nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2009‒05‒30
ten papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. Innovative firms or innovative owners ? determinants of innovation in micro, small, and medium enterprises By de Mel, Suresh; McKenzie, David; Woodruff, Christopher
  2. Exporting and Ownership Contributions to Irish Manufacturing Productivity Growth By Anne Marie Gleeson; Frances Ruane
  3. If Technology is like Word, Institutions are like Grammar: Institutional Context of Technological Innovations and Knowledge Systems at Grassroots. By Anil K Gupta
  4. How ’Open ’ is Innovation in the US and Japan?: Evidence from the RIETI-Georgia Tech inventor survey By John P. Walsh; Sadao Nagaoka
  5. Small farmers' access to high-value markets: what can we learn from the Malawi pigeopea value chain? By Makoka, Donald
  6. Science-Based R&D in Schumpeterian Growth By Guido Cozzi; Silvia Galli
  7. PRC-Latin America Economic Cooperation: Going beyond Resource and Manufacturing Complementarity By Masahiro Kawai
  8. The determinants of changes in the organization of production: Evidence from Spanish plant-level data By Bayo, Alberto; Galdon-Sanchez, Jose E.; Gil, Ricard
  9. What has been the Role of Investment in Turkey's Growth Performance? By Unal Zenginobuz; Sumru Altug
  10. Estimates of Multifactor Productivity, ICT Contributions and Resource Reallocation Effects in Japan and Korea By FUKAO Kyoji; MIYAGAWA Tsutomu; Hak K. PYO; Keun Hee RHEE

  1. By: de Mel, Suresh; McKenzie, David; Woodruff, Christopher
    Abstract: Innovation is key to technology adoption and creation, and to explaining the vast differences in productivity across and within countries. Despite the central role of the entrepreneur in the innovation process, data limitations have restricted standard analysis of the determinants of innovation to consideration of the role of firm characteristics. The authors develop a model of innovation that incorporates the role of both owner and firm characteristics, and use this to determine how product, process, marketing, and organizational innovations should vary with firm size and competition. They then use a new, large, representative survey from Sri Lanka to test this model and to examine whether and how owner characteristics matter for innovation. The survey also allows analysis of the incidence of innovation in micro and small firms, which have traditionally been overlooked in the study of innovation, despite these firms comprising the majority of firms in developing countries. The analysis finds that more than one-quarter of the microenterprises are engaging in innovation, with marketing innovations the most common. As predicted by the model, firm size has a stronger positive effect, and competition a stronger negative effect, on process and organizational innovations than on product innovations. Owner ability, personality traits, and ethnicity have a significant and substantial impact on the likelihood of a firm innovating, confirming the importance of the entrepreneur in the innovation process.
    Keywords: E-Business,Education for Development (superceded),Innovation,Labor Policies,Microfinance
    Date: 2009–05–01
  2. By: Anne Marie Gleeson (Waterford IT); Frances Ruane (ESRI)
    Abstract: This paper combines a literature identifying the sources of productivity growth with a literature exploring differences between the characteristics of exporters and non-exporters to examine the contributions of exporters and non-exporters to aggregate labour productivity growth in the Irish manufacturing sector between 1998 and 2004. Using the Breunig and Wong (2007) decomposition technique, we uncover the contributions to aggregate labour productivity of continuing, entering and exiting firms based on exporting and ownership status. We find that within-firm productivity growth of exporters drives overall productivity growth, with significant differences apparent between productivity growth rates of foreign and domestic owned establishments.
    Date: 2009–05
  3. By: Anil K Gupta
    Abstract: Many developing countries have taken interest in learning from the Honey Bee Network experience for replicating the model. In a UNESCO conference, the author was asked to identify the key steps that national governments can take to deal with the challenge of developing an inclusive innovation based development model. Thus, the author has identified six steps which can help the leaders in various countries.[W.P. No. 2009-03-01]
    Keywords: indigenous knowledge; India; Global Knowledge Conference; Honey Bee Network; Ugandan National Council of Science and Technology; SRISTI; NIF
    Date: 2009
  4. By: John P. Walsh; Sadao Nagaoka
    Abstract: While individual inventors are key to technological progress, it is becoming increasingly necessary for inventors and their firms to exploit information and capabilities outside the firm in order to combine onefs own resources with resources from the external environment. To better understand the collaborative process in inventions, we collected detailed information on a sample of triadic patents, focusing on the invention process, sources of ideas, and collaboration (the RIETI-Georgia Tech inventor survey), with over 1900 responses from the US and over 3600 responses from Japan. Our results suggest that in both countries, just over 10% of inventions involved an external co-inventor and about 30% involved external (non-co-inventor) collaborators (with the rate of collaboration somewhat higher in Japan). Cross-organizational co-inventions increase as firm size declines, especially in Japan. In both countries, vertical collaborations (both co-inventions and other collaborations) with users and suppliers were the most common. The most important knowledge sources were similar in the two countries: patents, customers, publications, and information from other parts of the firm, although their relative rankings varied somewhat. In particular, patent literature is a relatively more important information source in Japan and scientific literature is relatively more important in the US. Since our evidence suggest that inventors see literature globally, such difference does not seem to be driven by the difference of the disclosed literature (for an example, more early patent disclosure in Japan) as suggested by earlier literature but by that of the incentive and capability of the inventors. While in both countries most R&D funding is provided internally, venture capital and government funding play a greater role in the US than in Japan, with venture capital funds especially important for the smallest US firms. On the other hand, industry funding plays a greater role for university researchersf inventions in Japan. There is some evidence that gopen innovationh through collaborations enhances not only the technical significance of the invention, but also the probability of its commercialization through, for an example, vertical collaboration facilitating better matches between the needs of customers or the capabilities of suppliers.
    Date: 2009–05
  5. By: Makoka, Donald
    Abstract: Access to high-value markets remains one of the major challenges facing smallholder farmers in Africa. The paper applies a value chain analysis to the pigeonpea sub-sector in Malawi to determine ways of improving the access of small farmers to the global pigeonpea markets. The value chain analysis, complemented by primary data from a sample of 200 farmers, investigates the nature of the pigeonpea value chain by highlighting the main actors and the sources of inefficiency along the chain. The study shows that pigeonpea production is dominated by smallholder farmers with limited access to market information and who are also faced with lack of access to improved varieties. For the Malawian exporters, their competitiveness is being undermined by high freight costs and low pigeonpea grain quality. Policies to improve market institutional innovations through the use of the leading farmer organization, NASFAM, have the potential of improving the competitiveness of the producers.
    Keywords: Pigeonpea; value chain; smallholder farmers; Malawi
    JEL: N57 D13 B21
    Date: 2009–01–08
  6. By: Guido Cozzi; Silvia Galli
    Abstract: Firm success is often associated with the development of better products. Private firms undertake applied R&D seeking market advantage, by capitalizing on the freely accessible results of basic research. But unpatentable basic research often fails to address applied R&D open problems. What is the role of the incentives in improving the innovative performance of an economy by matching partially motivated public researchers to their mission? Sometimes government funded research projects are mission-directed, yet in many cases the public sector academics indulge in carrier-driven research. An innovation system where, as in the US, also basic research is driven by patents, implicitly sets an ex-post incentive to the researchers guided by invisible hand. For a public innovation system - like the European one - designing an incentive scheme to motivate public researchers is of key importance for fostering the performance of the economic system. This paper extends the Schumpeterian multisector growth model with vertical innovation by highlighting a link between the degree of "targetness" of public research and aggregate innovation. A positive effect of social capital is also proved.
    Keywords: Sequential Innovation, Research Tools, Basic Research, Knowledge Management, Social Capital.
    JEL: H44 O31 O34 O38
    Date: 2009–04
  7. By: Masahiro Kawai
    Abstract: Despite the rapid development of economic interaction between the People’s Republic of China (PRC) and Latin American and Caribbean (LAC) countries, their trade and investment ties are still in their very early stages, and the complementarily of factor endowments dominates their bilateral trade pattern. By examining the determinants of trade performance of the PRC and LAC economies, and stimulating alternative scenarios for their economic opening and cooperation , the PRC and LAC economies need to move beyond their traditional focus on resource complementarity to more dynamic, foreign direct investment(FDI) based intra-industry trade. Policies that encourage deep economic integration would help Latin America firms integrate into the value chains of global production and enable Chinese and other East Asian firms to have greater and more stable access to resources and markets. Further liberalization of trade, FDI regimes and regulatory policies should be of high priority for most LAC countries, while the PRC and other East Asian economies could make a great contribution to trade ties by investing in manufacturing sectors and infrastructure in Latin America. [WP 137]
    Keywords: People’s Republic of China; Latin America; East Asia; Economic Cooperation;Economic Linkages; Resource; Complementarity; Manufacturing Complementarity; Trade; Trade Development; Trade Linkages; Trade Cooperation; Bilateral Trade; Gravity Analysis
    Date: 2009
  8. By: Bayo, Alberto (Universidad Publica de Navarra); Galdon-Sanchez, Jose E. (UC-Santa Cruz); Gil, Ricard (UC-Santa Cruz)
    Abstract: In this paper we empirically examine the determinants of changes in the organization of production using detailed information on a data set from a new plant-level survey of 1003 plants covering the full range of manufacturing industries in Spain. In particular, and among many other things, survey respondents were asked how service outsourcing practices had changed in the last three years. The answer to this question is indicative of the changes in the importance of backward integration for each of the plants studied. Using other information provided in the survey, we relate the reported changes in outsourcing to changes in other relevant dimensions as possible determinants of the boundaries of the firm. These dimensions are: plant size, downstream market power, cost of inputs, price and quality of the final good and technological progress. Our findings show that outsourcing increases are strongly positively correlated with increases in market share and in market competition. We also find that outsourcing increases when plants face simultaneous increases in product quality and product prices and that it decreases when plants face simultaneous increases in market share and market competition. Finally, we find that multi-plant and one-plant firms adjust their outsourcing practices differently to outside changes. Since neither TCE nor PRT theories of vertical integration fully explain the patterns found in our data, we close this paper by following Adam Smith's claim that the extent of the market seems to be the only factor consistently limiting the degree of specialization in our setting.
    Keywords: outsourcing; vertical integration; competition; manufacturing plants;
    JEL: L22 L23 L60
    Date: 2009–03–15
  9. By: Unal Zenginobuz; Sumru Altug
    Date: 2009–02
  10. By: FUKAO Kyoji; MIYAGAWA Tsutomu; Hak K. PYO; Keun Hee RHEE
    Abstract: As the studies of Krugman (1994), Young (1994), and Lau and Kim (1994) showed, the East Asian economic miracle may be characterized as 'input-led' growth. However, both the stagnation in investment and the decrease in average working hours combined with a decrease in the fertility rate require a productivity surge for renewed, sustainable growth in East Asia. The purpose of our study is to identify the sources of economic growth based on a KLEMS model for Japan and the Republic of Korea, which experienced a 'Lost Decade' and a financial crisis in 1997-1998, respectively. We report estimates of multifactor productivity in the market economy of Japan and Korea based on the dataset of a 72-industry classification following EU KLEMS project guidelines. We also identify the contributions of ICT assets and resource reallocations in two economies. Both economies have strong ICT-producing sectors but relatively weaker ICT-usage effects. Lower productivity in service industries due to excessive regulations and lack of competition in public service sectors seem to have worked against enhancing ICT-usage effects and finding renewed sustainable growth paths. The resource reallocation effects of capital input in both Japan and Korea were either negligible or insignificant, while those of labor input (the labor shift from lower wage industries to higher wage industries) were positive and significant. Therefore, a series of productivity-enhancing policies designed to promote reallocation of capital input seems crucial for both economies to resume sustainable growth paths.
    Date: 2009–05

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