nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2009‒01‒17
ten papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. The Relationship Between Environmental Efficiency and Manufacturing Firm’s Growth By Massimiliano Mazzanti; Giulio Cainelli; Roberto Zoboli
  2. Towards a Dynamic Concept of Alliance Capability By Sluyts K.; Martens R.; Matthyssens P.
  3. Culture and the Survival of UK Independent Games Software Firms By Denise Tsang
  4. Organizing High-Tech R&D - Secrets of Successful Innovation Alliances By Elad Harison; Heli Koski
  5. When a good science base is not enough to create competitive industries: Lockin and inertia in Russian systems of innovation By Irina Jormanainen; Rajneesh Narula
  6. Product innovation and renewal: foreign firms and clusters in Belgium By Filip De Beule; Ilke Van Beveren
  7. Managerial Practices, Performance and Innovativeness: Some Evidence from Finnish Manufacturing By Heli Koski; Luigi -Mäkinen Marengo
  8. Vertical Contracts between Airports and Airlines: is there a Trade-off between Welfare and Competitiveness? By Cristina Barbot
  9. The Impact of Regional Absorptive Capacity on Spatial Knowledge Spillovers By Andrea Caragliu; Peter Nijkamp
  10. EFFICIENCY, TECHNOLOGICAL PROGRESS AND REGIONAL COMPARATIVE ADVANTAGE: A Study of Organised Manufacturing Sector in India By Mukherjee, Dipa; Majumder, Rajarshi

  1. By: Massimiliano Mazzanti (University of Ferrara); Giulio Cainelli (University of Bari); Roberto Zoboli (Catholic University of Milan & CERIS CNR)
    Abstract: This paper investigates the empirical link between emission intensity and economic growth, using a very large data set of 61,219 Italian manufacturing firms over the period 2000-2004. As a measure of lagged environmental performance (efficiency) at firm level we exploit NAMEA sector for CO2, NOx, SOx data over 1990-1999. The paper tests the extent to which (past) environmental efficiency/intensity, which is driven by structural features and firm strategic actions, including responses to policies, influences firms growth. Our results show, first, a typical trade off generally appearing for the three core environmental emissions we analyse: lower environmentally efficiency in the recent past allows higher degrees of freedom to firms and relax the constraints for growth, at least in this short/medium term scenario. Nevertheless, the size of the estimated coefficients is not large. Trade off are significant for two emission indicators out of two, but quite negligible in terms of impacts, besides the case of CO2. For example, growth is reduced by far less than 0.1% in association to a 1% increase of environmental efficiency. Environmental efficiency does not seem a primary cost factor and constraint to growth if compared to other factors affecting firm targets and firm competitiveness. In addition, non-linearity seems to characterise the economic growth-environmental performance relationship. Signals of inverted U shape appears: this may be a signal that both firm strategies and recent policy efforts are affecting the dynamic relationship between environmental efficiency and economic productivity, turning it from an usual trade off to a possible joint complementary/co-dynamics, where bad environmental performances hamper firm growth and investments in greener technologies may be associated to positive economic performances of firms and sectors.
    Keywords: Firm growth, Manufacturing, Emission intensity, Economic performance, Environmental performance
    JEL: C23 D21 O32 Q55
    Date: 2008–12
  2. By: Sluyts K.; Martens R.; Matthyssens P.
    Abstract: This paper has a threefold purpose. First, we offer a literature review on alliance capability based on strategic and competence based management literature. Second, we extend existing literature on alliance capability by breaking this concept down into five sub capabilities, which are each linked to a stage of the alliance life cycle. Finally, we suggest how firms can support these capabilities through structural, technological and people-related tools and techniques. We argue that current literature has focused mainly on organization-wide characteristics, the general alliance function and alliance experience to explain the level of alliance capability. Although we acknowledge the importance of these elements, we stress that more attention needs to be given to the various stage-specific components, tasks and supportive mechanisms that can lead to improved alliance capability.
    Date: 2008–12
  3. By: Denise Tsang (School of Management, University of Reading)
    Abstract: This paper reports on qualitative research that investigates the culture of survival among entrepreneurial UK games software development firms within the interactive entertainment industry. The survival culture depicts a culture where firms strive for cost efficiency in order to maximize their chance of continued operation. In-depth interviews with 12 managers illustrated a framework for understanding the cost advantages of surviving firms. It was found it was based on focusing on human relations, building critical inter-firm relationships and acknowledging the importance of cash flow, which were in turn supported by innovative product orientation. The analysis highlights that competitiveness within the interactive entertainment industry could be attained within market constraint and pressure.
    Keywords: Firm culture, competition and the interactive entertainment industry
    Date: 2008
  4. By: Elad Harison; Heli Koski
    Abstract: ABSTRACT : We use the data compiled from the USPTO patent and patent citations concerning the patented knowledge intensive technologies in three areas : cryptography, image analysis and data processing/software. The data is restricted to those patents between the years 1980-2003 that have two or more assignees, i.e. we consider only joint patents. We find some evidence that technological or product market proximity of partners in R&D alliance matters but whether the closeness generates more or less valuable innovations depends on the technology field. Our data further suggest that the most valuable innovations are generated when there is a certain level of prior patenting experience of the individual innovation partners. Interestingly, the prior patenting experience of the pairs of firms filing the joint patent does not seem to matter. It thus seems that learning from the prior joint patenting that creates more value for innovations is rather firm-specific than alliance-specific. Our findings on prior joint patenting experience generally hint that not only strategic benefits, and those benefits related to the management of joint patenting, can be gained from the R&D alliance experience.
    Date: 2009–01–07
  5. By: Irina Jormanainen (Department of International Business, Helsinki School of Economics.); Rajneesh Narula (School of Management, University of Reading)
    Abstract: Despite a well-developed science and technology base and considerable industrial capacity during the soviet era, Russia has largely failed to create a competitive industrial sector despite two decades of transition. This paper seeks to understand why Russia has not succeeded despite having relatively favourable initial conditions. We develop an understanding of its innovation system and the interplay between the firm and the nonfirm sector. We argue that – in any economy - when political and economic regimes were rapidly reformed, there is considerable structural inertia associated with complex interdependencies between the state, domestic firms and the formal and informal institutions that bind them together. In the case of Russia, this inertia has resulted in a system-wide lock-in, and industrial enterprises continued to engage in routines that generated a suboptimal outcome. Market forces did not result in the western-style innovation system, but a hybrid one, with numerous features of the soviet system. A significant segment of industry maintains a Soviet-style dependence on ‘top-down’ supply-driven allocation of resources and a reliance on external (but domestic) network of sources for innovation and capital. At the same time, ‘new’ firms and industries have also evolved which undertake their own R&D, and utilise foreign sources of capital and technology, and at least partly determine their production and innovative activities on the basis on market forces.
    Keywords: innovation systems, R&D, Russia, inertia, institutions, lock-in, transition, competitiveness
    Date: 2008
  6. By: Filip De Beule; Ilke Van Beveren
    Abstract: Using the cluster definitions of the European Cluster Observatory, this paper investigates the link between cluster membership and firm-level product innovation and renewal,using data from the Community Innovation Survey for Belgium. Clustered firms account for 71 percent of total product renewal generated in 2004 and for 53 percent of product innovators; compared to 29 and 47 percent for non-clustered firms, respectivily. Furthermore, cluster membership is shown to be conducive to firm-level product innovation and renewal once firm size, export intensity and reseach inputs are taken into account. Foreign firms are not more prone to carry out product innovation, except for subsidiaries in clusters.
    Keywords: Product Innovation, Clusters, Community Innovation Survey, Multinational Firms
    JEL: D21 F23 O31 O33
    Date: 2008
  7. By: Heli Koski; Luigi -Mäkinen Marengo
    Abstract: ABSTRACT : Our study aims at shedding light on the organizational mechanisms that produce differences in the firms´ innovation performance. We use a survey data collected from 398 Finnish manufacturing firms for the years 2002 and 2005 to empirically explore whether and which organizational factors explain why certain firms produce larger innovative research output than others, and whether the incentives to innovate that certain organizational practices generate differ between the SME’s and large firms, and between those firms that are operating in low-tech and high-tech industries. Our study indicates that one size does not fit all when it comes to the selection of organizational practices creating a business environment that is fruitful for innovation. There are vast differences in the organizational practices leading to more innovation both between the small and large firms, and between the firms that are functioning in high- and low-tech industries. While innovation in the small firms tend to benefit from the practices that enhance employee participation in the decision-making, the large firms that have more decentralized decision-making patterns do not seem to perform better in terms of innovation than those with a more bureaucratic decision-making structure. The most efficient incentive-based compensation means encouraging innovation among the sampled companies seems to be the ownership of a firm’s stocks by the employees and/or managers. Performance based wages also relates positively to innovation, but only when it is combined with a systematic monitoring of the firm´s performance.
    Keywords: innovation, firm size, organizational practices, HRM practices
    JEL: L25 M54 O31
    Date: 2009–01–07
  8. By: Cristina Barbot (CETE, Faculdade de Economia, Universidade do Porto)
    Abstract: Airports and airlines have been increasingly establishing vertical contracts, which have a wide variety of forms. These contracts have important implications for policy issues, namely for regulation and price discrimination legislation. In this paper we develop a model to analyse the effects of three types of vertical contracts, in what regards welfare, pro-competitiveness and the scope for regulation. We find that two types of contracts are anti-competitive, and that in all of them consumers are better-off, though in one of them within conditions regarding operational efficiency. We also conclude that regulation may (or may not) improve welfare depending on the type of contract and that price capping has different effects according to the facility the price of which is capped. Moreover, we find that these agreement’s effects exhibit a trade-off between pro-competitiveness and welfare and between price discrimination and welfare.
    Keywords: vertical contracts, regulation, airports, airlines.
    JEL: R48 L93
    Date: 2009–01
  9. By: Andrea Caragliu (Politecnico di Milano); Peter Nijkamp (VU University Amsterdam)
    Abstract: We design a conceptual framework for linking two approaches: the literature on absorptive capacity and the literature on spatial knowledge spillovers. Regions produce new knowledge, but only part of it is efficiently adopted in the economy; the share of efficiently adopted technology depends on territorial capital. Our data set is based on a panel of European regions over the period 1999-2005, combining data from EUROSTAT and the European Values Study (EVS); we test the hypothesis that insufficient levels of territorial capital hamper the capability of regions to grasp and fully exploit new knowledge. Results show that a lower regional absorptive capacity increases knowledge spillovers towards surrounding areas, hampering the regions’ capability to understand, decode and efficiently exploit new knowledge, both locally produced and originating from outside.
    Keywords: Absorptive capacity; knowledge spillovers; total factor productivity; spatial econometrics
    JEL: O33 R11
    Date: 2008–12–15
  10. By: Mukherjee, Dipa; Majumder, Rajarshi
    Abstract: Technological upgradation and increasing capital intensity in organised manufacturing sector in India has been championed on grounds of improving productivity, efficiency, and competitiveness. In a developing economy this is a costly proposition due to capital scarcity, and the effect of technological changes on productivity and efficiency levels have to be estimated before taking such policies. This paper seeks to estimate trends in Factor Productivity, Technological Progress, and Technological Efficiency in this sector and examines their relative importance also. Technical Efficiency is observed to be moderate and further declining in the nineties. Substantial disparity exists among regions and product groups regarding Efficiency, Technical Progress and Efficiency changes. It is found that increasing capital intensity has been associated with falling productivity, efficiency, and technological deceleration in the nineties. Wider diffusion rather than greater capital use is thus recommended for productivity rise. Regional efficiency matrix is also prepared so that states can focus on specific areas where they have comparative advantages.
    Keywords: Productivity; Technical Efficiency; Technological Progress; Organised Manufacturing; Diffusion; Regional Comparative Advantage
    JEL: E23 O33 D24 R11 L60
    Date: 2008

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