nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2010‒10‒30
twelve papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. Which firms want PhDs? The effect of the university-industry relationship on the PhD labour market By José García-Quevedo; Francisco Mas-Verdú; José Polo-Otero
  2. An investigation of the relation between cooperation and the innovative success of German regions By Tom Broekel; Matthias Buerger; Thomas Brenner
  3. Does history matter for the relationship between R&D, Innovation and Productivity? By Elena Huergo; Lourdes Moreno
  4. Comparative Survival Analysis of Firms: the case of the Portuguese North region By Elsa Sarmento; Alcina Nunes
  5. Innovation and Employment: A firm level analysis with European R&D Scoreboard data By Francesco Bogliacino
  6. The productivity and export spillovers of the internationalisation behaviour of Belgian firms By Michel Dumont; Bruno Merlevede; Christophe Piette; Glenn Rayp
  7. Internationalization strategy and performance of small and medium sized enterprises By Jonas Onkelinx; Leo Sleuwaegen
  8. The global downturn and its impact on euro area exports and competitiveness By Filippo di Mauro; Katrin Forster; Ana Lima
  9. The internationalization process of firms : From exports to FDI ? By Paola Conconi; André Sapir; Maurizio Zanardi
  10. Market size, competition and the product mix of exporters By Thierry Mayer; Marc J. Melitz; Gianmarco I.P. Ottaviano
  11. Management Entrepreneurial et Orientation Entrepreneuriale : Deux concepts aussi différents ? By K. Randerson; A. Fayolle
  12. A Cross-Sectional Performance Measure for Portfolio Management. By Monica Billio; Ludovic Calès; Dominique Guegan

  1. By: José García-Quevedo (Barcelona Institute of Economics (IEB) and Dpt. of Political Economy and Public Finance, University of Barcelona); Francisco Mas-Verdú (Dpt. of Economics and Social Sciences, Universidad Politécnica de Valencia and Barcelona Institute of Economics (IEB)); José Polo-Otero (CYD Foundation and Barcelona Institute of Economics (IEB))
    Abstract: PhD graduates hold the highest education degree, are trained to conduct research and can be considered a key element in the creation, commercialization and diffusion of innovations. The impact of PhDs on innovation and economic development takes place through several channels such as the accumulation of scientific capital stock, the enhancement of technology transfers and the promotion of cooperation relationships in innovation processes. Although the placement of PhDs in industry provides a very important mechanism for transmitting knowledge from universities to firms, information about the characteristics of the firms that employ PhDs is very scarce. The goal of this paper is to improve understanding of the determinants of the demand for PhDs in the private sector. Three main potential determinants of the demand for PhDs are considered: cooperation between firms and universities, R&D activities of firms and several characteristics of firms, size, sector, productivity and age. The results from the econometric analysis show that cooperation between firms and universities encourages firms to recruit PhDs and point to the existence of accumulative effects in the hiring of PhD graduates.
    Date: 2010–03
  2. By: Tom Broekel; Matthias Buerger; Thomas Brenner
    Abstract: Concepts like regional innovation systems, innovative milieu, and learning regions emphasize the positive contribution of intra-regional cooperation to firmsÕ innovation performance. Despite substantial numbers of case studies, the quantitative empirical evidence for this claim is thin. Using data on the co-application and co- invention of patents for 270 German labor market regions the study shows that intra- regional cooperation intensity and regional innovation efficiency are associated. In contrast to the negative influence of inter-regional cooperation, medium levels of intra-regional cooperation stimulate regional innovation efficiency.
    Keywords: regional innovation efficiency, cooperation intensity, collaboration, regional cooperation
    JEL: O18 R11 O31
    Date: 2010–10
  3. By: Elena Huergo; Lourdes Moreno
    Abstract: This paper analyzes the relationship between R&D expenditures, innovation and productivity growth, taking into account the possibility of persistence in firms’ behaviour. We study this relationship for a sample of Spanish manufacturing firms between 1990 and 2005, estimating a model with four equations: participation in technological activities, R&D intensity, the generation of innovations and the impact of these technological outputs on total factor productivity growth. Our results reflect the existence of true state dependence both in the decision of R&D investment and in the production of innovations. The omission of this persistence leads to an overestimation of the current impact of innovations on productivity growth. However, the presence of persistence in technological inputs and outputs entails current R&D activities having long–run effects on a firm’s productivity.
    Keywords: CDM model, productivity growth, persistence in R&D and innovation.
    JEL: D24 L6 O3
    Date: 2010–10–21
  4. By: Elsa Sarmento (Departamento de Economia e Gestão Industrial, Universidade de Aveiro); Alcina Nunes (Instituto Politécnico de Bragança, Departamento de Economia e Gestão)
    Abstract: This study approaches the survival ability of firms in the North region of Portugal from 1985 to 2007, allowing regional and national comparisons through the application of non-parametric and semi-parametric methods. This analysis is based on the creation of a specific entrepreneurship database, based on Quadros de Pessoal, where the methodology of Eurostat/OECD´s “Manual of Business Demography Statistics” was applied to. In the North, firms close earlier on during their infancy as their median duration is below the median duration of firms located in the rest of the country. The high turbulence of firm turnover is pointed out as a fundamental determinant of the survival probabilities of firms in this region.
    Keywords: Entrepreneurship, Firm Dynamics, Survival, Regional Analysis
    JEL: E30 E32 C22
    Date: 2010–09
  5. By: Francesco Bogliacino (JRC-IPTS)
    Abstract: In this article, we analyse the microeconomic relationship between innovation and employment, using company data from R&D Scoreboard for Europe covering 2000-2008. We estimate a reduced form equation in which R&D can account for both product and process innovation. The existence of non constant elasticities is assessed, due to the combination of efficient scale and decreasing return to R&D: in our empirical estimates the scale effect tends to prevail for a given R&D intensity generating an increasing relationship between total turnover and employment. Our results have important implications for policymakers: R&D and innovation supporting policies should be correctly tailored and monitored since the results depend on the characteristics of the firms benefited. By the same token, calibration of general equilibrium models aimed at quantifying the employment impact of R&D and innovation policies should take into account that the average elasticity can be a very rough approximation. We claim that our results support the position that R&D and innovation policies should be tailored towards favouring entry by knowledge intensive firms, instead of supporting existing actors.
    Keywords: Technological change, corporate R&D, employment, panel data
    JEL: O33 J20
    Date: 2010–09
  6. By: Michel Dumont (Federal Planning Bureau; University of Antwerp (UA)); Bruno Merlevede (UGent; HUBrussel); Christophe Piette (National Bank of Belgium, Research Department); Glenn Rayp (UGent, Sherppa)
    Abstract: This paper analyses to what extent the decision to start exporting may be subject to spillovers of the internationalisation behaviour of other (foreign and domestic) firms. We distinguish between two possible channels: effects on productivity and effects on the perceived level of sunk costs of exporting. For both channels, we consider geographical and activity or industry-based linkages between firms. For a sample Belgian firms we find evidence of significant spillovers on productivity as well as productivity-independent spillovers on the decision to start exporting. Spillovers seem more substantial in the geographical dimension than in terms of competitor, client or supplier links, except for the impact of multinationals on the productivity of domestic firms.
    Keywords: Export, FDI, spillovers, sunk cost, region
    JEL: F2
    Date: 2010–10
  7. By: Jonas Onkelinx (Vlerick Leuven Gent Management School); Leo Sleuwaegen (Vlerick Leuven Gent Management School; K.U.Leuven)
    Abstract: Focusing on the timing and geographical scope of import and export activities of Belgian small and medium sized enterprises (SMEs), the paper analyzes the importance, structural features and performance implications of firms that recently started to export following the geographical configuration of their international trade operations and their year of establishment. The analysis allows us to separate firms that started to export in the period 1998-2005 into four distinct groups: born internationals, i.e. firms which were established less than five years before their first year of exporting and exporting to less than five countries in the same region (regional focus), born globals; young firms but with a more internationally diversified export portfolio, born again globals, i.e. firms similar to born globals but established longer than five years before their first exports and traditional internationalizers, firms established more than five years before their first export operations characterized by a narrow geographical scope of their exports. We find SME export growth to be driven by a small group of born global firms, accounting for 60 per cent of the total increase in SME exports between 1998 and 2005. Analyzing the structural feature of the different types of firms, we find born globals to be more productive and characterized by a higher R&D spending and intangible asset intensity compared to other types of traders. We next test if the typology matters for the observed export performance differences across firms over time. We find that born globals grow faster in terms of export sales, have a stronger commitment to export markets and are more likely to continue exporting. Born globals also have the highest failure rate, traditional internationalizers the lowest. These findings suggest strong risk/return tradeoffs among the strategies chosen by the different types of firms. Performing a dynamic analysis of changes in trade configurations of firms over the observation period, we investigate how these changes have an impact on performance. Specific attention is paid to firms that stop importing/exporting. Especially firms that move from being exporters to become two-way traders, i.e. also starting to import goods from other countries show the most marked increases in turnover and productivity. The final part of the study analyzes the relationship between export and import activities to particular countries following the sequence in which they occur. We find that the probability to start importing from a country is 4 times higher for firms already exporting to that country than for trading SMEs without prior export experience in that country.
    Date: 2010–10
  8. By: Filippo di Mauro (European Central Bank, Directorate Economics, Economic Developments, Kaiserstrasse 29, 60311 Frankfurt am Main); Katrin Forster (European Central Bank, Directorate Economics, Economic Developments, Kaiserstrasse 29, 60311 Frankfurt am Main); Ana Lima (European Central Bank, Directorate Economics, Economic Developments, Kaiserstrasse 29, 60311 Frankfurt am Main)
    Abstract: World trade contracted sharply in late 2008 and early 2009 following the deepening of the financial crisis in September 2008. This paper discusses the main mechanisms behind the global downturn in trade and its impact on euro area exports and competitiveness. It finds that the euro area was hit particularly hard by the contraction in global demand. Moreover, the collapse in the demand for euro area products during the downturn was exacerbated to some degree by unfavourable developments in price competitiveness, resulting in further losses in competitiveness compared to our main trading partners, in line with pre-crisis trends. This view is also confirmed by evidence from broad-based competitiveness measures, which show that euro area countries recorded losses in productivity during this period. Going forward, the recovery in world trade will depend mainly on a resurgence in global demand and its expenditure composition. With regard to the euro area, as the global economy recovers at varying speeds and given the current growth momentum in emerging economies, the performance of the external sector may be hindered by the geographical orientation of its export markets, which are mainly focused on advanced economies and other EU member states. Furthermore, the strength and sustainability of the recovery in exports will also depend on the restructuring process undertaken by European firms in response to globalisation-related challenges. Governments within the European Union should therefore focus on policies to strengthen competition and increase market integration, in order to benefit fully from the globalisation process going forward. In contrast, a resurgence in global protectionist policies could dampen the prospects for world and euro area trade and should be strongly resisted. JEL Classification: F10, F15, F43
    Keywords: Trade, euro area, competitiveness
    Date: 2010–10
  9. By: Paola Conconi (Université Libre de Bruxelles (ECARES); CEPR); André Sapir (Université Libre de Bruxelles (ECARES); CEPR); Maurizio Zanardi (Université Libre de Bruxelles (ECARES))
    Abstract: We describe a simple model in which domestic firms decide whether to serve a foreign market through exports or horizontal foreign direct investment (FDI). This choice involves a trade-off between the higher variable trade costs associated with exports and the higher fixed set-up costs associated with establishing foreign subsidiaries. Crucially, firms are uncertain about their profitability in foreign markets and can only learn it by operating there. To obtain market-specific knowledge, firms may follow an “internationalization process”, serving the foreign market via exports first and eventually, in some cases, switching to local subsidiary sales. To assess the validity of the predictions of our model, we use firm-level data on export and FDI decisions in individual destination markets for all companies registered in Belgium over the period 1997-2008. We show that firms’ strategies to serve foreign markets depend not only on the variable and fixed costs associated with exports and FDI, but also on the export experience they have acquired in that market.
    Keywords: Exports, FDI, Uncertainty, Experimentation
    JEL: F10 D21 F13
    Date: 2010–10
  10. By: Thierry Mayer (Sciences-Po; CEPII; CEPR); Marc J. Melitz (Harvard University; NBER; CEPR); Gianmarco I.P. Ottaviano (Bocconi University; Fondazione Eni Enrico Mattei (FEEM); CEPR)
    Abstract: Recent empirical evidence has highlighted how the export patterns of multi-product firms dominate world trade flows, and how these multi-product firms respond to different economic conditions across export markets by varying the number of products they export. In this paper, we further analyze the effects of those export market conditions on the relative export sales of those goods: we refer to this as the firm's product mix choice. We build a theoretical model of multi-product firms that highlights how market size and geography (the market sizes of and bilateral economic distances to trading partners) affects both a firm's exported product range and its exported product mix across market destinations. We show how tougher competition in an export market - associated with a downward shift in the distribution of markups across all products sold in the market - induces a firm to skew its export sales towards its best performing products. We find very strong confirmation of this competitive effect for French exporters across export market destinations. Our theoretical model shows how this effect of export market competition on a firm's product mix then translates into differences in measured firm productivity. Thus, a firm operating a given technology will produce relatively more output per worker when it exports to markets with tougher competition. This productivity gain is further compounded by the effect of competition on the mix of exported products.
    Date: 2010–10
  11. By: K. Randerson (CERAG - Centre d'études et de recherches appliquées à la gestion - CNRS : UMR5820 - Université Pierre Mendès-France - Grenoble II); A. Fayolle (CERAG - Centre d'études et de recherches appliquées à la gestion - CNRS : UMR5820 - Université Pierre Mendès-France - Grenoble II)
    Abstract: Le management entrepreneurial (Stevenson et Gumpert, 1985) peut-il être assimilé à l'orientation entrepreneuriale (Miller, 1983 ; Covin et Slevin, 1988, 1989, 1991 ; Lumpkin et Dess, 1996), concept développé et largement utilisé pour mesurer l'intensité entrepreneuriale d'une organisation ? Nous démontrons que ces deux concepts sont distincts bien que conduisant tous deux vers l'entrepreneuriat organisationnel (Brown et al, 2001). Nous soulignons que le caractère dynamique de ce type d'entrepreneuriat appelle à des recherches qualitatives supplémentaires afin de donner un contenu au concept. Ceci permettrait, notamment, aux praticiens d'identifier les mécanismes et processus qui maintiennent l'intensité entrepreneuriale à un bon niveau et d'agir sur ces derniers quand cette intensité fait défaut. Ce contenu donnerait au monde académique un matériau pour réexaminer l'opérationnalisation de l'orientation entrepreneuriale, nécessité soulignée par Basso et al (2010).
    Keywords: Management Entrepreneurial ; Orientation Entrepreneuriale; entrepreneuriat organisationne mode de management favorisant l'entrepreneuriat organisationnel
    Date: 2010
  12. By: Monica Billio (Dipartimento di Scienze Economiche - University Ca' Foscari of Venezia); Ludovic Calès (University Ca' Foscari of Venezia et Centre d'Économie de la Sorbonne); Dominique Guegan (Centre d'Economie de la Sorbonne - Paris School of Economics)
    Abstract: Sharpe-like ratios have been traditionally used to measure the performances of portfolio managers. However, they are known to suffer major drawbacks. Among them, two are intricate : (1) they are relative to a peer's performance and (2) the best score is generally assumed to correspond to a "good" portfolio allocation, with no guarantee on the goodness of this allocation. Last but no least (3) these measures suffer significant estimation errors leading to the inability to distinguish two managers' performances. In this paper, we propose a cross-sectional measure of portfolio performance dealing with these three issues. First, we define the score of a portfolio over a single period as the percentage of investable portfolios outperformed by this portfolio. This score quantifies the goodness of the allocation remedying drawbacks (1) and (2). The new information brought by the cross-sectionality of this score is then discussed through applications. Secondly, we build a performance index, as the average cross-section score over successive periods, whose estimation partially answers drawback (3). In order to assess its informativeness and using empirical data, we compare its forecasts with those of the Sharpe and Sortino ratios. The results show that our measure is the most robust and informative. It validates the utility of such cross-sectional performance measure.
    Keywords: Performance measure, portfolio management, relative-value strategy, large portfolios, absolute return strategy, multivariate statistics, Generalized Hyperbolic Distribution.
    JEL: C14 C44
    Date: 2010–08

This nep-cse issue is ©2010 by Joao Jose de Matos Ferreira. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.