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on Economics of Strategic Management |
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Issue of 2010‒08‒21
thirteen papers chosen by Joao Jose de Matos Ferreira University of the Beira Interior |
| By: | Spyros Arvanitis; Heinz Hollenstein (WIFO) |
| Abstract: | The aim of this paper is to investigate the differences between specific motives of R&D investment in foreign locations with respect to the factors influencing the likelihood of foreign R&D and to the impact of foreign presence on the parent firms' innovativeness and productivity. An econometric analysis of Swiss firm panel data shows, firstly, that factors related to firm-specific knowledge-oriented advantages are more important for explaining the likelihood of foreign R&D activities than factors reflecting disadvantages related to home location. Secondly, knowledge-oriented motives of foreign R&D are positively correlated to innovation performance of domestic firms, whereas market-oriented and resource-oriented strategies correlate positively with productivity. |
| Date: | 2010–07–13 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2010:i:375&r=cse |
| By: | Brouwer, E.; Wiel, H.P. van der (Tilburg University, Center for Economic Research) |
| Abstract: | This paper examines the relationship between competition, innovation and productivity for the Netherlands. We use industry level data aggregated from micro data as well as moments from firm level data for the period 1996-2006. We match innovation data from Community Innovation Survey with accounting data to link innovative activities with performance at the industry level. We find strong evidence for a positive impact of competition on Total Factor Productivity (TFP) at the industry level. Competition directly increases TFP by reducing X-ineficiencies and removing inefficient forms from markets, but also through more innovation. Nonetheless, there exists an inverted U- curve between competition and innovation for the Netherlands, at least for manufacturing industries. Yet, our results indicate that a negative effect of competition on productivity through lower innovation expenditures arises only at very high levels of competition. |
| Keywords: | competition;innovation;profit elasticity;productivity |
| JEL: | D40 L16 O31 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:201052&r=cse |
| By: | Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Luis F. Medrano (Friedrich Schiller University Jena, School of Economics and Business Administration) |
| Abstract: | We analyze the spatial diffusion of knowledge in laser technology in West Germany from 1960, when this technology began, until 2005. Laser technology research has been nearly exclusively conducted in regions that are home to a university with a physics or electrical engineering department, an indication of the science-based character of the technology. Early adoption of laser knowledge was especially prevalent in large agglomerations. While we cannot detect knowledge spillovers from adjacent regions, geographic proximity to the center of initial laser research was conducive to early adoption of laser research; however, the effect is small. The earlier a region embarked on this type of research, the higher the level of laser research later, indicating the accumulation of knowledge generated in previous periods. Our results highlight the role of a region's absorptive capacity for commencing and conducting research in a new technological field. In the case of laser technology, it was more the level of existing tacit knowledge than an interregional transfer of tacit knowledge that played an important role. |
| Keywords: | Innovation, regional innovation systems, knowledge, spatial diffusion, laser technology |
| JEL: | R11 O33 O52 |
| Date: | 2010–08–04 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2010-048&r=cse |
| By: | Lambais, Guilherme B. R. |
| Abstract: | This paper examines the potential of the Metropolitan Region of Campinas (MRC) for becoming a technopolis. Located an hour from São Paulo, in Southeastern Brazil, the MRC has been internationally recognized as an important world technological center. This paper maps the economic and technological environment of the region and develops an analysis of the strengths, weaknesses, opportunities and threats in the MRC with respect to entrepreneurship and becoming a technopolis. We begin by looking at selected high-technology industry and service sectors as well as the infrastructure supporting technological innovation and entrepreneurship in the form of research institutes, a research university (Unicamp), support groups, and three incubators. We then discuss the results of two surveys of companies associated with Unicamp or one of the incubators to determine the reliance of these companies on the MRC infrastructure for financing and marketing to networking and legal assistance, as well as their policy recommendations for improving entrepreneurship in the region. We conclude that the region is attractive to many companies and has great potential for future success as a technopolis due to its high levels of both hard and smart infrastructure, the strength of support available from a variety of local institutions, and the high level of economic activity in potentially innovative industrial and service sectors. However, there are several ways that the university, incubators, and public policies could better support entrepreneurship in the MRC. Specifically, an increase in public and private partnerships as well as greater capitalization options for start-ups are key areas the region could change to provide support for greater diversification of the start-ups in the area and further development of the MRC as a technopolis. |
| Keywords: | technology-based start-ups; entrepreneurship; innovation; incubation; economic development; Campinas |
| JEL: | O18 O32 O31 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:24347&r=cse |
| By: | Rosique, Francisco |
| Abstract: | Corporate Growth is a concept that has been widely treated in a specific way or as part of strategy theories, in definition and in econometric models and has also been studied in many different aspects and approaches. The author describes in depth the main variables affecting corporate growth and the underlying business processes. This empirical research has focused on Sales, Profit-Cash Flow, Risk, Created Shareholder Value, Market Value and Overall Performance econometric models. These panel data models are based on the 500 Companies of the Standard & Poor’s 500. The methodology used has been very strict in identifying exogenous variables, walking through the different alternative econometric models, discussing results, and, in the end, describing the practical implications in today’s business corporate management. We basically assume that the Functions/Departments act independently in the same company, many times with different objectives, and in this situation clear processes are key to clarify the situations, roles and responsibilities. We also assume that growth implies interactions among the different functions in a company and the CEO acts to lead and coach his immediate Directors as a referee of the key conflicts through his Operating Mechanism. The objective of this PhD Dissertation is to clarify the business priorities and identify the most relevant variables in every process leading to the highest efficiency in reaching a sustainable and profitable growth. It covers the lack of academic studies on the nature and specific driving factors of corporate growth and provides a working framework for Entrepreneurs and Management leading to the Company’s success. |
| Keywords: | Models with Panel Data; Capital; Produtivity; Firm choice; Growth; Investment; Corporate Finance; Firm objectives; Firm performance; Industry studies; Manufacturing; Primary products and construction; Services; Transportation and utilities; Business economics; Research and development |
| JEL: | L25 L90 O32 C33 G30 L80 L60 L21 D92 D24 M21 L70 |
| Date: | 2010–06–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:24336&r=cse |
| By: | Halkos, George |
| Abstract: | In this paper we examine the innovative performance of Greek firms in terms of the women participation in research and technological development. For this reason we rely on the final results of a research project on women in innovation, technology and science, based on 279 questionnaires selected on a two years time period (2004-2006). Concerning the female participation in innovations a number of variables are used, like the total number of women employees by age, by education level, by firm size and by sector, as well as women in product and in process innovations, their position in the firm (owner, manager) and finally equality in job enrichment, in salary, in education–training and in promotion. Apart of presenting the empirical results relying on the analysis of the data collected by the survey to the Greek enterprises, we use the collecting variables in an econometric formulation using logistic regression and extracting the associated probabilities for implementing innovations. For this reason, first the General Linear Model (GLIM) is introduced and statistical inference and estimation problems are discussed. Then the Logit Model is presented under the theoretical framework of the Generalized Linear Models (GLIM), while some theoretical inside is extended with a number of suggested propositions and theorems. |
| Keywords: | Innovation; Entrepreneurship; Competitiveness; Diversity |
| JEL: | C10 Q55 L26 O31 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:24392&r=cse |
| By: | Stefan Ambec; Mark A. Cohen; Stewart Elgie; Paul Lanoie |
| Abstract: | Twenty years ago, Harvard Business School economist and strategy professor Michael Porter stood conventional wisdom about the impact of environmental regulation on business on its head by declaring that well designed regulation could actually enhance competitiveness. The traditional view of environmental regulation held by virtually all economists until that time was that requiring firms to reduce an externality like pollution necessarily restricted their options and thus by definition reduced their profits. After all, if there are profitable opportunities to reduce pollution, profit maximizing firms would already be taking advantage of those opportunities. Over the past 20 years, much has been written about what has since become known simply as the Porter Hypothesis (“PH”). Yet, even today, there is conflicting evidence, alternative theories that might explain the PH, and oftentimes a misunderstanding of what the PH does and does not say. This paper provides an overview of the key theoretical and empirical insights on the PH to date, draw policy implications from these insights, and sketches out major research themes going forward. <P>Il y a bientôt vingt ans, Michael Porter, économiste et professeur de stratégie de la Harvard Business School, a remis en question le paradigme généralement accepté quant à l’impact des réglementations environnementales sur la performance d’affaires, en affirmant que des politiques environnementales bien conçues pouvaient en fait améliorer la compétitivité des entreprises. Jusqu’alors, le point de vue dominant, accepté par la quasi-totalité des économistes, stipulait que d’imposer aux entreprises de réduire une externalité comme la pollution réduisait nécessairement les options à leur disposition et, par définition, leurs profits. Après tout, s’il y a des opportunités profitables de réduire la pollution, les firmes qui maximisent leurs profits auraient dû les identifier par elles-mêmes. Depuis 20 ans, beaucoup de choses ont été écrites sur ce qu’il est convenu d’appeler l’Hypothèse de Porter. Aujourd’hui, il y a diverses théories pour expliquer l’Hypothèse de Porter. Les résultats empiriques ne sont pas concluants et il subsiste une certaine confusion sur ce que dit et ne dit pas l’Hypothèse de Porter. Ce texte présente un survol des grands enjeux théoriques et empiriques entourant l’Hypothèse de Porter, en tire les grandes implications en termes de politiques publiques et propose des avenues de recherche pour le futur. |
| Keywords: | Porter Hypothesis, environmental policy, innovation, performance , Hypothèse de Porter, politiques environnementales, innovation, performance |
| Date: | 2010–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2010s-29&r=cse |
| By: | Kox, Henk L.M.; Leeuwen, George van; Wiel, Henry van der |
| Abstract: | The paper investigates whether scale effects, market structure, and regulation determine the poor productivity performance of the European business services industry. We apply parametric and nonparametric methods to estimate the productivity frontier and subsequently explain the distance of firms to the productivity frontier by market characteristics, entry- and exit dynamics and national regulation. The frontier is assessed using detailed industry data panel for 13 EU countries. Our estimates suggest that most scale advantages are exhausted after reaching a size of 20 employees. This scale inefficiency is persistent over time and points to weak competitive selection. Market and regulation characteristics explain the persistence of X-inefficiency (sub-optimal productivity relative to the industry frontier). More entry and exit are favourable for productivity performance, while higher market concentration works out negatively. Regulatory differences also appear to explain part of the business services' productivity performance. In particular regulation-caused exit and labour reallocation costs have significant and large negative impacts on the process of competitive selection and hence on productivity performance. Overall we find that the most efficient scale in business services is close to 20 employees and that scale inefficiencies show a hump-shape pattern with strong potential scale economies for the smallest firms and diseconomies of scale for the largest firms. The smallest firms operate under competitive conditions, but they are too small to be efficient. And since this conclusion holds for about 95 out of every 100 European business services firms, this factor weighs heavily for the overall productivity performance of this industry. |
| Keywords: | productivity; frontier models; scale; industry dynamics; regulation; European Union; business services |
| JEL: | L8 C34 L1 R38 |
| Date: | 2010–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:24389&r=cse |
| By: | Joshua Drucker |
| Abstract: | Regional economist Benjamin Chinitz was one of the most successful proponents of the idea that regional industrial structure is an important determinant of economic performance. His influential article in the American Economic Review in 1961 prompted substantial research measuring industrial structure at the regional scale and examining its relationships to economic outcomes. A considerable portion of this work operationalized the concept of regional industrial structure as sectoral diversity, the degree to which the composition of an economy is spread across heterogeneous activities. Diversity is a relatively simple construct to measure and interpret, but does not capture the implications of Chinitz’s ideas fully. The structure within regional industries may also influence the performance of business enterprises. In particular, regional intra-industry concentration—the extent to which an industry is dominated by a few relatively large firms in a locality—has not appeared in empirical work studying economic performance apart from individual case studies, principally because accurately measuring concentration within a regional industry requires firm-level information. Multiple establishments of varying sizes in a given locality may be part of the same firm. Therefore, secondary data sources on establishment size distributions (such as County Business Patterns or aggregated information from the Census of Manufactures) can yield only deceptive portrayals of the level of regional industrial concentration. This paper uses the Longitudinal Research Database, a confidential establishment-level dataset compiled by the United States Census Bureau, to compare the influences of industrial diversity and intra-industry concentration upon regional and firm-level economic outcomes. Manufacturing establishments are aggregated into firms and several indicators of regional industrial concentration are calculated at multiple levels of industrial aggregation. These concentration indicators, along with a regional sectoral diversity measure, are related to employment change over time and incorporated into plant productivity estimations, in order to examine and distinguish the relationships between the differing aspects of regional industrial structure and economic performance. A better understanding of the particular links between regional industrial structure and economic performance can be used to improve economic development planning efforts. With continuing economic restructuring and associated workforce dislocation in the United States and worldwide, industrial concentration and over-specialization are separate mechanisms by which regions may “lock in” to particular competencies and limit the capacity to adjust quickly and efficiently to changing markets and technologies. The most appropriate and effective policies for improving economic adaptability should reflect the structural characteristics that limit flexibility. This paper gauges the consequences of distinct facets of regional industrial structure, adding new depth to the study of regional industries by economic development planners and researchers. |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:10-14&r=cse |
| By: | Ethan Cohen-Cole (University of Maryland - College Park); Andrei Kirilenko (Commodity Futures Trading Commission); Eleonora Patacchini (University of Rome - La Sapienza) |
| Abstract: | Network spillovers explain as much as 90% of the individual variation in returns in a fully electronic market. We study two fully electronic, highly liquid markets, the Dow an S&P 500 e-mini futures markets. Within these markets, we use a unique dataset of realized trades that includes the precise topology of transactions; this topology allows us to identify precisely both the relevance of network structure as well as endogenous network spillovers. Within these markets, we will show that network positioning on the part of trader leads to remarkable spillovers in return. Empirically, we estimate that the implied average multiplier, the ratio of a individual level shock to the total network one, is as large as 20. A gain of $1 for a trader leads to an average of $20 in gains for all traders and much more for connected ones. In a zero-sum market, such as the one in this study, this suggests a very large re-allocation of returns according to network structure. |
| JEL: | G10 C21 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:eie:wpaper:1012&r=cse |
| By: | Kox, Henk L.M.; Rojas Romasgosa, Hugo |
| Abstract: | The paper investigates whether the self-selection hypothesis and other predictions from the heterogeneous-firms trade models can explain the export participation patterns for Dutch firms in manufacturing and services. The results provide strong support for the self-selection hypothesis, according to which firms need higher productivity performance to compensate for sunk entry costs in export markets. After controlling for many firm and market characteristics we robustly find higher productivity levels for exporters. The paper also tests for the reverse causality (learning-by-exporting), but finds no empirical support for it, not even after controlling for the firm's distance to a constructed international productivity frontier. This latter result may be important for the motivation of future export promotion policies. The empirical estimates are achieved by probit regressions at the plant level and at the firm level. As a robustness test we also applied the more standard OLS panel regression estimates, which provided similar results. The paper also tested whether the productivity-export link is conditional on the sectoral market structure and multinational affiliation. Services sectors with high competition and a lower degree of product differentiation have significantly higher export productivity premia than services firms in less competitive sectors. Such differences are not found in the manufacturing sector. |
| Keywords: | Export participation; productivity; self selection; market structure |
| JEL: | F23 F12 L1 |
| Date: | 2010–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:24390&r=cse |
| By: | Schaeck, K.; Cihák, M. (Tilburg University, Center for Economic Research) |
| Abstract: | How can competition enhance bank soundness? Does competition improve soundness via the efficiency channel? Do banks heterogeneously respond to competition? To answer these questions, we exploit an innovative measure of competition [Boone, J., A new way to measure competition, EconJnl, Vol. 118, pp. 1245-1261] that captures the reallocation of profits from inefficient banks to their efficient counterparts. Based on two complementary datasets for Europe and the U.S., we first establish that the new competition indicator captures a broad variety of other characteristics of competition in a consistent manner. Second, we verify that competition increases efficiency. Third, we present novel evidence that efficiency is the conduit through which competition contributes to bank soundness. In a final examination of banks’ heterogeneous responses to competition, we find that smaller banks’ soundness measures respond more strongly to competition than larger banks’ soundness measures, and two-stage quantile regressions indicate that the soundness-enhancing effect of competition is larger in magnitude for sound banks than for fragile banks. |
| Keywords: | bank competition;efficiency;soundness;Boone indicator;quantile regression |
| JEL: | G21 G28 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:201068s&r=cse |
| By: | Deb Kusum Das; Gunajit Kalita |
| Abstract: | This study attempts to address the issue of declining labour intensity in India’s organized manufacturing in order to understand the constraints on employment generation in the labour intensive sectors. Using primary survey data covering 252 labour intensive manufacturing-exporting firms across five sectors—apparel, leather, gems and jewellery, sports goods, and bicycles for 2005-06 an attempt is made to find out the factors which constrain employment generation in labour intensive firms. The study shows several constraints in the path of employment generation in labour intensive sectors—non-availability of trained skilled workers, infrastructure bottlenecks, low levels of investment, labour rules and regulations, and a noncompetitive export orientation. The study suggests a set of policy initiatives to improve the employment potential of these sectors. [Working Paper No. 237] |
| Keywords: | Indian Organized Manufacturing, Labor Intensity, Employment Growth, Skilled workforce, Wage structure, Export status, Machinery Usage, Labor laws, South Asia |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2770&r=cse |