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on Economics of Strategic Management |
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Issue of 2010‒01‒16
seventeen papers chosen by Joao Jose de Matos Ferreira University of the Beira Interior |
| By: | Kirti Sharda |
| Abstract: | Despite the importance of outsourcing firms and the highly competitive nature of the outsourcing industry, there has been minimal examination of outsourcing firm strategy. This paper investigates the strategic focus of 60 outsourcing firms using empirical data collected through survey and semi-structured interviews from 226 top management team respondents. Factor and cluster analysis reveal three outsourcing firm archetypes based on their strategic orientation, namely, superachievers, quality advocates and defenders. The dominance of these archetypes also varies across business activities offered by sample firms. By delineating dimensions underlying outsourcing form strategy and by identifying archetypes of strategic orientation, the paper provides an understanding of key differentiators of outsourcing firm performance. |
| Date: | 2009–12–23 |
| URL: | http://d.repec.org/n?u=RePEc:iim:iimawp:2009-12-03&r=cse |
| By: | Jeroen de Jong; Willem Hulsink |
| Abstract: | Small firms may rely on a variety of network partners, and in various roles, to identify and exploit opportunities for innovation. This paper adds to the literature on innovation networking by developing a typology at the level of innovation objects, rather than at the firm or industry level. |
| Date: | 2010–01–05 |
| URL: | http://d.repec.org/n?u=RePEc:eim:papers:h201002&r=cse |
| By: | Kirti Sharda; Leena Chatterjee |
| Abstract: | There is an increasing recognition of outsourcing firms as new organizational forms with unique systems and practices. This paper uses a configurational approach to integrate learnings from outsourcing literature, organization and management theory, strategic management and strategic human resource management in order to understand similarities and differences between outsourcing firms and their performance. It formulates a conceptual framework that proposes that certain combinations of work designs, strategic orientations, client relationships and contexts could lead to better organizational performance within a sample of outsourcing firms. |
| Date: | 2009–12–11 |
| URL: | http://d.repec.org/n?u=RePEc:iim:iimawp:2009-12-02&r=cse |
| By: | Chirco, Alessandra; Colombo , Caterina; Scrimitore, Marcella |
| Abstract: | In this paper we study the role of market competitiveness in a strategic delegation game in which owners delegate output decisions to managers interested in the firm's relative performance. In particular we study how the optimal delegation scheme - i.e. the distortion from pure profit maximization - is affected by market concentration and the elasticity of market demand. We show that these two indexes of market competitiveness do not alter managerial incentives in the same way: while the optimal degree of delegation decreases as the market becomes less concentrated, it increases as demand becomes more elastic. |
| Keywords: | Strategic delegation; relative performance; oligopoly; isoelastic demand |
| JEL: | L13 L21 D43 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:19540&r=cse |
| By: | Raquel Ortega-Argilés (JRC-IPTS); Lesley Potters (JRC-IPTS); Peter Voigt (JRC-IPTS) |
| Abstract: | The importance of SMEs in Europe’s innovation process can be seen in both the academic and the political arena. Adopted in June 2008, the ‘Small Business Act’ for Europe reflects the Commission’s political will to recognise the central role of SMEs in the EU economy and was the first to put in place a comprehensive SME policy framework for the EU and its Member States. One of its main aims is to promote growth among SMEs by helping them to tackle problems that hamper their development. This kind of policy calls for a more in-depth look into the nature of the SME population in Europe. Several attempts have been made in recent years to draw taxonomies of firms, but mostly they do not control for size effects within the defined groups of firms. The purpose of this paper is to typify different groups of R&D-intensive SMEs distinguished according to their inputs into the innovation process. In particular, we draw attention to SMEs that contribute the most to the industrial R&D investment in the EU. To do so, we run a cluster analysis on a sample of top European R&D SME investors based on a unique dataset made up of the different waves of the European R&D Investment Scoreboard. The results show that several clusters of R&D-intensive SMEs can be defined by certain characteristics, but that the diversity between clusters calls for a more careful understanding before developing measures to support European R&D-intensive SMEs. For companies labelled as ‘corporate laboratories’ according to the cluster analysis, it would be legitimate to question support for R&D, as these firms do not seem to have significant problems in finding investors that believe in their business model. On the other hand, e.g. the ‘Gazelles’ do in fact grow, but struggle with the high capital investment needed to become and remain large. In this case, it seems it would be more effective to focus on the weaknesses (physical expansion) of these firms rather than supporting their strengths (knowledge, R&D). |
| Keywords: | SMEs; innovation inputs; cluster analysis |
| JEL: | O33 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:wpaper:200915&r=cse |
| By: | Elena Verdolini (Fondazione Eni Enrico Mattei and Catholic University of Milan); Marzio Galeotti (University of Milan and IEFE-Bocconi) |
| Abstract: | This paper contributes to the induced innovation literature by extending the analysis of supply and demand determinants of innovation in energy-efficient technologies to account for international knowledge flows and spillovers. In the first part of the paper we select a sample of 38 innovating countries and we study how knowledge related to energy-efficient technologies flows across geographical and technological space. We demonstrate that higher geographical and technological distances are associated with a lower probability of knowledge flow. In the second part of the paper, we use our previous estimates to construct stocks of internal and external knowledge for a panel of 17 countries and present an econometric analysis of the supply and demand determinants of innovation accounting for international knowledge spillovers. Our results confirm the role of demand-pull effects, as proxied by energy prices, as well as that of technological opportunity, as proxied by the knowledge stocks. In particular, this paper provides evidence that spillovers between countries have a significant positive impact on further innovation in energy-efficient technologies. |
| Keywords: | Innovation, Technology Diffusion, Knowledge Spillovers, Energy-Efficient Technologies |
| JEL: | O33 Q55 C13 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2009.123&r=cse |
| By: | Makó, Csaba; Csizmadia, Péter; Illéssy, Miklós; Iwasaki, Ichiro; Szanyi, Miklós |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:hit:ceirps:2009-01&r=cse |
| By: | Szabolcs Blazsek; ALvaro Escribano |
| Abstract: | During the past two decades, innovations protected by patents have played a key role in business strategies. This fact enhanced studies of the determinants of patents and the impact of patents on innovation and competitive advantage. Sustaining competitive advantages is as important as creating them. Patents help sustaining competivite advantages by increasing the production cost of competitors, by signaling a better quality of products and by serving as barriers to entry. If patents are rewards for innovation, more R&D should be reflected in more patents applications but this is not the end of the story. There is empirical evidence showing that patents through time are becoming easier to get and more valuable to the firm due to increasing damage awards from infringers. These facts question the constant and static nature of the relationship between R&D and patents. Furthermore, innovation creates important knowledge spillovers due to its imperfect appropriability. Our paper investigates these dynamic effects using U.S. patent data from 1979 to 2000 with alternative model specifications for patent counts. We introduce a general dynamic count panel data model with dynamic observable and unobservable spillovers, which encompasses previous models, is able to control for the endogeneity of R&D and therefore can be consistently estimated by maximum likelihood. Apart from allowing for firm specific fixed and random effects, we introduce a common unobserved component, or secret stock of knowledge, that affects differently the propensity to patent of each firm across sectors due to their different absorptive capacity. |
| Keywords: | Point process, Conditional intensity, Latent factor, R&D spillovers, Patents, Secret innovations |
| JEL: | C15 C31 C32 C33 C41 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:we098951&r=cse |
| By: | Henrekson, Magnus (Research Institute of Industrial Economics (IFN)); Johansson, Dan (Ratio) |
| Abstract: | This essay argues that the economic contribution of certain firms – be they small, young or rapidly growing – has to be understood in a broader context of creative destruction. Growth of some firms requires contraction and exit of some other firms to free up resources that can be reallocated to expanding firms. Entry and expansion are flip sides to exit and contraction and the process through which the factors of production are put into different use defines structural transformation. We analyze institutions and policies conducive to structural transformation, in particular the expansion of high-growth firms (HGFs), since they have empirically been shown to contribute disproportionately to economic development. <p> Firm growth is viewed as resulting from the continuous discovery and use of productive knowledge. Rapid firm growth requires a set of economic actors with complementary competencies that work together to identify and commercialize novel business ideas. The institutional framework determines the incentives for these individuals to acquire and utilize knowledge. We identify a number of institutions that encourage the creation of HGFs and promote structural transformation. In particular, our analysis points to the key roles played by tax structures, labor market regulation, and the contestability of service markets. Even in advanced economies, there is a large untapped economic potential which can be unleashed by institutional changes, such as the opening up of closed markets for entrepreneurial competition. However, there is no “quick-fix” that will boost the frequency of HGFs and structural transformation. Our analysis suggests that policymakers need to adopt a broad approach and implement a wide array of complementary institutional reforms to increase the prevalence of HGFs and to facilitate structural transformation. |
| Keywords: | Entrepreneurship; Firm growth; Gazelles; High-growth firms; High-impact firms; Institutions; Job creation; Rapidly growing firms |
| JEL: | D21 L25 M13 O10 O40 |
| Date: | 2010–01–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0820&r=cse |
| By: | Christian Helmers; Mark Rogers |
| Abstract: | This paper provides an overview of a new database that uses intellectual property data to track the innovative activity of firms in the UK. The paper looks at the extent and nature of patenting activity, focusing on micro firms and SMEs. Over the period 2000 to 2007, SME patenting has increased whereas large firm patenting has fallen and micro firm patenting has been roughly con- stant. Most micro and SMEs patent while relatively young (aged ten or less) and this tendency is becoming more pronounced over time. The paper provides a descriptive analysis on micro firms and SMEs that become high growth firms (defined as having greater than 20 percent growth per annum). Overall, 28.0 percent of young micro and SMEs achieve high growth (over 2002 to 2007). In comparison, 29.4 percent of young micro or SMEs that patent achieve high growth. This difference is much greater for firms in the high-tech industries. Moreover, the analysis shows that due to the skewed nature of the firm-level growth distribution, standard conditional mean estimators may fail to uncover important differences in the association between patenting and firm growth across the conditional growth distribution. |
| Keywords: | Firm growth, patents |
| JEL: | L25 O12 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:hst:ghsdps:gd09-095&r=cse |
| By: | Siedschlag, Iulia; Zhang, Xiaoheng; Smith, Donal |
| Abstract: | We analyse the location decisions of 8,468 foreign affiliates in the Information and Communication Technologies (ICT) sector established in 224 regions in the European Union over the period 1998-2008. Our results suggest that on average, the location probability of foreign affiliates in ICT manufacturing and services increases with market size, market potential, the presence of other foreign-owned firms in the ICT sector, human capital, income tax, and decreases with the corporation tax rate. In addition, in the case of foreign affiliates in ICT services, the innovation intensity in the ICT sector has a positive effect on the location probability. We find that relevant geographical structures for the location decision are different for multinationals with a parent firm in the European Union and the United States. |
| Keywords: | Conditional logit/European Union/Foreign direct investment/Information and Communication Technologies/Location choice/Nested logit |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp336&r=cse |
| By: | Tengstam, Sven (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | The clothing sector has been a driver of diversification and growth for countries that have graduated into middle income. Using a partial adjustment panel data model for 61 countries 1975-2000, we investigate the global international location of clothing production by using a combination of variables suggested by the Heckscher-Ohlin theory and the New Economic Geography (NEG) theory. Our Blundell-Bond system estimator results confirm that the NEG variables do help explain the location of the clothing industry, and point to that convergence is not as inevitable as sometimes assumed. We find that closeness to various intermediates such as low-cost labor and textile production has strong effects on output. Factor endowments and closeness to the world market have inverted U-shaped effects. This is expected since above a certain level several other sectors benefit even more from closeness and factor endowments, driving resources away from the clothing industry.<p> |
| Keywords: | global clothing industry; new economic geography; comparative advantages; industrial agglomeration |
| JEL: | F12 F13 L13 L67 R12 R30 |
| Date: | 2009–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0423&r=cse |
| By: | KONNO Tomohiko |
| Abstract: | Most growth theories have focused on R&D activities. Although R&D significantly influences economic growth, the spillover effect also has a considerable influence. In this paper, we study knowledge spillover among agents by representing it as network structures. The objective of this study is to construct a framework to treat knowledge spillover as a network. We introduce a knowledge spillover equation, solve it analytically to find a workable solution. It has mainly three properties: (1) the growth rate is common for all the agents only if they are linked to the entire network regardless of degrees, (2) the TFP level is proportional to degree, and (3) the growth rate is determined by the underlying network structure. We compare growth rate among representative networks: regular, random, and scale-free networks, and find the growth rate is the greatest in scale-free network. We apply this framework, i.e., knowledge spill over equation, to the problem of firms forming a network endogenously and show how distance and region size affect the economic growth. We also apply the framework to network formation mechanism. The aim of our paper is not just showing results, but in constructing a framework to study spillover by network. |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:10002&r=cse |
| By: | Böbel, Ingo; Martis, Amrita |
| Abstract: | Health care has to make transitions to be truly effective in the modern world. A change in paradigm is needed. This requires that value - defined as the health outcome for a particular medical condition per unit of cost expended - must be applied and added to health care, and health care itself must be treated as a business that performs in a competitive environment to ultimately provide client or customer satisfaction. Health care today is typically service specific, necessitating that the client or patient visits different medical or clinical departments to get the range of treatment prescribed for his/her condition. We argue – following Porter and Teisberg - that health care should be patient-centric and that organization and treatment should be planned accordingly. Such planning must take into account the provision of a range of services directly accessible or networked regionally taking full advantage of technological advances in the field of medical technology and informational systems. We examine whether such principles are currently being applied in Monaco (specifically in the Centre Hospitalier Princesse Grace) taking into account both Monaco’s unique positioning and its geographical context in relation to the French health system as well as the resulting interaction in networking relationships. We explore how value in healthcare is currently being added and investigate plans for augmenting such efforts. Aspects of preventative and innovative initiatives are also discussed as a means of enhancing value. Finally, we offer a set of recommendations that in the context of the local situation might be successfully applied. Continuous review of performance and the application of best practice and technologies are proposed to ensure that the provision of health care services can compete with the best in the world. |
| Keywords: | Health care; value creation in health care; Monaco; Southern France |
| JEL: | I18 I10 |
| Date: | 2009–12–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:19689&r=cse |
| By: | Peter Havlik (The Vienna Institute for International Economic Studies, wiiw); Waltraut Urban (The Vienna Institute for International Economic Studies, wiiw); Jayati Ghosh; Marcos P. Ribeiro |
| Abstract: | The term BRICs puts under a common label the four largest fast growing emerging countries: Brazil, Russia, India and China. The BRICs show many common features, such as big land size, large population, fast economic growth etc., but important differences as well, due to their different models of economic development and resources endowments. In this report, we discuss the different models of economic development of the individual BRIC countries, with a special focus on their external relations (trade, FDI) and on likely future developments. Brazil is a domestically oriented service economy; Russia's economic development is heavily dependent on energy and raw material resources; the Indian economy is essentially service-led, supported by exports; and China's economic development is driven by manufacturing exports and investment. Finally, we explore the resulting future challenges and opportunities for EU competitiveness. |
| Keywords: | economic development, Brazil, Russia, India, China, the European Union, competitiveness, Foreign Direct Investment, Industry, International Trade and Competitiveness, Macroeconomic Analysis, Forecasts and Policy, Services |
| JEL: | O21 O53 O54 O57 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:wii:rpaper:rr:359&r=cse |
| By: | Che, Natasha Xingyuan |
| Abstract: | The sectoral composition of US economy has shifted dramatically in the recent decades. At the same time, knowledge and information capital has become increasingly important in modern production process. This paper argues that a ready explanation for the recent sectoral structural change lies in the difference of intangible capital accumulation across sectors. In the two-sector model of the paper, as the importance of intangible capital increases, labor is shifted from direct goods production to creating sector-specific intangible capital. In the process, the real output and employment shares of the high-intangible sector increase. The model generates sectoral composition change and labor productivity trend that reasonably match the data. It also shows that conventional labor productivity calculation understates the "true" productivity in sectoral goods production. The underestimation is greater for the growing sector. The empirical regressions of the paper indicate a positive and significant association between intangible capital investment intensity and firms' future output and employment growth. The correlation is higher for firms in the growing sector. At the industry level, controlling for industry human capital intensity, physical capital intensity and IT investment level, intangible capital intensity is positively correlated with future industry real output and employment share growth. These findings are consistent with the implications of the model. The paper also presents evidence suggesting that most growing service industries are intangible capital intensive. Thus the theory developed here can also help to reconcile the expansion of the service sector and the seemingly low productivity of the sector. |
| Keywords: | Intangible Capital; Structural Change; Knowledge Economy; Firm Investment; |
| JEL: | E22 E17 E23 |
| Date: | 2009–12–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:19653&r=cse |
| By: | Che, Natasha Xingyuan |
| Abstract: | The sectoral composition of the US economy has shifted dramatically in the recent decades. At the same time, knowledge and information capital has become increasingly important in modern production processes. This paper argues that a ready explanation for the recent sectoral structural change lies in the difference of intangible capital accumulation across sectors. In the two-sector model of the paper, as the importance of intangible capital increases, labor is shifted from direct goods production to creating sector-specific intangible capital. In the process, the real output and employment shares of the high-intangible sector increase. The model generates sectoral composition change and labor productivity trend that reasonably match the data. It also shows that conventional labor productivity calculation understates the "true" productivity in sectoral goods production. The underestimation is greater for the growing sector. The empirical regressions of the paper indicate a positive and significant association between intangible capital investment intensity and firms' future output and employment growth. The correlation is higher for firms in the growing sector. At the industry level, controlling for industry human capital intensity, physical capital intensity and IT investment level, intangible capital intensity is positively correlated with future industry real output and employment share growth. These findings are consistent with the implications of the model. The paper also presents evidence suggesting that most growing service industries are intangible capital intensive. Thus the theory developed here can also help to reconcile the expansion of the service sector and the seemingly low productivity of the sector. |
| Keywords: | Intangible Capital; Structural Change; Knowledge Economy; Firm Investment; |
| JEL: | E22 E17 E23 |
| Date: | 2009–12–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:19839&r=cse |