nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2012‒03‒21
twenty papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. High quality workplace training and innovation in highly developed countries By Christian Rupietta; Uschi Backes-Gellner
  2. Decentralization, Social Networks, and Organizational Learning By Emily Erikson; Sampsa Samila
  3. Diversification and Human Capital as Antecedents of Internationalization amongst Professional Service Firms: A Study of UK Based Engineering Consultants By Qian Cher Li; Andrea Mina; Bruce S. Tether; Karl Wennberg
  4. Does Cluster Policy Trigger R&D Activity? – Evidence from German Biotech Contests By Dirk Engel; Timo Mitze; Roberto Patuelli; Janina Reinkowski
  5. Are complex innovators more persistent than single innovators ? An empirical analysis of innovation persistence drivers By Christian Le Bas; Nicolas Poussing
  6. Small firm innovation performance and employee involvement By Andries, Petra; Czarnitzki, Dirk
  7. Cross-border acquisitions of science-based firms: Their effect on innovation in the acquired firm and the local science By Marcela Miozzo; Lori DiVito; Panos Desyllas
  8. Measuring the knowledge base of regional innovation systems in Sweden By Martin, Roman
  9. Environmental innovation and employment dynamics in different technology fields: An analysis based on the German community innovation survey 2009 By Horbach, Jens; Rennings, Klaus
  10. Interaction of leading and supporting factors for the SME competitiveness By Vladimirov, Zhelyu; Simeonova-Ganeva, Ralitsa; Ganev, Kaloyan
  11. Are firms exporting to China and India different from other exporters? By Giorgio Barba Navaretti; Matteo Bugamelli; Riccardo Cristadoro; Daniela Maggioni
  12. Cluster quo vadis? The future of the cluster concept By Koschatzky, Knut
  13. The business management strategy of Iran's large apparel firms : overview of results from a questionnaire survey and interviews 2009-2011 By Iwasaki, Yoko
  14. Do Business Subsidies Facilitate Employment Growth? By Heli Koski; Mika Pajarinen
  15. European cooperative R&D and firm performance By Luis Aguiar; Philippe Gagnepain
  16. From creativity to innovativeness: micro evidence from Italy By Roberto Antonietti
  17. Production Networks in Asia : A Case Study from the Hard Disk Drive Industry By Daisuke Hiratsuka
  18. Entrepreneurship in Services and Socially Disadvantaged in India By Rajeev Dehejia; Arvind Panagariya
  19. International Organization of Production with Heterogeneous Firms By Erasmus K. Kersting
  20. Corporate social responsibility disclosure: management, commitment, and stakeholder influence. By Thijssens, Thomas Jean Gertrude Ignace

  1. By: Christian Rupietta (Department of Business Administration, University of Zurich); Uschi Backes-Gellner (Department of Business Administration, University of Zurich)
    Abstract: This paper examines whether high quality, curriculum-based training at the workplace makes firms more innovative. Our dependent variable innovativeness is operationalized with four different measures: general innovation, product innovation, process innovation and patent applications. As explanatory variable we use regulated apprenticeship training programs with three to four years length of the type found in German speaking countries. We argue that this type of curriculum-based workplace training provides an additional source of knowledge in the knowledge production process through its innovative and steadily revised training curricula. We expect that this additional source of knowledge leads to higher innovation in training firms compared to non-training firms. Our empirical results show that up-to-date curriculum-based apprenticeship training is positively associated with all of the four innovation measures. Taking endogenous apprenticeship decision into account, the positive effect is only significant for general innovation and patent applications.
    Keywords: Apprenticeship training, Innovation, Education
    JEL: I20 O31
    Date: 2012–03
  2. By: Emily Erikson; Sampsa Samila
    Abstract: Research on the exploration and exploitation of knowledge in organizations suggests that the autonomy of subsidiaries or units encourages innovation. However, that same autonomy potentially discourages the exploitation of innovations through inter-unit communication – suggesting a tradeoff between innovation, associated with exploration, and communication, associated with exploitation. Analyzing data on the operational decisions of captains in the English East India Company, we find that high unit autonomy encourages the transfer of information via social networks, whereas centralization depresses the use of social networks. Further, the information transferred via social networks does make its way into the formal knowledge base of the firm.
    Date: 2012
  3. By: Qian Cher Li; Andrea Mina; Bruce S. Tether; Karl Wennberg
    Abstract: This paper studies the antecedents of internationalization amongst professional service firms (PSFs). Using a unique panel of UK-based engineering consultancies over the 1994-2009 period, we show that more specialized PSFs are more likely to internationalize than firms with a broader scope of activities, and that domestic geographical diversification as well as diversification into more unrelated fields enhances the international competitiveness of PSFs. Specific human capital also fosters internationalization, and moreover, significantly intensifies the advantages of various forms of diversification. Business size, age, foreign ownership and management buy-outs also exert positive and significant effects. The findings contribute to the literature on services internationalization and provide novel insights for the management of firms’ geographical and industrial diversification.
    Keywords: Internationalization ; diversificatin strategies ; human capital ; knowledge-intensive business services ; professional service firms (PSFs)
    JEL: F23 L25 L84 M16
    Date: 2011
  4. By: Dirk Engel; Timo Mitze; Roberto Patuelli; Janina Reinkowski
    Abstract: This paper evaluates the R&D enhancing effects of two large public grant schemes for the German biotechnology industry (BioRegio, BioProfi le). Both grant schemes are organized in the form of contents for cooperation with the goal to foster the performance of innovative firms by their organization in research clusters. We apply a Difference-in-Differences estimation technique in a generalized linear model framework, which allows us to control for different initial regional conditions in R&D activity of the biotech sector. 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” have positive effects on R&D activity in the short-term. Apart from this direct winner effect, for the non-winning participants no beneficial indirect effect due to a mobilization of local actors during the application phase could be detected. Finally, first attempts in estimating the long-term effects of the contests for cooperation approach on the winner regions’ R&D activity in the post-treatment period show ambiguous results.
    Keywords: Biotechnology; R&D policies; cluster; difference-in-differences estimation
    JEL: O38 C23
    Date: 2012–01
  5. By: Christian Le Bas (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France); Nicolas Poussing (CEPS/INSTEAD, 3, Avenue de la Fonte, 4364 Esch-sur-Alzette, Luxembourg)
    Abstract: This paper examines the persistence of innovation behaviour at the firm level (manufacturing and services sectors). We attempt to answer the question : does being successful in past innovation activities increase the probability of being successful in current innovation activities ? We contribute to the literature by explicitly distinguishing between single and complex innovation strategies. Using two waves of the Community Innovation Survey (2002–2004, 2006–2008) conducted in Luxembourg, the regressions show that complex innovators are more inclined to remain persistent innovators than single innovators. Within the group of single innovators pure product innovators have an advantage over pure process innovators. The results support the idea that the differences in innovation strategies across firms are important for understanding the firm innovation dynamics.
    Keywords: Innovation, Persistence, Single and Complex Innovators, CIS
    JEL: O31
    Date: 2012
  6. By: Andries, Petra; Czarnitzki, Dirk
    Abstract: It is known that small firms rely mainly on the CEO's individual knowledge for developing innovations. Recent work suggests that this approach is inefficient since it underutilizes other employees' knowledge. We study to which extent using CEOs, managers and non-managerial employees' ideas enhances small firms' innovation performance. A Heckman selection model on 305 small firms shows that not only CEO's and managers', but also non-managerial employees' ideas contribute to innovation performance. However, contributions depend heavily on the individuals' area of expertise and on whether product or process innovation is desired. Our findings enrich the current view on the entrepreneurial team, but also warn against the implementation of one-size-fits-all employee involvement programs in small firms. --
    Keywords: Employee involvement,upper echelon,non-managerial employees,innovation performance,small firms
    JEL: M12 O31 O32
    Date: 2012
  7. By: Marcela Miozzo; Lori DiVito; Panos Desyllas
    Abstract: This paper asks what happens to the technological resources and assets of host country science-based firms when they are acquired by foreign firms. Drawing on a multiple case study research design and interviews with UK biopharmaceutical firms and on patent data, the paper derives different patterns of knowledge base combinations through acquisition that have different outcomes in terms of innovation. These patterns are based on combinations of two factors: the complementarity or similarity of the technology, and the complementarity or similarity of the discovery and development capabilities of the target and acquiring firm. These combinations have clear differential outcomes in terms of investment in the acquired firm’s technology and important effects for the local science and technology system.
    Date: 2011
  8. By: Martin, Roman (CIRCLE, Lund University)
    Abstract: Within the literature on innovation systems, there are a growing number of scholars emphasizing the importance of differentiated knowledge bases underlying innovation activities. The existing work on knowledge bases is largely grounded on in-depth case studies; while surprisingly little effort has been done so far to operationalize the concept in a more systematic manner. In this paper, an attempt is made to develop a scheme of analysis to identify the knowledge base of a regional economy. We suggest using occupation data in association with a location quotient analysis, to assess whether a regional economy has a particular strength in one (or more) knowledge bases. To bring the analytical scheme into practice and assess it, we apply it on the county level in Sweden. The results are explained and contrasted with insights on the regional economies taken from secondary sources. We conclude that the proposed scheme of analysis leads to fairly reliable results, and could stimulate further empirical research on differentiated knowledge bases.
    Keywords: differentiated knowledge base; regional innovation system; Sweden
    JEL: O32
    Date: 2012–02–27
  9. By: Horbach, Jens; Rennings, Klaus
    Abstract: The employment effects of environmental technologies are in the focus of politicians but there are only few studies analyzing these effects for different environmental innovation fields. We use the 2009 wave of the German part of the Community Innovation Panel (CIS) allowing for such an analysis at the firm level. The main focus of the paper lies on the analysis of the adaptation behavior of firms with respect to the relationship of employment and (environmental) innovation. We use an endogenous switching regression approach to take the simultaneous haracter of innovation activities and employment demand into consideration. Our econometric analysis shows that innovative firms in general are characterized by a significantly more dynamic employment development. Especially the realization of environmental process innovations leads to a higher employment within the firm. The theoretical background of this finding is that process innovation induced cost savings improve the competitiveness of firms. This has a positive effect on demand and thus also increases employment. A more detailed analysis by different environmental innovation fields shows that material and energy savings are positively correlated to employment because they especially help to increase the profitability and competitiveness of the firm. On the other side, air and water process innovations that are still dominated by end-of-pipe technologies have a negative impact on the employment development. --
    Keywords: Employment,Environmental Innovation,Innovation Behaviour
    JEL: Q52 Q55 J49 C25
    Date: 2012
  10. By: Vladimirov, Zhelyu; Simeonova-Ganeva, Ralitsa; Ganev, Kaloyan
    Abstract: The main goal of this research was to investigate the SMEs competitiveness in terms of leading and supporting factors, and to compare the influence of these factors on SMEs performance. The study focused on four leading and four supportive factors. For each of these factors the respective indexes were constructed and calculated on the basis of 300 Bulgarian SMEs. Through the econometric modelling the research addressed the interaction between two groups of factors. The main findings related to the factors ordering - with some of leading factors stepping back and supporting ones becoming more important in the times of crisis.
    Keywords: SMEs; competitiveness factors; interaction; performance
    JEL: D21 L26 M2
    Date: 2012–01–07
  11. By: Giorgio Barba Navaretti (University of Milan); Matteo Bugamelli (Bank of Italy); Riccardo Cristadoro (Bank of Italy); Daniela Maggioni (Università Politecnica delle Marche)
    Abstract: This paper asks whether and why advanced countries differ in their ability to export to China and India. We exploit a newly collected, comparable cross-country survey of 15,000 European manufacturing firms (EFIGE). The dataset contains information on firms’ international activities and characteristics such as size and productivity, governance and management structure, workforce, innovation and research activity. We identify the firm characteristics that are correlated with exporting activity in general as well as with exporting to China and India conditional on being an exporter. In line with existing literature, we prove that larger, more productive and innovative firms are more likely to become exporters and to export more. Our results also provide new evidence on the role of governance: while there is not a strong negative effect of family ownership, a higher percentage of family management reduces a firm’s export propensity and export volumes. Regarding China and India, we find that firms exporting there are on average larger, more productive and more innovative than firms exporting elsewhere.
    Keywords: exports, productivity, firm size, management.
    JEL: F1 L2 M2
    Date: 2012–02
  12. By: Koschatzky, Knut
    Abstract: Although other regional- and sector-oriented promotional approaches exist alongside cluster promotion, from today's perspective the popularity of the cluster approach appears undiminished. At the global scale, no funding approach is as much discussed and implemented as the cluster concept. It must therefore be assumed that cluster support will still be a central innovation policy approach in the coming years. This view is strengthened by the fact that at present no successor for cluster promotion is apparent in the recent scientific theoretical discussion. Although improvements in the con-ceptual clarity and in the cluster policy approaches are being discussed, a new paradigm at a comparable level (as for instance the concept of innovation systems or also network funding before the diffusion of the cluster approach) is not recognizable. Cluster funding will however in future have to be more specific (and selective) than previously and have to network with other funding levels and funding approaches (e.g. European excellence clusters; promotion of excellence in universities in clusters; collaborative research and network promotion; new (heterogeneous) cooperation models). All empirical evidence shows that successfully operating clusters are characterized by a great diversity of actors and activities. These qualify the cluster as a platform to develop new cooperation forms and partnerships, as well as for further education and training measures, by learning from the experiences gathered in the cluster promotion programmes and building on the interactions in clusters. In this sense, new cooperation forms at the micro level, i.e. between single partners, and at the meso level in regional partnerships are not a substitute, but rather a supplement and extension of cluster promotion. --
    Date: 2012
  13. By: Iwasaki, Yoko
    Abstract: This paper is an overview of the results from a questionnaire survey and subsequent supplementary interviews of Iran's large apparel firms conducted by the author in 2009-2011. Most of the large apparel firms in Iran are based in Tehran and have been in business for some twenty years. They have a solid business with regular customers, but in general have hesitated to expand the size of their firms. Following the relaxation of restrictions on the procurement of raw materials that existed in the 1990s, the results of survey and interviews show that the firms have developed new channels of procurement although they depend to a considerable degree on imported raw materials and machinery. They have managed to maintain their level of output even with the rapid increase in imports since 2000, although the number of firms has decreased. Low-priced Chinese products have basically not been their rivals; instead, the inflow of foreign name-brand products have hit them heavily.
    Keywords: Iran, Apparel industry, Industrial management, Large-scale enterprises, Apparel firms, Questionnaire survey, Interview
    JEL: L67 M11
    Date: 2012–02
  14. By: Heli Koski; Mika Pajarinen
    Abstract: We use data from 15 508 Finnish companies with 10 or more employees for the years 2003-2008 to explore the relationship between employment growth and three endogenously determined business subsidy types (i.e. employment subsidy, R&D subsidy and the group of other business subsidies). We find a positive contemporary relationship between all business subsidy types and employment growth. In addition, our findings suggest that R&D subsidies further contribute to the firms’ employment for one year after and employment and other subsidies for three years after the reception of subsidies. After that, the differences between the subsidized and non-subsidized firms vanish. We further find in line with previous empirical studies that both product innovation and sales growth from a firm’s old products contribute to the firm’s employment growth. Innovation policy means successfully promoting product innovation should thus produce positive employment effects. Our empirical findings suggest that a positive employment effect of R&D subsidies is rather short-term though, and not likely a result of product innovation generated in the subsidized firms’ R&D projects.
    Keywords: Public subsidies ; enterprise policy ; industrial policy ; technology policy ; employment ; growth ; Finland
    JEL: J23 L10 L53 O25
    Date: 2012
  15. By: Luis Aguiar; Philippe Gagnepain
    Abstract: The goal of this paper is to assess the impact on the performance of firms that participate in Research Joint Ventures (RJVs) funded by the Fifth European Framework Programme for Research and Technological Development (EU-FP5). A special emphasis is made on the User-friendly Information Society (IST) programme, one of the most important thematic programmes of the EU-FP5. We use the funding available to the firms as an instrumental variable to account for self-selection and estimate the Local Average Treatment Effect (LATE) of participation by considering labor productivity and profit margin as performance measures. Our results show a large and positive impact of participation on the labor productivity of the firms, whereas the effect on profit margin is weaker. When taking into account the size of the RJV, we find that the positive impact on labor productivity comes mainly from participation in large projects and that participation in smaller RJVs has a negative effect on the profit margin
    Keywords: Research joint venture, R&D policy, Productivity, EU framework programme
    JEL: L24 L25 O31 O32 O38
    Date: 2012–02
  16. By: Roberto Antonietti
    Abstract: In this paper I assess the existence, and the magnitude, of technological externalities in the form of creativity spillovers that affect individual firms’ innovative intensity. Relying on a large sample of Italian manufacturing firms, I first estimate a knowledge production function; from this, I extract the residuals, which represent the unexplained part of the actual observed share of innovative sales, namely ‘innovativeness’. Then, I regress such a measure of firm innovativeness on a set of occupation-based, as well as density-based, indicators of creativity at the NUTS3 level, while controlling for firm localization, size and industry. I also control for endogeneity and non-linearity by estimating a two-stage least squares model and a generalized additive model respectively. My estimates show that: (i) there is a positive and highly statistically significant effect of creativity on innovativeness; (ii) the effect of creativity on actual innovative sales is weak, whereas I find a strong positive effect played by internal R&D labour; (iii) occupation-based measures of creativity outperform education-based measures of human capital; (iv) when controlling for the education content of jobs, firms’ innovativeness is affected more by the local availability of non-graduated creative workers than of graduated ones; (v) rather, a higher local availability of graduated creative workers affects the invention intensity of a city; (vi) the relationship between firm innovativeness and the local density of creative people is U-shaped, so that proximity-based knowledge externalities emerge only after a certain density threshold is reached, this occurring typically in larger urban areas, typically hosting design and service-based creative industries.
    Keywords: creativity; innovativeness; innovative sales; knowledge production function; proportions
    JEL: L60 O31 R10
    Date: 2011
  17. By: Daisuke Hiratsuka (Asian Development Bank Institute (ADBI))
    Abstract: Production networks have been extensively developed in East Asia. Previous studies on production networks used international trade data or input–output tables, but such aggregate data cannot explain how the networks actually operate. With the aim of understanding the features and characteristics of East Asian production networks, this paper examines the procurement system of a HDD assembler operating in Thailand. This micro-level case study found that this particular production network consists mostly of arm’s-length suppliers, who are independent and on an equal footing with the assembler. These arm’s-length suppliers are mostly located in the assembling country, but some are located in neighboring countries. This proximity is necessary to establish good relationships between customer and suppliers and allows problems to be solved as soon as they occur. The arm’s-length suppliers engaged in each country’s leading industries, such as the electronics industry in Malaysia and Singapore and the automobile industry in Thailand, have extended their business to supply the HDD industry. These suppliers have formed an industrial cluster in each country within a two- or three-hour drive area. Each cluster that spans different countries is linked by a well-developed logistic network that employs the just-in-time production method that prevails in East Asia. On a regional level, these separate clusters tend to form international production networks that connect to each other across neighboring countries within a distance that provides a quick response time for problem solving. This study also found that American HDD assemblers outsourced indigenous suppliers in Malaysia and Singapore because American suppliers did not follow the assemblers’ move to the region. However, since Japanese suppliers did follow the Japanese HDD assemblers to the Philippines and Thailand, indigenous suppliers were not outsourced.
    Keywords: Production Networks, Asia, Hard disk drive industry.
    JEL: F14 F15 F23
    Date: 2011–07
  18. By: Rajeev Dehejia (Tufts University); Arvind Panagariya (Columbia University)
    Keywords: India, growth, entrepreneurship, socially disadvantaged, poverty, services
    Date: 2011–10
  19. By: Erasmus K. Kersting (Department of Economics and Statistics, Villanova School of Business, Villanova University)
    Abstract: This paper presents a North-South model with differentiated goods being produced in the North. Each differentiated final good requires both management and manufacturing services as inputs, and firms are heterogeneous with regard to their productivity levels in providing these inputs. Moving manufacturing to the South lowers part of a firm's variable costs. Two scenarios, which are interpreted to correspond to vertical FDI and offshoring, are investigated. In both cases there is a minimum level of management productivity required for firms to benefit from relocation of manufacturing to the South. In the case of offshoring, productivity and profit gains are relatively larger for firms with low initial manufacturing productivity. In addition, firms with very high initial productivity in both aspects choose not to offshore due to the presence of fixed costs. The model is subsequently used to examine the implications of changes in economic integration on the type of firms that exit an industry, change production location or keep manufacturing domestically.
    Keywords: Firms; Offshoring; Vertical FDI
    JEL: F15 F23
    Date: 2012–02
  20. By: Thijssens, Thomas Jean Gertrude Ignace (Maastricht University)
    Date: 2012

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