nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2009‒11‒14
twenty-two papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. Do external knowledge sourcing methods matter in service innovation?: analysis of South Korean service firms By Ki H. Kang; Jina Kang
  2. Contextual effects on the complementarities between R&D activities: An empirical analysis of the Korean manufacturing industry By Sungki Lee; Donghyuk Choi; Yeonbae Kim
  3. How Do Firms Source External Knowledge for Innovation? : Analyzing Effects of Different Knowledge Sourcing Methods By Ki H. Kang; Jina Kang
  4. Outsourcing and Vertical Integration in a Competitive Industry By Ciliberto, Federico; Panzar, John
  5. Company strategy: Business model reconfiguration for innovation and internationalization By Casadesus-Massanell, Ramon; Ricart, Joan E.
  6. Evidence on Competitive Advantage and Superior Stock Market Performance By Gjerde, Øystein; Knivsflå, Kjell Henry; Sættem, Frode
  7. Global Value Chains, Technology Transfer and Local Firm Upgrading in Non-OECD Countries By Juliane Brach; Robert Kappel
  8. Regional Factors and Innovativeness – An Empirical Analysis of Four German Industries By Tom Broekel; Thomas Brenner
  9. Biotechnology in Catalonia. Industry analysis By Mas, Nuria
  10. Does partner type matter in R&D collaboration for product innovation? By Ki H. Kang; Jina Kang
  11. Socioeconomic heritage and rapid firm growth By Michael Wyrwich
  12. Revisiting Knowledge Transfer: Effects of Knowledge Characteristics on Organizational Effort for Knowledge Transfer By Ki H. Kang; Jina Kang
  13. Value Co-Creation with Suppliers By Catarina Roseira; Carlos Brito
  14. How firm characteristics affect the level of constrain to growth : An empirical analysis of micro and small firms in Vietnam. By Thi Quynh Trang Do
  15. A literature review on the links between environmental regulation and competitiveness By Fabio Iraldo; Francesco Testa; Vlasis Oikonomou; Michela Melis; Marco Frey; Eise Spijker
  16. Catalan competitiveness: Science and business By Cassiman, Bruno; Mas, Jordi
  17. Productivity of Catalan firms. International exposure and (product) innovation By Cassiman, Bruno; Golovko, Elena
  18. International Outsourcing's Role in International Technology Diffusion - The Irish Case By Fergal McCann
  19. Centers tehnology transfer-active factor an the regional development By Ghimisi, Stefan/St; Popescu , Gheorghe
  20. Rethinking regional competitiveness: Catalonia's international and interregional trade, 1995-2006 By Ghemawat, Pankaj; Llano, Carlos; Requena, Francisco
  21. The Faster Accelerating Knowledge-based Society By Tai-Yoo KIM; Almas HESHMATI; Jihyun PARK
  22. Determinants and effects of green supply chain management (GSCM) By Francesco Testa; Fabio Iraldo; Nick Johnstone

  1. By: Ki H. Kang; Jina Kang (Technology Management, Economics and Policy Program(TEMEP), Seoul National University)
    Abstract: This paper analyses the effects of different external knowledge sourcing methods on service innovation performance. We identify three external knowledge sourcing methods: informal information transfer, R&D collaboration, and technology outsourcing. Three hypotheses are established to examine the relationship between these three external knowledge sourcing methods and service innovation. Our result shows that the relationship between the extent of external knowledge sourcing and service innovation performance varies depending on the particular external knowledge sourcing method. This research grants important implication to firms in selecting an appropriate external knowledge sourcing strategy in service industry.
    Keywords: service innovation, external knowledge sourcing method, informal information transfer, R&D collaboration, technology outsourcing
    Date: 2009–08
  2. By: Sungki Lee; Donghyuk Choi; Yeonbae Kim (Technology Management, Economics and Policy Program(TEMEP), Seoul National University)
    Abstract: Firms undertake various R&D activities to generate commercializable innovations and to create and sustain competitive advantage. However, mere exploitation of various R&D opportunities has no conclusive impacts on a firm¡¯s competitive advantage in innovation, since R&D activities might closely interact with each other and their appropriate combination would have a synergy effect on a firm¡¯s innovation performance. The aim of this paper is to explore various contextual factors behind synergy effects derived from interactions between R&D activities based on the economic and technological sources of the R&D complementarities, such as absorptive capacity, knowledge flows, and uncertainty, as well as to examine the existence of complementarities between corporate R&D activities, using the 2004 innovation survey data of Korean manufacturing industries. The corporate R&D activities considered in this study are in-house R&D, R&D cooperation, and commissioned R&D. Our research concludes that there exists a complementary relationship between a firm¡¯s internal R&D and R&D cooperation activity. In addition, our study discovered that the complementarity between R&D activities relies on the organizational contextualities?a firm¡¯s cumulative patent stocks, perceived level of imitation risk, experience of external knowledge acquisition, and information inflows from public research institutes and universities?that lie hidden under the firm-specific activities.
    Keywords: Contextuality, Complementarity, Innovation, In-house R&D, R&D cooperation, Commissioned R&D
    Date: 2009–09
  3. By: Ki H. Kang; Jina Kang (Technology Management, Economics and Policy Program(TEMEP), Seoul National University)
    Abstract: In the era of ¡®open innovation¡¯, external knowledge is a very important source for technology innovation. In this paper, we investigate the relationship between external knowledge and performance of technology innovation. The effect of external knowledge on the performance of technology innovation can vary with different external knowledge sourcing methods. We identify three ways of external knowledge sourcing: information transfer from informal network, R&D collaboration, and technology acquisition. We propose three hypotheses to examine relationship between the three methods of external knowledge sourcing and the technology innovation performance. Our results show that information transfer from informal network and technology acquisition have positive relationships with the technology innovation performance. R&D collaboration, however, has an inverted-U shape relationship with technology innovation performance. This implies that the effect of external knowledge on technology innovation varies depending on the particular external knowledge sourcing method. This research has important implication for firms in selecting appropriate strategy for accessing external knowledge.
    Keywords: external knowledge, open innovation, knowledge sourcing method, technology innovation
    Date: 2009–08
  4. By: Ciliberto, Federico; Panzar, John
    Abstract: We develop a partial equilibrium, perfectly competitive framework of a (potentially) vertically integrated industry. There are three types of firms: upstream firms that use primary factors to produce an intermediate; downstream firms that use primary factors and intermediates to produce a final good; and vertically integrated firms that do both. We establish conditions under which vertically integrated firms exist and outsource (part of) the production of the intermediate input. We study the changes in industry configurations resulting from changes in costs and demand.
    Keywords: Competitive Industry; Vertical Integration; Outsourcing.
    JEL: L11 L22
    Date: 2009–10–30
  5. By: Casadesus-Massanell, Ramon (Harvard Business School); Ricart, Joan E. (IESE Business School)
    Abstract: The competitiveness of a country is the result of the competitiveness of its firms. The competitiveness of firms is partly determined by how their business models interact with the environment to produce offerings with added value. This chapter contributes to the reflection on Catalonia's competitiveness by using the business model concept to highlight the need to adapt business models to new realities in the Catalan environment. Catalan firms have made little effort to reconfigure their business models after being affected by important external shocks. We derive recommendations by presenting and analyzing examples of companies that have innovated in their business models. Business models sit at the core of competitiveness and should be the focus of managers willing to create efficient firms that foster sustained wealth in Catalonia.
    Keywords: Strategy; Business; Innovation; Internationalization; competitiveness; Firms;
    Date: 2009–07–17
  6. By: Gjerde, Øystein (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration); Knivsflå, Kjell Henry (Dept. of Accounting, Auditing and Law, Norwegian School of Economics and Business Administration); Sættem, Frode (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration)
    Abstract: This article analyzes the value-relevance of industry-based and resource-based competitive advantage in a large sample of firms listed on the Oslo Stock Exchange. We measure competitive advantage by a single variable and perform a new decomposition into its underlying sources. In 1986-2005, the industry-based and the resource-based competitive advantage explain more than 20% of abnormal stock market returns, accumulated over five years. The resource-based advantage is almost four times more important than the industry-based advantage. Differences in both the return and the risk capability of firms’ net assets relative to their industry peers are significant parts of the resource-based advantage, estimated at 60% and 40%, respectively.
    Keywords: Competitive advantage; superior performance; value-relevance of performance metrics
    JEL: L25
    Date: 2009–10–20
  7. By: Juliane Brach; Robert Kappel (GIGA Institute of Global and Area Studies)
    Abstract: The productivity and competitiveness of local firms in non-OECD countries depends as much on technological capacities and successful upgrading as in industrialized countries. However, developing countries undertake very little to no original R&D and primarily depend on foreign technology. Long-term contracts and subcontracting arrangements within global value chains are here very important forms of transnational cooperation and therefore also important channels for technology transfer, especially as the majority of these countries attract only limited foreign direct investment. Drawing on innovation and growth models as much as on value-chain literature, we outline an analytical model for empirical research on local firm upgrading in non-OECD countries and technology transfer within global value chains.
    Keywords: technology transfer, upgrading, innovation, non-OECD countries, global value chains
    Date: 2009–10
  8. By: Tom Broekel; Thomas Brenner
    Abstract: A growing body of work emphasizes the importance of regional factors for regional innovativeness. In this paper, about seventy variables approximating the social-economic characteristics of regions are aggregated to twelve regional factors. In four industry-specific set-ups their influence on firms’ innovativeness is tested. The study confirms that inter-industrial differences exist in the importance of these factors. In the empirical analyses a log-linear model is compared with a linear approach. While both are theoretically problematic it is shown that the log-linear model performs better in the empirical assessment.
    Keywords: regional innovation performance, regional innovativeness, knowledge production function, industry comparison, German regions
    JEL: O18 R11 R12
    Date: 2009–10
  9. By: Mas, Nuria (IESE Business School)
    Abstract: Biotechnology is considered one of the key engines to achieving long-term sustainable growth. Catalonia is the main player in the Spanish biotechnology market, boasting 35 percent of the Spanish biotech R&D and 24 percent of its firms. In this report, we analyze the state of the Catalan biotechnology sector, focusing on its competitive advantages and disadvantages relative to other European biotech clusters. Our findings indicate that, in Catalonia, the biotechnology sector has the potential to affect sectors that represent 10 percent of the Catalan GDP and that employ 9.3 percent of the Catalan workforce. However, Catalan biotech is still quite small in relation to the top European bioclusters and it is only slowly catching up in some of its strategic components. The main advantages of the Catalan biotechnology sector are, first, its research effort, which has been improving steadily, thus allowing Catalonia to start closing the gap with Europe, especially in industrial biotechnology. Second, the attractiveness of Barcelona to draw key staff. The main challenge it faces is access to funding and the fact that the size of related industries in the area is smaller than their size in the top European biotech regions. Finally, 65 percent of Catalan biotechnology firms are devoted to the health sector, while the performance of biotech research in the industrial sector has been particularly competitive.
    Keywords: Biotechnology; clusters; sector
    Date: 2009–07–15
  10. By: Ki H. Kang; Jina Kang (Technology Management, Economics and Policy Program(TEMEP), Seoul National University)
    Abstract: Recent research identify the type of partner as a critical factor determining the effect of R&D collaboration on innovation. Most firms tend to utilize various types of R&D collaboration partners simultaneously, and partnerships between different types of partners show different properties. Thus, the effect of R&D collaboration may vary depending on partner types. This study considers four partner types: competitors, customers, suppliers, and universities. It empirically examines the effect of R&D collaboration with each type of partner on product innovation,employing the Korea Innovation Survey data. Results show that R&D collaborations with customers and universities have a positive effect on product innovation, whereas R&D collaborations with suppliers and competitors have an inverted-U shape relationship with product innovation.
    Keywords: R&D collaboration, product innovation, competitors, customers, suppliers, universities
    Date: 2009–08
  11. By: Michael Wyrwich (Friedrich Schiller University Jena, Department of Economics)
    Abstract: The present paper sheds light on how growth of young firms is affected by expansive strategies and the socioeconomic heritage of their main actors. "Socioeconomic heritage" has to do with socialization, prior socioeconomic circumstances, and regional growth conditions; the term is elaborated upon and further defined in this study. The empirical analysis is carried out both for West Germany - a mature market economy - and for East Germany, which operated under a centrally planned economy until German reunification in 1990. The main finding of the paper is that the involvement of West Germans in East German start-ups has a favourable effect on these firms' chances to grow rapidly. This effect is attributed to the fact that West Germans are more likely to possess person-related and situation-related factors necessary for growing a business in a market economy. The results are more ambiguous as to the influence of expansive strategies on fast growth.
    Keywords: Entrepreneurship, Rapid firm growth, Strategy, Management, West Germany, East Germany
    JEL: L26 M13 O1 O18 P25
    Date: 2009–11–06
  12. By: Ki H. Kang; Jina Kang (Technology Management, Economics and Policy Program(TEMEP), Seoul National University)
    Abstract: This study analyzes the effects of knowledge characteristics on the extent of organizational effort for knowledge transfer. In this paper, three knowledge characteristics that affect organizational behavior for knowledge transfer are identified based on knowledge-based views and organizational learning theory: tacitness, difficulty, and the importance of knowledge. We establish three hypotheses on the effects of these three knowledge characteristics on the extent of effort for knowledge transfer (i.e., the frequency of contact with knowledge source), and provide empirical tests employing the dataset from project teams in a multinational consulting firm via the OLS model. Results show that tacitness, difficulty, and importance have positive effects on the frequency of contact with knowledge sources. This implies that firms exert more effort to acquire the knowledge when the knowledge is tacit, difficult, or important
    Keywords: knowledge transfer, knowledge characteristics, tacitness, difficulty,importance
    Date: 2009–08
  13. By: Catarina Roseira (Faculdade de Economia, Universidade do Porto); Carlos Brito (Faculdade de Economia, Universidade do Porto)
    Abstract: The growing specialization of firms and the reinforcement of vertical disintegration have led to an increasing reliance on purchasing and supply management. This means that an increasing proportion of value is created outside the boundaries of the firm, namely by suppliers. In this context, the paper aims to relate the configuration of the bonds companies establish with their suppliers to the process of value creation. The paper furthers our understanding of buyer-supplier relationships as mechanisms for the coordination and development of capabilities on both sides of the dyad. Evidence was found that relationships affect not only the access and exploration of suppliers’ resources, but also the perception the buying firm has about their capabilities which is likely to condition the potential for joint value creation. The main contribution of the paper is that value co-creation involving suppliers must be regarded as a strategic option which depends on several conditions. This research puts in evidence two of these conditions: suppliers’ capabilities and the way the buyer-seller relationships are configured.
    Keywords: Buyer-supplier relationships, capabilities, relationship configuration, value creation
    JEL: M19
    Date: 2009–11
  14. By: Thi Quynh Trang Do (Centre d'Economie de la Sorbonne)
    Abstract: Economic literature has introduced large theories on critical role of micro and small firms (MSEs) in the economic development. Particularly in developing countries, the development of the sectore has become a channel of poverty reduction by providing job opportunities and creating welfares. Besides, MSEs might be seen as embryonic form of sizable firms in the future, then contribute to the innovation process and economic growth. Consequently, promoting the growth of micro and small firms is in the center of interest of many developing countries, so does the case of Vietnam. By investigating the importance of firm characteristics with regard to the barriers that facing MSE in the growth process, this analysis brings some more light into the sector that unfortunately is still an under researched area. Using firm sample drawing from the Survey on Household's Living Standard in 2004 in Vietnam, we find that firms with different characteristics, among them : firm size, firm age, legal status, industrial sector and location, experiencing different levels of constraints. The level of signification of firm characteristics differs from barriers to barriers. In general, more sizable firms have often to face with higher level of constraints. These results enable policymakers to create more suitable MSEs fostering policies which better account for the different obstacles due to firm heterogeneity.
    Keywords: Firm performance, micro-small enterprises, barriers to growth, Vietnam.
    JEL: D21 L25 O53
    Date: 2009–06
  15. By: Fabio Iraldo (Sant’Anna School of Advanced Studies and IEFE – Institute for Environmental and Energy Policy and Economics, Bocconi University); Francesco Testa (IEFE – Institute for Environmental and Energy Policy and Economics, Bocconi University); Vlasis Oikonomou (Joint Implementation Network Laan Corpus den Hoorn); Michela Melis (IEFE – Institute for Environmental and Energy Policy and Economics, Bocconi University); Marco Frey (Sant’Anna School of Advanced Studies and IEFE – Institute for Environmental and Energy Policy and Economics, Bocconi University); Eise Spijker (Joint Implementation Network Laan Corpus den Hoorn)
    Abstract: The effects of environmental regulation on competitiveness is always a topic under debate for policymakers and practitioners. The article describes the different ways of defining and measuring the effects of environmental regulation on competition and market forces and synthesizes the most updated findings on the relationship between these dimensions. It also proposes an in depth analysis of the most recent empirical studies, with a particular focus on the buildings and construction (B&C) sector, which often is a substantial contributor to the most important countries’ economic indicators. We find that two variables have proved to be both (i) key in defining to what extent and under what conditions environmental regulation exerts adverse or positive effects on competitiveness and (ii) difficult to nail down: forms of regulation and responses by business.
    Date: 2009–04–01
  16. By: Cassiman, Bruno (IESE Business School); Mas, Jordi (IESE Business School)
    Abstract: Science has been shown to be an important driver of economic growth and performance. In this chapter we take a careful look at a key ingredient of this driver for Catalonia: the link between science and business. We argue that the Catalan innovation system faces three important challenges in order to better connect science to business: 1) the need for a sufficient supply of high quality science; 2) the need for a sufficient demand for science by companies, and 3) the ability to connect science and business, i.e., science needs different channels to connect with business and requires coordinated efforts between the different players in the innovation system. We find that the science landscape at Catalan (Spanish) scientific institutions has improved considerably in the last decade. Demand for science by Catalan firms, on the contrary, is still very weak. Nevertheless, we do find that industry and universities use a large variety of channels for knowledge interaction. In addition, we show that the three large Catalan universities have very different profiles in their interactions with industry. However, our analysis does indicate that there is currently a lack of basic information about the Catalan innovation system to help inform and direct such important policy measures. Some coordination on recording this information systematically would improve matters considerably.
    Keywords: Competitiveness; Catalonia; Science; Business;
    Date: 2009–07–17
  17. By: Cassiman, Bruno (IESE Business School); Golovko, Elena (Tilburg University)
    Abstract: Exporting firms are typically the more productive firms in an economy. Based on this observation, policy makers typically enact policies to stimulate exportation by domestic firms. In this chapter, we argue that firms make productivity enhancing investments and as a result the more productive firms start an export activity, which might make these firms even more productive. We find evidence of two types of productivity enhancing investments made by Catalan firms: both the fact that a firm imports some of its inputs and that the firm has innovated in the previous year seem to positively affect productivity and, hence, the decision to start exporting. We also find that there is an important difference between the effects of product innovations versus process innovations: product innovations seem to matter more for the export decision of Catalan firms while process innovations have little or no effect on this decision. Overall, we find that importing, innovating and exporting are strongly complementary activities. At the same time, firms develop these activities sequentially. Therefore, it seems that stimulating firms to become active in the international sourcing market and generate (product) innovations might be more productive policy measures than stimulating firms to enter the export market directly.
    Keywords: Firms; Productivity; Catalonia; Innovation;
    Date: 2009–07–17
  18. By: Fergal McCann (University College Dublin)
    Abstract: This paper analyses how international outsourcing affects plant productivity, with the major contribution lying in the identification of heterogeneous effects for firms with differing internationalisation status. The results point to a striking pattern: the status of being an outsourcer matters strongly for indigenous non-exporters, while for exporters and foreign affiliates, tfp increases are lower, insignificant and sometimes negative. On the other hand, a higher intensity of outsourcing matters for both exporters and foreign affiliates, but not for indigenous non-exporters. Similarly, in dynamic analysis, indigenous non-exporters are found to increase tfp for two periods after entering into international outsourcing, while indigenous exporters experience one more weakly significant period of growth. The key message of the paper is thus: outsourcing's role as a channel of technology diffusion is most pronounced when it serves as a first exposure to international markets.
    Keywords: Outsourcing, Productivity, Firm Structure
    Date: 2009–11–01
  19. By: Ghimisi, Stefan/St; Popescu , Gheorghe
    Abstract: The purpose of this paper is to investigate mechanisms of knowledge transfer between firms and universities. Universities have become increasingly involved in technology transfer by establishing offices of technology transfer, business incubators, and technology parks. This paper presents some aspects of technology transfer centers, specific activities in these entities, with a real example, UCB-Pitt, an entity founded the University Constantin Brancusi of Targu Jiu.
    Keywords: tehnology transfer; knowledge; university
    JEL: A12 D24
    Date: 2009–11–10
  20. By: Ghemawat, Pankaj (IESE Business School); Llano, Carlos (Universidad Autonoma de Madrid); Requena, Francisco (Universidad de Valencia)
    Abstract: Studies of competitiveness tend to focus on a local economy's global interactions, particularly its international trade. But for countries that are at least mid-sized (such as Spain), interregional trade tends to be as large as or significantly larger than international trade. The case of Catalonia illustrates the importance of interregional flows in truly analyzing and devising strategies for a region's external competitiveness. Accounting for interregional trade changes and performing analyses of Catalonia's overall merchandise trade balance, which sectors generate external surpluses as opposed to deficits, and who Catalonia's key trading partners are, and the use of a gravity-model approach to estimate external border effects at the regional level for Catalonia and the rest of Spain, reveal significant variations by sector and by trading partner, generally higher external border effects for exports than imports, and declines in border effects over time - but with a discernible flattening in recent years.
    Keywords: Border Effect; Gravity Model; Interregional trade; transport flows;
    JEL: F14 F17 F21 L14
    Date: 2009–07–11
  21. By: Tai-Yoo KIM; Almas HESHMATI; Jihyun PARK (Technology Management, Economics and Policy Program(TEMEP), Seoul National University)
    Abstract: Economies in knowledge-based societies grow faster than in previous agricultural and industrial societies. This growth is based on the information and communications technology (ICT) development. The production function of ICT industries shows increasing returns to scale. The network effect of ICT development causes increasingly accelerated production and consumption values as the market gets larger in all supply and demand aspects. Thus, ICT development is the fundamental driving force of the faster economic growth, accelerated by increasing returns to scale and the network effect. Early investment in ICT achieves steep economic growth. The definition and characteristics of a knowledge-based society are given, and the nature, causes, and patterns of the faster acceleration of it are explained.
    Keywords: Knowledge-based society, Information society, Post-industrial society, Economic development, Faster acceleration, Industrial policy, Technical change
    JEL: L16 O11 O47
    Date: 2009–08
  22. By: Francesco Testa (Sant’Anna School of Advanced Studies); Fabio Iraldo (Sant’Anna School of Advanced Studies and IEFE – Institute for Environmental and Energy Policy and Economics, Bocconi University, Milan); Nick Johnstone (National Policies Division, OECD Environment Directorate 2)
    Abstract: Green Supply-Chain Management (GSCM) is an increasingly widely-diffused practice among companies that are pursuing environmental excellence. The motivation for the introduction of GSCM may be ethical (e.g. reflecting the values of managers) and/or commercial (e.g. gaining a possible competitive advantage by signalling environmental concern). Drawing upon a database of over 4,000 manufacturing facilities in seven OECD countries this paper assesses the determinants and motivations for the implementation of GSCM. We find that GSCM is strongly complementary with other advanced management practices, and that it contributes to improved environmental performance. The effects on commercial performance are more ambiguous.
    Date: 2009–03–01

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