|
on Economics of Strategic Management |
|
Issue of 2009‒01‒03
nineteen papers chosen by Joao Jose de Matos Ferreira University of the Beira Interior |
| By: | Pradhan, Jaya Prakash |
| Abstract: | A host of strategic government policies including a process patent regime led to the rise of Indian pharmaceutical firms with significant process development capabilities. With policies getting liberalized overtime and a product patent regime in place, now firms’ survival crucially depends on their abilities to develop new products and brand creating exercise. Indian pharmaceutical firms with their inadequate product development capabilities are clearly at serious risk. In this context, an increasing number of Indian pharmaceutical firms are observed to be using acquisition as a strategy to overcome their limited innovation strength by accessing new products and their technologies, skills and new markets. Overseas acquisitions represent both challenges and opportunities for Indian pharmaceutical firms aspiring to emerge as global entities based on advance technologies. |
| Keywords: | Indian pharmaceutical industry; Outward FDI; Overseas Acquisition |
| JEL: | L65 F23 F21 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:12362&r=cse |
| By: | Michiel van Leuvensteijn (CPB Netherlands Bureau for Economic Policy Analysis); Christoffer Kok Sørensen (European Central Bank); Jacob A. Bikker (Nederlandsche Bank); Adrian van Rixtel (Banco de España) |
| Abstract: | This paper analyses the impact of loan market competition on the interest rates applied by euro area banks to loans and deposits during the 1994-2004 period, using a novel measure of competition called the Boone indicator. We find evidence that stronger competition implies significantly lower spreads between bank and market interest rates for most loan market products. Using an error correction model (ECM) approach to measure the effect of competition on the pass-through of market rates to bank interest rates, we likewise find that banks tend to price their loans more in accordance with the market in countries where competitive pressures are stronger. Further, where loan market competition is stronger, we observe larger bank spreads (implying lower bank interest rates) on current account and time deposits. This would suggest that the competitive pressure is heavier in the loan market than in the deposit markets, so that banks compensate for their reduction in loan market income by lowering their deposit rates. We observe also that bank interest ratesin more competitive markets respond more strongly to changes in market interest rates. These findings have important monetary policy implications, as they suggest that measures to enhance competition in the European banking sector will tend to render the monetary policy transmission mechanism more effective. |
| Keywords: | Monetary transmission, banks, retail rates, competition, panel data |
| JEL: | D4 E50 G21 L10 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:0828&r=cse |
| By: | Sofka, Wolfgang; Grimpe, Christoph |
| Abstract: | Firms compete increasingly in an open innovation environment. Search strategies for external knowledge become therefore crucial for firm success. Existing research differentiates between the breadth (diversity) and depth (intensity) with which firms pursue external knowledge source. A consensus exists that resource constrains force firms to balance both dimensions. However, relatively little is known on how managers can selectively strengthen one of these dimensions. We argue conceptually that the breadth and depth of a search strategy depends upon the nature of a firm’s absorptive capacity (i.e. whether they are built through internal or external R&D activities) and the munificence of its innovation environment. We test these hypotheses empirically for a large sample of more than 8,300 firms from 12 European countries. Our empirical results show that in-house R&D strengthens the depth of a firm’s search strategy while external R&D activities (e.g. contract research) increase its breadth. Moreover, we find that scarce innovation environments favor deep search strategies while breadth is more prevalent in munificent environments. We develop targeted management recommendations based on these results. |
| Keywords: | Open innovation, absorptive capacity, search strategies |
| JEL: | L60 O32 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:7418&r=cse |
| By: | Rammer, Christian; Schmiele, Anja |
| Abstract: | This paper investigates the drivers and effects of the internationalisation of innovation activities in SMEs based on a large data set of German firms covering the period 2002-2007. We look at different stages of the innovation process (R&D, design, production and sales of new products, and implementation of new processes) and explore the role of internal resources, home market competition and innovationrelated location advantages for an SME’s decision to engage in innovation activities abroad. By linking international innovation activities to firm growth in the home market we try to identify likely internationalisation effects at the firm level. The results show that export experience and experience in knowledge protection are highly important for international innovation activities of SMEs. Fierce home market competition turns out to be rather an obstacle than a driver. High innovation costs stimulate internationalisation of non-R&D innovation activities, and shortage of qualified labour expels production of new products. R&D activities abroad and exports of new products spur firm growth in the home market while there are no negative effects on home market growth from shifting production of new products abroad. |
| Keywords: | Internationalisation of Innovation, Globalisation, SMEs, Effects of Innovation, Absorptive Capacities, Market Structure |
| JEL: | F23 L22 L25 O31 O32 O47 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:7442&r=cse |
| By: | Pradhan, Jaya Prakash; Singh, Neelam |
| Abstract: | In recent years developing countries have emerged as significant participants in the OFDI (outward foreign direct investment) activities having the strategic asset seeking motive. Such OFDI which is assets exploiting cum augmenting involves potential two way cross border knowledge flows. This study examines these issues for the Indian automotive industry that is currently transnationalizing at a rapid rate in terms of both exports and OFDI. The study traces the technological capability building and several dimensions of OFDI in this industry. The case studies of two major automotive Groups highlight their competence building, and knowledge seeking operations. This study undertakes a quantitative analysis of the influence of OFDI activities on the in‐house (domestic) R&D performance of Indian automotive firms during 1988–2008. As expected, the favourable impacts on R&D intensity appear to be stronger for developed vs. developing host nations, and for joint venture vs. wholly‐owned ownership OFDI. The study concludes with suggestions to promote particularly the strategic asset enhancing OFDI. |
| Keywords: | OFDI; Strategic Assets‐seeking FDI; R&D; Automotive Industry |
| JEL: | F23 L62 O32 F21 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:12332&r=cse |
| By: | Pradhan, Jaya Prakash Pradhan; Singh, Neelam |
| Abstract: | In recent years developing countries have emerged as significant participants in the OFDI (outward foreign direct investment) activities having the strategic asset seeking motive. Such OFDI which is assets exploiting cum augmenting involves potential two way cross border knowledge flows. This study examines these issues for the Indian automotive industry that is currently transnationalizing at a rapid rate in terms of both exports and OFDI. The study traces the technological capability building and several dimensions of OFDI in this industry. The case studies of two major automotive Groups highlight their competence building, and knowledge seeking operations. This study undertakes a quantitative analysis of the influence of OFDI activities on the in‐house (domestic) R&D performance of Indian automotive firms during 1988–2008. As expected, the favourable impacts on R&D intensity appear to be stronger for developed vs. developing host nations, and for joint venture vs. wholly‐owned ownership OFDI. The study concludes with suggestions to promote particularly the strategic asset enhancing OFDI. |
| Keywords: | OFDI; Strategic Assets‐seeking FDI; R&D; Automotive Industry |
| JEL: | F23 L62 O32 F21 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:12325&r=cse |
| By: | António B. Moniz (IET, FCT-Universidade Nova de Lisboa); Margarida R. Paulos (IET, FCT-Universidade Nova de Lisboa) |
| Abstract: | The clothing sector in Portugal is still seen, in many aspects as a traditional sector with some average characteristics, such as: low level of qualifications, less flexible labour legislation and stronger unionisation, very low salaries and low capability of investment in innovation and new technology. Is, nevertheless, a very important sector in terms of labour market, with increased weight in the exporting structure. Globalisation and delocalisation are having a strong impact in the organisation of work and in occupational careers in the sector. With the pressure of global competitiveness in what concerns time and prices, very few companies are able to keep a position in the market without changes in organisation of work and workers. And those that can perform good responses to such challenges are achieving a better economical stability. The companies have found different ways to face this reality according to size, capital and position. We could find two main paths: one where companies outsource a part or the entire production to another territory (for example, several manufacturing tasks), close and/or dismissal the workers. Other path, where companies up skilled their capacities investing, for example, in design, workers training, conception and introduction of new or original products. This paper will present some results from the European project WORKS – Work organisation and restructuring in the knowledge society (6th Framework Programme), focusing the Portuguese case studies in several clothing companies in what concern implications of global context for the companies in general and for the workers in particular, in a comparative analysis with some other European countries. |
| Keywords: | Clothing Industry; Restructuring; Work; Knowledge Society |
| JEL: | A14 E23 F01 F23 J61 L22 L67 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:ieu:wpaper:09&r=cse |
| By: | Garrette, Bernard; Dussauge, Pierre; Castaner, Xavier |
| Abstract: | This paper investigates why firms choose to undertake product expansion through alliances with competitors rather than on their own. |
| Keywords: | alliance; governance; resource; competence; expansion; growth |
| JEL: | D21 D92 |
| Date: | 2008–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:heccah:0907&r=cse |
| By: | Alex Coad; Werner Hölzl (WIFO) |
| Abstract: | This paper studies the serial autocorrelation of annual growth rates in employment for selected Austrian service industries over a 30-year period using quantile regression techniques. The autocorrelation of growth rates provides important information on firms growth processes. We find that the growth patterns of micro firms are strikingly different from the growth patterns of small, medium-sized and larger firms. First, we do find a positive dependency of growth on size for growing micro firms, while this relationship is negative for the other size groups. Second, growing micro firms are subject to negative autocorrelation of annual growth rates making sustained growth a very rate occurrence, while larger growing firms usually display a positive autocorrelation suggesting that high growth episodes of larger firms stretch over a longer time horizon. This indicates that non-convex adjustment costs leading to lumpy growth are much more important for micro firms than for large firms. Furthermore, we find that the autocorrelation patterns are asymmetric with regard to decline and growth. |
| Keywords: | serial correlation, firm growth, service sector, quantile regression, Austria |
| Date: | 2008–10–27 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2008:i:332&r=cse |
| By: | Bronwyn H. Hall; Francesca Lotti; Jacques Mairesse |
| Abstract: | Innovation in SMEs exhibits some peculiar features that most traditional indicators of innovation activity do not capture. Therefore, in this paper, we develop a structural model of innovation which incorporates information on innovation success from firm surveys along with the usual R&D expenditures and productivity measures. We then apply the model to data on Italian SMEs from the "Survey on Manufacturing Firms" conducted by Mediocredito-Capitalia covering the period 1995-2003. The model is estimated in steps, following the logic of firms' decisions and outcomes: in the first, R&D intensity is linked to a set of firm and market characteristics. We find that international competition fosters R&D intensity, especially for high-tech firms. Firm size, R&D intensity, along with investment in equipment enhances the likelihood of having both process and product innovation. Both these kinds of innovation have a positive impact on firm's productivity, especially process innovation. Among SMEs, larger and older firms seem to be less productive. |
| JEL: | D24 L25 L26 O30 O32 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14594&r=cse |
| By: | Grimpe, Christoph; Hussinger, Katrin |
| Abstract: | Literature has identified formal and informal channels in university technology transfer. While formal technology transfer typically involves a legal contract on a patent or on collaborative research activities, informal transfer channels refer to personal contacts and hence to the tacit dimension of knowledge transfer. Research is, however, scarce regarding the interaction of formal and informal transfer mechanisms. In this paper, we analyze whether these activities are mutually reinforcing, i.e. complementary. Our analysis is based on a comprehensive dataset of more than 2,000 German manufacturing firms. We perform direct and indirect tests for the complementarity of formal and informal technology transfer. Our results confirm a complementary relationship: using both transfer channels contributes to higher innovation performance. The management of the firm should therefore strive to maintain close informal relationships with universities to realize the full potential of formal technology transfer. |
| Keywords: | University technology transfer, complementarity, innovation performance |
| JEL: | L24 O31 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:7422&r=cse |
| By: | Christian Genthon (LEPII - Laboratoire d'Économie de la Production et de l'Intégration Internationale - CNRS : UMR5252 - Université Pierre Mendès-France - Grenoble II) |
| Abstract: | This article deals with the internationalization process in the computer services industry. It discusses two aspects of internationalization: the relationship between international diversification and firm performances and the new process of offshoring part of the business to low-cost countries. Analysis is based on a proprietary database covering data for the industry's 45 largest companies for the past nine years (1998-2006). It shows that product internationalization has not generated substantial profits for firms that have given priority to international growth. Non sequitur, though precise data is lacking, it seems that it has become common practice over the last five years to outsource parts of the business to subsidiaries in low-cost countries. We do not find any relation between offshoring and profitability or internationalization. The internationalization of process and product seems to be disconnected. |
| Keywords: | computer industry ; services ; internationalization |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00348198_v1&r=cse |
| By: | Czarnitzki, Dirk; Etro, Federico Gabriele; Kraft, Kornelius |
| Abstract: | We develop a simple model of competition for the market that shows that, contrary to the Arrow view, endogenous entry threat in a market induces the average firm to invest less in R&D and the incumbent leader to invest more. We test these predictions with a Tobit model based on a unique dataset and survey for the German manufacturing sector (the Mannheim Innovation Panel). We confirm the empirical validity of our predictions and perform a number of robustness test with instrumental variables. |
| Keywords: | R&D, Entry, Endogenous market structures, Leadership |
| JEL: | O31 O32 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:7421&r=cse |
| By: | Seißer, Goetz |
| Abstract: | This paper addresses the reduction of market failure under imperfect competition. It proposes a taxscheme that provides firms with an incentive to forgo their market power: Firms optimize after-tax profits. Now simply consider a firm´s gross profit margin the unique tax-rate it is charged on absolute profits. In theory the firm´s tax-rate would be the mark-up over marginal costs, the firm´s Lerner index. As a result every firm determines its own tax-rate by setting its price and incurring costs. This creates a new trade off for firms between a low tax-burden and the exercising of market power. Welfare for society increases since firms with market power choose a lower price and produce a quantity closer or equal to social optimum; at the original monopolistic price-level they can increase their profits by lowering their tax-burden. Essentially the tax-condition does not seem to distort profit incentives or markets; under perfect competition the tax-rate would be zero. Thus, it is clear that the tax only takes effect when markets work inefficiently and its countervailing nature subsequently helps to remedy inefficiencies of imperfectly competitive markets. |
| Keywords: | Imperfect competition, market power, tax-condition, monopoly, welfare, efficiency |
| JEL: | D00 D21 D40 H21 H25 H26 P11 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:7404&r=cse |
| By: | Binz, Hanna L.; Czarnitzki, Dirk |
| Abstract: | This study investigates how local milieus foster innovation success in firms. We complement the common practice of linking firm performance indicators to regional characteristics with survey evidence on the perceived importance of locational factors. While the former approach assumes that location characteristics affect all firms in the same way, the survey allows us to model how firms judge the attractiveness of locations using a heterogeneous set of criteria. It turns out that the availability of highly skilled labor and the proximity to suppliers matter for firms’ innovation performance. Interestingly, location factors obtained from the survey provide a more accurate explanation of how local milieus facilitate innovation. |
| Keywords: | Innovation performance, R&D, location factors, Flanders |
| JEL: | O31 O38 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:7440&r=cse |
| By: | Selvarasu A.; José Filipe; Manuel A. Ferreira; Manuel Coelho |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp572008&r=cse |
| By: | Almuhanad Melhim; Erik J. O'Donoghue; C. Richard Shumway (School of Economic Sciences, Washington State University) |
| Abstract: | Recent consolidation in agriculture has shifted production toward fewer but larger farms, reshaping business relationships between farmers, processors, input suppliers, and local communities. We analyze growth and diversification of U.S. corn, wheat, apple, and beef, farms by examining longitudinal changes in ten size cohorts through three successive censuses. We fail to reject Gibrat’s law in apple and wheat industries and the mean reversion hypothesis in beef and corn industries. Apple and wheat farms diversify over time. Findings suggest that scale economies diminish for large farms across all four industries and scope economies dominate scale economies for large apple and wheat farms. |
| Keywords: | firm growth, diversification, scale economies, scope economies, Gibrat’s law, longitudinal data |
| JEL: | Q12 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:wsu:wpaper:shumway-3&r=cse |
| By: | Luiz Carlos Bresser-Pereira |
| Abstract: | O Crescimento Econômico é Quase que Invariavelmente o Resultado de uma Estratégia Nacional De Desenvolvimento. o Efetivo Desenvolvimento Econômico Ocorre Historicamente Quando a Nação é Uma Nação Forte, e as Diferentes Classes Sociais são Capazes de Cooperar e Formular uma Efetiva Estratégia Para Promover o Crescimento e Enfrentar a Competição Internacional. uma Estratégia Nacional De Desenvolvimento é Essencialmente uma Instituição ou um Conjunto de Instituições que Estimulam A Acumulação de Capital e o Progresso Técnico. Segue uma Discussão das Principais Características de Tais Estratégias. o Artigo Finaliza com uma Análise dos Conflitos ou Tensões Envolvidos nas Estratégias Nacionais de Desenvolvimento. |
| Date: | 2008–10–16 |
| URL: | http://d.repec.org/n?u=RePEc:fgv:eesptd:161&r=cse |
| By: | Khalid Bichou |
| Abstract: | The primary aim of maritime security assessment models is to assess the level of security within and across the maritime network. When managing risk through legislation, regulatory assessment models are used to assess risk levels and examine the impact of policy options, usually in terms of the costs and benefits of a regulatory proposal. This paper reviews the development, application and adequacy of existing risk assessment and management models to maritime and port security. In particular, we examine the problematical issues of security perception, value and impact, and discuss the limitations of the current regulatory framework in providing an integrated and effective approach to risk assessment and management, including for supply chain security. |
| Date: | 2008–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaaa:2008/20-en&r=cse |