nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2011‒01‒03
24 papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. Innovation in cultural industries: The role of university links By Zukauskaite, Elena
  2. Are knowledge-bases enough? A comparative study of the geography of knowledge sources in China (Great Beijing) and India (Pune) By Chaminade, Cristina
  3. Heterogeneity in R&D Cooperation: An Empirical Investigation By Oliviero Carboni
  4. From Basic Research to Innovation: Entrepreneurial Intermediaries for Research Commercialization at Swedish ‘Strong Research Environments’ By Kitagawa, Fumi; Wigren, Caroline
  5. The determinants of innovation adoption By Corinne Autant-Bernard; Jean-Pascal Guironnet; Nadine Massard
  6. Regional Innovation Policy beyond ‘Best Practice’: Lessons from Sweden By Martin, Roman; Moodysson, Jerker; Zukauskaite, Elena
  7. The Effectiveness of Virtual R&D Teams in SMEs: Experiences of Malaysian SMEs By Ale Ebrahim, Nader; Ahmed, Shamsuddin; Abdul Rashid, Salwa Hanim; Taha, Zahari
  8. The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness? By Ambec, Stefan; Cohen, Mark; Elgie, Stewart; Lanoie, Paul
  9. From new to the firm to new to the world. Effect of geographical proximity and technological capabilities on the degree of novelty in emerging economies By Plechero, Monica; Chaminade, Cristina
  10. Human capital and high-grow firms in Italy By A. Arrighetti; A. Lasagni
  11. Inter-firm rivalry and firm growth: Is there any evidence of direct competition between firms? By Alex Coad; Mercedes Teruel
  12. Development of Regional Production and Logistic Networks in East Asia: the Case of the Philippines By Mari-Len R. Macasaquit; Fatima Lourdes E. del Prado; Melalyn C. Mantaring; Michael R. Cabalfin
  13. Continuous supply chain collaboration : Road to achieve operational excellence By Nakkeeran, Senthil kumar; Pugalendhi, Subburethina Bharathi
  14. Firm heterogeneity, international cooperations and export participation By Castellacci, Fulvio
  15. Network governance work: evidence from the video game industry By Chahira Mehouachi; Véronique Perret
  16. Dynamic Knowledge Capitalization through Annotation among Economic Intelligence Actors in a Collaborative Environment By Olusoji Okunoye; Bolanle Oladejo; Victor Odumuyiwa
  17. The impact of ICT in the transformation and production of knowledge in Sudan By Nour, Samia Satti Osman Mohamed
  18. I distretti produttivi in Sicilia. Analisi e proposte per la competitività By Schilirò, Daniele
  19. A Multi-dimensional Approach to Management of Port Life Cycle: The Case of Major Ports in India By Deepankar Sinha
  20. The incidence and transfer of knowledge in the Arab countries By Nour, Samia Satti Osman Mohamed
  21. Job flows in Italian SMEs: a longitudinal analysis of growth, size and age. By Marco Corsino; Roberto Gabriele; Sandro Trento
  22. Globalization and Glocalization: Experiences in the Local Philippine Context By Ma. Divina Gracia Z. Roldan
  23. Theoretical models of heterogeneity, growth and competitiveness: insights from the mainstream and evolutionary economics paradigms By Castellacci, Fulvio
  24. The role of home and host country characteristics in FDI: firm-level evidence from Japan, Korea and Taiwan By Hayakawa, Kazunobu; Lee, Hyun-Hoon; Park, Donghyun

  1. By: Zukauskaite, Elena (CIRCLE, Lund University)
    Abstract: This paper analyses the role of university knowledge in innovation processes of cultural industries. Most of the previous studies on cultural industries highlighted the importance of locally clustered firms in innovation processes. Studies, analyzing university-industry collaboration focused on technological development or industrial R&D, neglecting cultural industries as object of analysis. The paper addresses this gap in the literature while analyzing collaboration with university patterns and innovation processes of new media firms in Scania, Southern Sweden. The findings reveal that innovation, influenced by industry-academia collaboration, takes place not only in technology based industries. Collaborative aspects of innovation process go beyond R&D transfer and include joint competence building, changes in market concepts and new social corporate responsibility actions. This paper adds to the understanding of innovation processes in cultural industries by introducing university as one more important actor in the knowledge exchange networks.
    Keywords: University-industry collaboration; innovation; cultural industries; new media; knowledge exchange
    JEL: O30
    Date: 2010–11–01
  2. By: Chaminade, Cristina (CIRCLE, Lund University)
    Abstract: This paper focuses on the organization and geography of interactions between firms and other organizations in two industries: software and autoparts. In contrast to most recent literature in economic geography that argues that industries differ in their knowledge bases and that consequently different industries show different patterns of local-global interactions, our results show stronger differences between regions in the same industry than between industries in the same region, thus pointing out to other factors explaining the geography of innovation in that particular industry.
    Keywords: internationalization; innovation; Pune; Beijing; region
    JEL: O30
    Date: 2010–12–01
  3. By: Oliviero Carboni
    Abstract: This work explores the roles of potential simultaneity and heterogeneity in determining firms decisions to engage in R&D collaboration, using a sample of Italian manufacturing firms. Partnerships with other firms, research institutions, universities and other small centres are considered jointly by applying a multivariate probit specification. This allows for systematic correlations among different cooperation choices. The results support the hypothesis that the four cooperation decisions are interdependent. The decision to cooperate in R&D differs significantly depending on the cooperation options. Public support, the researcher intensity and the size are all of importance in determining R&D alliance strategies.
    Keywords: Applied Econometrics; R&D cooperation; firm behaviour
    JEL: C24 D21 O31 O32
    Date: 2010
  4. By: Kitagawa, Fumi (University of Bristol); Wigren, Caroline (CIRCLE, Lund University)
    Abstract: The recent rise in university-industry partnerships has stimulated an important public policy debate degrading the theoretical rationale for government support for knowledge transfer/exchanges from higher education sector. This paper draws on a particular case study conducted at Lund University, which is the largest comprehensive research university in Sweden. We ask the role of fundamental research at the university and organizational responses to growing expectations with respect to its subsequent use and applications, particularly those of ‘Centres of research excellence’. We identify new forms of intermediary organizations as ‘brokers on the boundaries’ which bridge the gap between everyday scientific activities of researchers, entrepreneurial activities of academics, and more centralized forms of strategic initiatives taken by an ‘entrepreneurial university’ as an organizational actor. The paper concludes by identifying organizational strategic choices and constraints, and implications for rapidly changing higher education and research policies in Sweden and beyond.
    Keywords: Academic Entrepreneurship; Sweden
    JEL: O30
    Date: 2010–01–01
  5. By: Corinne Autant-Bernard (Université de Lyon, Lyon, F-69003, France ; Université Jean Monnet ; CNRS, GATE Lyon St Etienne, Saint-Etienne, F-42000, France); Jean-Pascal Guironnet (Université de Caen, CREM CNRS 6211); Nadine Massard (Université de Lyon, Lyon, F-69003, France ; Université Jean Monnet ; CNRS, GATE Lyon St Etienne, Saint-Etienne, F-42000, France)
    Abstract: Using a sample of 46 000 EU firms from the Community Innovation Survey, this paper analyses the drivers of innovation adoption. In contrast to most empirical studies on innovation diffusion in which a specific technology is analyzed, this study covers several countries and industries in the European Union. Following Van de Ven and Van Praag (1981), Heckman’s method is applied in a context of binary endogenous variable to explain the choices made by firms regarding innovation. Distinctions are made between the internal generation of innovation and the adoption of innovation produced by others, as well as between different types of adoption (product vs. process and cooperation-based adoption vs. isolated adoption). The study is focused on the impact of users’ features and their cooperation with suppliers on the adoption choices. The results point out that cooperation is a key driver of adoption choices. Usual determinants such as firm size, absorptive capability or exports would foster generation of innovation instead of adoption.
    Keywords: Innovation adoption, Innovation diffusion, Community Innovation Survey, Process adoption, Product adoption
    Date: 2010
  6. By: Martin, Roman (CIRCLE, Lund University); Moodysson, Jerker (CIRCLE, Lund University); Zukauskaite, Elena (CIRCLE, Lund University)
    Abstract: This paper deals with policy measures in the regional innovation system of Scania, Southern Sweden. Focus is dedicated to requirements on innovation policy from actors representing different industries. Previous studies have identified profound differences with regard the organization of knowledge sourcing between firms and other actors in industries drawing on different knowledge bases. In correspondence with these findings, industries differ also with regard to how policy measures aiming to support innovation are perceived and acquired. Despite this, there is a tendency among regional policy programs to base their strategies on one ‘best practice’-model, inspired by successful (or sometimes less successful) cases in other parts of the world. The paper presents an in-depth analysis of such policy support targeting three industries located in one region, and ends with a suggestion to how those should be adapted to render influence on the institutional framework of the regional innovation system.
    Keywords: innovation policy; regional innovation systems; knowledge bases; Sweden
    JEL: O30 O38
    Date: 2010–11–01
  7. By: Ale Ebrahim, Nader; Ahmed, Shamsuddin; Abdul Rashid, Salwa Hanim; Taha, Zahari
    Abstract: The number of small and medium enterprises (SMEs), especially those involved with research and development (R&D) programs and employed virtual teams to create the greatest competitive advantage from limited labor are increasing. Global and localized virtual R&D teams are believed to have a high potential for SMEs growth. Due to the fast growing complexity of the new product, coupled with new emerging opportunities of virtual teams, a collaborative approach is believed to be the future trend. This research explores the effectiveness of virtuality in SMEs virtual R&D teams. An online questionnaire emailed to Malaysian manufacturing SMEs and 74 usable questionnaires were received, representing a 20.8 percent return rate. To avoid the bias that may result from pre-suggested answer, a series of open-ended questions asked from expertise. This study based on analyzing an open-ended question; extract four main themes among expertise recommendations on the effectiveness of virtual teams for SMEs growth and performance. These are suitable for SMEs new product design manager to realize the key advantage and importance of virtual R&D teams in the process of NPD, which lead to increase the effectiveness of the new product's procedure.
    Keywords: Virtual teams; New product development; Survey finding; Small and medium Enterprises.
    JEL: G14 O32 M12 L7 M11 M1 O3 L15 P4
    Date: 2010–06
  8. By: Ambec, Stefan; Cohen, Mark; Elgie, Stewart; Lanoie, Paul
    Date: 2010–09
  9. By: Plechero, Monica (CIRCLE, Lund University); Chaminade, Cristina (CIRCLE, Lund University)
    Abstract: This paper investigates empirically what it takes for a firm to move from new to the firm to new to the domestic market and new to the world innovations. More specifically, the paper analyses the relationship between, on the one hand, the degree of novelty of product innovation and on the other hand the accumulation of technological capabilities at firm level as well as the geographical spread of the innovation activities of the firm. The analysis is based on a unique firm level data collected in Pune(India) and Beijing (China) in 2008. The paper shows that the role of the region supporting the move from new to the firm to new to the world is limited. In order to achieve a higher degree of innovation global networks are more important than local networks.
    Keywords: degree of novelty; technological capabilities; technological sourcing; research collaboration; region
    JEL: O30
    Date: 2010–09–01
  10. By: A. Arrighetti; A. Lasagni
    Abstract: Firm growth is a selective and non-homogeneous phenomenon. In fact, “Most firms start small, live small and die small” (Davidsson et al. 2005). Few firms seem to grow in a rapid way, but their contribution to employment growth is often impressive. The main purpose of this paper is to analyze both external and internal factors which can affect the probability of being a high-growth firm (henceforth HGF) in Italy. We found that HGFs are on average young firms and are present in different sectors, but the role of demand is important to understand their performance. The most original results of this paper regard endogenous determinants of fast growth. First, we found that the concentration of ownership is important for HGFs that grow in sales. Second, the quality of human capital is a strong point for firms experiencing rapid employment growth.
    Keywords: : high-growth firms, firm growth, human capital, rapid firm growth
    JEL: D24 L25 L26
    Date: 2010
  11. By: Alex Coad; Mercedes Teruel
    Abstract: Inter-firm competition has received much attention in the theoretical literature, but recent empirical work suggests that the growth rates of rival firms are uncorrelated, and that firm growth can be taken as an essentially independent process. We begin by investigating the correlations of the growth rates of competing firms (i.e. the largest and second-largest firms in the same industry) and observe that, surprisingly, the growth of these firms can be taken as independent. Nevertheless, peer-effect regressions, that take into account the simultaneous interdependence of growth rates of rival firms, are able to identify significant negative effects of rivals' growth on a firm's growth.
    Keywords: Competition, Firm growth, Peer effects econometrics Length 32 pages
    JEL: L25
    Date: 2010–12
  12. By: Mari-Len R. Macasaquit; Fatima Lourdes E. del Prado; Melalyn C. Mantaring; Michael R. Cabalfin (Philippine Institute for Development Studies)
    Abstract: Regional production networks and local production linkages are important not only for the generation of industrial activity through investment flows but also as essential sources of new information and technology. Complementing this are the so-called knowledge networks within or around industrial agglomerations that are equally important sources of technology for industrial upgrading and innovation. Both are present in the case study area of CALABARZON in the Philippines but the former seem to be more apparent than the latter as this has been characterized as weak based on secondary data and conduct of survey of establishments. With weaknesses in the S&T system in the country as part of the study’s findings, policy suggestions were provided to strengthen the linkages that remain to be wanting but are important for stimulating innovation.
    Keywords: production linkages, Philippines, logistic networks
    JEL: D20
    Date: 2010
  13. By: Nakkeeran, Senthil kumar; Pugalendhi, Subburethina Bharathi
    Abstract: Supply chain management (SCM) is becoming critical as firms recognize that competition is shifting from company versus company to supply chain versus supply chain. In the present competitive scenario, the fierce competition has driven most companies to seek means of enhancing performance beyond their four wall boundaries. The firm’s ability in collaborating with its upstream and downstream partners determines its success in attaining better performance with supply chain collaboration; a firm is able to serve fragmented markets in which end customers require more product varieties and availability with shorter product life cycle and at the same time lower supply chain costs. Hence, this paper introduces the framework of continuous supply chain collaboration (CSCC), which extends the traditional frame of reference in strategic sourcing from a supplier centric to a supply-chain-scope as continuous improvement efforts to enhance the customer satisfaction. CSCC practices are rather exceptional, yet CSCC is believed to be the single most comprehensive framework for attaining operational excellence.
    Keywords: Continuous supply chain collaboration (CSCC); Supply chain management: Continuous improvement; Operational excellence; Supply Chain Management
    JEL: M00 M11
    Date: 2010–10–01
  14. By: Castellacci, Fulvio
    Abstract: The paper investigates the relationship between firms’ international cooperation strategies and export decision. It proposes an extension of the recent class of models of firm heterogeneity and trade according to which prospective exporters must engage in a cooperation agreement with a foreign partner in order to favour their market access and distribution activities overseas. The paper analyses the empirical relevance of this model by means of a new survey dataset providing information on the internationalization activities of 814 Norwegian firms in the service sectors for the period 2004-2006. The econometric results point out that international cooperation, both on existing and on innovative products, is indeed an important factor to foster the firms’ decision to enter the export market.
    Keywords: Export; firm heterogeneity; international cooperations; innovation; survey data
    JEL: L0 O1 F0
    Date: 2010
  15. By: Chahira Mehouachi (DRM - Dauphine Recherches en Management - CNRS : UMR7088 - Université Paris Dauphine - Paris IX); Véronique Perret (DRM - Dauphine Recherches en Management - CNRS : UMR7088 - Université Paris Dauphine - Paris IX)
    Abstract: Many call for research invites for further investigation of the underlying processes, practices and specificities of governance in the network context. Through an examination of what governance involves and how does it occur in a French cluster of video game companies, our multimethod study provide useful insights in the functions and purposes of governance in an inter-organizational and collaborative context, the main tools and mechanisms that are being used and the structure supporting these purposes and mechanisms. Our findings shed also light upon the processual nature of governance in network context. Governance is a set of processes, or a “meta-process”, that are geared toward the creation, the maintenance and the evolution of collaboration relationships and the network as a collective actor. We refer to this process of governance functioning, evolution and continuous (re) evaluation as governance work.
    Keywords: network governance ; interorganizational networks ; video game industry ; creative industries
    Date: 2010–12–07
  16. By: Olusoji Okunoye (LORIA - SITE - INRIA - CNRS : UMR7503 - Université Henri Poincaré - Nancy I - Université Nancy II - Institut National Polytechnique de Lorraine (INPL)); Bolanle Oladejo (LORIA - SITE - INRIA - CNRS : UMR7503 - Université Henri Poincaré - Nancy I - Université Nancy II - Institut National Polytechnique de Lorraine (INPL)); Victor Odumuyiwa (LORIA - SITE - INRIA - CNRS : UMR7503 - Université Henri Poincaré - Nancy I - Université Nancy II - Institut National Polytechnique de Lorraine (INPL))
    Abstract: The shift from industrial economy to knowledge economy in today's world has revolutionalized strategic planning in organizations as well as their problem solving approaches. The point of focus today is knowledge and service production with more emphasis been laid on knowledge capital. Many organizations are investing on tools that facilitate knowledge sharing among their employees and they are as well promoting and encouraging collaboration among their staff in order to build the organization's knowledge capital with the ultimate goal of creating a lasting competitive advantage for their organizations. One of the current leading approaches used for solving organization's decision problem is the Economic Intelligence (EI) approach which involves interactions among various actors called EI actors. These actors collaborate to ensure the overall success of the decision problem solving process. In the course of the collaboration, the actors express knowledge which could be capitalized for future reuse. In this paper, we propose in the first place, an annotation model for knowledge elicitation among EI actors. Because of the need to build a knowledge capital, we also propose a dynamic knowledge capitalisation approach for managing knowledge produced by the actors. Finally, the need to manage the interactions and the interdependencies among collaborating EI actors, led to our third proposition which constitute an awareness mechanism for group work management.
    Keywords: Annotation, knowledge representation, knowledge capitalisation, economic intelligence, collaboration, knowledge exploitation, group awareness
    Date: 2010–10–25
  17. By: Nour, Samia Satti Osman Mohamed (Faculty of Economic and Social Studies, Khartoum University, and UNU-MERIT)
    Abstract: This paper focuses on the impact of ICT in the transformation and production of knowledge, notably in Sudan, and discusses the importance of the use of ICT in Khartoum University. It considers how the use of ICT, in particular the Internet, facilitates connections, networks and communication within knowledge institutions in Sudan and regional and international institutions and enhances collaboration between Sudanese universities and others, and its integration in the system of global knowledge production. Research results reinforce the idea that using ICT enhances access, production and dissemination of knowledge in Khartoum University. Finally, our findings support the hypothesis that the use of ICT introduces positive and negative effects by providing opportunities for the transformation and production of knowledge but simultaneously also creates hazards in this transformation and knowledge production: positive transformations include building connections and organizational changes; while the negative transformation is the building disconnections for those who do not know how to use ICT. We find that the most important advantage related to the use of the Internet for facilitating connections and transformations involve increasing digital knowledge for academic researchers by finding information that was not earlier accessible and the rapid quantitative and qualitative increases in transferring available information. In addition to the development of new models for disseminating and distributing electronic information, there is an increase in the creation and transfer of knowledge and an increase in free access to electronic publications for academic purposes. The most serious problem related to the use of the Internet is the lack of regular or inadequate budgets for university libraries to pay for access to scientific and technical information and obtain licences or subscriptions to relevant material.
    Keywords: : ICT use, ICT impact, knowledge production, transformation, Sudan
    JEL: O10 O12 O30
    Date: 2010
  18. By: Schilirò, Daniele
    Abstract: The work analyzes the productive districts in Sicily, which is a lagging region in terms of development, and it suggests several proposals to make the working of these districts more effective for the competitiveness and the development of the regional economy. The analysis points out the need for a region like Sicily, which is particular-ly weak in the manufacturing sector, to improve its human capital and to trasform this human capital into social capital, and, at the same time, to enrich its en-dowments of material and institutional infrastructures, because all these elements are essential factors for the competitiveness of the districts and their firms. Furthermore, in this essay we put forward the proposition that the Institutions and the State should contribute to create, also through the adoption of the principle of subsidiarity (Quadrio Curzio, 2002), which regulates the interplay between institutions, society, the growth in Sicily, which is a region that spends a great amount of public money, without an adequate return in terms of growth of income and employment.
    Keywords: industrial districts; competitiveness; regional development.
    JEL: O25 L20 R11
    Date: 2010–12
  19. By: Deepankar Sinha (Indian Institute of Foreign Trade, Kolkata)
    Abstract: This paper aims at understanding the different dimensions of life cycle of a seaport enabling the port-planners to decide on their strategies. There are different stages in the life cycle of an organization. The course of action would vary from stage to stage of the life cycle. This paper aims at identifying the different dimensions of port business. This has been accomplished using factor analysis, a multivariate data analysis technique. This paper further explores the relevance of these dimensions in the context of major Indian ports at the different stages of the lifecycle. The results of analysis show that primarily four dimensions impact the life cycle. The paper finally recommends a strategic framework for planners to respond to the management needs in the different stages of the life cycle.
    Keywords: Ports, ships, cargo, dimensions, lifecycle, strategies, factor analysis
    JEL: F19
    Date: 2010–11
  20. By: Nour, Samia Satti Osman Mohamed (Faculty of Economic and Social Studies, Khartoum University, and UNU-MERIT)
    Abstract: In this paper we use the systematic, descriptive and statistical approaches, fill the gap in the Arab literature and present a more comprehensive analysis of the important ways of enhancing the incidence and transfer of knowledge in the Arab countries. Different from the conventional view in the literature that use the conventional classification of countries according to income level, an interesting element in our analysis is that we use a more comprehensive classification not only by income level but also by geographic location and the structure of the economy to examine the important ways of enhancing the incidence and transfer of knowledge in the Arab countries. We find that somewhat surprising the classification of Arab countries by income level provides inconclusive evidences in terms of capacity to create knowledge. Our findings support the first hypothesis that the components of knowledge show positive correlation with economic growth and hence can be used to enhance economic growth and promote human capital in the Arab countries. Our results corroborate the second and third hypotheses that the incidence and transfer of knowledge can be enhanced by institutional support in the form of subsidies and incentives to knowledge components (education, R&D and ICT). The major policy implication from our findings is that in order to benefit from integration in global knowledge economy the Arab countries should create the most appropriate political, economic, educational, technological and scientific institutions. The Arab countries should stimulate local efforts and incentives for building and transferring knowledge and should pay more attention to enhance institutions setting, especially, effective system of intellectual property rights protection to motivate the creation and transfer of knowledge. Apart from the role of Arab governments, it is essential for Arab societies to support the culture aimed at fostering and enhancing the incidence and transfer of knowledge.
    Keywords: : Tacit Knowledge, Codified Knowledge, Transfer of Knowledge, Arab countries
    JEL: O10 O11 O30
    Date: 2010
  21. By: Marco Corsino; Roberto Gabriele; Sandro Trento
    Abstract: The paper proposes an empirical investigation of job flows for continuing manufacturing firms in Italy from 1996 to 2004 using high quality data on work forces and other characteristics of the firm. The magnitude of the job flows for small and medium-sized limited liability companies in Italy is lower than what observed in Anglo-Saxon countries, but it is still in line with evidence for firms in the Euro area. Second, the magnitude of job flows significantly shrunk in the aftermath of the economic downturn in 2001. Firms fared worse than in the late nineties and the labour market became less efficient in allocating job flows. Third, gross job creation and gross job destruction decrease as firm get larger, but when added to compute an indicator of net employment growth, size does not seem to affect firms' expansion. On the contrary, age significantly hinges on the growth opportunities of small and medium-sized enterprises. The econometric analysis corroborates the major findings of our descriptive investigation referring to the role of size and age. In particular, it shows that classification methods used to define size classes strongly influence the estimated relationship between growth and size industrial regimes play a role in shaping job flows. Our result show that firms in supplier dominated industries fared significantly lower than enterprises in other sectors during the sample period.
    Keywords: job creation; job destruction; persistence of jobs; firm growth
    JEL: J62 L60
    Date: 2010–12
  22. By: Ma. Divina Gracia Z. Roldan (Philippine Institute for Development Studies)
    Abstract: The study examines local responses to globalization, with Cebu as a case in point. It describes the initiatives of the business, export, and ICT sectors in adjusting to global demands. Manifestations of glocalization are indicated in the increased role of local players, intensified global-local linkaging, and the translocal and decentralized nature of responses by government. Attendant issues and challenges concerning Cebu’s glocal experience such as, persistent poverty and increasing inequalities are also discussed.
    Keywords: globalization, glocalization, local governance
    JEL: F01 F15
    Date: 2010
  23. By: Castellacci, Fulvio
    Abstract: This paper presents a survey of theoretical models of heterogeneity, growth and competitiveness. We compare two main theoretical traditions, evolutionary economics and mainstream heterogeneity models, in order to investigate whether the incorporation of heterogeneous agents has made the recent wave of mainstream models more similar to the evolutionary modelling style and results. The results of our survey exercise can be summarized as follows. On the one hand, we observe some increasing similarities and converging aspects between the evolutionary and the mainstream approaches to the study of heterogeneity. On the other hand, however, there are still some fundamental differences between them, which mainly relate to the distinct set of theoretical assumptions and methodological frameworks in which these heterogeneity models are set up and rooted. In short, the evolutionary approach emphasizes the complexities of the growth process and makes an effort to provide a realistic description of it, whereas the mainstream approach does instead follow a modelling methodology that emphasizes the analytical power and tractability of the formalization, even if that implies a somewhat simplified and less realistic description of the growth process.
    Keywords: Heterogeneity models; economic growth; international trade; industrial dynamics
    JEL: L0 O1 F0
    Date: 2011
  24. By: Hayakawa, Kazunobu; Lee, Hyun-Hoon; Park, Donghyun
    Abstract: There is a large and growing empirical literature that investigates the determinants of outward foreign direct investment (FDI). This literature examines primarily the effect of host country characteristics on FDI even though home country characteristics also influence the decision of firms to invest abroad. In this paper, we examine the role of both host and home country characteristics in FDI. To do so, we constructed a firm-level database of outward FDI from Japan, Korea, and Taiwan. Our empirical analysis yields two main findings. First, host countries with better environment for FDI, in terms of larger market size, smaller fixed entry costs, and lower wages, attract more foreign investors. Second, firms from home countries with higher wages are more likely to invest abroad. An interesting and significant policy implication of our empirical evidence is that policymakers seeking to promote FDI inflows should prioritize countries with higher wages.
    Keywords: FDI, Multinational firm, Firm heterogeneity, Foreign investments, International business enterprises, Industrial management, Productivity
    JEL: D24 F21 F23
    Date: 2010–12

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