company strategies and business goals to which ergonomics could contribute. Conceptual models are presented and examples are given to illustrate: 1) the present situation in which ergonomics is not part of regular planning and control cycles in organizations to ensure business performance, and 2) the desired situation in which ergonomics is an integrated part of strategy formulation and implementation. In order to realize the desired situation, considerable changes must take place within the ergonomics research, education and practice community by moving from a health ergonomics paradigm to a business ergonomics paradigm, without losing the health and safety goals.
    Keywords: corporate strategy;system performance;paradigm shift
    Date: 2008–09–11
  8. By: Lejpras, Anna (DIW Berlin); Stephan, Andreas (CESIS and JIBS)
    Abstract: This paper has two goals. First, it analyzes the extent to which the innovativeness of spin-offs, either born from a research facility or from another company, is influenced by locational conditions. Second, it provides evidence on how important local cooperation links are in comparison to nonlocal ones. Using a sample of approximately 1,500 East German firms from knowledge-intensive sectors, we estimate a structural equation model applying the partial least squares method. We find that proximity to local research institutes and universities is the most influential factor for the cooperation intensity of spin-offs. Furthermore, the higher the cooperation intensity, the greater the innovativeness of a firm. Moreover, the results indicate that it is not the local but the nonlocal cooperation ties that are more conducive to innovativeness of research spin-offs. The findings also highlight that the innovativeness of research spin-offs with solely local links is strongly depends on support from various authorities and institutions.
    Keywords: Research and Company Spin-Offs; Locational Conditions; Cooperation Intensity; Innovativeness; Structural Equation Modeling; Partial Least Squares Approach
    JEL: M13 O18
    Date: 2008–09–09
  9. By: Geschwind, Lars (SISTER); Larsson, Karin (SISTER)
    Abstract: Across Europe new forms of research funding and management arrangements are established. European higher education institutions (HEIs) are increasingly facing global competition and they are responsive to many stakeholders. As a consequence of more deregulated HE systems, performance based funding, strategic management and more extensive evaluation and follow up-systems have replaced the former state directed systems. Currently, also the Swedish HE sector is in a time of change. A number of state inquiries have reviewed the Swedish HE research landscape, including the resource allocation system and the academic career system. The implications of these inquiries have the potential to restructure the entire sector. Some of the issues will be presented in a government bill this fall, while other reforms are further ahead. The phase we study could thus be described as a pre-reform or policy formation phase. This paper explores research strategies in the Humanities at a selection of Swedish HEIs. The aim of the paper can be articulated in one straightforward question: in a period of pre-reform, which strategies are used by ten Swedish HEIs to increase research quality in the Humanities? The methodology used is primarily qualitative, including email enquiry, interviews and documentary studies on ten Swedish Universities which are the main producers of Humanities research in Sweden.
    Keywords: higher education institutions; university strategy
    JEL: I21 I23
    Date: 2008–09–09
  10. By: De Stobbeleir, K.; Ashford, S.; Buyens, D. (Vlerick Leuven Gent Management School)
    Abstract: Using a sample of 456 supervisor-employee dyads from 4 organizations, this study examined how employees use feedback seeking as a self-regulation strategy to manage their creative performance. As hypothesized, employees’ cognitive style and perceived organizational support for creativity affected two patterns of their feedback seeking, i.e. their tendency to inquire for feedback from various sources and their propensity to monitor their environment for indirect feedback cues. Feedback inquiry from various sources further related to supervisor ratings of employee creative performance. These results highlight the importance of studying employees’ self-regulatory behaviors in the creative process and support the proposition that feedback seeking is not only a strategy that facilitates individual adaptation, but also an individual resource that can help individuals to achieve creative outcomes.
    Keywords: self-regulation, feedback-seeking behavior, employee creativity, cognitive style, perceived organizational support for creativity.
    Date: 2008–09–09
  11. By: Olivier Coibion; Yuriy Gorodnichenko
    Abstract: We consider a DSGE model in which firms follow one of four price-setting regimes: sticky prices, sticky-information, rule-of-thumb, or full-information flexible prices. The parameters of the model, including the fractions of each type of firm, are estimated by matching the moments of the observed variables of the model to those found in the data. We find that sticky-price firms and sticky-information firms jointly account for over 95% of firms in the model, with the two receiving approximately equal shares. We compare the performance of our hybrid model to pure sticky-price and sticky-information models along various dimensions, including monetary policy implications.
    JEL: E3 E5
    Date: 2008–09
  12. By: Hulsink, W.; Suddle, K.; Hessels, S.J.A. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: In this contribution we develop a theoretical framework derived from the national system of innovation literature and the subsequent criticisms voiced by regional scientists and industry/technology experts who emphasize the importance of the intermediate subnational and sectoral levels to analysing science- and technology-based regional entrepreneurship in the Netherlands. The national system of innovation of the Netherlands, and its specifics and peculiarities, and the country’s general entrepreneurship policy, and the most important policy and support initiatives are subsequently discussed. Based on a desire to overcome the knowledge paradox between fundamental research and market needs and on the recognition that the Netherlands lags behind other countries when it comes to innovative entrepreneurship, various changes and initiatives were recently introduced in the Netherlands. The impression is of an overambitious national government with numerous programmes, schemes and agencies involved, sometimes working with each other but at other times separately as well, and its effectiveness can be questioned. Serious paperwork and preparation is involved in the participation in most programes and, together with the complexity of these programmes and policies, small and young entrepreneurs are neither informed, ready or well-equipped; some of them are not even interested in participating in those schemes.
    Keywords: system of innovation;science & technology policy;the Netherlands;regional entrepreneurship;high-growth entrepreneurship;universities;knowledge transfer
    Date: 2008–08–05
  13. By: Luigi Aldieri (University of Naples Parthenope & Université Libre de Bruxelles, DULBEA-CERT)
    Abstract: The purpose of this paper is to investigate the pattern of knowledge flows as indicated by patent citations. In order to compute the technological proximity, we have followed the methodology developed by Jaffe (1986), where a technological vector is based on the distribution of patents of each firm across technology classes. As far as the geographic proximity is concerned, we have used the latitude and the longitude coordinates of the city in which each firm is located. The empirical results suggest that the effects of proximity variables on knowledge flows are rather differentiated.
    Keywords: Innovation, Knowledge Spillovers, Technology Transfer, Patent Citations.
    JEL: F1 F2 O3
    Date: 2008–09
  14. By: Deiaco, Enrico (SISTER); Homén, Magnus (Chalmers Institute of Technology); McKelvey, Maureen (Chalmers Institute of Technology)
    Abstract: This article addresses the issue of how and why European universities are learning to compete, in a situation where the national institutional context and sectoral conditions are undergoing transformation. European universities – from top leaders, faculties, research groups and individual employees – are increasingly forced to explain to many stakeholders about how, whether, and why their scientific knowledge and educational programmes are relevant to society or not. For example, if universities are not contributing to public and private goods, why should society continue providing resources? Why should students pay for education, if the individual returns are too low? Why should companies and private foundations pay for research, if the results are not directly relevant to their goals? How can the efficiency and productivity of the university be improved – and which metrics can be used to demonstrate that those goals have been met? What are the dilemmas and trade-offs that this new competitive regime imposes on the functioning of universities and of society? These are the types of questions currently raised within universities in Continental Europe and Nordic countries, and ones that university leaders, faculty and staff will have to answer. Or else, they should raise new types of questions and perspectives about the role of the university in society.universities now face clear demands of producing immediately usefulness knowledge to students, businesses and society (enhanced amongst other by the Bologna process). The pressures on the university to quickly respond to societal and industrial demands have been more forcefully articulated in recent years. If these organizations wish to retain the traditional values of scholarship, they will need to do so, in parallel with understanding – and changing – their selection environment in the future. We focus upon the competition aspect from a Schumpeterian view, in order to draw out the logical conclusions but we do not focus upon whether those outcomes are desirable or negative. We choose this focus because we know that universities play major roles in the knowledge society, and current debates within the EU indicate that we will see additional major changes in the national institutional context and global markets. The article turns to more abstract questions, such as whether competition exists amongst universities and if so, what are the major trends and future outcomes of this shift from a social institution to a knowledge business. Thus, do universities really compete? And if so, how do they compete? And over what?
    Keywords: universities; competition
    JEL: I21 I23
    Date: 2008–09–09
  15. By: Asen Ivanov (Department of Economics, VCU School of Business)
    Abstract: Based on subjects’ play and stated beliefs in ten one-shot normal-form games, we study behavior along the two general dimensions “naive vs. strategic” and “risk neutral vs. risk averse”. We also investigate how behavior varies depending on whether (A) subjects play without interference from belief elicitation, (B) subjects state beliefs while playing, or (C) subjects choose between lottery tickets instead of between actions in a game. With our games and graduate subjects, we find that under (A) a small minority of subjects is naive and a minority is risk neutral. However, these findings are not robust to changing the games or the subject population. Regarding the comparative statics across (A), (B) and (C), we find that naive behavior diminishes from (A) to (B) to (C) and that considerably more subjects are risk neutral under (B) than under (A) or (C). The latter is interpreted in terms of ambiguity aversion.
    Keywords: games, experiments, beliefs, risk aversion, ambiguity aversion
    JEL: C72 C92 C51 D81 D84
    Date: 2008–09
  16. By: Ferguson, M.; Fleischmann, M.; Souza, G.C. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: We study the disposition decision for product returns in a closed-loop supply chain. Motivated by the asset recovery process at IBM, we consider two disposition alternatives. Returns may be either refurbished for reselling or dismantled for spare parts. Reselling a refurbished unit typically yields higher unit margins. However, demand is uncertain. A common policy in many firms is to rank disposition alternatives by unit margins. We show that a revenue management approach to the disposition decision which explicitly incorporates demand uncertainty can increase profits significantly. We discuss analogies between the disposition problem and the classical airline revenue management problem. We then develop single period and multi-period stochastic optimization models for the disposition problem. Analyzing these models, we show that the optimal allocation balances expected marginal profits across the disposition alternatives. A detailed numerical study reveals that a revenue management approach to the disposition problem significantly outperforms the current practice of focusing exclusively on high-margin options, and we identify conditions under which this improvement is the highest. We also show that the value recovered from the returned products critically depends on the coordination between forward and reverse supply chain decisions.
    Keywords: remanufacturing;revenue management;spare parts inventory
    Date: 2008–08–21
  17. By: Nigel Driffield; Sarmistha Pal
    Abstract: The present paper examines the capital structure adjustment dynamics of listed non-financial corporations in seven East Asian countries during 1994-2002. Compared to firms in the least affected countries, average leverages were much higher among firms in the worst affected countries while the average speeds of adjustment were lower. This general ranking is robust to various alternative specifications and sample selections. We argue that this pattern is closely linked to weaknesses in regulatory environment and lack of access to alternative sources of finance in the worst affected countries.
    Date: 2008–03

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