nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2009‒08‒22
ten papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. The Challenge of Restoring French Competitiveness By Rafal Kierzenkowski
  2. Territorial innovation dynamics and integration of SMEs into the collaborative innovation projects of French competitiveness poles: the underlying mechanisms By Rani Jeanne Dang
  3. One-third codetermination at company supervisory boards and firm performance in German manufacturing Industries: First direct evidence from a new type of enterprise data By Joachim Wagner
  4. THE MEGACRISIS UNKNOWN TERRITORY - In Search of Conceptual and Strategic Breakthroughs By Patrick Lagadec
  5. Vertical Relations in the Presence of Competitive Recycling By Liliane Karlinger
  6. Effects of Organizational Change on Firm Productivity By Håkansson, Christina
  7. Internal and external political competition By David Hugh-Jones
  9. Measuring Cognitive Competencies By Ulrich Trautwein
  10. Trade, Foreign Investment, and Industrial Policy for Developing Countries By Ann Harrison; Andrés Rodríguez-Clare

  1. By: Rafal Kierzenkowski
    Abstract: Since the beginning of the decade, France has seen a marked decline in its export performance, leading to growing concerns on the part of the authorities and of civil society about the economy’s capacity to adapt to the intensified globalisation of trade and investment in goods and services. The poor foreign trade performance of recent years is related to a series of factors, rather than to any single cause. It cannot be explained by external determinants alone, such as the exchange rate, the trade inroads of emerging countries with strong export potential or the sharp rise in oil prices in 2007-08. Indeed, it is not so much the loss of market share itself that is of concern (many countries have experienced this), but rather the extent of that loss, which reflects problems in responding to the acceleration in global demand earlier this decade, before the apparition of the current crisis. An analysis of the deterioration in competitiveness points to supply-side factors such as the relative inability of French firms to service foreign markets, and the pursuit of industrial strategies of offshoring the entire production process. Restoring competitiveness will require steps to strengthen the country’s growth potential and to address the main long-term determinants of that potential, such as fostering research and development, promoting innovation, reducing the tax burden, boosting competition and creating favourable conditions for businesses to grow rapidly. The lack of competitiveness is more often a symptom than the cause of one or more underlying economic weaknesses. What is called for, then, is a comprehensive policy response that addresses the sources of the competitiveness problem, rather than targeted interventions designed directly to remedy the growing trade deficit. This Working Paper relates to the 2009 OECD Economic Survey of France (
    Keywords: globalisation, OECD, France, firm, innovation, competitiveness, R&D, export performance, growth potential, market share, SMEs, tax burden, trade deficit
    JEL: F10 F14 I23 I28 O31 O38
    Date: 2009–08–06
  2. By: Rani Jeanne Dang (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR6227 - Université de Nice Sophia-Antipolis)
    Abstract: Geographical clusters are nowadays considered as a relevant factor for competitiveness, thanks to their innovative capabilities. In this context, public policies based on this approach are flourishing all over the world. The French “Pole of competitiveness” (PoC) policy (Politique des pôles de compétitivité) is one of these initiatives. It is the new French industrial policy aiming at reinforcing the specializations of the economy and the attractiveness of territories by fostering the development of R&D projects, bringing together multinationals, universities, and particularly Small-Middle-Sized-Enterprises (SMEs). Precisely, significant research suggests that in order to innovate SMEs need to cooperate and they are also vital for the functioning, and survival of innovative milieux. Consequently, their integration is a key issue for French PoC’ success. However, the call for projects shows that despite their efforts, French Poles of Competitiveness are not totally successful: a gap remains especially between the massive financial investments helping SMEs innovate and the expected results. Yet, this issue is only analysed by focusing on intrinsic weaknesses of SMEs’ management or on the complexities of existing support programmes supporting SMEs’ innovation. This is insufficient. Innovation dynamics are different from a cluster to another and many failures of innovation policies come from the lack of identification of these specificities. Therefore, this paper aims are threefold: it aims at introducing the French PoC, indeed, the French PoC policy is the main new policy gathering all the nation’s innovation programmes. But few papers are explaining how they work. It aims at identifying the territorial innovation dynamics within PoC and how they work, and then combine this analysis with the intrinsic features of SMEs management, to better understand how they get involved in these dynamics. It finally aims at presenting the preliminary results of the first stage of research: the analysis of a specific French PoC, the “Secured Communicating Solutions”(SCS) PoC as well as the further research questions they raise for the next stage of research.
    Keywords: clusters, interaction, knowledge management, SMEs
    Date: 2009–01–30
  3. By: Joachim Wagner (Institute of Economics, University of Lüneburg)
    Abstract: This paper contributes to the empirical literature on the co-determination – firm performance nexus by using a new type of data that combines information on the co-determination status of enterprises from a commercial data base and supplementary information collected from the firms with comprehensive data on the firms from official statistics. The data allow for the first time a direct comparison of enterprises from the same size class with and without codetermination at the supervisory board level. It is shown that one-third codetermination at the supervisory board level in limited-liability companies from West German manufacturing industries seems to be neither positively nor negatively related to two core firm performance indicators, productivity and profitability.
    Keywords: One –third co-determination, firm performance, Germany
    JEL: J50
    Date: 2009–08
  4. By: Patrick Lagadec (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X)
    Abstract: The nature of major crises has dramatically evolved over the past fewyears: Megcrises become the name of the game. The goal of this contribution is to capture the evolving notion of crisis, and to prepare new references to deal with the new crisis landscapes. The first section aims at building a renewed understanding of the emerging challenges we face – a combination of rogue events made of severity, speed, ignorance, hypercomplexity, inconceivability, and liquefaction-prone contexts that no longer guarantee the “back to normalcy” comforting rule. The second develops the components of a strategic response which includes: a seminal paradigm shift; a switch from management to leadership, and from “Command and Control” to decisive empowerment; and a whole new approach in education and training.
    Keywords: Mega-crises, Critical Thinking, Strategic Approach
    Date: 2009–07–15
  5. By: Liliane Karlinger
    Abstract: We develop a model that incorporates salient features of growth in modern economies. We combine the expanding-variety growth model through horizontal innovations with a hierarchy of basic and applied research. The former extends the knowledge base, while the latter commercializes it. Two-way spillovers reinforce the productivity of research in each sector. We establish the existence of balanced growth paths. Along such paths the stock of ideas and the stock of commercialized blueprints for intermediate goods grow with the same rate. Basic research is a necessary and sufficient condition for economic growth. We show that there can be two different facets of growth in the economy. First, growth may be entirely shaped by investments in basic research if applied research operates at the knowledge frontier. Second, long-run growth may be shaped by both basic and applied research and growth can be further stimulated by research subsidies. We illustrate different types of growth processes by examples and polar cases when only upward or downward spillovers between basic and applied research are present.
    JEL: H41 O31 O41
    Date: 2009–07
  6. By: Håkansson, Christina (Institute for International Economic Studies, IIES.)
    Abstract: An increasing use of IT facilitates firms to use more efficient organiza- tional forms. Significant reorganizations of business processes around IT capital can thereby boost productivity growth. The aim of this study is to empirically examine how …rm productivity growth is affected by orga- nizational changes and investments in IT using a Difference-in-Difference approach on a panel of Swedish firms over the years 1997-2005. The empirical results show a positive and significant effect on total factor pro- ductivity growth for firms that invested above median in IT and at the same time undertook organizational changes.
    Keywords: information technology; productivity; organizational change
    JEL: D24 E22 L22 O33
    Date: 2009–06–01
  7. By: David Hugh-Jones
    Abstract: All rulers face political competition, both from rivals within their state, and from other states to which their subjects may exit. In a simple model, both kinds of competition are substitutes. Internal competition (democracy) bene?ts citizens by allowing them to replace rent-seeking rulers. But it also weakens these rulers' incentives to invest. External competition forces rent-seeking rulers to invest so as to prevent migration. As a result, citizens are less willing to ?ght for democracy, and rulers are less eager to oppose it, when external competition is high. In a panel of countries, there are fewer changes towards democracy when states have low GDP relative to their neighbours.
    Keywords: political competition, dictatorship, democracy, transitions
    JEL: D72 H77
    Date: 2009–08–10
  8. By: Reyno Seymore (Department of Economics, University of Pretoria); Margaret Mabugu (Department of Economics, University of Pretoria); Jan van Heerden (Department of Economics, University of Pretoria)
    Abstract: The South African Government announced, in the 2008 Budget Review, the intention to tax the generation of electricity from non-renewable sources with 2c/kWh. This tax is to be collected by the producers/generators of electricity at the source. The intention of the tax is to serve a dual purpose of managing the potential electricity shortages in South Africa and to protect the environment. The primary objective of this paper is to evaluate the impact of an electricity generation tax on the international competitiveness of South Africa. Specifically, different scenarios are assessed to establish whether the loss of competitiveness can be negated through an international, multilateral electricity generation tax. The paper firstly considers the beneficial impact of environmental taxation on the competitiveness of a country. We subsequently apply the Global Trade Analysis Project (GTAP) model to evaluate the impact of an electricity generation tax on the competitiveness of South Africa, given multilateral taxes on SACU, SADC and European Union economies. We simulate the proposed tax as a 10 percent increase in the output price of electricity. We assume a closure rule that allows unskilled labour to migrate between sectors and a limited skilled workforce. As expected, a unilateral electricity generation tax in South Africa will adversely affect the competitiveness of the South African economy and slightly improve the competitiveness of the other SACU and SADC economies. However, if a multilateral tax is imposed throughout the SACU and SADC countries, South Africa will experience a marginally greater loss of competitiveness compared to a unilateral tax. At the same time the rest of the SACU and SADC countries will experience a loss of competitiveness. The benefit of emission reduction in South Africa will also be lower under these multilateral tax scenarios. The competitiveness effect on the South African economy as well as emission reduction will be more moderate under a multilateral South Africa/EU electricity generation tax than under a unilateral South African tax.
    Date: 2009–08
  9. By: Ulrich Trautwein
    Abstract: The systematic of key cognitive competencies is of high scientific and societal relevance, as is the availability of high-quality data on cognitive competencies. In order to make well-informed decisions, politicians and educational authorities need high-quality data about the effectiveness of formal and non-formal educational environments. Similarly, researchers need strong data to test complex theoretical models about how individual biographies are shaped by the interplay between individual and institutional affordances and constraints. Innumerable data sets offer some form of information on competencies such as respondents’ years at school and their school grades. Such data are relatively easy to collect. When it comes to making informed political and educational decisions, however, there are increasing calls for a more systematic use of standardized competence tests. The production, storage, and use of standardized test data on competencies in specific domains is expensive, complex, and time-consuming, however. This chapter argues that there is a paucity of adequate data on cognitive competencies in important domains, especially of longitudinal data from standardized competence tests, and that for many important questions there are no good alternatives to high-quality standardized tests of cognitive competencies. Furthermore, it outlines some challenges in the construction and application of standardized competence tests and makes several recommendations.
    Keywords: cognitive competencies, assessment, intelligence, school grades
    Date: 2009
  10. By: Ann Harrison; Andrés Rodríguez-Clare
    Abstract: In this paper we explore the popular but controversial idea that developing countries benefit from abandoning policy neutrality vis-a-vis trade, FDI and resource allocation across industries. Are developing countries justified in imposing tariffs, subsidies, and tax breaks that imply distortions beyond the ones associated with optimal taxes or revenue constraints? We refer to this set of government interventions as "industrial policy". We explore the theoretical foundation for industrial policy and then review the related empirical literature. We follow this with a broader look at the empirical work on the relationship between trade and FDI and growth. In this review, we find little evidence that countries benefit from "hard" interventions that distort prices to deal with Marshallian externalities, learning-by-exporting, and knowledge spillovers from FDI. We discuss an alternative set of "soft" industrial policies that deal directly with the coordination failures that may arise within the sectors or clusters where the country has a comparative advantage.
    JEL: F0 O0
    Date: 2009–08

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