nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2010‒02‒27
ten papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. Sequential optimizing investing strategy with neural networks By Ryo Adachi; Akimichi Takemura
  2. Capability Matrix : A Framework for Analyzing Capabilities in Value Chains By Sato, Yuri; Fujita, Mai
  3. A Strategic Orientation Model for the Turkish Local e-Governments By Aykut, Arslan
  4. Organization, learning and cooperation. By Barr, Jason; Saraceno, Francesco
  5. The effects of entry on incumbent innovation and productivity. By Aghion, P.; Blundell, R.; Griffith, R.; Howitt, P.; Prantl, S.
  6. Development Strategies: Lessons from the Experiences of South Korea, Malaysia, Thailand and Vietnam By Khan, Haider A
  7. Reinvestment Decisions by Small Businesses in Emerging Economies By Sugato Chakravarty; Meifang Xiang
  8. Strategic complementarity and substitutability without transitive indifference By Kukushkin, Nikolai S.
  9. Market institutions and firm behaviour: employment and innovation in the face of reform . By Macartney, G.J.
  10. The effect of academic socializing strategies on collaboration: Empirical evidence from European economics departments By Peter Schneider

  1. By: Ryo Adachi; Akimichi Takemura
    Abstract: In this paper we propose an investing strategy based on neural network models combined with ideas from game-theoretic probability of Shafer and Vovk. Our proposed strategy uses parameter values of a neural network with the best performance until the previous round (trading day) for deciding the investment in the current round. We compare performance of our proposed strategy with various strategies including a strategy based on supervised neural network models and show that our procedure is competitive with other strategies.
    Date: 2010–02
  2. By: Sato, Yuri; Fujita, Mai
    Abstract: This paper develops a Capability Matrix for analyzing capabilities of developing country firms that participate in global and national value chains. This is a generic framework to capture firm-level knowledge accumulation in the context of global and local industrial constellations, by integrating key elements of the global value chain (GVC) and technological capabilities (TC) approaches. The framework can visually portray characteristics of firms’ capabilities, and highlight a relatively overlooked factor in the GVC approach: local firms’ endogenous learning efforts in varieties of relationship with lead firms.
    Keywords: Developing Countries, Industrial Management, Business Enterprises, Capability Matrix, Capabilities, Value Chains, Lead Firms, Local Firms
    JEL: B41 L22 L60 O31
    Date: 2009–12
  3. By: Aykut, Arslan
    Abstract: Increased environmental uncertainty and complexity along with budget constraints requires public organizations to manage strategically as never before. The environments of public organizations have become increasingly turbulent and more firmly interconnected. During the past two decades, governments have innovated new management tools such as strategic planning, outsourcing, and performance measurement to deal with complex governance and networks to provide their public services. Meanwhile, the drive to implement e-government has resulted in the formulation of many e-government visions and strategies, driven by their own sets of political, economic, and social factors and requirements. With this regard, recent developments in e-service provision of Turkish Local e-Governments deserve empirical and well-structured research. Building on the recent literature, this study draws a strategic orientation framework and tests it by analyzing the contents of strategic documents of 114 Turkish Local e-Governments.
    Keywords: Turkish Local e-Governments; e-Government Strategy; Strategic Orientation Model;
    JEL: O1 O18 H1 H7 O3
    Date: 2009–03
  4. By: Barr, Jason; Saraceno, Francesco (Centre de recherche en économie de Sciences Po)
    Abstract: This paper models the organization of the firm as a type of artificial neural network in a duopoly setting. The firm plays a repeated Prisoner’s Dilemma type game, and must also learn to map environmental signals to demand parameters and to its rival’s willingness to cooperate. We study the prospects for cooperation given the need for the firm to learn the environment and its rival’s output. We show how profit and cooperation rates are affected by the sizes of both firms, their willingness to cooperate, and by environmental complexity. In addition, we investigate equilibrium firm size and cooperation rates.
    Keywords: Artificial neural networks;; Prisoner’s Dilemma;; Cooperation;; Firm learning;
    JEL: C63 C72 D21 D83 L13
    Date: 2009–05
  5. By: Aghion, P.; Blundell, R.; Griffith, R.; Howitt, P.; Prantl, S.
    Abstract: How does firm entry affect innovation incentives in incumbent firms? Microdata suggest that there is heterogeneity across industries. Specifically, incumbent productivity growth and patenting is positively correlated with lagged greenfield foreign firm entry in technologically advanced industries, but not in laggard industries. In this paper we provide evidence that these correlations arise from a causal effect predicted by Schumpeterian growth theory—the threat of technologically advanced entry spurs innovation incentives in sectors close to the technology frontier, where successful innovation allows incumbents to survive the threat, but discourages innovation in laggard sectors, where the threat reduces incumbents' expected rents from innovating. We find that the empirical patterns hold using rich micro panel data for the United Kingdom. We control for the endogeneity of entry by exploiting major European and U.K. policy reforms, and allow for endogeneity of additional factors. We complement the analysis for foreign entry with evidence for domestic entry and entry through imports.
    Date: 2009–02
  6. By: Khan, Haider A
    Abstract: This piece synthesizes the development strategies of Korea, Malaysia, Thailand and Vietnam and draws some relevant lessons. Using a complex adaptive systems approach, strategic openness, a set of heterodox macroeconomic policies, creation of institutions for productive investment in both agriculture and industry, avoidance of severe inequalities and political conflict, special initial conditions and willingness to learn from unexpected developments are found to be some of these factors. Although no country can succeed by following mechanically the experience of another country cautious experimentation, rapid feedback and flexible, pragmatic policy-making with a strategic medium to long run perspective, can be helpful. Dynamic learning and flexible institution building are essential components of such a strategic approach to development.
    Keywords: development strategy, complex systems, heterodox policies, institution building, dynamic learning
    Date: 2010
  7. By: Sugato Chakravarty (Purdue University); Meifang Xiang (University of Wisconsin, Whitewater)
    Abstract: We investigate the cross-country determinants of profit reinvestment decisions, using data compiled by the World Bank from around 7,000 businesses in 34 countries. We find that, compared to the security of property rights, it is a firm’s access to external financing that plays a significant role in a firm’s reinvestment decision in emerging economies. The extent of private ownership and the level of competition faced by firms are additional significant factors correlated with the reinvestment decision. Furthermore, we uncover a firm size effect in that the above factors driving firm reinvestment decision appears to impact small firms more than the relatively larger firms. Our findings complement, as well as build on, those from China and a few Eastern European countries.
    Keywords: Reinvestment; investment; external financing; property rights; competition
    Date: 2010–01
  8. By: Kukushkin, Nikolai S.
    Abstract: We study what useful implications strategic complementarity or substitutability may have when the indifference relation(s) need not be transitive. Two results are obtained about the existence of a monotone selection from the best response correspondence when both strategies and parameters form chains. Two more results are obtained about the existence of a Nash equilibrium in games with strategic complementarities where strategy sets are chains, but monotone selections from the best response correspondences need not exist.
    Keywords: Strong acyclicity; interval order; single crossing; monotone selection; Nash equilibrium
    JEL: C72
    Date: 2010–02–15
  9. By: Macartney, G.J.
    Abstract: This thesis investigates the effect that market institutions have on economic outcomes such as employment and innovation. The market institutions under study are those that determine the conditions in product, labour and capital markets. Of particular interest is how the effect of institutional changes in one market depends on the conditions in another, or depends on the nature of innovation by the firm. The first chapter describes the matching of patents at the European Patent Office to firm accounts data for all registered firms across fifteen European countries. This constitutes a valuable new dataset for research in innovation that is used for much of the empirical work in this thesis. The second chapter investigates the impact of product market competition on unemployment, and how this depends on labour market institutions. It uses differential changes in regulations across OECD countries to find that increased competition reduces unemployment, more so in countries with strong unions. The third chapter investigates how the effect of product market competition on innovation depends on financial institutions. Using exogenous variation in competition in manufacturing industries this chapter finds that the positive effect of competition on innovation is larger in countries with good financial institutions. The fourth chapter investigates the effect of employment protection legislation on innovation. The theoretical effect of employment protection legislation on innovation is ambiguous, and empirical evidence is thus far inconclusive. This chapter finds that within multinational enterprises overall innovation occurs more in subsidiaries located in countries with high employment protection, however radical innovation occurs more in subsidiaries located in countries with low employment protection.
    Date: 2009–09
  10. By: Peter Schneider (Institute for Labour Law and Industrial Relations in the EC, University of Trier)
    Abstract: We present an explorative analysis from qualitative and quantitative data of fourteen European economics departments for the years 2001 to 2003 and investigate how one component of a successful PhD education, which is socializing PhD students into the academic community, should be designed in order to support intercultural collaboration among PhD students. We employ Multi-Value Qualitative Comparative Analysis (MVQCA) to analyze the data. Our results reveal unique patterns of socializing strategies present in economics departments with either high or low intercultural collaboration among PhD students. It turns out that high intercultural collaboration is characterized by two configurations of different socializing strategies. In the first configuration we find that a “high number of foreign PhD students” in a department sufficiently explains high intercultural collaboration as it is realized in American research universities. In the second configuration we find that a combination of “different backgrounds in academic disciplines” among PhD students with “active support for research visits” sufficiently explains high intercultural collaboration. Low intercultural collaboration is characterized by three single strategies: “Financing attendance at academic conferences or events about once per year”, “no active support for research visits” and a “small number of foreign PhD students”. Each condition is sufficient to explain the outcome. The results for high intercultural collaboration are not affected by any of five resource conditions we added as controls. Low intercultural collaboration though was partly co-explained by low amounts of extra time among faculty and low financial resources of the department. The results indicate that high intercultural collaboration is not only supported by a socializing strategy typical for American research universities but can also be achieved by different socializing strategies.
    Date: 2010

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