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on Economics of Strategic Management |
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Issue of 2010‒03‒13
twelve papers chosen by Joao Jose de Matos Ferreira University of the Beira Interior |
| By: | Belderbos, Rene; Van Roy, Vincent; Duvivier, Florence |
| Abstract: | We examine the drivers of international and domestic technology transfer strategies of firms and the impact of these transfers on firms’ productivity performance in a sample of 440 Flemish innovating firms during 2003-2006. Technology transfers may occur through R&D contracting, purchase of licenses and know how, purchase of specialized machinery, hiring of specialized personnel, and various informal channels. Analysis of the drivers of technology sourcing strategies shows that combined technology sourcing strategies are more likely to be adopted by firms that 1) face resource limitations in their innovative effort 2) have a basic research orientation and conduct more R&D 3) successfully use various technology protection strategies to appropriate the benefits of innovation efforts 4) are engaged in international R&D collaboration. Estimates of a dynamic productivity model show that firms engaging in international knowledge sourcing strategies record substantially and significantly higher productivity growth. The largest impact is found for firms combining foreign transfer strategies with local technology acquisition, suggesting that a diverse external technology strategy combining local technologies as well as know how from abroad is most likely to improve firm performance. |
| Keywords: | Technology transfer; Productivity; Multinational Firms; |
| Date: | 2009–11–25 |
| URL: | http://d.repec.org/n?u=RePEc:ner:leuven:urn:hdl:123456789/252065&r=cse |
| By: | Czarnitzki, Dirk; Wastyn, Annelies |
| Abstract: | The concept of knowledge has gained in interest since industrialized economics have induced a shift in importance from labor, capital and natural resources towards intellectual resources. This study investigates how the management of knowledge influences the innovation performance of a firm. While former studies mainly focused on knowledge management cycles, we distinguish different types of knowledge management techniques. It turns out that there is a difference between three knowledge management techniques and their influence on product and process innovation. The ability to source external knowledge positively affects the firm’s introduction of new products and products new to the market. For obtaining cost reductions it is effective to stimulate employees to share knowledge. The availability of a codified knowledge management policy also positively affects the cost reduction possibilities of a firm. These results indicate that it is important for a firm to carefully select the tools of knowledge management in function of the kind of technical innovation it wants to proceed. |
| Keywords: | Knowledge management; innovation performance; |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:ner:leuven:urn:hdl:123456789/250667&r=cse |
| By: | Cassiman, Bruno; Veugelers, Reinhilde; Zuniga, Pluvia |
| Abstract: | This paper examines the diversity of the types of links of firms to science and their effect on innovation performance for a sample of Belgian firms. While at the industry level links to science are highly related to the R&D intensity of the sector, we show that there exists considerable heterogeneity in the type of links to science at the firm level. Overall, firms with a science link enjoy superior innovation performance, in particular with respect to innovations that are new to the market. At the invention level, our findings confirm that patents from firms engaged in science are more frequently cited and have a broader technological and geographical impact, but we show that it is crucial to distinguish between direct science links at the invention level and indirect science links at the firm level to encounter these distinct positive effects of science links. |
| Keywords: | Innovation; Cooperation; Patents; forward citation; science; industrial innovation; |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:ner:leuven:urn:hdl:123456789/255978&r=cse |
| By: | fiorenza belussi (University of Padua); silvia rita sedita (University of Padua); alessia sammarra (University of Padua) |
| Abstract: | The paper investigates the existence of an Open Regional Innovation System (ORIS model). This model is characterised by the firms’ adoption of an open innovation strategy, which overcomes not only the boundaries of the firms but also the boundaries of the region. Using data collected in a sample of life science firms, our research provides the evidence that the Emilia Romagna RIS has evolved towards an ORIS model, where firms’ innovation search strategy, despite being still embedded in local nets (involving several regional public research organisations - PROs), is open to external-to-the-region research networks and knowledge sources. It also shows that innovation openness influences significantly the firms’ innovative performance. |
| Keywords: | life science sector, learning at the boundaries, Regional Innovation Systems, networks, open innovation model |
| JEL: | L7 O31 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:pad:wpaper:0113&r=cse |
| By: | Giovanni Cerulli; Bianca Potì (CERIS-CNR, Institute for Economic Research on Firms and Growth) |
| Abstract: | The paper explores the impact of a specific R&D policy tool, the Italian “Fondo per le Agevolazioni della Ricerca” (FAR), on industrial R&D and technological output at firm level. Our objective is threefold: first, identifying econometrically the presence/absence of private R&D investment additionality/crowding-out within a pooled sample, in a series of firms’ subsets (by regional, dimensional, technological and other characterizations), and by taking into account the effect of single as well as a mix of policy instruments; second, exploring the output (innovation) additionality by comparing the differential impact of “privately funded” (firm own resources) and “public funded” industrial R&D expenditures on firm patent applications; third, comparing the structural characteristics of the group of firm performing additionality with that doing crowding-out, in order to appreciate which are the firm characteristics driving to the success of the policy at stake. Our results suggest that FAR has been effective in the pooled sample, although no effect emerges in some subsets of firms. In particular, while large firms seem to have been decisive for the success of this policy, small firms present a more marked crowding-out effect. Furthermore, firm growth’s strategy and capacity of effectively transform R&D input into innovation output (patents) seem to lead toward a better effect in term of additionality. |
| Keywords: | business R&D; public incentives; econometric evaluation |
| JEL: | O32 C52 O38 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dsc:wpaper:10&r=cse |
| By: | Belderbos, Rene; Faems, Dries; Leten, Bart; Van Looy, Bart |
| Abstract: | This article analyzes the financial performance consequences of technology strategies categorized along two dimensions: (1) explorative versus exploitative and (2) solitary versus collaborative. The financial performance implications of firms’ positioning along these two dimensions has important managerial implications, but has received only limited attention in prior studies. Drawing on organizational learning theory and technology alliances literature, a set of hypotheses on the performance implications of firms’ technology strategies are derived. These hypotheses are tested empirically on a panel dataset (1996-2003) of 168 R&D-intensive firms based in Japan, the US and Europe and situated in five different industries (chemicals, pharmaceuticals, ICT, electronics, non-electrical machinery). Patent data are used to construct indicators of explorative versus exploitative technological activities (activities in new or existing technology domains) and collaborative versus solitary technological activities (joint versus single patent ownership). The financial performance of firms is measured via a market value indicator: Tobin’s Q index. The analyses confirm the existence of an inverted U-shape relationship between the share of explorative technological activities and financial performance. In addition, it is observed that most sample firms do not reach the optimal level of explorative technological activities. These findings point to the relevance of creating a balance between exploitation and exploration in the context of technological activities. Moreover, they suggest that, for the majority of R&D intensive firms, reaching such a balance between exploration and exploitation implies investing additional efforts and resources in exploring new knowledge domains. The analyses also show that firms, engaging more intensively in collaboration, perform relatively stronger in explorative activities. At the same time, a negative relationship between the share of collaborative technological activities and a firm’s market value is observed. Contrary to our expectations, it is collaboration in explorative technological activities, rather than collaboration in exploitative technological activities, that leads to a reduction in firm value. These findings question the relevance of open business models for technological activities. In particular, they suggest that the potential advantages of collaboration for (explorative) technological activities (i.e. access to complementary knowledge from other partners, sharing of technological costs and risks) might not compensate for the potential disadvantages, such as the incurred increase in coordination costs and the need to share innovation rewards across innovation partners. |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:ner:leuven:urn:hdl:123456789/252485&r=cse |
| By: | Pradhan, Jaya Prakash |
| Abstract: | The liberalization of economic policies in the last two decades and intensifying market competition tend to be a cause of policy concern for the survival of SMEs in emerging economies like India as these firms accounts for the largest chunk of industrial units and employment. Given their limited financial and intangible resources, the promotion of R&D among SMEs has become a very important policy parameter. The aim of this paper is to contribute to the literature on Indian R&D by analyzing the trends and patterns of R&D investment by Indian manufacturing SMEs during the period 1991−2008 and exploring various factors that determine their R&D behaviour. The results show that Indian SMEs have lowest incidence of doing in-house R&D and their R&D intensities have fallen in the last decade. A number of factors that play important role in determining SME R&D have been identified based on the three steps Censored Quantile Regression and some useful policy implications are suggested for enhancing R&D activities of small firms. |
| Keywords: | SMEs; R&D; Business Groups; Foreign Firms |
| JEL: | L11 F23 O32 L22 O31 |
| Date: | 2010–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20951&r=cse |
| By: | Lecocq, Catherine; Leten, Bart; Kusters, Jeroen; Van Looy, Bart |
| Abstract: | This paper investigates whether firms active in biotechnology can improve their technological performance by developing R&D activities in technology clusters. Regions that host a concentration of biotechnology activity are identified as technology clusters (level of US states, Japanese prefectures and European NUTS2 regions). A fixed effect panel data analysis on a set of 59 biopharmaceutical firms (period 1995-2002) provides evidence for a positive, albeit diminishing (inverted-U shape) relationship between the number of technology clusters in which a firm is present and its total technological performance. This effect is distinct from a mere multi-location effect. |
| Keywords: | Cluster; Innovation; Biotechnology; |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:ner:leuven:urn:hdl:123456789/249147&r=cse |
| By: | Alex Coad; Werner Hölzl |
| Abstract: | Recent research has led to the empirical regularity that firm growth rate distributions are heavy tailed. This finding implies that a few firms experience spectacular growth rates and decline, but that most firms have marginal growth rates. The literature on high growth firms shows that high growth firms are the central drivers of job creation in the economy but that these firms are neither clustered in high technology sectors nor are these firms necessarily young and small. The evidence on the determinants of firm growth confirms that firm growth is difficult to predict. The finding that firm growth is well approximated by a random process does not only reflect the heterogeneity at the firm level but is also associated with the low persistence of growth rates over time. |
| Keywords: | firm growth Length 25 pages |
| JEL: | L11 L25 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2010-02&r=cse |
| By: | Robert S. Kaplan (Harvard Business School, Accounting and Management Unit) |
| Abstract: | David Norton and I introduced the Balanced Scorecard in a 1992 Harvard Business Review article (Kaplan & Norton, 1992). The article was based on a multi-company research project to study performance measurement in companies whose intangible assets played a central role in value creation (Nolan Norton Institute, 1991). Norton and I believed that if companies were to improve the management of their intangible assets, they had to integrate the measurement of intangible assets into their management systems. After publication of the 1992 HBR article, several companies quickly adopted the Balanced Scorecard giving us deeper and broader insights into its power and potential. During the next 15 years, as it was adopted by thousands of private, public, and nonprofit enterprises around the world, we extended and broadened the concept into a management tool for describing, communicating and implementing strategy. This paper describes the roots and motivation for the original Balanced Scorecard article as well as the subsequent innovations that connected it to a larger management literature. |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:10-074&r=cse |
| By: | Niels D. Grosse (School of Economics and Business Administration, Friedrich-Schiller-University Jena) |
| Abstract: | This paper investigates the effects of neighborhood size and network structure on strategic experimentation. We analyze a multi-arm bandit game with one safe and two risky alternatives. In this setting, risk taking produces a learning externality and an opportunity for free riding. We conduct a laboratory experiment to investigate whether group size and the network structure affect risk taking. We find that group size has an effect on risk taking that is qualitatively in line with equilibrium predictions. Introducing an asymmetry among agents in the same network with respect to neighborhood size leads to substantial deviations from equilibrium play. Findings suggests that subjects react to changes in their direct neighborhood but fail to play a best-response to their position within the network. |
| Keywords: | strategic experimentation, experiment, bandit game, risk taking |
| JEL: | C91 D81 D85 O33 |
| Date: | 2010–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2010-011&r=cse |
| By: | Azar, Ofer H. |
| Abstract: | The article presents an experiment that illustrates a behavior that I denote “relative thinking.” Subjects in the experiment revealed the minimal price difference for which they were willing to spend 20 minutes and go to a cheaper store. Five different goods and nine different prices were used in a between-subjects design. Subjects showed striking positive correlation between the good’s price and their valuation of their time as it was reflected in their decisions. The experiment suggests that subjects think about both the relative and the absolute price differences, even though according to economic theory they should only consider the absolute price difference. Quantifying the effect suggests that consumers’ valuation of their time is approximately proportional to the square root of the price of the good they want to purchase. Studying economics courses seems to mitigate relative thinking. Several alternative explanations for the observed behavior are suggested and discussed, but the conclusion is that only the relative thinking explanation can account for the experimental results. Finally, several implications of relative thinking for business strategy are discussed. |
| Keywords: | Relative thinking; Consumer behavior; Behavioral economics |
| JEL: | M30 D10 M10 C91 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20962&r=cse |