nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2009‒09‒19
thirteen papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. The effects of knowledge management on innovative success: an empirical analysis of German firms By Cantner, Uwe; Joel, Kristin; Schmidt, Tobias
  2. How Do Organizational Capabilities Shape Industry Dynamics ? By Marco Corsino; Roberto Gabriele; Enrico Zaninotto
  3. Positional Advantage within Small Farms: Evidence from Illinois By Micheels, Eric T.; Gow, Hamish R.
  4. The predictive value of behavioural characteristics on the success of strategic alliances By Vanpoucke, E.; Vereecke, A.
  5. Market fields structure & dynamics in industrial automation By Slowak, André P.
  6. Knowledge, innovation and localised technological change in Italy, 1950-1990 By Antonelli Cristiano; Barbiellini Amidei Federico
  7. The Generation and Exploitation of Technological Change: Market Value and Total Factor Productivity By Antonelli Cristiano; Colombelli Alessandra
  8. Policy approaches regarding technology transfer: Portugal and Switzerland compared By Maria das Dores B. Moura Oliveira; Aurora A.C. Teixeira
  9. Efficiency and profitability of European banks: how important is operational efficiency? By Werner, Karl; Moormann, Jürgen
  10. Entrepreneurship and aggregate merchandise trade growth in New Zealand By Richard Fabling; Lynda Sanderson
  11. Small farms in Italy between decline and innovative formula: an entrepreneurial model analysis By Capitanio, Fabian; Adinolfi, Felice; Malorgio, Giulio
  12. STRATEGIC costs management at societies group level. Multicriterial model for optimization By Pirvu, Cerasela; Mehedintu, Anca
  13. Distance-related Barriers and the Internationalisation of Finnish MNEs By Sarianna M. Lundan

  1. By: Cantner, Uwe; Joel, Kristin; Schmidt, Tobias
    Abstract: The aim of this paper is to analyse the effects of knowledge management on the innovation success of firms in Germany. Using a matching procedure on data from the German Innovation Survey of 2003 (Mannheim Innovation Panel), we pair firms applying knowledge management with twin firms with similar characteristics not applying knowledge management. Our focus is on investigating the effects of knowledge management techniques on the economic success of firms with product and process innovations. The results of our matching analysis reveal that firms which apply knowledge management perform better in terms of higher-than-average shares of turnover with innovative products compared to their twins. We do not find a significant effect of knowledge management on the share of cost reductions with process innovation.
    Keywords: knowledge management,innovation,matching estimator
    JEL: O32 L23 L25 M11
    Date: 2009
  2. By: Marco Corsino; Roberto Gabriele; Enrico Zaninotto
    Abstract: This paper aims to reconcile the logic behind stochastic models of firm growth and the notion of organizational capabilities as drivers of economic performance. In the proposed behavioral model of bounded rational firms, two mechanisms drive growth: independent stochastic growth of individual opportunities and the process by which firms capture new opportunities. To extend the stochastic framework, this research incorporates behavioral assumptions about the interactions between the firm and the business environment and the mechanism by which firms sense and seize business opportunities. The model generates statistical regularities in firm size, growth rates, and profit differentials between firms that are consistent with observed patterns in real-world settings. The greater the selective power of organizational capabilities, the more the steady-state distribution of firm size appears to deviate from log normality, which provides a potential explanation of various observed departures from the Law of Proportionate Effect. With regard to firm diversity, the distribution of opportunities per firm is skewed; just a few entities account for most of the business opportunities that arise during the simulation period. Moreover, the interaction between the external environment and the internal structure of firms influences heterogeneity in the value of the opportunities that they capture, as well as the persistence of long-run profits.
    Keywords: Organizational Capabilities; Firm Size Distribution; Growth Rates; Profitability
    JEL: C14 C63 D21 L25
    Date: 2009–09–08
  3. By: Micheels, Eric T.; Gow, Hamish R.
    Abstract: As the economic viability of small farms continues to be an issue facing policy makers and economists alike, a market orientation may be a valuable resource producers can develop as they compete in a marketplace dominated by larger firms. Marketing and strategy scholars have long established the importance of a market orientation in determining firm performance. More recently, scholars have studied the effect of these concepts in agriculture. Extending the literature of market orientation in agriculture, this study examines the concept of a positional advantage and its effect on performance using a sample of small farms in Illinois. Using a sample of 347 Illinois beef producers, we empirically measure and test the construct of positional advantage and test the relationship between positional advantage and subjective performance. Our results indicate that market orientation, entrepreneurship, innovation and learning are first-order indicators of positional advantage and that the positional advantage of a firm is positively related to firm performance.
    Keywords: Agriculture, innovation, market orientation, positional advantage, Farm Management, Production Economics, L11, L25, L26,
    Date: 2009–08–20
  4. By: Vanpoucke, E.; Vereecke, A. (Vlerick Leuven Gent Management School)
    Abstract: An increasing number of companies are setting up strategic alliances with suppliers and customers. However, the majority of these alliances do not succeed. Our aim is to understand how different behavioural characteristics are associated with alliance success. We hypothesize that alliance attributes, communication behaviour and alliance management are predictors of cost and service benefits. Furthermore, we found that while alliance attributes are related with both cost and service benefits, communication behaviour and alliance management are only associated with service and cost benefits respectively. We also see that alliance attributes explain most of the variance of supply chain success and are thus better predictors of alliance success than other behavioural characteristics. Furthermore, we provide insight into the way managers can build up supply chain performance by setting up strategic alliances.
    Keywords: Strategic alliances, Supply chain management, Operational performance
    Date: 2009–08–14
  5. By: Slowak, André P.
    Abstract: There is a research tradition in the economics of standards which addresses standards wars, antitrust concerns or positive externalities from standards. Recent research has also dealt with the process characteristics of standardisation, de facto standard-setting consortia and intellectual property concerns in the technology specification or implementation phase. Nonetheless, there are no studies which analyse capabilities, comparative industry dynamics or incentive structures sufficiently in the context of standard-setting. In my study, I address the characteristics of collaborative research and standard-setting as a new mode of deploying assets beyond motivations well-known from R&D consortia or market alliances. On the basis of a case study of a leading user organisation in the market for industrial automation technology, but also a descriptive network analysis of cross-community affiliations, I demonstrate that there must be a paradoxical relationship between cooperation and competition. More precisely, I explain how there can be a dual relationship between value creation and value capture respecting exploration and exploitation. My case study emphasises the dynamics between knowledge stocks (knowledge alignment, narrowing and deepening) produced by collaborative standard setting and innovation; it also sheds light on an evolutional relationship between the exploration of assets and use cases and each firm's exploitation activities in the market. I derive standard-setting capabilities from an empirical analysis of membership structures, policies and incumbent firm characteristics in selected, but leading, user organisations. The results are as follows: the market for industrial automation technology is characterised by collaboration on standards, high technology influences of other industries and network effects on standards. Further, system integrators play a decisive role in value creation in the customer-specific business case. Standard-setting activities appear to be loosely coupled to the products offered on the market. Core leaders in world standards in industrial automation own a variety of assets and they are affiliated to many standard-setting communities rather than exclusively committed to a few standards. Furthermore, their R&D ratios outperform those of peripheral members and experience in standard-setting processes can be assumed. Standard-setting communities specify common core concepts as the basis for the development of each member's proprietary products, complementary technologies and industrial services. From a knowledge-based perspective, the targeted disclosure of certain knowledge can be used to achieve high innovation returns through systemic products which add proprietary features to open standards. Finally, the interplay between exploitation and exploration respecting the deployment of standard-setting capabilities linked to cooperative, pre-competitive processes leads to an evolution in common technology owned and exploited by the standard-setting community as a particular kind of innovation ecosystem.
    Keywords: standard-setting,innovation,industry dynamics and context,industrial automation
    JEL: D71 M21 L69 O32
    Date: 2009
  6. By: Antonelli Cristiano (University of Turin); Barbiellini Amidei Federico
    Abstract: The paper is an attempt to provide an interpretation of the Italian puzzle in the post-WWII era consisting of very low levels of expenditure in R&D and yet high TFP growth. The research aims to supply the basic tools and the framework for a better understanding of the Italian industry innovation system and of its contribution to the country’s long term growth performance. The study applies the localized echnological change approach to implement the notion of knowledge interactions so as to appreciate: a) the role of external factors in the generation and exploitation of technological knowledge; b) the role of creative adoption in TFP dynamics. The analysis is based on a new dataset containing sectoral and regional series of TFP, capital intensity,wages per labour unit, R&D expenditures, patents granted in the USA, Technological Balance of Payments receipts and expenses, etc. for Italy over the 1950-1990 period. Using a SURE model framework, the impact of user-producer interactions on the dynamic efficiency of the Italian industrial sector is investigated across industries and regions. The significant and distinctive features of Italian innovation dynamics in the post WWII era that result are: i) the emerging and functioning of an innovation system based upon both horizontal dynamics of technological cooperation within industrial districts and vertical dynamic interdependence within industrial filieres; ii) a relevant, albeit incomplete, diffusion/catching up process in Italian regions.
    Date: 2009–09
  7. By: Antonelli Cristiano (University of Turin); Colombelli Alessandra
    Abstract: In this paper we articulate and test the hypothesis that TFP is a reliable and relevant measure of firm’s innovation capabilities, and, as such, accounts for Tobin’s q indicator. With this aim, we investigate empirically the relationship between firm level total factor productivity and the Tobin’s q. Measuring Tobin’s q allows inferring the actual value of knowledge capital from stock market valuation. We use a panel of companies listed on UK and the main continental Europe financial markets (Germany, France and Italy) for the period 1995 - 2005. Our results confirm that TFP is a reliable indicator of firm’s innovative capabilities. When we control for firm’s R&D investments, the effects of TFP on market value remain highly significant. This suggests that TFP is a broader measure of innovation capability than R&D is. The validation of the Tobin’s q and TFP relationship has important implications concerning firm’s technological innovation measurement.
    Date: 2009–09
  8. By: Maria das Dores B. Moura Oliveira (UPIN - Universidade do Porto Inovação, Universidade do Porto); Aurora A.C. Teixeira (CEF.UP, Faculdade de Economia, Universidade do Porto; INESC Porto)
    Abstract: The environment in which technology transfer takes place plays a key role in defining the best approaches and, ultimately, their success. In the present paper we analyse the extent to which Technology Transfer Offices (TTOs) efficiency is influenced by framework conditions and, in particular, by the innovation policies and programmes. We hypothesise that countries with higher technology transfer efficiency levels would have innovation policies more supportive to technology transfer efforts. Results based on an in depth account and statistical analysis of over 60 innovation policies from Switzerland (widely associated to high levels of technology transference efficiency) and Portugal (a laggard country in this particular) corraborate our initial hypothesis. Switzerland policies overall include more references to knowledge and technology transfer, in the form of licenses, R&D collaboration and spin-offs, than Portuguese policies. One exception is the case of patents (intellectual property rights, in general) with stronger weight in Portuguese policies and, to some extent, the support to spin-off creation and venture capital. The findings highlighted significant differences in variables with impact in technology transfer, namely the priorities addressed, target groups and funding eligibility, aspects of the innovation process targeted and forms of funding. From the exercise it was possible to derive some policy implications. Specifically, we advance that if a country wishes to increase technology transfer efficiency then it should implement a mandate for R&D cooperation between different actors, give priority to fund cutting edge science and research performers, and attribute a higher emphasis on applied industrial research and prototype creation aspects of the innovation process.
    Keywords: Technology transfer, innovation policies, technology transfer efficiency
    Date: 2009–09
  9. By: Werner, Karl; Moormann, Jürgen
    Abstract: Most previous research on efficiency in banking takes a regulatory perspective. In contrast, this paper investigates the empirical relation between efficiency and profitability in five large economies of the European Union during the period 1998-2005 and discusses the results from the perspective of corporate bank strategy. Methodologically the existing literature is expanded by the use of DEA super-efficiency values to regress profitability, the incorporation of risk by calculative costs of capital, and a model specification built on the modern understanding of banks as centers of value creation. The results of the conducted static and dynamic regression analyses show that profitable banks operate with higher technical efficiency than their competitors. Furthermore, the strategic environment and in this regard the structure and concentration of the national financial sector have a considerable impact on a bank's financial performance. Both issues proved to be statistically and economically significant. Thus, the results support the appropriateness of the generic strategy of cost leadership for the European banking market. Banks following this strategic position were able to achieve higher excess returns during the analyzed period.
    Keywords: Banks,corporate strategy,efficiency,operational efficiency,profitability
    JEL: C14 G21 L25 M21
    Date: 2009
  10. By: Richard Fabling; Lynda Sanderson (Reserve Bank of New Zealand)
    Abstract: We present a descriptive analysis of firm-level merchandise trade, focussing on the role of entrepreneurial exporting behaviour. We document two aspects of the dynamics of trade – the contribution of novel export activity to aggregate trade growth and, conversely, the substantial exit rates of new trade relationships. The unique contribution of this paper lies in the detailed and comprehensive data we have available on market and product choices. Specifically, we make use of shipment-level goods trade data, linked to information for the universe of economically active New Zealand manufacturers,to examine trade at the firm-level and at the product-country-firm nexus. Our growth decomposition and survival analysis suggest several themes: (a) novel market entry is a significant contributor to aggregate export growth; (b) the study of international entrepreneurial behaviour should encompass not just de novo entrants, but the broad range of trade innovations initiated by incumbent exporters; (c) much expansion in trade appears to be incremental in nature; (d) despite this, such innovations appear to be inherently risky; and (e) experience and scale appear to be key factors in overcoming these risks (or at least proxies for such factors).
    JEL: D21 F10 L25
    Date: 2009–09
  11. By: Capitanio, Fabian; Adinolfi, Felice; Malorgio, Giulio
    Abstract: During the three-year period of our investigation, we found that the weight of family run farms declined and there was an increase in the role of farms integrated in the market and in integrated low-impact farm. This is a partial change which may be an indicator of a greater capacity of the entrepreneurial fabric to come to the market and the ability to capitalise on the relationship between farm and territory. Comparison between the two periods observing the behaviour of common farmers confirmed the substantial stability of the reference framework and offered further scope for interpretation. First, only about 22% changed their strategic profile. Shifts between strategic profiles especially affected family-run farms and light weighted specialised farms (17%). In particular, there was a major shift from the family-run type to the small, specialised farm. By contrast, the shift from the area of specialisation to the family-run type was less marked, and mostly concerned farms situated in marginal areas with less labour employed on the farm. Another element to be taken into consideration is that the second strategic profile, which has a positive balance of some importance, is that of integrated low-impact farms.
    Keywords: Farmers strategic profile, enterpreneurial analysis, rural development, Agricultural and Food Policy, Q18, Q58,
    Date: 2009–08–24
  12. By: Pirvu, Cerasela; Mehedintu, Anca
    Abstract: In our opinion, the performances at group level must be analyzed differently, depending on the adopted strategy. Thus, we consider that a major problem of the accounting and cost control is their compatibility with the strategy. This is justified by the fact that a certain system, that can be an efficient instrument for assessing the performances of a group whose strategy is cost dominated, could cause malfunctions in a company that adopts a differentiation strategy. Because groups’ management currently faces a specific problem – adopting decisions when several objectives are followed simultaneously or the same objective common for more branches – we consider that, in such cases, the decisions cannot be based on a classic model of optimization of a single objective function. We consider that an optimization model with several objective functions, which aims at optimizing the costs for the subsidiaries and choosing a satisfactory solution for the company, is necessary.
    Keywords: costs; the optimization of the costs; decision process; linear programming; games theory.
    JEL: M41 M10
    Date: 2009–09–08
  13. By: Sarianna M. Lundan
    Abstract: ABSTRACT : In an integrated global economy, multinational enterprises (MNEs) have more opportunities than ever to reap the benefits of broader markets and more possibilities for an extensive division of labour between different locations. In spite of this, the evidence on the spread of the activities of MNEs seems to indicate a strong regional tendency, at least for the largest MNEs. This paper examines the theoretical arguments for the existence of such boundaries in an integrated global economy, and then examines their empirical importance using recent evidence on the internationalisation patterns of Finnish MNEs. We find that while some of the largest MNEs do indeed appear to be quite regional, some of the smaller internationalising firms are notably more global in terms of the spread of their activities.
    Keywords: multinational enterprises, internationalisation, entropy, cultural distance, institutional distance
    JEL: D21 D24 F21 F23
    Date: 2009–09–07

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