nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2009‒10‒31
thirteen papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. Internationalization of Chinese firms in Europe By Zhang, Ying; Filippov, Sergey
  2. Alliance-based Network View on Chinese Firms' Catching-up: Case Study of Huawei Technologies Co.Ltd By Zhang, Ying
  3. Product and Process Innovation and the decision to Export: Firm-level evidence for Belgium By Ilke VAN BEVEREN; Hylke VANDENBUSSCHE
  4. Fits and Misfits: Technological Matching and R&D Networks By Cowan, Robin; Jonard, Nicolas; Sanditov, Bulat
  5. Analysis of reaching the Lisbon Strategy targets at the national level: the EU-27 and Slovenia By Aristovnik, Aleksander; Andrej, Pungartnik
  6. E-business Environment in the Global Information Society By Vymětal, Dominik; Suchánek, Petr
  7. Delocation and Trade Agreements in Imperfectly Competitive Markets By Kyle Bagwell; Robert W. Staiger
  8. Emerging Multinationals from India and China: Origin, Impetus and Growth By Pradhan, Jaya Prakash
  9. Working Paper 09-09 - Alternative assessment of Belgian competitiveness By Chantal Kegels
  10. Performance measures for hierarchical organizations: Frontier analysis as a decision support tool By Aude Deville; Gary D. Ferrier; Hervé Leleu
  11. Breakthrough Inventions and Migrating Clusters of Innovation By William R. Kerr
  12. Integrating Resource-Based and Rational Contingency Views:Understanding Design of Dynamic Capabilities of Organisations By Kaushik Roy; Pradyumana W. Khokle
  13. International Trade, Foreign Direct Investment, and Technology Spillovers By Wolfgang Keller

  1. By: Zhang, Ying (UNU-MERIT); Filippov, Sergey (UNU-MERIT)
    Abstract: Since end of the 1990s, the world has been witnessing a phenomenon of internationalisation of Chinese companies. This internationalisation is often understood through FDI inflows, whereby multinational companies establish their presence in a form of subsidiaries overseas. However, lately many companies (and Chinese firms in particular) started to use strategic alliances and M&As as a pair of tools of internationalisation. Despite the growing body of literature on this topic in the context of advanced western economies, use of strategic alliances in the internationalisation of Chinese firms remains an under-researched topic. In the paper we investigate the potential benefits for Chinese companies to internationalise through strategic alliances and M&As, and specifically in comparison to the traditional forms of outward FDI. By using the data from Thomson SDC database, we specifically focus on the Single European market as a new prospective location for Chinese companies and provide a quantitative overview of Chinese firms' alliances as well as M&As in Europe. To illustrate the optimal pattern of internalisation of Chinese firms in Europe, we additionally use a case study of Chinese automotive manufacturer Chery Automobile Co. Ltd.
    Keywords: strategic alliances, emerging economies, China, Europe, internationalisation
    JEL: F23 M10 L62 O32
    Date: 2009
  2. By: Zhang, Ying (UNU-MERIT)
    Abstract: With China's rapid economic growth in recent years, many Chinese firms especially in high-tech industries have started to technically lead in the international market. In this study, we aim to uncover the root causes that lead to Chinese firms' catching up from network perspective. By taking Huawei Technologies Co. Ltd. as a case, we integrate absorptive capacity development and firm-level catching up into an alliances-based network framework. We found that network alliances with firms and universities complement each other at different catching up stages; and alliances-based network provides a springboard for Chinese firms to shorten catching up path. We argue that in Chinese context, impact of FDI on firms' performance comes into effect only if partnership is carried out; alliances with universities facilitate development of absorptive capacity at an early stage; Partnering with leading players stimulate R&D investment at a late stage and simultaneously enhance firm's innovation performance as well.
    Keywords: Strategic alliances, Network, Chinese firms, absorptive capacity, catching up
    JEL: M13 O32 O19 L24
    Date: 2009
  3. By: Ilke VAN BEVEREN (Lessius University College, Department of Business Studies, Antwerp and UniversitŽ catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)); Hylke VANDENBUSSCHE (UniversitŽ catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES), Katholieke Universiteit Leuven, LICOS Centre for Institutions and Economic Performance and ¤ CEPR.)
    Abstract: Using data from the Community Innovation Survey for Belgium in two consecutive periods, this paper explores the relationship between firm-level innovation activities and the propensity to start exporting. To measure innovation, we include indicators of both innovative effort (R&D activities) as well as innovative output (product and process innovation). Our results suggest that the combination of product and process innovation, rather than either of the two in isolation, increases a firmÕs probability to enter the export market. After controlling for potential endogeneity of the innovation activities, only firms with a sufficiently high probability to start exporting engage in product and process innovation prior to their entry on the export market, pointing to the importance of self-selection into innovation.
    Keywords: Exports, Product innovation, Process innovation, Self-selection, Firm heterogeneity
    JEL: D24 F14 L25 O31 O33
    Date: 2009–09–14
  4. By: Cowan, Robin (UNU-MERIT, and BETA, Universite Louis Pasteur); Jonard, Nicolas (Universite du Luxembourg.); Sanditov, Bulat (UNU-MERIT, and Maastricht University)
    Abstract: This paper presents an economic model of R&D network formation through the creation of strategic alliances. Firms are randomly endowed with knowledge elements. They base their alliance decisions purely on the technological fit of potential partners, ignoring social capital considerations and indirect benefits on the network. This is sufficient to generate equilibrium networks with the small world properties of observed alliance networks, namely short pairwise distances and local clustering. The equilibrium networks are more clustered than "comparable" random graphs, while they have similar characteristic path length. Two extreme regimes of competition are examined, to show that while the competition has a quantitative effect on the equilibrium networks (density is lower with competition), the small world features of the equilibrium networks are preserved.
    Keywords: network formation, small worlds, R&D networks, strategic alliances, business clusters
    JEL: D85 O32
    Date: 2009
  5. By: Aristovnik, Aleksander; Andrej, Pungartnik
    Abstract: Adopted by the European Council in 2000, the Lisbon Strategy is a long-term strategy whose main target is to make Europe the most competitive, dynamic and knowledge-based economy in the world by 2010. During the 2005 mid-term review, the Lisbon Strategy refocused its two main targets on economic growth and employment, and formally integrated the Cohesion policy into its implementation. In spite of the review, the efforts to meet the strategic targets have proven insufficient at both the EU and Slovenian levels. While certain progress has been observed, the strategy should be further adjusted, coordinated and supplemented at the national and pan-European levels so that the Lisbon targets can be attained. The article investigates the current stage of the achievement of the targets, using the time-distance method to calculate the time lead or lag in implementing the Lisbon Strategy targets at the levels of the European Union and Slovenia.
    Keywords: EU, Slovenia, Lisbon Strategy, Lisbon targets, Cohesion policy, time distance
    JEL: P11 C88 C49 O52
    Date: 2009–10–23
  6. By: Vymětal, Dominik; Suchánek, Petr
    Abstract: In today´s digital 21st century, almost all businesses face intense competition from competitors all around the globe. There are no borders and business area for the all companies is almost unlimited. As the main supports of mentioned fact are globalization and ICT´s development. Influences such as globalization, increased popularity of outsourcing and offshoring have recently combined to produce an environment where ICT graduates need to have up-to-date and industry-relevant knowledge and skills, so that they can be successful in this highly competitive environment. Development of e-business and e-commerce make possible the companies to enter to the global markets. Fundamental prerequisite of the successful company in the global market is well-made corporate strategy and correct source information. Of high account condition of an entry to global markets is an adjustment of the information system to global information and business system management standards. The statistics gained from the Czech market shows, that in spite of enormous Internet proliferation the ratio of e-sales is lower than the ratio of e-purchases. Some possible reasons for these phenomena are discussed at the end of this paper.
    Keywords: E-business; e-commerce; global information society; information and communication technology; IT security; IT standards; business strategy; enterprise resource planning; customer relationship management.
    JEL: M00 O39 M29 M0 O30 F01 M20 M21
    Date: 2009
  7. By: Kyle Bagwell; Robert W. Staiger
    Abstract: We consider the purpose and design of trade agreements in imperfectly competitive environments featuring firm-delocation effects. In both the segmented-market Cournot and the integrated-market monopolistic competition settings where these effects have been identified, we show that the only rationale for a trade agreement is to remedy the inefficiency attributable to the terms-of-trade externality, the same rationale that arises in perfectly competitive markets. Furthermore, and again as in the perfectly competitive benchmark case, we show that the principle of reciprocity is efficiency enhancing, as it serves to "undo" the terms-of-trade driven inefficiency that occurs when governments pursue unilateral trade policies. Our results therefore indicate that the terms-of-trade theory of trade agreements applies to a broader set of market structures than previously thought.
    JEL: F12 F13
    Date: 2009–10
  8. By: Pradhan, Jaya Prakash
    Abstract: This study deals with the outward FDI (OFDI) behaviours of the emerging multinationals from India and China. In the backdrop of changing public policies and economic performance of the home country, it traces the evolution of OFDI by these emerging multinationals over a long period, from early 1950s to the present decade. Indian and Chinese multinationals, in addition to their similarity of achieving high growth rates of OFDI with long term sectoral and geographical diversification, are observed to have a number of important differences in terms of characteristics of outward investing firms and their locational motivations.
    Keywords: Outward FDI; Emerging multinationals; India; China
    JEL: F23 O53 F21
    Date: 2009–10–23
  9. By: Chantal Kegels
    Abstract: This paper investigates graphically and econometrically the relationship between the relative positions, in terms of value added and relative prices, of Belgian manufacturing and market services in the European Union over 1970-2005. Relative prices are then decomposed into relative unit costs of factors of production. The analysis goes further by replacing relative unit labour cost with relative hourly wages and relative productivity. Finally, relative produc-tivity is replaced with relative capital deepening, relative labour composition effect and relative total factor productivity. All data are coming from the EUKLEMS database, March 2008 release.
    JEL: D24 F14 F20 P42
    Date: 2009–09–15
  10. By: Aude Deville (LEG-FARGO, IAE, University of Bourgogne); Gary D. Ferrier (Walton College of Business, University of Arkansas); Hervé Leleu (LEM-CNRS (UMR 8179), IÉSEG School of Management)
    Abstract: We extend the standard frontier efficiency models (data envelopment analysis [DEA] and stochastic frontier analysis [SFA]) by allowing the “decision making units” (DMUs) whose performances are assessed to consist of two different levels within hierarchical organizations. Generally, the lower level unit is responsible for “operations;” while higher level units are assumed to make “strategic” decisions. Our primary contribution in this paper is thus to extend the use of frontier efficiency models to assess each level performance with relevant technical and allocative inefficiency measures. We illustrate our approach using DEA applied to data from a sample of 1,585 branches of a major French bank. A second contribution of the paper is to explicitly relate the efficiency to differences in the operating environments and the sizes of the bank branches. We believe that the simple, easy to implement method we introduce can serve as a valuable component of a “balanced score card” approach to benchmarking performance within hierarchical settings such as a banking network.
    JEL: M40 G21 C43
    Date: 2009–01
  11. By: William R. Kerr
    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 confirm the mechanism of industry migration proposed in models like Duranton (2007).
    JEL: F2 J4 J6 O3 O4 R1 R3
    Date: 2009–10
  12. By: Kaushik Roy; Pradyumana W. Khokle
    Abstract: Resource-based view of organisation emphasises that no organisation can be self sufficient and it will always be dependent on the environment for the fulfillment of resource needs. Further, this interaction with the environment can take various forms including manipulation, which is manifested through mergers, acquisitions and other inter-organisational relationships. The rational contingency view of organisations emphasises the goals that an organisation has, which are not clearly brought out in the resource dependence view. It is attempted here to integrate perspectives from the resource-based and rational contingency views of organisations to assess how the dominant coalition would view its role in an organisation with respect to building dynamic capabilities after analysing an array of goal-resource linkage possibilities.
    Date: 2009–02–06
  13. By: Wolfgang Keller
    Abstract: This paper examines how international flows of technological knowledge affect economic performance across industries and firms in different countries. Motivated by the large share of the world's technology investments made by firms that are active across borders, we focus on international trade and multinational enterprise activity as conduits for technological externalities, or spillovers. In addition to reviewing the recent empirical research on technology spillovers, the discussion is guided by a new model of foreign direct investment, trade, and endogenous technology transfer. We find evidence for technology spillovers through international trade and the activity of multinational enterprises. The analysis also highlights challenges for future empirical research, as well as the need for additional data on technology and innovation.
    JEL: F1 F2 L2 O3 O4
    Date: 2009–10

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