nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2009‒02‒07
fourteen papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. An assessment of the construct validity of environmental strategy measures By Walls, Judith L.; Phan, Philip H.; Berrone, Pascual
  2. Strategic Environmental Policy and the Accumulation of Knowledge By Thomas Ziesemer; Peter Michaelis
  3. The Role of Firms in Energy Transformation By Perrot, Rhadika
  4. Innovation – source to obtain the competitive advantage in the global economy By Sipos, Gabriela Lucia
  5. (R)evolution of the E-grocery Industry: Strategic Implications By Mário Pedro Ferreira
  6. Relationship Lending and Firm Innovativeness By Giannetti, C.
  7. Subcontracting in the Italian industry. Labour Division, Firms’ Growth and North-South Divide By Giunta, Anna; Nifo, Annamaria; Scalera, Domenico
  8. Persistence and Change of Regional Industrial Activities – The Impact of Diversification in the German Machine Tool Industry By Dirk Fornahl; Christina Guenther
  9. Prospects for Skills-Based Export Growth in a Labour-Abundant, Resource-Rich Economy: Indonesia in Comparative Perspective By Coxhead, Ian; Li, Muqun
  10. Outsourcing and corporate results By Oscar F. Bustiza; Matilde Morales-Gallego
  11. Persistence of outstanding performance and shareholder value among diversified firms: The impact of past performance, efficient internal capital market, and relatedness of business segments By Marinelli, Federico
  13. The decision to innovate: Antecedents of opportunity exploitation in high tech small firms By Jeroen de Jong

  1. By: Walls, Judith L. (University of Michigan); Phan, Philip H. (Johns Hopkins University); Berrone, Pascual (IESE Business School)
    Abstract: The natural resource-based view of the company is emerging as a dominant paradigm for understanding the intersection of strategic management and the natural environment. Companies that proactively incorporate a natural environment perspective into their enterprise strategies are said to have sustainable competitive advantages. However, defining and measuring environmental strategy has been challenging, with different approaches yielding inconsistent results. Many studies ignore the empirical difficulties of marrying the theoretical connection between the company's resource base and environmental strategy, and its impact on environmental company performance. In this paper, we apply an inductive approach to derive a measure of environmental strategy theoretically congruent with the natural resource-based-view of the firm. We assess its reliability and, using a multi-trait multi-method matrix, confirm the convergent and discriminant validities of this measure against other measures often used by researchers. We also establish predictive validity of our environmental strategy measure for environmental performance. We discuss the implications of the measure for future research and practice.
    Keywords: environmental performance; environmental strategies; inductive study; measures;
    Date: 2008–05–08
  2. By: Thomas Ziesemer (University of Augsburg, Department of Economics); Peter Michaelis (University of Augsburg, Department of Economics)
    Abstract: Recent political discussions about the possible advantages of first-mover behaviour in terms of environmental policy again called attention to the well-established controversy about the effects of environmental regulation on international competitiveness. Conventional theory claims that the trade-off between regulation and competitiveness will be negative while the revisionist view, also known as the Porter Hypothesis, argues for the opposite. Several previous attempts that analysed this quarrel by means of strategic trade game settings indeed support the former claim and conclude that, to increase a firm’s competitiveness, ecological dumping is the most likely outcome in a Cournot duopoly configuration. However, these results were derived from one period games in which so-called innovation offsets are unlikely to occur. The present paper considers a two-period model that includes an intertemporally growing firm-level knowledge capital. In doing so the accumulation of knowledge is modelled in a unilateral and a bilateral variant. It is shown that for both scenarios in period 1 the domestic government will set a higher emission tax rate compared to its foreign counterpart. Furthermore, we identify conditions for which the domestic tax rate will be set above the Pigouvian level in period 1 in both model variants.
    Keywords: first-mover behaviour, Porter Hypothesis, strategic environmental policy, environmental regulation, international competitiveness
    JEL: F18 Q55 Q58
    Date: 2008–03
  3. By: Perrot, Rhadika (UNU-MERIT.)
    Abstract: This paper looks at the role of firms in the transformation of fossil fuel based energy systems towards cleaner and greener energy systems. Firms are playing an important role in determining the speed and direction of technical change towards such energy systems. But systemic constraints and negative externalities tend to make such transformations constraint and difficult. To be able to understand how firms overcome these systemic constraints and bring about positive externalities it would be important to observe the strategic role played by firms. Firms are removing technological and economic constraints by engaging in strategic alliances with other firms and research organizations. Both small and large firms have positioned themselves strategically in the green energy market either through basic innovations or through innovations brought about by joint technological partnerships.
    Keywords: Firm Strategy, Sustainable Energy, Renewable Energy, System Transition
    JEL: A10 M21
    Date: 2009
  4. By: Sipos, Gabriela Lucia
    Abstract: A strong motivation to replace the comparative advantage theory with the competitive advantage theory is given by the significant change of the present economic conditions comparing with the old conditions that inspired the competitive advantage issues. The dynamic character of the market competition and the fact that, in the present, the competitiveness is located to enterprise’s level and not to the level of the national economy are some important argues that sustain the necessity and the opportunity to move the economic thinking from the comparative advantage theory to the competitive advantage theory. In the past, the comparative advantage of an economy was given by the natural resources, by the geographical position or by the specific features of products or services. Nowadays the competitive advantage is created through innovation by all its forms.
    Keywords: innovation; comparative advantage; competitive advantage
    JEL: O32
    Date: 2008–04
  5. By: Mário Pedro Ferreira (Faculdade de Economia e Gestão, Universidade Católica Portuguesa (Porto))
    Abstract: The use of the Internet in grocery retailing created the need for new business models, but it did not bring radical changes to consumer behaviour. Despite adopting revolutionary business models in their early days, online grocery firms did not manage to survive or reach profitability without using existing supermarket infrastructure and knowledge. Today, with most online grocers supplying small market niches, it is important to understand the reasons that made online grocers adopt a hybrid click and mortar strategy. Historical evidence from online grocery in the UK and the US suggests that firms had to adopt contingent strategies to face the difficulty of attracting consumers, sectorial entry barriers and financial targets.
    Keywords: e-grocery, contingency, mismatch, revolution and evolution
    Date: 2009–01
  6. By: Giannetti, C. (Tilburg University, Center for Economic Research)
    Abstract: This study investigates the effects of relationship lending on firm innovativeness using a panel of Italian manufacturing firms. In order to disentangle the impact of bank ties on the discovery phase from that in the introduction phase of new technologies, the analysis proceeds in two steps, estimating two distinct equations for each phase. As there are conflicting theoretical predictions on the effects of the various sources of funding in the different stages of the innovative process, this study provides results for small and high-tech firms, so as to control for firm heterogeneity, relying on both cross-section and panel data techniques. Results suggest that for small firms, banks do not carry out a sophisticated intervention at the stage of development of new technologies, playing their traditional role of financing investments of constrained firms. Differently, relationship banks do play an important role in both phases for high-tech firms.
    Keywords: Credit relationship;external financing;bank competition.
    JEL: C34 G21 O31
    Date: 2009
  7. By: Giunta, Anna; Nifo, Annamaria; Scalera, Domenico
    Abstract: By making use of a 4000 firms database, this paper analyzes the dynamics of division of labour among Italian manufacturing firms during the '90s, and seeks to assess the impact that subcontracting has on manufacturing firms' growth. In particular, we investigate the relationship between labour division and firms' growth with three specific objectives: a) to understand whether and how subcontracting may have affected firms' growth dynamics; b) to test if larger growth could be due to stronger incentives to innovate for subcontracting firms and c) to study the joint influence of subcontracting and location in Southern Italy on growth. The main results are that i) the propensity to carry out subcontracting activities is relevant for growth, especially when allowing for a nonlinear relationship between growth and subcontracting; ii) more innovative subcontracting firms are also more susceptible to grow and iii) the deep dualism of the Italian industrial structure is once again confirmed, as Southern subcontractors show poorer performances and slower growth.
    Keywords: subcontracting; growth; location
    JEL: D23 L23
    Date: 2009–01–19
  8. By: Dirk Fornahl; Christina Guenther
    Abstract: The paper Investigates stability and change of regional economic activities in the long-run. As the unit of analysis we selected the machine tool industry in West Germany for the years 1953 to 2002. We spot a strong variance in the activities between the different regions. These differences are relatively stable over time and the regional activities are rather path-dependent. Nevertheless, the paper also identifies changes in the level of activities. As the main driving factors for these changes we examine the effect of regional diversification strategies. We find that those regions pursuing a general diversification strategy have a higher likelihood to grow than regions which are specialising. Furthermore, diversification into totally new technological and product fields is only beneficial under specific circumstances based on technological and market developments. Hence, in most cases a broad diversification is superior to one focusing on new state-of-the-art technological fields.
    Keywords: Geographic concentration, specialisation indices, machine tool industry, path-dependencies, agglomeration economies Length 29 pages
    JEL: L61 O1 O18 R11 R12
    Date: 2009–01
  9. By: Coxhead, Ian (U of Wisconsin and Norwegian University of Life Sciences); Li, Muqun (U of Wisconsin)
    Abstract: In an integrated global economy, specialisation in trade is an increasingly prominent strategy. A labour-abundant, resource-rich economy like Indonesia faces stiff competition for labourintensive manufactures; meanwhile, rapid growth in demand for resources from China and India exposes it to the ‘curse’ of resource wealth. This diminishes prospects for more diversified growth based on renewable resources like human capital. Using an international panel data set we explore the influence of resource wealth, foreign direct investment, and human capital on the share of skill-intensive products in total exports. FDI and human capital increase this share; resource wealth diminishes it. We use the results to compare Indonesia with Thailand and Malaysia. Indonesia’s reliance on skill-intensive exports would have been higher had it achieved higher levels of FDI and skills. Indonesia’s performance in accumulating these endowments, and its relative resource abundance, impede diversification in production and trade. Finally, we discuss policy lessons and options.
    JEL: F14
    Date: 2008–04
  10. By: Oscar F. Bustiza (Universidad de Granada. Dpt. of Business Management); Matilde Morales-Gallego (Universidad de Granada. Dpt. of Business Management)
    Abstract: Few corporate practises have awakened so much recent interest as outsourcing. Seen as the carrying out of a process or activity by an external company or organisation, when this process was traditionally undertaken within the heart of the company, it is not known how far it can be used to determine the limits of the company and, the final aim of this article, the repercussion of its use from the perspective of corporate results analysis. In this way, it appears indispensable to study the internal capabilities of the organisations, in particular their flexibility and the knowledge management that they carry out, understanding that these variables act as moderators when it comes to determining the true effects of outsourcing on the determination of results
    Keywords: Outsourcing, Knowledge Management, Flexibility, Profits.
    Date: 2008–11–15
  11. By: Marinelli, Federico (IESE Business School)
    Abstract: The research domain that attempts to study the relationship between diversification and performance has not yet reached definitive and interpretable findings, and recent studies challenge the existence of a "diversification discount" and explain it partially by a data artefact. None of these studies centred their research on the question: does there exist a specific performance pattern among diversified firms? This research aims to identify persistence in performance heterogeneity by measuring the shareholder value creation of diversified firms using alternative indicators other than the excess value methodology. It also aims to measure the impact on the performance according to the degree of efficiency of the internal capital market and the degree of relatedness among business segments. A sample of 164 diversified firms with turnover higher than 1$ billion during the period 1999-2006 is examined. Because of the presence of the firm's specific effect and the length of the time series, the persistence performance is tested through the instrumental variables (IV) system generalized method of moments (GMM) dynamic panel data and the persistence of shareholder value creation and destruction is estimated according to different estimators from top tercile and lower tercile portfolios of diversified firms. Some diversified firms persistently create value as well as beat the market index while others persistently underperform. Finally, if the efficiency of the internal capital market gives certain explanatory power of the performance pattern, but limited compared to the past performance, important insights might be drawn from the findings that diversified firms with segments in many unrelated industries perform better than others in few industries or with a high number of segments; hence the inverted-U curvilinear relationship between diversification and performance is here not confirmed.
    Keywords: diversification; performance persistence; internal capital market; relatedness obusiness segments;
    Date: 2008–07–15
    Abstract: RESUMEN Las microempresas son muy importantes para la economía por generar empleo y renta. En este contexto, se tiene como objetivo trazar consideraciones sobre la competitividad de las microempresas en el campo de calzados en Juazeiro do Norte-CE en el año 2006. Para eso, fueron utilizadas pesquisas bibliográfica y descriptiva, bien como, la aplicación de cuestionario a veintinueve microempresas que componen el Sindidústria (Sindicato das Indústrias de Calçados e Vestuários de Juazeiro do Norte). El criterio de tamaño de la empresa utilizado fue el número de empleados utilizado por el Sebrae - Serviço Brasileiro de Apoio às Micro e Pequenas Empresas. La estructura del artículo quedó así establecida, en una primera sección, fueron hechas algunas consideraciones sobre la industria y la competitividad en el sector de calzados, y, por fin, un estudio de casos múltiples con la competitividad de las microempresas en el campo de calzados. En la pesquisa de campo fueron identificados los principales problemas enfrentados por las microempresas, como: baja escolaridad, mano de obra intensiva, máquinas y equipamientos obsoletos, falta de interacción entre los microempresarios, altas tasas de interés, falta de incentivos gubernamentales, dificultad de acceso a líneas de crédito. En lo que se refiere a la permanencia de las empresas en el mercado productivo fue identificada una instabilidad, la cual se da frente a la alta competitividad del mercado, además de la falta de incentivo por parte de instituciones de fomento. RESUMO As microempresas são muito importantes para a economia por gerar emprego e renda. Neste contexto, tem-se como objetivo traçar considerações sobre a competitividade das microempresas no ramo calçadista em Juazeiro do Norte-CE no ano de 2006. Para isso, foram utilizadas pesquisas bibliográfica e descritiva, bem como, a aplicação de questionário a vinte e nove microempresas que compõem o Sindidústria (Sindicato das Indústrias de Calçados e Vestuários de Juazeiro do Norte). O critério de tamanho da empresa utilizado foi o número de empregados utilizado pelo Sebrae-Serviço Brasileiro de Apoio às Micro e Pequenas Empresas. A estrutura do artigo ficou assim estabelecida, numa primeira seção, foram feitas algumas considerações sobre a indústria e a competitividade no setor calçadista, e, por fim, um estudo de casos múltiplos com a competitividade das microempresas no ramo de calçados. Na pesquisa de campo foi identificado os principais problemas enfrentados pelas microempresas, como: baixa escolaridade, mão-de-obra intensiva, máquinas e equipamentos obsoletos, falta de interação entre os microempresários, altas taxas de juros, falta de incentivos governamentais, dificuldade de acesso a linhas de crédito. No tocante à permanência das empresas no mercado produtivo foi identificada uma instabilidade, a qual se dá em face da alta competitividade do mercado, além da falta de incentivo por parte de instituições de fomento. ABSTRACT Microcompanies are very important for economies, as they generate employment and income. In this context, to trace considerations about the competitiveness of microcompanies of the shoe industry in Juazeiro do Norte- CE during the year 2006. For this purpose, bibliographic and descriptive research methodologies were used, as well as a questionnaire applied to twenty-nine microcompanies that belong to the Sindidústria (Shoe and Clothing Industry Syndicate of Juazeiro do Norte). The company size criteria selected was the number of employees used by Sebrae – Brazilian Support Service to Micro and Small Companies. The structure of the article was organized as follows: in the first section, some considerations on the industry and the competitiveness of the shoe industry were elaborated, followed by a multiple-case study the competitiveness of companies of the shoe manufacturing sector. In the on-field research, the main problems faced by companies were identified, among them: low educational levels, intensive labor, obsolete machinery and equipment, lack of interaction among micro-entrepreneurs, high interest rates, lack of government incentives and difficult access to credit lines. In regards to the permanence of companies in the productive market, some instability was detected, due to the growing competitiveness of the market and the lack of incentives from development institutions.
    Date: 2008–05–29
  13. By: Jeroen de Jong
    Abstract: The current paper explores the antecedents of small business owners' decision to exploit identified opportunities for innovation. Drawing on social psychology, entrepreneurship and organizational behavior literature three potential antecedents are proposed: attitude towards the opportunity, subjective norms of close ties, and perceived behavioral control. It is hypothesized that each of these constructs correlates with the decision to innovate. Drawing on multiple-source survey data of 160 high tech small business owners in the Netherlands, it is found that subjective norms and perceived behavioral control are positively related to the decision to innovate. Moreover, a three-way interaction is estimated and confirmed, suggesting that when all antecedents are simultaneously present, opportunity exploitation is significantly more likely. Implications for practice and future research are discussed.
    Date: 2009–02–02
  14. By: Mojica, Maribel; Gebremedhin, Tesfa; Schaeffer, Peter
    Keywords: Community/Rural/Urban Development,
    Date: 2009–01

This nep-cse issue is ©2009 by Joao Jose de Matos Ferreira. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.