nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2012‒01‒25
eighteen papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. Strategic Sourcing of R&D: The Determinants of Success By Jacques Brook; Albert Plugge
  2. How a Smart Follower Becomes a Top Performer: An Institutional Innovation Perspective on Competitive Advantage By Jacques Brook
  3. Exporters, Spin-outs and Firm Performance By Lööf, Hans; Nabavi, Pardis
  4. Energy and Material Efficiency Innovations: The Relevance of Innovation Strategies By Bönte, Werner; Dienes, Christian
  5. Capable companies or changing markets? Explaining the export performance of firms in the defence industry By Castellacci, Fulvio; Fevolden, Arne
  6. The European Research Framework Programme and innovation performance of companies. An empirical impact assessment using a CDM model By Abraham Garcia
  7. Intangible resources: the relevance of training for European firms’ innovative performance By Daria Ciriaci
  8. Organizational Characteristics and Performance of Export Promotion Agencies: Portugal and Ireland compared By Inês Veloso Ferreira; Aurora A. C. Teixeira
  9. Upgrading of Symbolic and Synthetic Knowledge Bases: Analysis of the Architecture, Engineering and Construction industry and the Automotive Industry in China By Jan van der Borg; Erwin van Tuijl
  10. "Productivity and innovation spillovers: Micro evidence from Spain" By Esther Goya; Esther Vayá; Jordi Suriñach
  11. Community as a locus of innovation: co-innovation with users in the creative industries By Guy Parmentier; Vincent Mangematin
  12. What Can Be Learned from “Green Growth Diagnostics” for Greening the Growth Path of China? - Conceptional Issues and Industry Evidence By Harald Sander
  13. Strategy Only Matters A Bit: The role of Strategy in the High Performance Organization By André de Waal
  14. The Dynamics of Inter-Regional Collaboration – An Analysis of Co-Patenting By Sidonia von Proff; Thomas Brenner
  15. A simple model of discontinuous firm’s growth By D'Elia, Enrico
  16. Creating High Performance Organisations: The Determining Factors By André de Waal
  17. The effects of the underground economy on economic competitiviness By Donici, Gabriel-Andrei/GA
  18. Social identity and competitiveness By Dargnies, Marie-Pierre

  1. By: Jacques Brook (Faculty of Strategy, Marketing and International Business, Maastricht School of Management, The Netherlands.); Albert Plugge (Faculty of Technology, Policy and Management, Delft University of Technology, The Netherlands.)
    Abstract: The outsourcing of the R&D function is an emerging practice of corporate firms. In their attempt to reduce the increasing cost of research and technology development, firms are strategically outsourcing the R&D function or repositioning their internal R&D organisation. By doing so, they are able to benefit from other technology sources around the world. So far, there is only limited research on how firms develop their R&D sourcing strategies and how these strategies are implemented. This study aims to identify which determinants contribute to the success of R&D sourcing strategies. The results of our empirical research indicate that a clear vision of how to manage innovation strategically on a corporate level is a determinant of an effective R&D strategy. Moreover, our findings revealed that the R&D sourcing strategy influences a firm’s sourcing capabilities. These sourcing capabilities need to be developed to manage the demand as well as the supply of R&D services. The alignment between the demand capabilities and the supply capabilities contributes to the success of R&D sourcing.
    Keywords: Sourcing strategies, R&D, outsourcing, capabilities.
    JEL: O31 O32
    Date: 2011–05
  2. By: Jacques Brook (Maastricht School of Management, the Netherlands)
    Abstract: The competitive advantage literature has tended to establish a strong relation between innovation leadership and high firm performance. However, we found that this is not always true. Inspired by the failure of many firms to be leaders in innovation, many other firms prefer to orient their corporate innovation strategy towards being a smart follower. Here their objective is to reduce the risks of innovations and to achieve a sustained competitive advantage. Smart followers move beyond the traditional notion of follower that focuses on the decision of not becoming a leader in particular technology domain and how to gain a cost advantage by learning from the leader. This paper discusses an institutional innovation framework based on a business system thinking approach. The objective is to assist the leadership in firms in synergizing capabilities in the interactions between the innovation dimensions. We found that firms that choose to be smart followers can become top performer if they pursue institutional innovation.
    Keywords: Innovation Strategy, Institutional Innovation, Competitive advantage, Business model innovation, technology innovation, process innovation, service and product innovation, social and sustainable innovation, performance.
    JEL: M12 M14
    Date: 2011–10
  3. By: Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Nabavi, Pardis (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: This paper analyzes the relationship between exporters, spin-outs and firm performance. A large body of research has shown that exporters perform better than non-exporters. But are also firms spawn out from exporters better than other new firms in terms of survival, productivity and growth? Using a panel of about 2,000 ex-employee starts ups, their parent companies and 10 000 other new firms in Sweden observed over a sequence of 5 years, we provide new evidence on spinouts as a channel of transferring knowledge from exporting firms to new ventures.
    Keywords: Exports; new firms; spin-out; spillovers; productivity
    JEL: J24 L26 M13 O31 O32
    Date: 2012–01–13
  4. By: Bönte, Werner (Schumpeter School of Business and Economics, University of Wuppertal, Germany); Dienes, Christian (Schumpeter School of Business and Economics, University of Wuppertal, Germany)
    Abstract: This study explores the relationship between energy and material efficiency innovations (EMEIs) and innovation strategies employed by manufacturing firms to develop their process innovations. Firms may mainly develop process innovations in-house, let them mainly develop by other enterprises or institutions, or they or they may develop them jointly with external partners. The empirical analysis is based on data of European manufacturing firms obtained from the fourth Community Innovation Survey. Our results suggest that EMEIs are related to process innovation strategies. Firms which let mainly develop their process innovations by other enterprises or institutions tend to be less likely to introduce EMEIs at all and these firms are also less likely to introduce EMEIs with stronger efficiency effects. Moreover, our results do not suggest that firms following the 'cooperation strategy' are more likely to introduce EMEIs and to reach a higher EMEI performance than firms following the 'in-house strategy'.Hence, our results do not confirm the results of previous research pointing to a positive relationship between environmental innovations and cooperation with external partners.
    Keywords: energy and material efficiency, process innovations, innovation strategy
    JEL: D22 O32 O33 Q55
    Date: 2012–01
  5. By: Castellacci, Fulvio; Fevolden, Arne
    Abstract: The paper carries out an empirical analysis of the factors explaining the export performance of firms in the defence sector. We focus on the case of Norway, and make use of two complementary methodologies: the first is based on quantitative firm-level data analysis for the whole population of defence companies, and the second is based on qualitative case study research on the three most important defence export products (weapon stations, ammunition, electronics). Our empirical results highlight the importance of four major success factors for exporting firms: (1) the participation in offset agreements; (2) the ability to focus on their set of core competencies; (3) their R&D activities and interactions with the public S&T system; (4) demand opportunities and, relatedly, user-producer interactions.
    Keywords: Defence industry; liberalization; export; R&D and innovation
    JEL: F5 M2 F1 O3 L1
    Date: 2012–01
  6. By: Abraham Garcia (JRC-IPTS)
    Abstract: The effect of the EU Research Framework Programme (FP) on European company innovation performance is analysed for the period 1998-2000. The possibility of applying for the grant might make companies engage in new projects which they would not have considered if the fund was not there. In addition, the FP programme increases collaboration with other innovation agents (e.g., universities, research labs, governments and other firms). Both the existence of FP and collaboration are simultaneously modelled when innovation performance is studied. To measure innovation performance, an input indicator (level of R&D expenditure) is used in combination with an output indicator (increase in the innovation sales). Following Crepon et al. (1998) a simultaneous equations system is used with four equations (FP, collaboration, R&D and Innovation sales). The paper finds a positive impact for the FP on collaboration, and both factors positively affect the innovation performance (R&D and Innovation sales) of European firms. No crowding-out effect is found in the analysis.
    Keywords: Funding, Framework Programme, R&D investment, CIS, CDM model
    Date: 2011–12
  7. By: Daria Ciriaci (JRC-IPTS)
    Abstract: This paper assesses whether European firms’ innovative performance is impacted by investments in training directly aimed at developing and/or introducing innovation, in addition to the scale of a firm's investments in innovation proxied by the number of R&D personnels. In particular, it explores the complementarity between these two factors (in the presence of a well-trained workforce, the knowledge created by a firm’s R&D personnel can be better exploited), and their dependence on a firm's knowledge intensity (high versus low % of tertiary-educated workforce) and size (SMEs versus large firms). Using European CIS non-anonymised data for the period 1998-2000, this paper estimates a system of simultaneous equations in which investments in training and stock of R&D personnel are treated as endogenous in relation to the innovative sales on which they are presumed to have an effect. The choice to use this time period rather than more recent ones – to which I had access at the Eurostat Safe Centre – is data-driven. It has better information on training expenditures and it is the last period to provide firm-level information on the number of employees with tertiary education. Unlike the majority of CIS-based studies, the main variables of interest are continuous ones, while dummy variables are used as controls only. Empirical evidence confirms most previous results – investment in training and stock of R&D personnel positively affects firms' innovativeness – but also provides some important additional insights. Ceteris paribus, returns to training and R&D personnel are not affected by the knowledge intensity of the firm, while are always statistically significantly higher in large than in small and medium sized firms. However, while in the case of training the differences in returns between SME and large firms are small, in the case of R&D personnel are quite pronounced.
    Keywords: Intangibles, R&D investment, human capital, CIS, CDM model
    JEL: O30 O31 O32 D83 D62
    Date: 2011–12
  8. By: Inês Veloso Ferreira (Faculdade de Economia, Universidade do Porto); Aurora A. C. Teixeira (CEF.UP, Faculdade de Economia, Universidade do Porto; INESC Porto; OBEGEF)
    Abstract: Export Promotion Agencies (EPAs) have been in operation in developed countries since the beginning of the 20th century to improve the competitiveness of firms by increasing knowledge and competences applied to export market development.
    Keywords: Export Promotion Agencies; Organizational Performance; Portugal; Ireland
    JEL: F13 D02 D23
    Date: 2012–01
  9. By: Jan van der Borg (Department of Economics, University Of Venice Cà Foscari); Erwin van Tuijl (HIS and RHV, Erasmus University Rotterdam)
    Abstract: The degree and the way of upgrading differ widely per industry. This article tries to give some new insights in these differences by linking the concept of upgrading to that of the knowledge base. Moreover, we try to identify barriers to upgrading as well as the appropriate spatial scale on which upgrading takes place, again for different knowledge bases. We support our argument by analysing the process of upgrading in two industries in China: the AEC industry (in Beijing and Shanghai) and the automotive industry (in Shanghai). Within these industries we focus on upgrading on two levels: within firms and within projects. Our findings for both industries suggest that the principal ways of upgrading of the symbolic knowledge base are joint brainstorming in internal and external project teams and labour mobility. Major factors that hinder the upgrading of symbolic knowledge include the development stage of China, the Chinese educational system and tensions about duplication of western designs. Upgrading of the synthetic knowledge base takes mainly place via inter-company training programmes of foreign firms, technology transfer and labour mobility on the long run. A possible barrier for upgrading of synthetic knowledge, especially in the automotive industry, is that foreign firms tend to keep certain engineering activities in their home base because of the risk of knowledge leakage. However, this is changing quickly as many foreign carmakers and their suppliers invest in engineering centres in China due to an increasing demand for cars, to governmental regulations and to intensifying competition.
    Keywords: Urban development, upgrading, automotive industry, AEC industry, knowledge economy, China.
    JEL: L2 R00 R3 O3
    Date: 2011
  10. By: Esther Goya (Faculty of Economics, University of Barcelona); Esther Vayá (Faculty of Economics, University of Barcelona); Jordi Suriñach (Faculty of Economics, University of Barcelona)
    Abstract: This article analyses the impact that innovation expenditure and intrasectoral and intersectoral externalities have on productivity in Spanish firms. While there is an extensive literature analysing the relationship between innovation and productivity, in this particular area there are far fewer studies that examine the importance of sectoral externalities, especially with the focus on Spain. One novelty of the study, which covers the industrial and service sectors, is that we also consider jointly the technology level of the sector in which the firm operates and the firm size. The database used is the Technological Innovation Panel (PITEC), which includes 12,813 firms for the year 2008 and has been little used in this type of study. The estimation method used is Iteratively Reweighted Least Squares method (IRLS), which is very useful for obtaining robust estimations in the presence of outliers. The results confirm that innovation has a positive effect on productivity, especially in high-tech and large firms. The impact of externalities is more heterogeneous because, while intrasectoral externalities have a positive and significant effect, especially in low-tech firms independently of size, intersectoral externalities have a more ambiguous effect, being clearly significant for advanced industries in which size has a positive effect..
    Keywords: Productivity, innovation, sectoral externalities, firm size. JEL classification:D24, O33
    Date: 2011–12
  11. By: Guy Parmentier (ESC Chambéry - GROUPE ESC Chambéry, IREGE - Institut de Recherche en Gestion et en Economie - Université de Savoie); Vincent Mangematin (MTS - Management Technologique et Strategique - Grenoble Ecole de Management)
    Abstract: The aim of the paper is to characterize innovation with user communities and to explore managerial implications for creative industries. Based on four case studies, we explore the interrelations between the firm and user communities. The digitalization and virtualization of interactions change the ways in which the boundaries between the firm and its user community are defined. User communities are actively developing new products, new services. Definitions of value differ for firms and users. Users are valuating the possibility to be creative, to transform individual creativity into products while firms are making money with innovation. Finally, innovation with user communities may modify the respective identities of firms and communities.
    Keywords: innovation; community; lead user; innovation with communities; boundaries; identity
    Date: 2011
  12. By: Harald Sander (Professor of Economics and International Economics & Director of the Institute of Global Business and Society, Cologne University of Applied Sciences Professor of Economics at Maastricht School of Management)
    Abstract: It is evident that China’s manufacturing‐based growth model increasingly contradicts local, regional and global environmental imperatives. It is therefore of high importance to identify cost‐efficient strategies for greening the growth path of China. On 25 May 2011 the OECD has launched a “Green Growth Strategy” and proposed a “Green Growth Diagnostics” approach to identify the binding constraints on green growth. This paper discusses the usefulness of this approach for identifying the binding constraints to green growth in general as well as for the special case of China. It is argued that the approach is best applied at the industry level after some adjustments to identify binding constraints to the ‘greening’ of certain industries. The workings of the approach are illustrated for the case of the Chinese energy sector.
    JEL: Q54 O11 O13
    Date: 2011–11
  13. By: André de Waal (Maastricht School of Management, Endepolsdomein 150, 6229 EP Maastricht, The Netherlands.)
    Abstract: Ever since Porter’s book Competitive Strategy (1980), developing a generic strategy and then executing this strategy well has been seen as the main source of competitive advantage for organizations. However, since the publication of Porter’s book the business environment has changed dramatically, giving rise to the questions: How important is strategy nowadays for an organization to become and stay successful? and Are the generic strategies of Porter still valid? To find answers on these questions, research into the characteristics of high performance organizations (HPOs) was looked at. Based on the results of that research it was established that there was only one strategy characteristic of importance for establishing and maintaining an HPO. Strategy thus only matters a bit in the sense that just having a strategy is not enough to become a high performance organization. For this the strategy has to be unique, and this uniqueness cannot be achieved by choosing one of Porter’s generic strategies as having one such a generic strategy is no longer enough for the modern-day organization. Thus, the emphasis during the strategy development process should be on identifying the elements that make the organization stand-out from its competitors, and then on devising ways to exploit the unique traits of the organization in order to achieve sustainable competitive advantage.
    Keywords: strategy; high performance organization; uniqueness; importance; generic strategies
    JEL: M12 M14
    Date: 2011–02
  14. By: Sidonia von Proff (Department of Geography, Philipps University Marburg); Thomas Brenner (Department of Geography, Philipps University Marburg)
    Abstract: The paper at hand investigates how co-patenting over distance develops when aggregating inventive activities on a regional level. That means, the object of analysis is a link between two regions in contrast to other studies, where links between two individuals or firms are investigated. We analyse which regional characteristics influence the creation and continuation of such links. The main focus lies on different types of distance. The approach adds a dynamic view to the existing, often static literature about collaboration behaviour. The regressions are done for all patent-relevant industries in Germany. We find that several distance types decrease – as expected – the likelihood of link creation but also - not in all cases expected - of link continuation.
    Keywords: patents, research collaboration, collaboration dynamics, inter-regional links, Germany
    JEL: R11 O34 L14
    Date: 2011–10
  15. By: D'Elia, Enrico
    Abstract: Typically, firms change their size through a row of discrete leaps over time. Sunk costs, regulatory, financial and organizational constraints, talent distribution and other factors may explain this fact. However, firms tend to grow or fall discontinuously even if those inertial factors were removed. For instance, a very essential model of discontinuous growth can be based on a couple of assumptions concerning only technology and entrepreneurs’ strategy, that is: (a) in the short run, the firm’s equipment and organization provide the maximum profit only for a given production level, and diverging form it is costly; and (b) in the long run, the firm adjusts its size as if the current equipment had to be exploited until overall profit exceeds the profit expected from the new desired plant at the current production level. Combining the latter two hypotheses entails a number of testable consequences, usually regarded as nuisance facts within the traditional theoretical framework. First of all, an upper bound constraints both investment and disinvestment. Secondly, the profitability is not a continuous function of the firms’ size, but exhibits a number of peaks, each corresponding to a locally optimal size. Thirdly, firms tend to invest when profit approaches a local minimum, corresponding to the lowest profit claimed by the entrepreneur. Therefore, firm’s level data would prove only weak statistical relationships among profitability, output and investment. Finally, the distribution of firms by growth rate is multimodal since, within each sector, every firm typically adjusts its size through the same sequence of leaps. There are a number of analogies between the firm’s growth process predicted by the model and some physical phenomena explained by the quantum theory.
    Keywords: Capacity utilization; Discontinuity; Firm’s size; Growth; Lumpy investment
    JEL: D21 L11 D92
    Date: 2011–12
  16. By: André de Waal (Associate Professor Strategic Management at the Maastricht School of Management, Academic Director of the Center for Organizational Performance, and guest lecturer at the Free University Amsterdam and Erasmus University Rotterdam.)
    Abstract: The recent economic downturn has caused tremendous upheaval in the business world and it has spurred many companies to engage in self-analysis and organisational improvement activities. As a result, interest in the determinant factors of sustainable high performance is increasing. Managers all over the world are trying out new performance improvement concepts, though unfortunately with varying success. One likely reason for this is the current lack of consensus on the organisational characteristics that lead to high performance. The aim of the research study described in this article was to identify the characteristics that lead to sustainable high performance. The initial phase of the study - a descriptive review of 290 research studies into high performance – resulted in the identification of 189 potential characteristics which could make up a high performance organisation. In the following phase, these were tested in a worldwide survey and narrowed down to 35 characteristics, categorised in five factors, which showed a positive correlation with competitive performance. The factors were applied in a case study at a division of a prominent Dutch bank. The application led to specific characteristics that explained the difference in performance between the high and the low performing regions of the examined bank division. The study results show that identifying the determining factors of sustainable high performance is feasible and that these factors can be used at organisations to determine the differences between high and low performing units. This research theferore offers managers a framework that provides focus to organisational improvement projects.
    Keywords: high performance organisations, organisational characteristics, banking
    JEL: M12 M14
    Date: 2011–08
  17. By: Donici, Gabriel-Andrei/GA
    Abstract: A real, almost palpable, connection exists between the official and the underground economy. More than that, both sides of the economy (official and underground) are connected with the competitiveness of a country. Strangely a large presence of undereground in the economy is a sign of competitiveness. Although we would be tempted to say that underground is bad for competitiveness the reality is that due to taxes and regulations the resources (especially the human ones) used ”illegaly” would probably be wasted. In the end the wages from the underground economy return to the oficial one suporting it and hence the competitiveness of the country.
    Keywords: official economy; underground economy; illegal activities; tax evasion; economic competitiveness
    JEL: E26 H26
    Date: 2012–01–06
  18. By: Dargnies, Marie-Pierre
    Abstract: Recent experimental results indicate that women do not like competitive environments as much as men do. Another literature is interested in the effect of social identity on economic behaviors. This paper investigates in the lab the impact of social identity on men and women's willingness to compete both individually and as part of a team. To this aim, participants from the Identity sessions had to go through group identity building activities in the lab while participants from the Benchmark sessions did not. The main result is that men are only willing to enter a team competition with a teammate of unknown ability if they share a common group identity with him or her. This change of behavior seems to be caused by high-performing men who are less reluctant to be matched with a possibly less able participant when he or she belongs to his group. On the other hand, group identity does not seem to induce women to take actions more in the interest of the group they belong to. --
    Keywords: Social Identity,Gender Effects,Tournament,Teams
    Date: 2011

This nep-cse issue is ©2012 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.