nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2009‒08‒30
nine papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. The Global-Local Interplay of MNE and Non-MNE Firms By Johansson, Börje; Lööf, Hans
  2. The Determinants of Value Creation at the Firm, Industry and National Levels: A Framework and Evidence By Pitelis, Christos; Vasilaros, Vassilis
  3. Human Resource Practices and Value Capture from Investment in Knowledge/Innovation: Evidence from a Quasi-Experiment By Georgiadis, Andreas; Pitelis, Christos
  4. Intracompany Governance and Innovation By Sharon Belenzon; Tomer Berkovitz; Patrick Bolton
  5. Value Capture from Organizational Advantages and Sustainable Value Creation By Pitelis, Christos
  6. The Firm and the Region as Breeding Grounds for Entrepreneurs By Baltzopoulos, Apostolos
  7. Factors influencing the Internationalisation of Firms: Micro Foundations of Macro Determinants By Pitelis, Christos; Argitis, George
  8. Performance and Congestion Analysis of the Portuguese Hospital Services By Simões, Pedro; Cunha Marques, Rui
  9. What Determines the Attractiveness of EU Regions to the Location of Multinational Firms in the ICT Sector? By Siedschlag, Iulia; Zhang, Xiaoheng; Smith, Donal

  1. By: Johansson, Börje (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: During a sequence of decades we can observe a co-evolution of globalization through network formation of multinational (MNE) firms and concentration in specific places due to agglomerative forces. First, innovation ideas arrive at a faster speed to firms with past experience of innovation activities and with established export market contacts. Second, innovativeness is strongly dependent on corporate and ownership structure. Third, the returns to innovation efforts are positively influenced by firms’ capability to exploit extended markets. All these phenomena can be theoretically explained by MNE’s capacity to coordinate global supply chains and orchestrate localized R&D activities and knowledge flows. The paper illuminates how attributes of MNEs and non-MNEs differ, and how these differences affect the productivity and export intensity. It also shows how agglomeration economies affect MNEs and non-MNEs.
    Keywords: globalization; agglomeration; corporate ownership structure; innovation; exports; productivity
    JEL: C16 F14 L25 O33 R12 R30
    Date: 2009–08–26
  2. By: Pitelis, Christos; Vasilaros, Vassilis
    Abstract: We aim to bridge three (plus one) levels of (strategic) management theory of value capture and sustainable value creation; micro (firm), meso (industry, region), macro (national) (and also global). We propose a framework for value creation by firms and explore firm strategies for value capture and their relationship to value creation. We construct requisite variables and test our framework for 17 OECD countries using panel data. We find support for our integrative framework. We also explore the issue of sustainability and its implications for managerial practises, corporate governance, public policy and global governance that promote sustainable global value creation.
    Keywords: Global value creation and capture, sustainability, governance
    Date: 2009
  3. By: Georgiadis, Andreas; Pitelis, Christos
    Abstract: We analyse the link between human resource (HR) practices and the ability of firms to capture value from investments in knowledge-innovation and present evidence that supports a positive relationship between the two, employing an empirical design that utilises a unique data set that is based on a quasi-experiment. Our findings suggest that an additional pound invested in R&D, increases the rate of return of businesses that receive support in the form of employees and management/entrepreneur training, as well as improved workforce retention and recruitment, by significantly more than businesses that didn't receive such support. This has important implications for managerial practice and public policy.
    Date: 2009
  4. By: Sharon Belenzon; Tomer Berkovitz; Patrick Bolton
    Abstract: This paper examines the relation between ownership, corporate form, and innovation for a cross-section of private and publicly traded innovating firms in the US and 15 European countries. A striking novel observation emerges from our analysis: while most innovating firms in the US are publicly traded conglomerates, a substantial fraction of innovation is concentrated in private firms and in business groups in continental European countries. We find virtually no variation across US industries in the corporate form of innovating firms, but a substantial variation across industries in continental European countries, where business groups tend to be concentrated in industries with a slower and more fundamental innovation cycle and where intellectual protection of innovators seems to be of paramount importance. Our findings suggest that innovative companies choose the corporate form most conducive to R&D, as predicted by the Coasian view of how firms form. This is especially true in Europe, where there are fewer regulatory hurdles to the formation of business groups and hybrid corporate forms. It is less the case in the US, where conglomerates are generally favored.
    JEL: O16 O31 O32
    Date: 2009–08
  5. By: Pitelis, Christos
    Abstract: The impact of firm value capture strategies on the sustainability of the value creation process as a whole has been little discussed in the literature. Despite contributions by leading scholars on issues pertaining to value capture and value creation, moreover, we still lack a systematic framework of their determinants. Our purpose in this paper is to propose a conceptual framework for value creation and value capture, explore their relationship, and discuss pre-requisites for sustainable system-wide value creation. We then derive propositions and explore implications of our analysis on business strategy and public policy.
    Keywords: Advantages, Value Creation, Value Capture, Sustainability, Policy
    Date: 2009
  6. By: Baltzopoulos, Apostolos (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: The present study carries out a mutli-level analysis of entrepeneurship by considering the choice of the individual to leave his job position to become self-employed. A comprehensive data-set matching the individual to his place of work allows controlling for the characteristics of both the firm and the region he worked in before starting his own firm. The results suggest that small firms spawn entrepreneurs more frequently and individuals working in larger regions that are characterized by larger local markets, higher accumulation of knowledge resources and higher population density are more likely to transcend into entrepreneurship. I also find evidence that people are more likely to select the path of self-employment in the face of weak local competition.
    Keywords: Entrepreneurship; self-employment; externalities
    JEL: D01 O12 O18 R10
    Date: 2009–08–26
  7. By: Pitelis, Christos; Argitis, George
    Abstract: We draw on insights from the theory of the multinational enterprise (MNE) to explain outward investment and (thus) internationalisation. We claim that micro insights from the work of Stephen Hymer, Edith Penrose and other extant theories of the MNE can serve as micro foundations of some macro determinants of internationalisation. The focus on macro determinants pursues and develops an earlier critique of the theory of the MNE by Penrose; that it fails to distinguish between intra-national and inter-national expansion of firms. We propose demand-side national business cycle considerations as a Penrose-inspired answer to the Penrosean critique. Our evidence derives from USA and UK data, supports insights from Hymer, Vernon, Penrose and our response to the Penrosean challenge.
    Keywords: Hymer, Penrose, Business Cycle, Outward Investment
    Date: 2009
  8. By: Simões, Pedro; Cunha Marques, Rui
    Abstract: The health care services have been characterised by a growing demand by the citizens leading to the need of more and more resources. Population aging, new pathologies and drugs as well as new treatments are some of the major factors for this. However, in hospitals, for example, consumption of a large number of inputs frequently has not corresponded to the production of the same or more proportion of outputs. Sometimes, the outputs even decline with the increase of inputs due to the influence of the congestion effect on efficiency. The heavy burden of the health sector on the state budget brings about the interest of research over its efficiency. This paper aims to assess the performance of the Portuguese hospitals and particularly the contribution of the congestion effect. We use the non-parametric technique of data envelopment analysis (DEA) for this purpose and a double-bootstrap procedure to take into account the influence of operational environment on efficiency. Afterwards, by comparing three different approaches we determine the importance of congestion in efficiency measurement and discuss its computation methodologically. The results suggest significant levels of inefficiency in 68 major Portuguese hospitals for the year 2005 and more than half of them were found to be congested.
    Keywords: Hospitals; congestion; efficiency; DEA; Portugal
    JEL: I11 C14 I1 C1
    Date: 2009–08–24
  9. By: Siedschlag, Iulia (ESRI); Zhang, Xiaoheng (ESRI); Smith, Donal (ESRI)
    Abstract: We examine the attractiveness of European Union regions for location of multinationals in the Information and Communication Technologies (ICT) sector. Using data on 8,543 foreign subsidiaries established in 229 regions of the European Union over the period 1998-2008 we find that on average, the location probability increases with regional demand, agglomeration economies, technological development, flexibility of labour markets, and information technology infrastructure. The determinants of the location choice of ICT multinationals are different for regions in Western Europe and Central and Eastern Europe. While in Western Europe, regions with higher GDP per capita are preferred for both ICT multinationals in manufacturing and service sectors, in Central and Eastern Europe, regions with lower GDP per capita attract the bulk of ICT multinationals in the service sector. Unemployment rates appear negatively correlated with the probability of location in the whole European Union and Western Europe, while they increase attractiveness for regions in Central and Eastern Europe. Some determinants are also found to have heterogeneous effects on multinationals from different countries. In particular, US multinationals are not sensitive to labour costs while EU multinationals respond to this factor negatively.
    Keywords: Foreign direct investment; Information and Communication Technologies; Location choice; Conditional logit; Nested logit; European Union.
    Date: 2009

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