nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2009‒09‒26
eighteen papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. What Turns Knowledge into Innovative Products? The Role of Entrepreneurship and Knowledge Spillovers By Block, J.H.; Thurik, A.R.; Zhou, H.
  2. Product and Process Innovation in a Growth Model of Firm Selection By Cristiana Benedetti Fasil
  4. The Strategic Role of Marketing Communication in he SME: the Case of Fornari SpA By Marco Cioppi; Andrea Buratti
  5. First We Try, Then We Trust! Real Options and the Cooperation-Competition Tension in Strategic Alliance Social Dilemmas By McCarter, Matthew W.; Mahoney, Joseph T.; Northcraft, Gregory B.
  6. Reverse knowledge transfer and its implications for European policy By Narula, Rajneesh; Michel, Julie
  7. Location, Internationalization and Performance of Firms in Italy: a Multilevel Approach By Giorgia Giovannetti; Giorgio Ricchiuti; Margherita Velucchi
  8. Successfully Executing Ambitious Strategies in Government: An Empirical Analysis By Kelman, Steven; Myers, Jeff
  9. Policy approaches regarding technology transfer: Portugal and Switzerland compared By Maria das Dores B. Moura Oliveira; Aurora A.C. Teixeira
  10. When a japanese subsidiary is not a japanese subsidiary: internationalization as changing organizational identity and capabilities By Voisey, C.;
  11. Industrial clusters and economic integration : theoretic concepts and an application to the European Metropolitan Region Nuremberg By Litzel, Nicole; Möller, Joachim
  12. Intra-Industry Adjustment to Import Competition: Theory and Application to the German Clothing Industry By Horst Raff ,; Joachim Wagner
  13. The evolution of an industrial cluster in China: By Fleisher, Belton; Hu, Dinghuan; McGuire, William; Zhang, Xiaobo
  14. The Economic Optimality of Sanction Mechanisms in Interorganizational Ego Networks – A Game Theoretical Analysis – By Muhamed Kudic; Marc Banaszak
  15. Breakthrough Inventions and Migrating Clusters of Innovation By William R. Kerr
  16. Clusters of Entrepreneurship By Edward L. Glaeser; William R. Kerr; Giacomo A. M. Ponzetto
  17. The interplay between entrepreneurship education and regional knowledge potential in forming entrepreneurial intentions By Sascha Walter; Dirk Dohse
  18. Does the location of manufacturing determine service sectors’ location choices? Evidence from Portugal By Nuno Crespo; Maria Paula Fontoura

  1. By: Block, J.H.; Thurik, A.R.; Zhou, H. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: The knowledge spillover theory of entrepreneurship seeks to explain the sources of entrepreneurship and its consequences with regard to economic performance. This paper extends this theory and links it to innovation performance. We propose that a high rate of entrepreneurship facilitates the process of turning knowledge into innovative products while it has no effect on the relation between knowledge and imitative products. We use European country-level data to test our propositions. Our results show that a high rate of entrepreneurship increases the chances that knowledge turns into innovative products. The findings highlight the importance of entrepreneurs in the process of commercialization of knowledge. Implications for innovation policy are discussed.
    Keywords: innovation;entrepreneurship;knowledge;patents;technology policy;knowledge spillovers;commercialization of knowledge;economic growth;O30
    Date: 2009–09–15
  2. By: Cristiana Benedetti Fasil
    Abstract: Recent empirical evidence based on firm level data emphasizes firm heterogeneity in innovation activities and the different effects of process and product innovations on the productivity level and productivity growth. To match this evidence, this paper develops an endogenous growth model with two sources of firm heterogeneity: production efficiency and product quality.Both attributes evolve endogenously through firms’ innovation choices. Growth is driven by innovation and self-selection of firms and sustained by entrants who imitate incumbents. Calibrating the economy to match the Spanish manufacturing sector, the model enables to quantify the different effects of selection, innovation, and imitation as well as product and process innovation on growth. Compared to single attribute models of firm heterogeneity, the model provides a more complete characterization of firms’ innovation choices explaining the partition of firms along different innovation strategies and generating consistent firm size distributions.
    Keywords: endogenous growth theory, firm dynamics, heterogeneous firms, productivity, quality, innovation
    JEL: L11 L16 O14 O31 O40
    Date: 2009
  3. By: Thomas Gillier (ERPI - Equipe de Recherche sur les Processus Innovatifs - Institut National Polytechnique de Lorraine - INPL - Ecole Nationale Supérieure en Génie des Systèmes Industriels, EDF R&D - EDF, MINATEC IDEAs Laboratory - CEA); Gérald Piat (EDF R&D - EDF); Benoît Roussel (ERPI - Equipe de Recherche sur les Processus Innovatifs - Institut National Polytechnique de Lorraine - INPL - Ecole Nationale Supérieure en Génie des Systèmes Industriels); Patrick Truchot (ERPI - Equipe de Recherche sur les Processus Innovatifs - Institut National Polytechnique de Lorraine - INPL - Ecole Nationale Supérieure en Génie des Systèmes Industriels)
    Abstract: Our paper refers to an industrial practice based on an integrated theoretical framework of design, CK design theory (Hatchuel and Weil, 2002, Hatchuel and Weil, 2003, Hatchuel and Weil, 2008), to support people in management of innovation fields. This study is based on an empirical case in a new form of R&D partnerships, the Cross Industry Exploratory Partnerships. MINATEC IDEAs Laboratory® is composed of a broad scope of partners 2 which aims to co-explore opportunities of micronanotechnologies. The paper deals with a strategic design tool, OPERA, which has been experimented since 2007 and involved participation of design team work and powerholders. During two years, creative insights and projects of the two laboratory's major innovation fields have been collected and structured within CK theory. This tool permits power-holders to drive innovation projects by giving an overview of explored concepts (and still not explored), activation and production of competencies and knowledge.
    Keywords: CK theory; innovative design; innovation partnership; OPERA; design theory; management of innovation
    Date: 2009–06–08
  4. By: Marco Cioppi (University of Urbino (Italy)); Andrea Buratti (University of Urbino (Italy))
    Abstract: In this paper we discuss the strategic importance of communication and Intranet for theItalian Small and Medium Enterprise (SMEs). We analyse the case of Fornari SpA, an Italian medium size clothing and shoes manufacturer that uses internet as a communication tool. The aim of this study is to understand the potential of internet in a specific case and to understand whether internet is a strategic tool or only an operative tool. The firm currently uses two applications of internet: extranet and intranet. The analysis underlines the importance of marketing competences and training that are absolutely necessary to make the most effectiveand efficient use of the internet potential.
    Keywords: SME, ICT, Internet Marketing.
    JEL: M30 M31
    Date: 2009
  5. By: McCarter, Matthew W. (University of Illinois at Urbana-Champaign); Mahoney, Joseph T. (University of Illinois at Urbana-Champaign); Northcraft, Gregory B. (University of Illinois at Urbana-Champaign)
    Abstract: The cooperation-competition tension in strategic alliances creates a social dilemma where
    Abstract: member and alliance interests are in conflict. Because social dilemmas have significant
    Abstract: negative implications for strategic alliance and member success, understanding the
    Abstract: psychological mechanisms underpinning the cooperation-competition tension and ways to
    Abstract: navigate this tension holds important theoretical implications for strategic alliance research.
    Abstract: This paper proposes a real options approach to navigating strategic alliance social dilemmas.
    Abstract: Acquiring a real option at the alliance level provides alliance members access to achieving a
    Abstract: small win of mutual cooperation, and, when the small win is realized, members are more
    Abstract: likely to cooperate in the larger strategic alliance. The increase of cooperation is because
    Abstract: alliance member's perceived vulnerability is reduced. The level of exposure when acquiring
    Abstract: the real option may influence the effect of a small win on perceived vulnerability through the
    Abstract: development of trust.
    Date: 2009–01
  6. By: Narula, Rajneesh (John H Dunning Centre for International Business, Henley Business School, University of Reading); Michel, Julie (Center for Competitiveness, Faculty of Economics and Social Sciences, University of Fribourg)
    Abstract: There is a growing international dispersion of R&D activities by MNEs for the purposes of maintaining and augmenting their knowledge assets. Firms need to tap into alternative knowledge sources , as home countries are rarely able to meet all their technological needs. However, accessing to foreign knowledge implies integration with the host country innovation system that requires considerable time and resources. Although asset-augmenting activities are seen as primarily benefitting the MNE, we argue that home country innovation systems can also benefit from reverse knowledge transfer. Policy makers need to promote these linkages and flows, rather than seeing R&D internationalisation as a threat to the home economy. New knowledge developed abroad by firms can and should be encouraged to be transferred to the rest of the firm and to the local environment of the home country.
    Keywords: reverse knowledge transfer, R&D, innovation policy, EU
    JEL: F23 O32 L22
    Date: 2009
  7. By: Giorgia Giovannetti (Università degli Studi di Firenze, Dipartimento di Scienze Economiche); Giorgio Ricchiuti (Università degli Studi di Firenze, Dipartimento di Scienze Economiche); Margherita Velucchi (Università degli Studi di Firenze, Dipartimento di Statistica “G. Parenti”)
    Abstract: Competition is increasingly crossing borders. However, location still matters: the most successful competitors in an industry often cluster in the same geographic areas and companies use the advantages of location to compete at a global level. When competing across borders, firms can coordinate among different activities in a variety of ways to harness network advantages. This paper analyses how Italian firms’ performance, proxied by their propensity to export, depends both on geographical and institutional context and on individual characteristics. Using a multilevel model, we estimate and distinguish the effect of individual (firm level) and context variables (province level) on the performance of internationalized Italian firms.
    Keywords: Exports, Multilevel Model, Heterogeneity
    JEL: C1 F1 F2 L1
    Date: 2009
  8. By: Kelman, Steven (Harvard University); Myers, Jeff (Booz Allen Hamilton Inc)
    Abstract: How are senior government executives who attempt to execute an ambitious vision requiring significant strategic change in their organizations able to succeed? How do they go about formulating a strategy in the first place? What managerial and leadership techniques do they use to execute their strategy? In this paper, these questions are examined by comparing (so as to avoid the pitfalls of "best practices" research) management and leadership behaviors of a group of agency leaders from the Clinton and Bush administrations identified by independent experts as having been successful at executing an ambitious strategy with a control group consisting of those the experts identified as having tried but failed at significant strategic change, along with counterparts to the successes, who had the same position as they in a different administration. We find a number of differentiators (such as using strategic planning, monitoring performance metrics, reorganizing, and having a smaller number of goals), while other techniques either were not commonly used or failed to differentiate (such as establishing accountability systems or appeals to public service motivation). We find that agencies that the successes led had significantly lower percentages of political appointees than the average agency in the government. One important finding is that failures seem to have used techniques recommended specifically for managing transformation or change as frequently as successes did, so use of such techniques does not differentiate successes from failures. However, failures (and counterparts) used techniques associated with improving general organizational performance less than successes.
    Date: 2009–04
  9. By: Maria das Dores B. Moura Oliveira (UPIN – Universidade do Porto Inovação, Universidade do Porto); Aurora A.C. Teixeira (INESC Porto; CEFUP, Faculdade de Economia, Universidade do 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
  10. By: Voisey, C.; (Vlerick Leuven Gent Management School)
    Abstract: As multinational corporations (MNCs) have increasingly expanded abroad to seek out new assets and capabilities from different specialized locations, so they have sought to become embedded in diverse local social and cultural contexts. Several streams of work have examined the managerial challenges of the integrated network MNC, as well as factors influencing the successful adoption or transfer of organizational practices within the MNC. In this work, however, the role and dynamics of organizational identity, of how the organization’s members and outside audiences perceive the organization, remains largely unexplored. In a longitudinal case study of the international expansion over a 15-year period of the business unit of a Japanese MNC into the United States, I find that the North American subsidiary’s members engaged in identity work to construct a hybrid identity for their organization. It was through this hybrid identity that the organization’s members enacted their environment, organizational capabilities at integrating knowledge, strategy, and structure. These, in turn, recursively interacted with the organization’s hybrid identity in complex ways, either reinforcing it or stressing it, leading to identity change and renewed efforts at identity construction by the organization’s members. The dynamics of the organization’s hybrid identity are different from how changes occur in these other constructs, with identity playing an influential, and perhaps the key role, in the evolution of the organization.
    Date: 2009–09–17
  11. By: Litzel, Nicole (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Möller, Joachim (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "Economic integration typically goes along with disintegration of production through outsourcing and offshoring (Feenstra 1998). As horizontal and vertical links between firms become more and more pronounced, value chains within regions are increasingly organized by production and innovation clusters. On the basis of a literature overview, we argue that in a world of economic integration clusters can be expected to play a prominent role. Therefore clusters can also be seen as a key element in the European Metropolitan Region concept. Within such an economic space, localisation economies according to the 'Marshallian trinity' (knowledge spillovers, input sharing and labour market pooling (Rosenthal/Strange 2003)) can be realized. The paper builds on a comprehensive company survey for the core of the European Metropolitan Region Nuremberg that includes customer-supplier relationships and various forms of cooperation. As indicated by numerous empirical studies, the characteristics of clusters differ substantially. In order to overcome the fuzziness of the concept we suggest a bottom-up methodology of cluster identification using a set of qualitative and quantitative indicators. Given that many kinds of barriers to interregional and international trade are becoming less and less important and transport cost are falling, modern production clusters tend to have a higher geographical extension than traditional ones. We therefore raise the question of whether clustering is relevant for economic integration on the regional, national and supra-national level." (author's abstract, IAB-Doku) ((en))
    JEL: R11 R12
    Date: 2009–09–17
  12. By: Horst Raff ,; Joachim Wagner
    Abstract: This paper uses an oligopoly model with heterogeneous firms to examine how an industry adjusts to rising import competition. The model predicts that in the short run the least efficient firms in the industry become inactive, surviving firms face a fall in output, mark-ups and profits, and the average productivity of survivors increases. These pro-competitive effects of import penetration on the domestic industry disappear in the long run. The predictions for the short run are confirmed in an empirical study of the German clothing industry
    Keywords: international trade, firm heterogeneity, productivity, clothing industry
    JEL: F12 F15
    Date: 2009–09
  13. By: Fleisher, Belton; Hu, Dinghuan; McGuire, William; Zhang, Xiaobo
    Abstract: "We use two rounds of surveys, taken in 2000 and 2008 in the Zhili Township children's garment cluster in Zhejiang Province, to examine in depth the evolution of this industrial cluster. Firm size has grown on average in terms of output and employment, and increasing divergence in firm sizes has been associated with a significant rise in specialization and outsourcing among firms in the cluster. Although the investment amount needed to start a business has more than tripled, this amount remains low enough that formal bank loans remain an insignificant source of finance. Because of low entry barriers, the number of firms in the cluster has risen, driving down profits and bidding up wages, particularly since the year 2000. Facing severe competition, more firms have begun to upgrade their product quality. By the year 2007, nearly half of the sampled firms had established registered trademarks and nearly 20 percent had become International Office of Standardization (ISO) certified." from authors' abstract
    Keywords: Cluster, Industrialization, Growth, Development strategies,
    Date: 2009
  14. By: Muhamed Kudic; Marc Banaszak
    Abstract: Even though small- and medium-sized firms (SMEs) were believed not to proceed beyond exporting in their internationalization routes, we can observe new types of co-operation intensive entrepreneurial firms – so-called “micromultinational enterprises” (mMNEs) – entering the global landscape. These firms face the challenge to manage and control a portfolio of national and international alliances simultaneously (ego network). The aim of this paper is to provide game theoretically consolidated conditions in order to analyze the effectiveness and efficiency of interorganizational sanction mechanisms in an alliance portfolio setting. A game theoretical framework is developed over three stages with increasing complexity. Results show that two out of six analyzed sanction mechanisms do not fulfill the game theoretical condition for effectiveness. The efficiency analysis sensibilizes for discretionary elements in governance structures and demonstrates that not one single sanction mechanism but rather the right choice and combination of different types of sanction mechanisms leads to efficient results. We contribute to the international business, alliance, and network literature in several ways by focusing on alliance portfolios held by mMNEs. In doing so, we move beyond the dyadic level and analyze sanction mechanisms from an ego network perspective, a still widely under-emphasized topic in the literature.
    Keywords: alliance portfolio, ego network, governance, sanctions, game theory
    JEL: L14 L22 L24 M21
    Date: 2009–09
  15. By: William R. Kerr (Harvard Business School, Entrepreneurial Management Unit)
    Abstract: We investigate the speed at which clusters of invention for a technology migrate spatially following breakthrough inventions. We identify breakthrough inventions as the top one percent of US inventions for a technology during 1975-1984 in terms of subsequent citations. Patenting growth is significantly higher in cities and technologies where breakthrough inventions occur after 1984 relative to peer locations that do not experience breakthrough inventions. This growth differential in turn depends on the mobility of the technology's labor force, which we model through the extent that technologies depend upon immigrant scientists and engineers. Spatial adjustments are faster for technologies that depend heavily on immigrant inventors. The results qualitatively con.rm the mechanism of industry migration proposed in models like [Duranton, G., 2007. Urban evolutions: The fast, the slow, and the still. American Economic Review 97, 197.221].
    Keywords: Agglomeration, Clusters, Entrepreneurship, Invention, Mobility, Reallocation, R&D, Patents, Scientists, Engineers, Immigration.
    JEL: F2 J4 J6 O3 O4 R1 R3
    Date: 2009–09
  16. By: Edward L. Glaeser (Harvard University, Faculty of Arts and Sciences; Harvard Kennedy School); William R. Kerr (Harvard Business School, Entrepreneurial Management Unit); Giacomo A. M. Ponzetto (CREI and Universitat Pompeu Fabra)
    Abstract: Employment growth is strongly predicted by smaller average establishment size, both across cities and across industries within cities, but there is little consensus on why this relationship exists. Traditional economic explanations emphasize factors that reduce entry costs or raise entrepreneurial returns, thereby increasing net returns and attracting entrepreneurs. A second class of theories hypothesizes that some places are endowed with a greater supply of entrepreneurship. Evidence on sales per worker does not support the higher returns for entrepreneurship rationale. Our evidence suggests that entrepreneurship is higher when fixed costs are lower and when there are more entrepreneurial people.
    Keywords: Entrepreneurship, Industrial Organization, Chinitz, Agglomeration, Clusters, Cities.
    JEL: J2 L0 L1 L2 L6 O3 R2
    Date: 2009–09
  17. By: Sascha Walter; Dirk Dohse
    Abstract: This study examines how the effect of entrepreneurship education on students’ entrepreneurial intentions is (1) contingent on the mode of education (active, e.g. business plan seminar, vs reflective, e.g. theory lectures), (2) contingent on the regional context and (3) complemented by individual-level influences such as role models or work experience. Results show that active modes of entrepreneurship education directly increase intentions and attitudes, whereas the impact of reflective modes depends on the regional context. Parental role models and work experience are found to complement entrepreneurship education in different ways. The findings have important implications for theory building as well as for the practice of teaching entrepreneurship
    Keywords: entrepreneurship education, knowledge spillover, entrepreneurial intentions, theory of planned behavior
    JEL: A20 I23 O31 R19
    Date: 2009–09
  18. By: Nuno Crespo (ISCTE – Lisbon University Institute, Department of Economics and ERC/UNIDE); Maria Paula Fontoura (ISEG (School of Economics and Management), Technical University of Lisbon and UECE (Research Unit on Complexity and Economics))
    Abstract: Considering the case of Portugal over the period 1995-2000, this paper analyses whether the location of market services is explained by the geographical proximity of the industrial sectors that use these services as intermediate inputs. A rather detailed level of regional disaggregation is used, namely the county level (275 counties). This influence is confirmed by the results of some location indices and by the regressions made for each sector. An alternative spatial unit is also used, consisting of the county itself combined with those with which it shares boundaries, showing the relevance of the level of regional disaggregation for the results obtained.
    Keywords: Services, Manufacturing Industry, Location of Economic Activity, Portugal.
    JEL: R11 R12 R30
    Date: 2009–09

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