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on Economics of Strategic Management |
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Issue of 2009‒09‒05
nine papers chosen by Joao Jose de Matos Ferreira University of the Beira Interior |
| By: | Sofka , Wolfgang; Grimpe, Christoph |
| Abstract: | Searching for external knowledge has frequently been characterized as crucial for firm success. However, little is known about how the direction of search strategies influences innovation performance. In this paper, we argue that firms need to specialize their search strategy and that its effectiveness is moderated by R&D investments and potential knowledge spillovers from a firm's environment. Based on a sample of more than 5,000 firms from five European countries, our results show that being open for innovation generally pays off. However, both moderating factors have a crucial role to play: On the one hand, in-house R&D investments are most effective when combined with a market-oriented search strategy. On the other hand, a technologically advanced environment requires firms to reach out to scientific knowledge sources in order to access novel knowledge and to enhance innovation performance. We develop targeted management recommendations based on these results. |
| Keywords: | Open innovation,search strategies,innovation management |
| JEL: | L60 O32 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:09016&r=cse |
| By: | Giovanni Dosi; Richard R. Nelson |
| Abstract: | This work prepared for B. Hall and N. Rosenberg (eds.) Handbook of Innovation, Elsevier (2010), lays out the basic premises of this research and review and integrate much of what has been learned on the processes of technological evolution, their main features and their effects on the evolution of industries. First, we map and integrate the various pieces of evidence concerning the nature and structure of technological knowledge the sources of novel opportunities, the dynamics through which they are tapped and the revealed outcomes in terms of advances in production techniques and product characteristics. Explicit recognition of the evolutionary manners through which technological change proceed has also profound implications for the way economists theorize about and analyze a number of topics central to the discipline. One is the theory of the firm in industries where technological and organizational innovation is important. Indeed a large literature has grown up on this topic, addressing the nature of the technological and organizational capabilities which business firms embody and the ways they evolve over time. Another domain concerns the nature of competition in such industries, wherein innovation and diffusion affect growth and survival probabilities of heterogeneous firms, and, relatedly, the determinants of industrial structure. The processes of knowledge accumulation and diffusion involve winners and losers, changing distributions of competitive abilities across different firms, and, with that, changing industrial structures. Both the sector-specific characteristics of technologies and their degrees of maturity over their life cycles influence the patterns of industrial organization ? including of course size distributions, degrees of concentration, relative importance of incumbents and entrants, etc. This is the second set of topics which we address. Finally, in the conclusions, we briefly flag some fundamental aspects of economic growth and development as an innovation driven evolutionary process. |
| Keywords: | Innovation, Technological paradigms, Technological regimes and trajectories, Evolution, Learning, Capability-based theories of the firm, Selection, Industrial dynamics, Emergent properties, Endogenous growth |
| Date: | 2009–08–31 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2009/07&r=cse |
| By: | Zimmermann, Jörg; Grimpe, Christoph; Sofka, Wolfgang |
| Abstract: | Young firms with the ability to internationalize early and decisively have received much attention in recent academic discussion. However, relatively little is known about the underlying processes that enable them to skip several stages of the internationalization process. We contribute to this research stream by establishing theoretical links with the emerging open innovation paradigm of firms optimizing their R&D activities by interconnecting them with external partners such as leading customers, universities or specialized suppliers. Based on a sample of more than 2,500 firms in Germany we contrast young and mature firms with regard to the effect of open innovation strategies on internationalization performance. Our results show that both the breadth and depth of search strategies for external knowledge help young firms to enter international markets. Once they have entered these markets, though, the drivers for success seem to shift from general knowledge sourcing to targeted and specific ones. |
| Keywords: | New ventures,internationalization,innovation,search strategies,entrepreneurship |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:09017&r=cse |
| By: | Hyun-Ju Koh (University of Munich); Nadine Riedel (Oxford University Centre for Business Taxation) |
| Abstract: | This paper assesses the agglomeration pattern of four-digit industries in Germany using a rich data set on the population of German firms. To identify geographical agglomeration, we follow the distance based approach of Duranton and Overman (2005) and find that the location pattern of 78% of our industries departs from randomness in the sense that firms exhibit significant geographical localization. In line with previous studies on manufacturing firms in the UK and France, our analysis suggests that especially traditional manufacturing industries exhibit strong localization patterns. Moreover, we find that geographical localization is not restricted to the manufacturing sector but that it plays an equally, or even more important role in service industries. |
| Keywords: | Geographic concentration, agglomeration |
| JEL: | R12 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:btx:wpaper:0913&r=cse |
| By: | Cassiman, Bruno; Veugelers, Reinhilde; Zuniga, Pluvia |
| Abstract: | This paper examines the diversity of the types of links of firms to science and their effect on innovation performance for a sample of Belgian firms. While at the industry level links to science are highly related to the R&D intensity of the sector, we show that there exists considerable heterogeneity in the type of links to science at the firm level. Overall, firms with a science link enjoy superior innovation performance, in particular with respect to innovations that are new to the market. At the invention level, our findings confirm that patents from firms engaged in science are more frequently cited and have a broader technological and geographical impact, but we show that it is crucial to distinguish between direct science links at the invention level and indirect science links at the firm level to encounter these distinct positive effects of science links. |
| Keywords: | Innovation,cooperation,patents,forward citation,science,industrial innovation |
| JEL: | O32 O34 L13 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:200930&r=cse |
| By: | Holger Görg; Henning Mühlen; Peter Nunnenkamp |
| Abstract: | In addition to firm and industry characteristics, the heterogeneity of foreign direct investment (FDI) has to be taken into account when analyzing the determinants of outward FDI. We combine two firm-specific datasets on German firms with subsidiaries and joint ventures in the Czech Republic, compared to a control group of German firms without FDI in this host country. The impact of firm and industry characteristics on FDI decisions is assessed by estimating two-step Heckman models. We find that larger, more productive and more experienced firms are more likely to invest in the Czech Republic. Firm characteristics also affect the size of FDI in manufacturing. The relevance of both firm and industry characteristics critically depends on whether FDI is horizontal or vertical |
| Keywords: | multinational enterprises, firm heterogeneity, industry characteristics, sector-specific FDI, vertical and horizontal FDI |
| JEL: | F23 L25 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1544&r=cse |
| By: | Gottschalk, Sandra; Müller, Kathrin; Niefert, Michaela |
| Abstract: | This paper analyzes empirically the determinants of new born firms' initial size. As survival prospects of young firms tend to be linked to a firm's start-up size, a better understanding of the factors influencing start-up size is crucial. Most of the rare literature on initial firm size focuses on industry characteristics. We contribute to the understanding of the determinants of initial firm size by analyzing firm specific factors such as founders' human capital composition and entry strategies. We find that in addition to industry effects start-up size is considerably influenced by the human capital of firm founders. We distinguish between generic and specific human capital. Generic human capital refers to the general knowledge acquired through formal education and professional experience and usually coincides with a higher personal wealth. Specific human capital comprises competences that can be directly applied to the entrepreneurial job. For generic human capital we find that having a university degree has a positive influence on start-up size. The same applies for general working experience proxied by the founder's age. For the specific human capital components we find that successful entrepreneurial experience and managerial experience gained in dependent employment support a higher start-up size. Altogether, specific human capital tends to have a larger impact on initial size than generic human capital. Entry strategies are expected to have a crucial influence on start-up size, because objectives of market entry largely determine the resources a firm requires. We distinguish between different types of entry strategies. On the one hand, we look at entry strategies based on innovation. We measure innovation by a variable which indicates if a firm carries out continuous R&D. On the other hand, entry is classified according to the main motive of the founders for firm formation. We conclude that different motives are accompanied by diverse entry strategies. The four main groups of entry strategies are independency entrepreneurship, opportunity entrepreneurship, spin-out entrepreneurship and necessity entrepreneurship. The results indicate that firms conducting R&D continuously start larger than others when measuring initial employment in full-time equivalents. We do not observe a significant effect on start-up size measured in head counts. This suggests that R&D tasks are mostly carried out by fulltime employees and to a lesser extent by persons working part-time for the firm. Further, firms with entry strategies based on the exploitation of new market opportunities as well as spin-out entrepreneurship exhibit a higher initial size while start-ups established from necessity appear to start at a smaller scale. |
| Keywords: | firm start-up size,human capital,firm foundation |
| JEL: | L11 L26 J24 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:09030&r=cse |
| By: | Squicciarini, Mariagrazia |
| Abstract: | The paper focuses on the role of Science Parks (SPs) as seedbeds of innovation. It investigates whether and to what extent locating inside a science park relates to the innovative output of tenant firms. The simple assessment methodology proposed relies on count data models, uses patents as innovation performance indicators, and exploits original data regarding the Finnish science parks, their main characteristics, and the data of 252 SP tenant firms, including their patenting activity over the period 19702002. Among other results, the study suggests that both within and among SPs interaction and spillover effects exist, and points out the way in which they relate to firms' innovative output. Results are robust to controlling for the existence of innovation lags. Parks' first mover disadvantages also emerge, as well as non-negligible matching phenomena whereby firms' and parks' characteristics matter jointly. |
| Keywords: | Science Parks,knowledge spillovers,innovation,patents,firm performance |
| JEL: | L29 O32 O38 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:200932&r=cse |
| By: | John Hutchinson (European Central Bank); Jozef Konings (Economics Department, K.U. Leuven); Patrick Paul Walsh (SPIRe and The Geary Institute University College Dublin) |
| Abstract: | We show that the stylized facts of the Firm Size Distribution (FSD) by age cohorts, as shown in Cabral and Mata (2003), bind within 4-digit manufacturing industries in the UK and Belgium. As in Klepper and Thompson (2006) and Sutton (1998), we explore whether time to build a portfolio of products is a mechanism that relates age to firm size. While inter industry diversification, to some extent, accounts for the role of age, we find that the presence of economies of scope has a separate impact on firm size when controlling for age, amongst other factors. Using the techniques in Cabral and Mata's we show that the FSD by degrees of product diversification shifts to the right, but more so in older age groups. This shows a role for inter-industry diversification over and above an age effect. |
| JEL: | L10 L11 L16 |
| Date: | 2009–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:200926&r=cse |