nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2010‒09‒25
ten papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. Localisation strategies of firms in wind energy technology development By Perrot, Radhika; Filippov, Sergey
  2. Emergence of firms: a sociogeographic demand side perspective By Hellerstedt, Karin; Wennberg, Karl
  3. Regional Tourism Competition in the Baltic States: a Spatial Stochastic Frontier Approach By Pavlyuk, Dmitry
  4. The R&D activity of multinational enterprises in peripheral economies: evidence from the EU new member states By Narula, Rajneesh; Guimon, Jose
  5. Clustering the Winners: the French Policy of Competitiveness Clusters By Lionel Fontagne; Pamina Koenig; Florian Mayneris; Sandra Poncet
  6. Knowledge in cities By Todd Gabe; Jaison R. Abel; Adrienne Ross; Kevin Stolarick
  7. Corporate strategies – the institutional approach By Waśniewski, Krzysztof
  8. Patterns of technological progress and corporate innovation By Waśniewski, Krzysztof
  9. Technological innovation in creative clusters. The case of laser in conservation of artworks in Florence By Luciana Lazzeretti; Francesco Capone; Tommaso Cinti
  10. The Role of Technological Complexity and Absorptive Capacity in Internalization Decision By Arti Grover

  1. By: Perrot, Radhika (UNU-MERIT); Filippov, Sergey (Delft University of Technology)
    Abstract: This paper looks at the localisation strategies of multinational companies in wind energy sector in the emerging countries of China and India. It seeks to explain why western multinationals are localising new manufacturing and R&D facilities in emerging economies such as China and India, and how local knowledge and capabilities are being increasingly integrated into global technology and manufacturing networks of multinationals. It explores the reasons behind the localisation of multinational companies that helps them gain strategic access to wind energy technological capabilities in emerging economies. It examines the case of the company Vestas in expanding wind energy cluster of Tianjin in China and Chennai in India. At the strategic level, it explains the importance of the role of local capabilities and skills in the global production networks of multinationals. At the policy level, the discussions leading from the case focuses on the concrete steps necessary to integrate technology and innovation more closely into development of sustainable energy markets in developing countries.
    Keywords: renewables, multinational companies, emerging economies
    JEL: F23 L72 O32 Q20 Q42
    Date: 2010
  2. By: Hellerstedt, Karin (Jönköping International Business School); Wennberg, Karl (The Ratio Institute and Stockholm School of Economics)
    Abstract: This paper presents an analysis of regional start-up rates in the knowledge intensive services and high-tech industries. To supplement prevailing frameworks focusing mainly on supply-side economic factors, we integrate insights from economic geography and population ecology to the entrepreneurship literature as to present a theoretical framework that captures both supply-and demand-side factors, with a specific emphasis on the demand side. Using a rich multi-level data material on all knowledge intensive start-ups across the 286 Swedish municipalities between 1994 and 2002, the empirical analysis focuses on how characteristics of the economic milieu of regions influence firm births. We find that economically affluent regions dominate entrepreneurial activity in terms of firm births, yet a number of much smaller rural region revealed high levels of start ups. Both economic and sociological variables such as knowledge spillovers from universities and firm R&D, and the political regulatory regime within the municipality, exhibit strong influences on firm births. These patterns points to strong support for the notion that ‘the geographic connection’ is important for analyzing entrepreneurial processes.
    Keywords: Firm birth; Geography; Entrepreneurship
    JEL: M13 R11 R23
    Date: 2010–09–14
  3. By: Pavlyuk, Dmitry
    Abstract: This paper aimed at a statistical analysis of competition for tourists between regions within Baltic states (Estonia, Latvia, Lithuania) and estimation relative efficiency levels of regions. We apply a modern approach called Spatial Stochastic Frontier and corresponded to spatial modification of a stochastic frontier model. We specify two alternative spatial stochastic frontier models – distance and travel-time based to identify an influence of existing transport network on research results. Using the model we analyse region-specific factors (tourism infrastructure, employment, geographical position and natural attractors) having an effect on a number of visitors and estimate regions' efficiency values. We discover a significant level of inefficiency of Baltic states regions and propose some ways to improve the situation.
    Keywords: spatial stochastic frontier; efficiency; competition; regional tourism; transport network
    JEL: C51 O18 R15 C31 L83 C33
    Date: 2010–08
  4. By: Narula, Rajneesh (John H. Dunning Centre for International Business, Henley Business School, University of Reading); Guimon, Jose (Department of Economic Structure and Development Economics, Faculty of Economics, Universidad Autónoma de Madrid)
    Abstract: This paper explores the impact of MNEs on innovation systems and the policy options available for peripheral economies to attract and embed the R&D activities of MNEs. After developing the conceptual and policy framework, we discuss the case of the new member states from Central and Eastern Europe that joined the EU between 2004 and 2007. We analyse the evolution of the R&D activity of MNE subsidiaries since the 1980s, contrasting the new member states with the core and Mediterranean countries of the EU. This analysis is useful to illustrate some common challenges for peripheral economies, including the difficulty of building linkages with MNEs in high value adding activities; the risk of crowding-out of domestic R&D following cross-border acquisitions; the risk of external dependency; and the limitations of protectionist policies. We recommend that governments of peripheral economies focus their efforts on fostering a demand-oriented upgrading of technological capabilities and on stimulating domestic linkages and clusters around MNEs, rather than seeking to attract supply-driven R&D.
    Keywords: European Union, FDI, investment, innovation systems, innovation policies, linkages, MNE, multinational enterprises, new member states, peripheral economies, R&D
    JEL: O32 F23 P33
    Date: 2010
  5. By: Lionel Fontagne; Pamina Koenig; Florian Mayneris; Sandra Poncet
    Abstract: In 2005 the French government launched a policy of competitiveness clusters, giving subsidies for innovative projects managed locally and collectively by firms, research centers and universities. This paper proposes an ex-ante analysis of the outcome of the selection process that took place before the implementation of the subsidies program, in order to assess whether the policy ended up in choosing winners or losers. We first ask how the clusters have been selected, and then focus on the selection of firms within the clusters, using export and productivity as a measure of performance. Our main conclusion is that public authorities have chosen the winners during the two-step selection procedure. Export premium, beyond what individual characteristics would predict, is however most visible within the category of clusters having no international ambition, where heterogeneity among firms is the largest.
    Keywords: Competitiveness; clusters; international trade; firm selection
    JEL: F1 F14
    Date: 2010–09
  6. By: Todd Gabe; Jaison R. Abel; Adrienne Ross; Kevin Stolarick
    Abstract: This study identifies clusters of U.S. and Canadian metropolitan areas with similar knowledge traits. These groups—ranging from Making Regions, characterized by knowledge about manufacturing, to Thinking Regions, noted for knowledge about the arts, humanities, information technology, and commerce—can be used by analysts and policymakers for the purposes of regional benchmarking or comparing the types of programs and infrastructure available to support closely related economic activities. In addition these knowledge-based clusters help explain the types of regions that have levels of economic development that exceed, or fall short of, other places with similar amounts of college attainment. Regression results show that Engineering, Enterprising, and Building Regions are associated with higher levels of productivity and earnings per capita, while Teaching, Understanding, Working, and Comforting Regions have lower levels of economic development.
    Keywords: Regional economics ; Productivity ; Manufacturing industries ; Education - Economic aspects ; Professional employees
    Date: 2010
  7. By: Waśniewski, Krzysztof
    Abstract: The present paper introduces a model of corporate strategies, based on institutional theories of the firm and formalized with the concepts of the theory of games. Corporate strategies are balanced outcomes of four social games: capital market, corporate governance, product market and social responsibility. Two empirical applications of the model are then introduced: a qualitative one, consisting in comparative study of strategies deployed by Royal Dutch Shell and Israel Corporation, then a quantitative one, presenting a study of capital accumulation and operational efficiency in 79 companies listed in the Warsaw Stock Exchange.
    Keywords: institutional economics; strategy; corporation
    JEL: D53 L2 D81 D2 G12 D02 G3 D01
    Date: 2010–06
  8. By: Waśniewski, Krzysztof
    Abstract: The bulk of the global innovative effort takes place in 5 countries: USA, Japan and China as leaders, with France and United Kingdom as immediate followers, which all display, on the long run, a negative marginal value added on innovation. The present paper attempts to answer the following question: why does most of innovative activity takes place in markets apparently hostile to innovation, i.e. giving back negative marginal value added on innovation ? A model is introduced in which any market may be represented as a Selten’s extensive game, subgames of which are played as Harsanyi’s games with imperfect information, by a temporarily finite and changing set of players. The firms’ innovative activity is a Nash’s dynamic equilibrium in which innovating is rational though suboptimal, without premium on innovation being a real economic profit. The model is the theoretical framework for the study of six cases: Ford Motor, General Motors, Honda, Chevron, Akzo Nobel and IBM, which allow to conclude that firms do innovation either because they have to or because this is their comparative advantage and they can do it in an exceptionally efficient way. As economic growth is grounded in efficient business patterns and in some countries those business patterns shape themselves in the context of a strong exogenous pressure on innovation. This leads to the development of economies which, regardless its pace of economic growth and balance of payments, come to a point when marginal value added on innovation is negative. At this point, however, incentives to innovate do not disappear and firms continue to apply the same business patterns and thus do create scientific input which gives back negative marginal real output. This pattern of global technological progress seem to be quite durable, with financial markets that allow to compensate, by successful financial placements, the downturns of innovative projects.
    Keywords: innovation; technology; technological progress; corporate strategies
    JEL: E22 L71 D20 D40 L60 B52 O3 L25 D21 D81 L10 C70 L16 L21 D52 D01 D00
    Date: 2010–05
  9. By: Luciana Lazzeretti (Department of Business Economics, University of Florence); Francesco Capone (Department of Business Economics, University of Florence); Tommaso Cinti (Department of Social and Business Studies, University of Siena)
    Abstract: The field of laser application to the restoration and cleaning of cultural assets is amongst the most thriving developments of recent times. Ablative laser technological systems are able to clean and protect inestimable works of art subject to atmospheric agents and degradation over time. This new technology, which has been developing for the last forty year, is now available to restorers and has received a significant success all over Europe. An important contribution in the process of laser innovation has been carried out in Florence by local actors belonging to a creative cluster. The objects of the analysis are the genesis of this innovation in this local Florentine context, and the relationships among the main actors who have contributed in it. The study investigates how culture can play a part in the generation of ideas and innovations, and which are the creative environments that can favour it. In this context, the issue of laser technologies for the restoration of cultural heritage has been analysed as a case study in the various paths taken by the Creative Capacity of the Culture (CCC).
    Keywords: innovation, creative cluster, art restoration
    JEL: O31 R11 L14
    Date: 2010–04
  10. By: Arti Grover
    Abstract: Technology transfer costs have a profound influence on the firm’s entry mode into a production sharing relationship. To explore this nexus, they associate technological complexity of the off-shored input with the organizational mode of international production sharing by extending the Antràs (2005) model. They modify the Antràs model by proposing that the low-tech input, as qualified within the model, cannot be produced in the low wage south without costly technology transfer. The cost of technology transfer in turn depends on three factors, which are the technological complexity of this input, the absorptive capacity of the host country and the wages of the host country. Theirmodel refines the results obtained in Antràs (2005). [Working Paper No. 153]
    Keywords: Outsourcing, Foreign Direct Investment, Technology Transfer, Absorptive Capacity
    Date: 2010

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