nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2011‒03‒26
seventeen papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. The contribution of international R&D to firm profitability By Peters, Bettina; Schmiele, Anja
  2. Costs and benefits of inter-departmental innovation collaboration By Cuijpers, Maarten; Guenter, Hannes; Hussinger, Katrin
  3. When do global pipelines enhance knowledge diffusion in clusters? By Andrea Morrison; Roberta Rabellotti; Florian Lorenzo Zirulia
  4. R&D, Innovation and Exporting By Richard Harris; John Moffat
  5. Does Cultural Diversity Help Innovation in Cities: Evidence from London Firms By Neil Lee; Max Nathan
  6. Localized knowledge spillovers and patent citations: A distance-based approach By Yasusada Murata; Ryo Nakajima; Ryosuke Okamoto; Ryuichi Tamura
  7. R&D collaboration with uncertain intellectual property rights By Czarnitzki, Dirk; Hussinger, Katrin; Schneider, Cédric
  8. Modelling credit risk for innovative firms: the role of innovation measures By Chiara Pederzoli; Grid Thoma; Costanza Torricelli
  9. Regional Patterns of Intangible Capital, Agglomeration Effects and Localised Spillovers in Germany By Kurt Geppert; Anne Neumann
  10. The Winner's Choice: Sustainable Economic Strategies for Successful 21st Century Regions By Mark D., Partridge; M. Rose, Olfert
  11. The dividend strategy of Indian companies: An empirical assessment By Ghosh, Saibal
  12. Institution-Driven Comparative Advantage, Complex Goods and Organizational Choice By Ferguson, Shon; Formai, Sara
  13. Industry and the Urge to Cluster: A Study of the Informal Sector in India By Megha Mukim
  14. Opportunity and/or necessity entrepreneurship? The impact of the socio-economic characteristics of entrepreneurs By Giacomin, Olivier; Janssen, Frank; Guyot, Jean-luc; Lohest, Olivier
  17. Intelectual capital (IC) models – a comparative approach By Jianu (Dumitru), Ionela; Dumitru, Ionut

  1. By: Peters, Bettina; Schmiele, Anja
    Abstract: The internationalisation of corporate R&D opens up the chances to participate in international knowledge sharing. This increasingly motivates firms to accelerate the pace and extent of their international R&D activities in order to enhance innovativeness and consequently competitiveness and profitability. Such business ventures, however, might be associated with huge organizational costs as well as risks of outgoing knowledge spillovers. In this paper we empirically address the question whether international R&D activities boost profitability. We employ a large data set of about 1300 firms from the German Community Innovation Survey (CIS). The empirical results demonstrate that R&D location matters for profitability. Firms with both domestic and foreign R&D activities make significantly higher profits than all other firms, including those that carry out solely domestic R&D. We furthermore ascertain that the degree of R&D internationalisation affects profitability. Our findings suggest that medium decentralised firms which innovate in two or three foreign countries outperform firms with centralized or highly decentralized international R&D strategies. Notwithstanding, decentralized firms achieve a higher firm performance than firms that solely conduct R&D activities in their home country. --
    Keywords: R&D,Innovation,Internationalisation,Firm performance,Profit
    JEL: O32 F23
    Date: 2011
  2. By: Cuijpers, Maarten; Guenter, Hannes; Hussinger, Katrin
    Abstract: Inter-departmental innovation collaboration facilitates innovation performance. At the same time, it has been identified as source of increased coordination costs. Using organizational information processing theory, this paper builds and tests hypotheses on the costs and benefits of innovation-related collaboration within firms. Based on a sample of 433 German manufacturing firms we show inter-departmental innovation collaboration to increase process innovation performance, but also to produce costs in terms of project delay and project termination. These costs, however, do not affect innovation performance at the firm level. This finding suggests firms to be well able to balance the costs and benefits of interdepartmental collaboration across their innovation project portfolio. Theoretical and managerial implications are discussed. --
    Keywords: Inter-departmental innovation collaboration,innovation performance,project delay,project termination
    JEL: O32 M54 O31
    Date: 2011
  3. By: Andrea Morrison; Roberta Rabellotti; Florian Lorenzo Zirulia
    Abstract: Recent studies have stressed the role played by global pipelines in fostering cluster growth and innovativeness. This paper develops a formal model investigating when global pipelines contribute to increase local knowledge, depending on various cluster characteristics such as size, knowledge endowment and ease of internal knowledge transmission. This model is an extension of Cowan and JonardÕs 2004 model in which we introduce the concept of cluster and a role for spatial proximity in knowledge diffusion. We find that there is a natural tendency of actors within global pipelines to act as external stars rather than knowledge gatekeepers. Global pipelines are beneficial for cluster knowledge accumulation only if the cluster is either characterized by a high quality local buzz or is small and weakly endowed in terms of knowledge.
    Keywords: knowledge gatekeepers, clusters, knowledge diffusion
    JEL: R11 O33 D83 C63
    Date: 2011–03
  4. By: Richard Harris; John Moffat
    Abstract: This study considers the determinants of whether a firm exports, undertakes R&D and/or innovates, and, in particular, the contemporaneous links between these variables using three waves of the UK Community Innovation Survey (CIS). Where appropriate, an instrumental variables procedure is employed to overcome problems of endogeneity. The results show that in both manufacturing and services, being involved in exporting increased the probability that an establishment was engaged in spending on R&D. Spending on R&D in manufacturing had a much larger impact on the probability of exporting which implies that spending on R&D was not simply to boost the probability of producing new goods and services, but also to improve the establishment's knowledge assets which would in turn help it break down barriers to international markets. In non-manufacturing, spending on R&D increased the probability of innovating but had no significant impact on whether the establishment exported; rather, innovating increased the probability of exporting. Exporting had no direct impact on whether innovation occurred in either sector. Given the key role of R&D, innovation and exporting in determining productivity, it is important that government understands these complex interactions between R&D, innovation and exporting and takes advantage of them when devising and implementing productivity-enhancing policies at the micro-level.
    Keywords: R&D, innovation, exporting, endogeneity
    JEL: C35 O32 R11
    Date: 2011–03
  5. By: Neil Lee; Max Nathan
    Abstract: London is one of the world's major cities, and one of its most diverse. London's cultural diversity is widely seen as a social asset, but there is little hard evidence on its importance for the city's businesses. Theory and evidence suggest various links between urban cultural diversity and innovation, at individual, firm and urban level. This paper uses a sample of 7,400 firms to investigate, exploiting the natural experiment of A8 accession. The results, which are robust to most endogeneity challenges, suggest there is a small but significant 'diversity bonus' for London firms. Diverse management teams are particularly important for ideas generation, reaching international markets and serving London's cosmopolitan population.
    Keywords: cities, innovation, entrepreneurship, cultural diversity, migration, London
    JEL: J61 L21 M13 O11 O31 R23
    Date: 2011–02
  6. By: Yasusada Murata (Advanced Research Institute for the Sciences and Humanities, Nihon University); Ryo Nakajima (Department of Economics, Yokohama National University); Ryosuke Okamoto (National Graduate Institute for Policy Studies); Ryuichi Tamura (Graduate School of Humanities and Social Sciences, University of Tsukuba)
    Abstract: We develop a new approach to localized knowledge spillovers by incorporating the concept of control patents (Jaffe, Trajtenberg and Henderson 1993) into the distancebased test of localization (Duranton and Overman, 2005). Using microgeographic data, we identify localization distance while allowing for cross-boundary spillovers, unlike the existing literature where the extent of localized knowledge spillovers is detected at the state or metropolitan statistical area level. We revisit the recent debate by Thompson and Fox-Kean (2005) and Henderson, Jaffe and Trajtenberg (2005) on the existence of localized knowledge spillovers, and find solid evidence supporting localization, even when finer controls are used.
    Keywords: localized knowledge spillovers; distance-based tests; microgeographic data; K-density; patent citations; control patents
    JEL: O31 R12
    Date: 2011–03
  7. By: Czarnitzki, Dirk; Hussinger, Katrin; Schneider, Cédric
    Abstract: Patent pendencies create uncertainty in research and development (R&D) collaboration agreements, resulting in a threat of expropriation of unprotected knowledge by potential partners, reduced bargaining power and enhanced search costs. In this paper, we show that - depending of the type of partner - uncertain intellectual property rights (IPR) lead to reduced collaboration between firms and may hinder the production of knowledge. This has implications for technology policy as R&D collaborations are exempt from anti-trust legislation in order to increase R&D in the economy. We argue that a functional IPR system is needed for successful utilization of this policy. --
    Keywords: R&D collaboration,intellectual property,uncertainty,patents
    JEL: O31 O38
    Date: 2011
  8. By: Chiara Pederzoli; Grid Thoma; Costanza Torricelli
    Abstract: Financial constraints are particularly severe for R&D projects of SMEs, which cannot generally rely on equity markets and, in the EU, on a sufficiently developed VC industry. If innovative SMEs have to depend on banks to finance their R&D projects, it is particularly important to develop models able to estimate their probability of default (PD) in consideration of their peculiar features. Based on the signaling value of some innovative assets, the purpose of this paper is to show the importance to include them into models which have proved to be successful for SMEs. To this end, we take a logit model and test it on a unique dataset of innovative SMEs (based on PATSTAT database, EPO BULLETIN and AMADEUS) to estimate a two-year PD with default years 2006-2008. In the regression analysis the innovation-related variables are two in order to account for R&D productivity at the level of the firm and to consider the value of the inventive output. Our analyses first address measurement issues concerning innovation-related variable and then show that, while the accounting variables and the patent value are always significant with the expected sign, the patent number per se reduces the PD only in the presence of an appropriate equity level.
    Keywords: innovative SMEs; default probability; patent value
    JEL: G21 G32 C25 O31 O34
    Date: 2011–03
  9. By: Kurt Geppert; Anne Neumann
    Abstract: We use a large micro-dataset to assess the importance of intangible capital - organisation, R&D and ICT capital - for the economic performance of establishments and regions in Germany. In 2003 self-produced intangible capital accounted for more than one fifth of the total capital stock of estab-lishments. More than half of the intangible capital is R&D capital. This high proportion is mainly due to a relatively strong and research-intensive manufacturing sector in Germany. At the regional level, we find descriptive evidence for a positive relationship between intangible capital and the economic performance of regions. This is true both for the level of economic activities and for growth. The results of cross-sectional regressions for the years from 1999 to 2003 indicate that dou-bling the intangible capital intensity of establishments increases the average wage levels by one percent. Regarding the regional economic environment of establishments, we find that the substan-tial net advantages of agglomeration have more to do with broad knowledge and diversity than with regional clustering and specialisation. Separate regressions for the wage levels of non-intangible workers show very similar results. These workers can share the rents of the activities of intangible workers. Thus, intangible capital generates positive externalities not only at the regional level, but also at the level of establishments.
    Keywords: Firm productivity, intangible capital, agglomeration, local spillovers
    JEL: J24 M40 O33 R30
    Date: 2011
  10. By: Mark D., Partridge; M. Rose, Olfert
    Abstract: Throughout the second half of the 20th Century, urbanization, new technologies, rapid labor-saving productivity growth in primary industries, and improved highways combined to create large-scale rural-urban functionally integrated regions. These forces have raised the stakes for regions in their pursuit of economic development and growth, making successful regional policy even more important. Changes to the governance structures consistent with the increased interdependence within broad rural-urban regions will improve the region's competitiveness; adopting fad-based approaches and policies aimed at “picking winners” will be less fruitful. Going forward, continuing globalization and environmental sustainability have the potential to fundamentally reshape relative regional attractiveness.
    Keywords: Regional Policy; Rural Development
    JEL: R58 R10 H0
    Date: 2010–03–04
  11. By: Ghosh, Saibal
    Abstract: The paper uses firms across different ownership categories to examine the factors influencing dividend policy. The results suggest that bigger, mature and low-leveraged firms tend to pay more dividends. As well, the findings suggest that bigger, less profitable and high-leveraged firms are more likely to initiate a dividend cut.
    Keywords: dividend strategy; leverage; firm size; manufacturing; India
    JEL: G35 C33 P52
    Date: 2010–06
  12. By: Ferguson, Shon (Dept. of Economics, Stockholm University); Formai, Sara (Stockholm School of Economics)
    Abstract: The theory of the rm suggests that firms can respond to poor contract enforcement by vertically integrating their production process. The purpose of this paper is to examine whether firms' integration opportunities affect the way institutions determine international trade patterns. We find that vertical integration lessens the impact of a country's ability to enforce contracts on the comparative advantage of complex goods. We also find that countries with good financial institutions export disproportionately more in sectors that produce complex goods and that have a high propensity for vertical integration. In doing so we use a new outcome-based measure of vertical integration propensity and we employ several empirical strategies: cross section, panel and event study analysis. Our results confirm the role of institutions as source of comparative advantage and suggest that this depends not only on the technological characteristics of the goods produced but also on the way firms are able to organize the production process.
    Keywords: International Trade; Comparative Advantage; Contract Enforcement; Financial Institutions; Vertical Integration
    JEL: D23 F10 F14 G20 G34 L22 L23
    Date: 2011–03–21
  13. By: Megha Mukim
    Abstract: This paper studies the determinants of firm location choice at the district-level in India to gauge the relative importance of agglomeration economies vis-à-vis good business environment. A peculiar characteristic of the Indian economy is that the unorganised nonfarm sector accounts for 43.2% of NDP and employs 71.6% of the total workforce. I analyse National Sample Survey data that covers over 4.4 million firms, in both unorganised sectors - manufacturing and services. The empirical analysis is carried out using count models, and I instrument with land revenue institutions to deal with possible endogeneity bias. I find that buyer-suppler linkages and industrial diversity make a district more attractive to economic activity, whilst the quality and level of infrastructure are also important. I conclude that public policy may be limited in its ability to encourage relocation of informal firms.
    Keywords: Agglomeration economies, informal sector, location choice
    JEL: R12 R3 O17
    Date: 2011–03
  14. By: Giacomin, Olivier; Janssen, Frank; Guyot, Jean-luc; Lohest, Olivier
    Abstract: Few studies have tried to identify the impact of the socio-economic characteristics of entrepreneurs on their opportunity-necessity positioning. Based on a sample of 538 entrepreneurs, we point out that individuals who get involved in an entrepreneurial process, have encountered a situation of necessity and/or opportunity and that the latter can take various forms. We point out the impact of the socio-economic characteristics of entrepreneurs on the alignment of their project with a necessity or opportunity entrepreneurial dynamics. The existence of sub-profiles of entrepreneurs within the necessity-opportunity typology is also highlighted. We point out, for instance, that not all jobseekers are necessity entrepreneurs and that new venture creation based on family pressure may convey both a necessity and opportunity dimension. Finally, our survey reveals a new kind of entrepreneurship: the hobby entrepreneurship.
    Keywords: Necessity - Opportunity - motivations
    JEL: L2 L26
    Date: 2011–01–01
    Abstract: La competitividad se ha estudiada con diferentes nombres desde el nacimiento de la economía y las firmas; el uso del concepto es objeto de debate por las relaciones con diversos desarrollos teóricos en la administración, la geografía económica y las políticas. Objetivo: Diferenciar las perspectivas, escuelas y autores que estudian la competitividad territorial. Metodología: En la literatura sobre competitividad se encuentran unos referentes teóricos notorios como lo son la competitividad internacional de la Escuela de Harvard, el Foro Económico Mundial y la Escuela de Negocios IMD; la competitividad sistémica del Instituto Alemán de Desarrollo; y la competitividad regional. La revisión bibliográfica y el análisis se hacen a partir de artículos sistematizados en las categorías competitividad internacional, sistémica y regional. Resultados: Se encuentra que la competitividad territorial es una categoría transversal que reúne la competitividad nacional y regional. Se concluye que el uso de la competitividad como categoría de análisis de los territorios es académicamente válido, y por lo tanto son válidas sus implicaciones en política comercial estratégica y regulación.
    Date: 2010–12–14
    Abstract: El Desarrollo local se plantea a través de numerosas estrategias que involucran elementos clave como la Regulación o desregulación del Estado, el libre juego de las fuerzas del mercado, las empresas, redes, alianzas y estrategias, el territorio como construcción social, la cultura, el conocimiento y la innovación. Todos estos elementos se conjugan en el territorio como fundamentales para generar los procesos y las condiciones de la internacionalización con Desarrollo Local. Objetivo: Revisar las diferentes teorías del Desarrollo Local y las condiciones de la internacionalización de las empresas en los territorios, conducentes a la formación del concepto glocal en las regiones. Metodología: Revisión de 20 artículos de investigaciones nacionales e internacionales que consideran e incorporan el Desarrollo Local y la internacionalización como ejes fundamentales. Hallazgos: El Desarrollo Local debe darse antes de hacerse un proceso de internacionalización en las empresas que les permiten ser competitivas en entornos globalizados; no existen procesos de internacionalización exitosos en las empresas sin los aspectos fundamentales que contiene el Desarrollo Local en las regiones.
    Date: 2010–12–14
  17. By: Jianu (Dumitru), Ionela; Dumitru, Ionut
    Abstract: This paper presents a comparative analysis of some intellectual capital models. The analysis is based on four criteria: the main concepts and classifications on which the models are based on, the analysis of functional characteristics, the analysis of operational performances, limitations.
    Keywords: intellectual capital; measurement; evaluation; models
    JEL: M1 J5
    Date: 2011

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