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on Economics of Strategic Management |
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Issue of 2010‒07‒31
nine papers chosen by Joao Jose de Matos Ferreira University of the Beira Interior |
| By: | Pitelis, Christos |
| Abstract: | Despite recent emphasis on intra-organizational issues, scholarship on organizations, management and strategy remains unduly reliant on economic models, such as the industrial organization (IO) market structure-based analysis. The focus of such models is on price-output determination by firms and the economy-wide efficient allocation of scarce resources under conditions of full knowledge and certainty. This limits their usefulness for students of organizations who have concerns that are simultaneously wider and also focused on organizations, as opposed to just markets. In this paper, we aim to provide an answer and framework for analysing the most fundamental, indeed existential, issue of organization studies and strategic management scholarship. This is whether and how the pursuit of value capture from economic agents who perceive that they possess appropriable value creating advantages, capabilities and action potential, can motivate the emergence of organizations and their strategies and actions intended to capture socially co-created value in conditions of real life . To do so, we explore (the co-evolution of) value capture and creation and (their relationship to) organizational sustainable advantage (SA). In particular, we delve into the nature, determinants and relationship between organizational value capture and creation and explore causal pathways, trade-offs and their co-evolution, as well as vehicles through which SA can be effected in an evolving and uncertain environment. We also discuss implications for managerial practice, limitations and future research opportunities. |
| Keywords: | Value Creation; Value Capture; Sustainable Advantage; Co-evolution |
| JEL: | M00 L21 B00 M20 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:23937&r=cse |
| By: | Tatiana Plotnikova (DFG Research Training Program "The Economics of Innovative Change", Friedrich-Schiller-University Jena, Germany) |
| Abstract: | This paper investigates the determinants of success in the development of new drugs. In specific, it explores the factors of success in drug development programs at different stages of innovation process. We use economies of scale, scope, R&D competition and technological spillovers as explanatory variables and test whether the effect of these variables on the success of a project differs in relation to the discovery and development stages of innovation, respectively. Our main finding is that spillovers, including spillovers from collaboration, are important in explaining the success of projects during the discovery stage of innovation, while in the later development stage, the effects of competition outweigh any benefits from spillovers. |
| Keywords: | economies of scale and scope, spillovers, competition, R&D, innovation process |
| JEL: | O32 L25 L65 |
| Date: | 2010–07–26 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2010-045&r=cse |
| By: | Pitelis, Christos |
| Abstract: | In this paper, we explore the role of foreign direct investment (FDI) on the competitiveness of emerging economies and economic integration. We structure the paper as follows. Following this Introduction (Section I), in Section II, we assess briefly and critically extant theories of FDI and the MNE. In Section III, we critically assess competitiveness and catching-up theory and policy and the role of FDI in this context. Section IV sets off from limitations of extant scholarship identified in the previous section to develop a novel framework for competitiveness and catching-up and discuss the role of FDI, clusters and government policy in its context. Section V discusses ways through which emerging economies can effect economic integration through enhanced competitiveness and accelerated catching-up, by leveraging strategies informed from recent developments on scholarship in International Business (IB) strategy. Section VI summarizes and concludes. |
| Keywords: | Foreign Direct Investment; Multinational Enterprise; International Competitiveness; Integration |
| JEL: | F23 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:23938&r=cse |
| By: | Giulio Bottazzi (Sant'Anna School for Advanced Studies, Pisa); Tatiana Plotnikova (DFG Research Training Program "The Economics of Innovative Change", Friedrich-Schiller-University Jena, Germany) |
| Abstract: | This paper aims to investigate the effect of knowledge characteristics on the total factor productivity of firms developing drugs in the pharmaceutical industry. We decompose knowledge into knowledge associated with the technological firm portfolio and knowledge related to R&D projects, which represent drug development at the clinical testing stage. The latter is attributed to the knowledge of relevant markets where the drugs will be sold. The results show that the effect of technological coherence vs. market coherence and of accumulated knowledge on the productivity of firms differs. Productivity increases with the number of patents and decreases with the patent diversity and project portfolio coherence. When considering only the project knowledge, the diversity of the project portfolio positively affects productivity. |
| Keywords: | total factor productivity, diversity,,coherence, knowledge |
| JEL: | D24 O32 L25 L65 |
| Date: | 2010–07–26 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2010-044&r=cse |
| By: | Gray, Elie (Toulouse Business School and Toulouse School of Economics (LERNA)); Grimaud, André (Toulouse School of Economics (IDEI, LERNA) and Toulouse Business School) |
| Abstract: | This paper exploits the formalization of a circular product differentiation model of Salop (1979) to propose an endogenous growth quality ladder model in which the knowledge inherent in a given sector can spread variously across the sectors of the economy, ranging from local to global influence. Accordingly, this affects the size of the pool of knowledge in which innovations draw themselves on in order to be produced. Therefore, the law of knowledge accumulation, and thus the growth rate of the economy, depend positively on the expected scope of diffusion of innovations, i.e. on the intensity of knowledge spillovers. This approach generalizes the endogenous growth theory as developed in the seminal models of Grossman & Helpman (1991) and Aghion & Howitt (1992), extending their analysis to the possibility of considering stochastic and partial knowledge spillovers. This framework allows us to mitigate the positive externality of knowledge and thus to apprehend the issue of the funding of research with more parsimony. We characterize the set of steady-state Schumpeterian equilibria as a function of the public tools. We provide an explanation for the fact that research effort can either be suboptimal or over-optimal, depending on the expected scope of knowledge. Accordingly, we find that the optimal public tool dedicated to foster R&D activity depends positively on it. |
| Keywords: | Schumpeterian growth, scope of diffusion of innovations, knowledge spillovers |
| JEL: | O30 O31 O41 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:22690&r=cse |
| By: | Aurora A.C. Teixeira (CEF.UP, Faculdade de Economia, Universidade do Porto; INESC Porto; OBEGEF); Margarida Catarino (IAPMEI; Faculdade de Economia, Universidade do Porto) |
| Abstract: | Despite the large number of publications related to business cooperation in R&D and the wide perception of the importance of intermediary institutions in the R&D cooperation process, empirical studies on its role are scarce, scattered and fragmented. Moreover, the academic work developed in this area is basically of a theoretical nature, whereas the international perspective of R&D cooperation is seldom approached. Departing from a unique database that includes 473 R&D cooperation projects developed within the 6th Framework Programme, involving firms and intermediaries from all European Union countries, this paper gauges the determinants of the importance attached to Intermediaries, through a direct survey to the organizations involved. Based on an estimation of the multivariate model, this study demonstrates that the importance given to Intermediaries depends more on project features than on the characteristics of the participating organizations. In particular, the nationality of participating organizations and the promoter emerged with a strong explanatory power: ceteris paribus, projects with at least one participant from the United Kingdom tend to assign greater importance to intermediaries in international R&D cooperation. Unambiguously, results evidence that the innovating capacity of an organization emerges (both positively and significantly) associated with a greater importance attached to Intermediaries. |
| Keywords: | R&D Cooperation; Intermediaries; International projects; Europe |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:385&r=cse |
| By: | Ernesto Tavoletti (University of Macerata) |
| Abstract: | <div style="text-align: justify;">This study aims at exploring the process of internationalization in the Italian fashion firms, focusing on strategy-structure fit and the governance role of the founding team in providing such a fit. It does so with a single case study of a leading fashion firm. It suggests that classic deterministic theories about strategy-structure fit in growing firms offer poor guide. The strategy is entirely \emergent" and inspired by the specific talents of the founding team. Evidence confirms the causal link between strategy and structure: company structure is network based and evolves according to the emerging strategy. However, the development route does not follow any deterministic model: Uppsala's model of incremental and cognitive internationalisation, especially in its revisited and network based form, appears to be the more appropriate reference for the case, characterised by creative dynamics that are constantly evolving, following the vision and strategy that are constantly provided by the founding team.</div> |
| Keywords: | network,fashion industry,strategy,founding team,internationalisation,structure |
| JEL: | L20 L21 F23 M10 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:mcr:wpaper:wpaper00029&r=cse |
| By: | Dolores Anon Higon; Nicholas Vasilakos |
| Abstract: | This paper discusses the impact of foreign-ownership presence on the productivity performance of British-owned domestic retailers. In particular, we analyse the existence of productivity spillovers, in the form of knowledge transfer, by using establishment-level data from the Annual Respondents Dataset over the period 1997-2003. The results confirm the presence of such spillovers and highlight their positive and significant impact on the productivity of domestic firms, though these spillovers are mostly confined to the region in which foreign subsidiaries locate. There is also evidence that the productivity benefit from regional FDI spillovers increases with the absorptive capacity of domestic retailers. |
| Keywords: | FDI, Multinationals, Productivity, Retailing, Spillovers |
| JEL: | D24 F23 L25 L81 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:bir:birmec:10-23&r=cse |
| By: | Aradhna Aggarwal |
| Abstract: | The slow progress and modest achievements of regional integration in South Asia have generated a huge amount of skepticism about its role as an effective strategy of growth. The present study, however, argues that there is need to forge deeper integration within the region. It examines the prospects and problems of serious fiscal consolidation within the area. Essentially, it looks at the effect of deepened regionalism on investment flows. It argues that regional integration has the potential to promote intra and extra regional FDI flows and economic development in individual countries of the region. This will pave the way for the most efficient use of the region's resources through additional economies of scale, value addition, employment and diffusion of technology. A number of challenges remain. Structural weaknesses, institutional bottlenecks, political movements, narrow nationalism and mutual mistrust are some of the factors that explain the failure of the region to exploit possibilities. Paradoxically, the problems themselves provide strong motivation for strengthening cooperation. It is only through more intensive collaboration that these complexities can be addressed and resolved. [Working Paper No. 218] |
| Keywords: | Regional integration, South Asia, intra regional FDI, extra regional FDI, SAFTA |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2691&r=cse |