nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2011‒02‒26
twenty papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. What Do I Take With Me: The Impact of Transfer and Replication of Resources on Parent and Spin-Out Firm Performance By Rajshree Agarwal; Benjamin Campbell; April M. Franco; Martin Ganco
  2. Empresas y distritos industriales en el mercado mundial: una aproximación desde la historia económica By Jordi Catalan; José Antonio Miranda; Ramón Ramón-Muñoz
  3. Regional Clusters of Innovative Activity in Europe: Are Social Capital and Geographical Proximity the Key Determinants? By Laura de Dominicis; Raymond J.G.M. Florax; Henri L.F. de Groot
  4. Does Quality Make a Difference? Employment Effects of High- and Low-Quality Start-Ups By Michael Fritsch; Alexandra Schroeter
  5. Innovation and demand in industry dynamics. By Francesco Bogliacino; Mario Pianta
  6. Does the support of innovative clusters sustainably foster R&D activity? Evidence from the German BioRegio and BioProfile contests By Dirk Engel; Timo Mitze; Roberto Patuelli; Janina Reinkowski
  7. Spreading the Word: Geography, Policy and University Knowledge Diffusion By Sharon Belenzon; Mark Schankerman
  8. Do best and worst innovative companies differ in terms of intellectual capital, knowledge and radicalness? By Carmen Cabello Medina; Antonio Carmona Lavado; Gloria Cuevas Rodríguez; Ana Pérez-Luño
  9. Micro-Evidence on the Determinants of Innovation in The Netherlands: The Relative Importance of Absorptive Capacity and Agglomeration Externalities By Martijn J. Smit; Maria A. Abreu; Henri L.F. de Groot
  10. What are service sector innovations and how do we measure them? By Krzysztof Szczygielski
  12. How to select Instruments supporting R&D and Innovation by Industry By Marcel J.L. de Heide; Amit Kothiyal
  13. Knowledge diffusion from FDI and Intellectual Property Rights By Roger Smeets
  14. Selling, Passing on or Closing? Determinants of Entrepreneurial Intentions on Exit Modes By Martina Battisti; Hiroyuki Okamuro
  15. Strategy-proof allocation mechanisms for economies with public goods By Diego Moreno; María José Moscoso
  16. Export Growth and Factor Market Competition: Theory and Some Evidence By Julian Emami Namini; Giovanni Facchini; Ricardo A. Lopez
  17. Export performance of Chinese domestic firms: the role of foreign export spillovers By Florian MAYNERIS; Sandra PONCET
  18. The role of subsidies for exports: Evidence from Portuguese manufacturing firms By Armando Silva
  19. Vertical Differentiation in a Cournot Industry: The Porter Hypothesis and Beyond By L. Lambertini; A. Tampieri
  20. Competing Recombinant Technologies for Environmental Innovation By Paolo Zeppini; Jeroen C.J.M. van den Bergh

  1. By: Rajshree Agarwal; Benjamin Campbell; April M. Franco; Martin Ganco
    Abstract: Focusing on entrepreneurial ventures created by employees leaving a firm, our study examines the differential impact of knowledge transfer and knowledge spillovers on both parent and spin-out performance. While extant research often uses knowledge transfer and spillover interchangeably, our study distinguishes between the two based on the “rivalness” of the relevant knowledge. We theorize that both knowledge transfer (proxied by the size of the exiting employee team) and knowledge spillovers (proxied by the experience of the exiting employee team) will aid spin-out performance. However, knowledge transfer, being more rival, will have a greater adverse impact than knowledge spillovers on parent firm performance. Using U.S. Census Bureau linked employee-employer data from the legal services industry, we find support for our hypotheses. Our study thus contributes to extant literature by highlighting a key dimension of knowledge — rivalness — and the differential competitive dynamics effect of resources with varying degrees of rivalness.
    Date: 2011–02
  2. By: Jordi Catalan (Universitat de Barcelona); José Antonio Miranda (Universidad de Alicante); Ramón Ramón-Muñoz (Universitat de Barcelona)
    Abstract: This paper deals with the contribution of industrial districts and clusters to the creation of competitive advantage in industry. It is divided into two well-differentiated parts. The first one provides an interpretative summary of key issues in the analysis of the geographic concentration of industry. In particular, some of the main interpretations and debates on the causes and characteristics of this concentration are presented. Additionally, it pays particular attention to the ongoing debate about the role of external economies (i.e. the externalities of industrial concentration) and internal economies (i.e. the strategies and capabilities of medium-large firms) in the competitiveness of districts and clusters. The second part of the paper reviews some recent studies, mostly focused on nineteenth- and twentieth-century Spain. This review, which includes historical analyses of districts, clusters and industries with export capacity, is undertaken in the light of the discussion in the first part of this study. An interesting conclusion that emerges from the studies reviewed is that in Southern Europe the competitive advantage of the geographically concentrated industry appears to have been associated more with hub-firm clusters than with neo-Marshallian districts (Main text in Spanish)
    Keywords: industrial districts, clusters, competitive advantage, externalities, leading firms, economic history, industrial economics.
    JEL: L25 N00 O14 R12
    Date: 2011–02
  3. By: Laura de Dominicis (European Commission, Seville); Raymond J.G.M. Florax (Purdue University, W. Lafayette, and VU University Amsterdam); Henri L.F. de Groot (VU University Amsterdam)
    Abstract: Finding proper policy instruments to promote productivity growth features prominently on the Lisbon agenda and is central in many national as well as European policy debates. In view of the increased mobility of high-skilled workers in Europe, ongoing globalization and increased interregional and international co-operation, location patterns of innovative activity may be subject to drastic changes. A proper understanding of location patterns of innovative outputs can enhance the effectiveness and efficiency of national and European innovation policies. Building on the literature on the knowledge production function the aim of this paper is to explain the observed differences in the production of innovative output across European regions. Our main research question is whether geographical proximity and social capital are important vehicles of knowledge transmission for the production of innovative output in Europe. Several other variables are used to control for structural differences across European regions. We find support for the hypothesis that both social capital and geographical proximity are important factors in explaining the differences in the production of innovative output across European regions.
    Keywords: innovation; knowledge production function; social capital; spatial econometrics; European regions
    JEL: C21 I23 O18 O31
    Date: 2011–01–13
  4. By: Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Alexandra Schroeter (School of Economics and Business Administration, Friedrich-Schiller-University Jena)
    Abstract: This paper investigates the impact of new firms' quality on the magnitude of their employment effects. Our results clearly show that the quality of start-ups, measured by their affiliation with sectors and innovative industries, strongly influences the direct and the overall employment contribution of new firms. In particular, start-ups in manufacturing industries generate larger direct and overall growth effects than those in services. Moreover, new businesses in innovative manufacturing and in knowledge-intensive service industries make a larger direct contribution to employment than start-ups affiliated with other industries. We also find a relatively strong overall effect of new business formation in knowledge-intensive service industries. However, the impact of start-ups in innovative manufacturing industries on overall regional employment growth is not statistically significant, which may be mainly due to their rather small share in all start-ups and because they impact more on firms and employment in other regions than do start-ups in non-innovative manufacturing. Finally, we discuss the implications for entrepreneurship policy that can be derived from our findings.
    Keywords: Entrepreneurship, new business formation, innovative industries, regional development, entrepreneurship policy
    JEL: L26 M13 O1 O18 R11
    Date: 2011–02–15
  5. By: Francesco Bogliacino (European Commission); Mario Pianta (Department of Economics, Università di Urbino "Carlo Bo")
    Abstract: The links between three interconnected elements of the Schumpeterian sources of economic change are explored, conceptually and empirically, in this paper: the commitment of industries to invest profits in cumulative R&D efforts; the ability of industries’ R&D to lead to successful innovations; the impact of new products and processes on high entrepreneurial profits. We consider the nature and variety of innovative efforts – distinguishing in particular between strategies of technological and cost competiveness – and we introduce the role of demand in pulling technological change and supporting profits. We develop a simultaneous three-equation model and we test it at industry level – for 38 manufacturing and service sectors – on eight European countries over two time periods from 1994 to 2006. The results show that the model effectively accounts for the dynamics of European industries and highlights the interconnections between the different factors contributing to growth.
    Keywords: R&D, Innovation, Profits, Demand, System Three Stages Least Squares.
    JEL: L6 L8 O31 O33 O52
    Date: 2011
  6. By: Dirk Engel (University of Applied Science Stralsund; RWI); Timo Mitze (RWI; Ruhr University Bochum); Roberto Patuelli (University of Lugano; The Rimini Centre for Economic Analysis (RCEA)); Janina Reinkowski (ifo Munich)
    Abstract: In this paper, we evaluate the R&D enhancing effects of two large public grant schemes aiming at encouraging the performance of firms organized in clusters. These are Germany's well known BioRegio and BioProfile contests for which we compare the research performance of winning regions in contrast with non-winning and non-participating comparison regions. We apply Difference-in-Difference estimation techniques in a generalized linear model framework, which allows to control for different initial regional conditions in the biotechnology related R&D activity. Our econometric findings support the view that winners generally outperform non-winning participants during the treatment period, thus indicating that exclusive funding as well as the stimulating effect of being a "winner" seems to work in the short-term. In contrast, no indirect impacts stemming from a potential mobilizing effect of the contest approaches have been detected. Also, we find only limited evidence for long-term effects of public R&D grants in the post-treatment period. The results of our analysis remain stable if we additionally augment the model to account for the particular role of spatial dependence in the R&D outcome variables.
    Keywords: Biotechnology, R&D Policies, Cluster, Diff-in-Diff Estimation
    JEL: O38 R38 C23
    Date: 2011–02
  7. By: Sharon Belenzon; Mark Schankerman
    Abstract: Using new data on citations to university patents and scientific publications, and measures of distance based on Google maps, we study how geography affects university knowledge diffusion. We show that knowledge flows from patents are localized in two respects: they decline sharply with distance up to about 100 miles, and they are strongly constrained by state borders, controlling for distance. While distance also constrains knowledge spillovers from publications, the state border does not. We investigate how the strength of the state border effect varies with university and state characteristics. It is larger for patents from public, as compared to private, universities and this is partly explained by the local development policies of universities. The border effect is larger in states with stronger non-compete laws that affect intra-state labor mobility, and those with greater reliance on in-state educated scientists and engineers. We confirm the impact of non-compete statutes by studying a policy reform in Michigan that introduced such restrictions.
    Keywords: knowledge spillovers, diffusion, geography, university technology transfer, patents, scientific publications
    JEL: K41 L24 O31 O34
    Date: 2010–08
  8. By: Carmen Cabello Medina (Department of Business Administration, Universidad Pablo de Olavide); Antonio Carmona Lavado (Department of Business Administration, Universidad Pablo de Olavide); Gloria Cuevas Rodríguez (Department of Business Administration, Universidad Pablo de Olavide); Ana Pérez-Luño (Department of Business Administration, Universidad Pablo de Olavide)
    Abstract: This paper differentiates “best innovative companies” from “worst innovative companies” and it takes into account three separate bodies of literature— intellectual capital, knowledge-based view, and innovation literatures. Based on a sample of 181 firms which belong to manufacturing and services industries, our findings show that best innovative performers companies (considering both financial and non-financial dimensions of innovation success) present systematically higher scores for all dimensions of intellectual capital: human, organizational and social capital) than worst innovation performers. Knowledge exchange and combination seems to be characteristic of most successful innovators, but no differences in systemic, tacit, complex and not observable knowledge have been found for these companies. Finally, regarding radicalness, firms with more innovation success provide new products or services that incorporates a new technology and new customer benefits (uniqueness), while firms with less innovation success laughs new products or services which are unfamiliar or difficult to understand by customers.
    Keywords: Mobile-shopping
    Date: 2011–01
  9. By: Martijn J. Smit (VU University Amsterdam); Maria A. Abreu (University of Groningen, University of Cambridge); Henri L.F. de Groot (VU University)
    Abstract: This paper employs firm-level data to analyze the relative importance of firm characteristics and agglomeration externalities in explaining variation in innovation rates across firms. More specifically, we combine micro-data and census data to estimate the probability that a firm will introduce a goods, service or process innovation. We consider internal firm-level characteristics as well as externalities, using information on the regional production structure to test for Marshall-Arrow-Romer, Porter and Jacobs effects. Our results show that most firm-specific variables are highly statistically significant, whereas agglomeration variables are only significant for a few specific sectors, and even then only for some types of innovation.
    Keywords: innovation; absorptive capacity; agglomeration externalities; Community Innovation Survey; micro-data; firm behavior
    JEL: L20 O30 R11
    Date: 2010–06–21
  10. By: Krzysztof Szczygielski
    Abstract: Services dominate all advanced economies but service innovations are still an underresearched topic. One of the reasons are definitional and measurement difficulties. The goal of the paper is to highlight those by reviewing recent literature and to assess the current state of knowledge and challenges. Theoretical approaches, empirical techniques and selected empirical results are discussed. Apparently the biggest challenge, at this point, is to create a unified conceptual framework, that would encompass both manufacturing ad services. Meeting this challenge will, however, be difficult, given the strong focus on manufacturing, both in the literature and in the way enterprise surveys are designed.
    Keywords: innovation, services, manufacturing
    JEL: O30 O33 L89
    Date: 2011–02
  11. By: Jaan Masso; Priit Vahter
    Abstract: The emerging literature on the characteristics of innovation processes in the service sector has paid relatively little attention to the links between innovation and productivity. In this paper we investigate how the innovation-productivity relationship differs across various sub-branches of the service sector. For the analysis we use the CDM structural model consisting of equations for innovation expenditures, innovation output, productivity and exports. We use data from the community innovation surveys for Estonia. We show that innovation is associated with increased productivity in the service sector. The results indicate surprisingly that the effect of innovation on productivity is stronger in the less knowledge-intensive service sectors, despite the lower frequency of innovative activities and the results of earlier literature. Non-technological innovation only plays a positive role in some specifications, despite its expected importance especially among the service firms. An additional positive channel of the effects of innovation on productivity may function through increased exports.
    Keywords: innovation, services, productivity
    JEL: O31 O33 L80
    Date: 2011
  12. By: Marcel J.L. de Heide (Erasmus University Rotterdam); Amit Kothiyal (Erasmus University Rotterdam)
    Abstract: We present a theoretical framework which allows for the comparison of the effectiveness of tax measures, loans and funding, in supporting industry-oriented research. We estimate for each of the instruments the exact contribution required by a firm to decide on investing in R&D, given the costs and probability of success of the project, and the foreseen change in profit following successful implementation of the research results. We apply Prospect Theory to analyse the risk attitude of the firm. By comparing the contribution required, we identify the instrument which is most effective, and therefore preferred by a government. Our analysis indicates that there exists a critical value for the probability of success of the project for which the modality of the most effective instruments changes. For a probability of success smaller than the critical value, a tax measures offering support only in case of successful completion of the project is preferred. For a probability higher than the critical value, a loan is most effective. The value of the critical probability depends on the perception of risk and loss aversion of the firm involved in the research.
    Keywords: R&D; innovation; firms; public policy
    JEL: D81 O38
    Date: 2011–02–03
  13. By: Roger Smeets
    Abstract: We study the extent to which a country's strength of Intellectual Property Rights (IPR) protection mediates knowledge spillovers from Foreign Direct Investment (FDI). Following the opposing views in the IPR debate, we propose a negative effect of IPR strength on unintentional horizontal (intra-industry) knowledge diffusion.
    JEL: F23 O33 O34
    Date: 2011–02
  14. By: Martina Battisti; Hiroyuki Okamuro
    Abstract: Exit is an important part of the entrepreneurial lifecycle. In contrast to numerous previous studies on entry, however, little attention has been paid to entrepreneurial exit, and much less on exit modes thus far. Using a recent original survey data on small business owners in New Zealand, where a large majority of them prefer selling their firms when they exit, we empirically investigate the determinants of intended entrepreneurial exit modes: selling out, succession, or closure. Estimation results of multinomial logit analysis suggest that the intention to sell the business is significantly affected by the size and performance of the firm, the involvement of family and how the owner entered the business. Moreover, we find that the intention to liquidate the business is significantly affected by the size and performance of the firm and partly by family involvement in the business.
    Keywords: entrepreneurial exit, liquidation, small and medium enterprise (SME), New Zealand
    Date: 2010–10
  15. By: Diego Moreno; María José Moscoso
    Abstract: We show that strategy-proof allocation mechanisms for economies with public goods are dictatorial -- i.e., they always select an allocation in their range that maximizes the welfare of the same single individual (the dictator). Further, strategy-proof and efficient allocation mechanisms are strongly dictatorial -- i.e., they select the dictator's preferred allocation on the entire feasible set. Thus, our results reveal the extent to which the conflict between individual incentives and other properties that may be deemed desirable (e.g., fairness, equal treatment, distributive justice) pervades resource allocation problems.
    Keywords: Allocation mechanisms, Public goods, Strategy-proofness, Dictatorship, Efficiency
    Date: 2010–10
  16. By: Julian Emami Namini (Erasmus University Rotterdam); Giovanni Facchini (Erasmus University Rotterdam); Ricardo A. Lopez (Brandeis University, Waltham)
    Abstract: Empirical evidence suggests that sectoral export growth decreases exporters' survival probability, whereas this is not true for non-exporters. Models with firm heterogeneity in total factor productivity (TFP) predict the opposite. To solve this puzzle, we develop a two{factor framework where firms differ in factor intensities. Thus, export growth increases competition for the factor used intensively by exporters, eliminating some of them, while non-exporters
    Keywords: F12; F14; F16; L11
    Date: 2011–01–20
  17. By: Florian MAYNERIS (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and Center for Operations Research and Econometrics (CORE)); Sandra PONCET (Paris School of Economics - Université de Paris 1 Panthéon-Sorbonne and CEPII)
    Abstract: We investigate how the proximity to multinational exporters influences the creation of new export linkages (extensive margin of trade) by domestic firms in China. Using panel data from Chinese customs for 1997-2007, we show that domestic firms’ capacity to start exporting new varieties to new markets positively responds to the export activity of neighboring foreign firms for that same product-country pair. We find that foreign export spillovers are limited to ordinary trade activities. No foreign export spillovers are found for processing trade. More, export spillovers are stronger for sophisticated products indicating that proximity to foreign exporters may help domestic exporters to upgrade their exports. However we observe that foreign export spillovers are weaker when the technology gap between foreign and domestic firms is large, suggesting that upgrading may not occur when foreign firms have already a strong edge.
    Keywords: Export performance; spillovers; FDI; Sophistication
    JEL: F1 R12 L25
    Date: 2011–02–04
  18. By: Armando Silva (nstituto Politécnico do Porto- ESEIG. Rua D. Sancho I, 981, 4480-876 Vila do Conde, Portugal.)
    Abstract: Production subsidies have not been used by International Business literature to explain firms internationalization processes. We argue subsides may have a role to play in that process. Using a longitudinal database (1996-2003) at the plant level, this paper aims to shed light on the causal nexus between production-related subsidies and exports, in Portugal. We implement a propensity score matching approach in order to evaluate the effects of subsidies on both the probability of domestic firms to begin exporting and on the probability of increasing the export share of already exporters. We find no impact of subsidies on the ability of domestic firms to become exporters; additionally, no effects of subsidies are detected on export shares. Such disappointing results may be explained by the inefficiency in the granting criteria.
    Keywords: Subsidies, Exports, Portugal, Matching
    JEL: F13 F14 H29
    Date: 2011–02
  19. By: L. Lambertini; A. Tampieri
    Abstract: We modify the vertically differentiated duopoly model by André et al. (2009) replacing Bertrand with Cournot behaviour to show that firms may spontaneously adopt a green technology even in the complete absence of any form of regulation.
    JEL: L13 L51 Q55 Q58
    Date: 2011–02
  20. By: Paolo Zeppini (University of Amsterdam); Jeroen C.J.M. van den Bergh (Autonomous University of Barcelona, and VU University Amsterdam)
    Abstract: This article presents a model of sequential decisions about investments in environmentally dirty and clean technologies, which extends the path-dependence framework of Arthur (1989). This allows us to evaluate if and how an economy locked into a dirty technology can be unlocked and move towards the clean technology. The main extension involves the inclusion of the effect of recombinant innovation of the two technologies. A mechanism of endogenous competition is described involving a positive externality of increasing returns to investment which are counterbalanced by recombinant innovation. We determine conditions under which lock-in can be avoided or escaped. A second extension is "symmetry breaking" of the the system due to the introduction of an environmental policy that charges a price for polluting. A final extension adds a cost of environmental policy in the form of lower returns on investment implemented through a growth-depressing factor. We compare cumulative pollution under different scenarios, so that we can evaluate the combination of environmental regulation and recombinant innovation.
    Keywords: externalities; hybrid technology; lock-in; R&D; sequential decisions
    JEL: O33 Q55
    Date: 2010–10–26

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