nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2009‒04‒25
fourteen papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. Appropriability, Patents, and Rates of Innovation in Complex Products Industries By Luigi Marengo; Corrado Pasquali; Marco Valente; Giovanni Dosi
  2. Forecasting VaR and Expected Shortfall using Dynamical Systems: A Risk Management Strategy By Cyril Caillault; Dominique Guegan
  3. In serach of lost disincentive effect from intra-industry spillovers By Stéphane Lhuillery
  4. Product Innovation Incentives: Monopoly vs. Competition By Marius Schwartz
  5. Industrial Research Institutes’ Collaboration: a three-way solution to integrating new research skills By Bienkowska, Dzamila; Larsen, Katarina
  6. The geography of innovation : challenge to technology policy within regions By Muriel Fadairo; Nadine Massard
  7. The evolution of Chinese entrepreneurial firms: Township-village enterprises revisited By Xu, Chenggang; Zhang, Xiaobo
  8. De-Industrialisation, Entrepreneurial Industries and Welfare By Albert G. Schweinberger; Jens Suedekum
  9. Strategy at the crossroads: The case of the navy hospital ships By Webb, Natalie J; Richter, Anke
  10. Agglomeration Effects and the Location of Foreign Direct Investment – Evidence from French First-time Movers By Vivien Procher
  11. Market Share, R&D Cooperation, and EU Competition Policy By Richard Rubble; Bruno Versaevel
  12. EU Energy Policy and Regional Co-operation in South-East Europe: managing energy security through diversification of supply? By Diana Bozhilova
  13. The Value of RFID Technology Enabled Information to Manage Perishables By Ketzenberg, M.E.; Bloemhof-Ruwaard, J.M.
  14. Competitividad, inversión y crecimiento. Los casos de Colombia, Chile, Perú, Corea y China By César Attilio Ferrari

  1. By: Luigi Marengo; Corrado Pasquali; Marco Valente; Giovanni Dosi
    Abstract: The economic theory of intellectual property rights is based on a rather narrow view of both competition and technological knowledge. We suggest some ways of enriching this framework with a more empirically grounded view of both and, by means of a simulation model, we analyze the impact of different property right regimes on the dynamics of a complex product industry, that is an industry where products are complex multi-component objects and competition takes place mainly through differentiation and component innovation. We show that, as the complexity of the product spaces increases, stronger patent regimes yield lower rates of innovation, lower product quality and lower consumers' welfare. localized ones.
    Keywords: patents; appropriability of innovation; complex product industries; industrial dynamics
    JEL: O31 O34 L11
    Date: 2009–04–07
  2. By: Cyril Caillault (Fortis Investments - Fortis investments); Dominique Guegan (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: Using non-parametric and parametric models, we show that the bivariate distribution of an Asian portfolio is not stable along all the period under study. We suggest several dynamic models to compute two market risk measures, the Value at Risk and the Expected Shortfall: the RiskMetrics methodology, the Multivariate GARCH models, the Multivariate Markov-Switching models, the empirical histogram and the dynamic copulas. We discuss the choice of the best method with respect to the policy management of bank supervisors. The copula approach seems to be a good compromise between all these models. It permits taking financial crises into account and obtaining a low capital requirement during the most important crises.
    Keywords: Value at Risk ; Expected Shortfall ; Copulas ; Risk management ; GARCH models ; Markov switching models
    Date: 2009–04
  3. By: Stéphane Lhuillery (Chaire en Economie et Management de l'Innovation, Collège du Management de la Technologie, Ecole Polytechnique Fédérale de Lausanne)
    Abstract: Standard innovation surveys do not consider incoming spillovers for non-innovative firms. The Swiss innovation surveys presented here measure the importance of competitors' knowledge for both innovating and noninnovating firms. This original feature not only enables us to accurately identify the role of incoming knowledge on R&D decisions and innovation output, but also to compare resulting data with those which standard innovation questionnaires provide. Using a panel data over four periods, we show that knowledge from rivals actually deters manufacturing firms from engaging in R&D activities. Moreover, we provide stronger evidence that intra-industry spillovers are more detrimental to innovation than that generally provided by data from standard surveys. The results suggest that the dominance of the absorptive capacity effect is more important to firms investing in R&D and that non-innovative firms rely more heavily than expected on their competitors to maintain their technological capacities.
    Keywords: intra-industry spillovers, absorption, innovation survey
    JEL: O31 C35 C81
    Date: 2009–03
  4. By: Marius Schwartz (Department of Economics, Georgetown University)
    Abstract: Arrow (1962) showed that a secure monopolist (unconcerned with preemption) has a weaker incentive than would a competitive firm to invest in a patentable process innovation. This paper shows that the ranking can be reversed for product innovations. Only the innovator sells the new product, a differentiated substitute for the old. Under alternative market structures considered, the old product is sold only by that same firm (two-product monopoly), only by a different firm (post-innovation duopoly), or in perfect competition. In an asymmetric Hotelling model, the innovation incentive under monopoly is greater than under duopoly if and only if the new product has the higher quality, and is always greater than under perfect competition. Classification-JEL Codes: D4, L1
    Date: 2009–04–02
  5. By: Bienkowska, Dzamila (KTH and HELIX); Larsen, Katarina (KTH)
    Abstract: Innovation processes in emerging fields of technology frequently utilize scientific knowledge and technical skills from several research areas. Likewise, technological development frequently involves a diverse set of organizations including for example private firms, universities, corporate research labs and public or semi-public research and technology organizations (RTOs). These processes spur the need for both organizational and institutional change and adjustment, e.g. in order to facilitate research and development (R&D) and formation of innovation networks. The main question analyzed in the paper is how RTOs cope with integrating new skills in their competence base in the quest for exploring new emerging science fields and technology applications. The empirical setting consists of Swedish semi-public industrial research institutes active in the fields of pulp & paper technology and electronics, optics & communication technology respectively. The results of the study bring attention to three ways of integrating diverse skills and types of actors in R&D networks. These are: organization of collaborative research in formalized industry-specific R&D programs, purposeful organizational change also including redefinition of categories of core research competence and finally by targeting ‘open’ innovation processes characterized by incorporation of both end-users and skills of neighboring technology areas.
    Keywords: Industrial research institutes; Innovation networks; Emerging technology; RTOs; Collaborative R&D; Interdisciplinary; Innovation policy; management and organization; Sweden
    JEL: L20 L33 L52 L80 L84 O25 O31 O32 O38
    Date: 2009–04–22
  6. By: Muriel Fadairo (CREUSET - Centre de Recherche Economique de l'Université de Saint-Etienne - CNRS : FRE2938 - Université Jean Monnet - Saint-Etienne); Nadine Massard (CREUSET - Centre de Recherche Economique de l'Université de Saint-Etienne - CNRS : FRE2938 - Université Jean Monnet - Saint-Etienne)
    Abstract: The "Geography of Innovation" is based on the desire to give empirical foundations to the explanations behind the pronounced spatial polarisation of the innovation activities. It focuses on an attempt to measure the spatial dimension of knowledge externalities, in order to reveal their role in the organisation of research systems. The aim of this paper is to survey this empirical literature in order to highlight the main results interesting for the innovation policy. This analysis emphasises one main role of technology policy : supporting the institutions which generate knowledge and learning. These are found at various territorial levels, especially within the European Union. Here attention is drawn to the regional intervention level.
    Keywords: technology policy, geography of innovation, knowledge externalities, European regions, knowledge-based economy
    Date: 2009–04–20
  7. By: Xu, Chenggang; Zhang, Xiaobo
    Abstract: "Township-village enterprises (TVEs) were a major engine of China's rapid rural industrialization in the past three decades. TVEs also played a key role in fostering entrepreneurship and served as a major stepping-stone for institutional changes when legal protections of private property rights were not in place and the state-owned enterprises (SOEs) were slow to react to changing market demand. As private ownership was gradually recognized legally, TVEs lost their edge in competing with private firms. In the past two decades, industrial clusters with a concentration of private entrepreneurial firms coordinated by local governments have emerged rapidly in many areas. The structures of such firms as TVEs and the subsequent clustering modes of production are an outcome of interaction with other local and macro environments. As the environment changes, a firm's organization and organizational structure may change as well." from authors' abstract
    Keywords: Cluster, Firm theory, Industrialization, Growth, Development strategies,
    Date: 2009
  8. By: Albert G. Schweinberger; Jens Suedekum
    Abstract: We develop a two-sector general equilibrium model with monopolistic competition featuring nonhomothetic production and a variable demand elasticity for the manufactured goods. An increase in the relative price of manufacturing varieties can lead to a decline in total industrial output in our framework, i.e., to de-industrialisation.The two key mechanisms behind this surprising result are that the founding of firms requires skilled labour as a fixed input requirement, and that the price increase can raise the profit margin in the manufacturing industry and thereby induce firm entry. When the manufacturing sector mainly adjusts at the extensive margin,we refer to this industry as being entrepreneurial. Due to the fixed input requirement entry reduces the effective endowment of skilled labour available for production.This reduces industrial output owing to a novel generalized version of the Rybczynski effect. De-industrialisation occurs if that effect is sufficiently large in comparison with the standard output price effect for a given number of firms. Furthermore we prove the counterintuitive result that de-industrialisation implies a fall in the output per firm and under plausible conditions a rise in welfare. Our results shed new light on the current debates about possible causes of premature de-industrialisation and its welfare effects.
    Keywords: Entrepreneurial industries, monopolistic competition, de-industrialisation, welfare effects
    JEL: F12 D43
    Date: 2009–03
  9. By: Webb, Natalie J; Richter, Anke
    Abstract: We examine the state of knowledge in the defense literature on the use of military medical humanitarian assistance missions and examine their implications for navy hospital ships. As humanitarian assistance missions grow in importance for combatant commanders, deployed forces, senior government leaders and the international community, it becomes more important to determine desired outcomes and to set clear priorities for hospital ship use. Only when this is done can activities that promote achievement of policy goals be selected. While traditional hospital ship missions focus on combat support and training, successful humanitarian assistance campaigns typically address improving security and stability in a region, attitudes towards Americans and the West, and health and welfare conditions of local populations. We argue that well-crafted and communicated goals and priorities for the use of hospital ships are essential if the ships are to achieve desired policy outcomes.
    Keywords: humanitarian assistance; military medicine; strategic planning
    JEL: F35 H5 I1
    Date: 2009–02–17
  10. By: Vivien Procher
    Abstract: This paper analyzes the location choice determinants of French first-time investments in Europe, North America and North Africa. Firm locations are examined on two geographical scales, the national and regional level. The final sample comprises 307 location decisions in 27 countries and across 45 regions. Both, location- and firm-specific variables are used for analysing the investment strategy of French firms. The results show that higher market demand and cultural proximity to France increase the likelihood of a particular location to be chosen, whereas higher labour cost and a larger distance between a foreign location and the headquarters deter FDI investments. Manufacturing and older companies are more likely to establish their first subsidiary in Eastern Europe. Furthermore, this study examines the extent to which French investors choose foreign locations that already host a significant number of French firms.The results obtained from regressions with various absolute and relative agglomeration measures suggest that French investors are rather attracted by firm cluster in general, or by the unobserved factors that led to the agglomeration in the first place, than by any nation-specific firm cluster.
    Keywords: Foreign direct investment, location choices, agglomeration, smalland medium-sized enterprises
    JEL: F21 F23 D21 R30
    Date: 2009–03
  11. By: Richard Rubble (EMLYON Business School - EMLYON Business School); Bruno Versaevel (EMLYON Business School - EMLYON Business School, GATE - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines)
    Abstract: Current EU policy exempts horizontal R&D agreements from antitrust con- cerns when the combined market shares of participants are low enough. This paper argues that existing theory does not support limiting the exemption to low market shares. This is done by introducing a set of non-innovating outside ï¬rms to the standard framework to assess what link might exist between the market share of innovating ï¬rms and the product market beneï¬ts of cooperation. With R&D output choices, the market share criterion, while it rules out the most socially harmful R&D cooperation agreements, also hinders the most beneï¬cial ones. With R&D input choices, cooperation may actually be desirable in concentrated industries, and harmful in more competitive ones. If R&D cooperation does have anti-competitive effects in product markets, it seems that these are therefore best addressed by other tools than market share criteria.
    Keywords: R&D; Cooperation; Competition; Regulation
    Date: 2009
  12. By: Diana Bozhilova
    Abstract: For decades after founding the ECSC (1951) the member states have relegated the issue of joint supranational energy policy development. The situation changed decisively in the early 1990s, with the dramatic shift in the geo-politics of the resource-rich Eurasia, following such developments as the collapse of the USSR and the Gulf War. In light of these developments, European states gradually consolidated their position in favour of supranational energy policy development. This paper presents an analysis of developments in EU energy policy given the ongoing realignment of strategic interest. It outlines the process of Europeanization, identifying caveats in the security of energy supply. It then proposes a solution to the main problematic of diversification of hydrocarbons supply through the fostering of regional co-operation amongst the states of South-East Europe (mainly Greece, Bulgaria and Turkey). The paper argues that this is the only viable and lasting solution to EU energy dependency away from Russia, at once showing the fundamental importance of pipeline ‘mapping’ in the area.
    Keywords: Energy, Regional Co-operation, Europeanization, Transmission Pipelines.
    Date: 2009–03
  13. By: Ketzenberg, M.E.; Bloemhof-Ruwaard, J.M. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: We address the value of RFID technology enabled information to manage perishables in the context of a supplier that sells a random lifetime product subject to stochastic demand and lost sales. The product's lifetime is largely determined by the time and temperature history in the supply chain. We compare two information cases to a Base case in which the product's time and temperature history is unknown and therefore its shelf life is uncertain. In the first information case, the time and temperature history is known and therefore the remaining shelf life is also known at the time of receipt. The second information case builds on the first case such that the supplier now has visibility up the supply chain to know the remaining shelf life of inventory available for replenishment. We formulate these three different cases as Markov decision processes, introduce well performing heuristics of more practical relevance, and evaluate the value of information through an extensive simulation using representative, real world supply chain parameters.
    Keywords: perishable inventory;value of information;simulation;RFID
    Date: 2009–04–07
  14. By: César Attilio Ferrari
    Abstract: En el mundo globalizado, la competitividad es el requisito del crecimiento moderno de un país económicamente pequeño, particularmente con una población de ingresos reducidos. Ello es tal porque en ese contexto, producir y vender cada vez más bienes y servicios sólo puede hacerse vendiendo en el exterior, el mercado interno es insuficiente, y para ello se debe competir en el mercado internacional. Tal competitividad, que es una cuestión económica y no administrativa, depende de los precios básicos de la economía que, a su vez, dependen de la política económica vigente. Los casos diferenciales de Colombia, Chile, Perú, Corea y China permiten ilustrar en forma comparativa tal condicionamiento.
    Date: 2008–07–15

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