nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2012‒09‒30
eighteen papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. Generation and diffusion of innovations in a District Innovation System: The case of ink-jet printing By Reig-Otero,Y.; Edwards-Schachter,M.; Feliú-Mingarro,C.; Fernández De Lucio,I.
  2. Innovative Parents and Entrepreneurial Spawning By Lööf, Hans; Nabavi, Pardis; Bazzazian , Navid
  3. The Competitiveness of Global Port-Cities: The Case of Helsinki - Finland By Olaf Merk; Olli-Pekka Hilmola; Patrick Dubarle
  4. Guanxi, performance and innovation in entrepreneurial service projects. By Iván Arribas; Penélope Hernández; Jose E. Vila
  5. Research Productivity and the Quality of Interregional Knowledge Networks By Tamás Sebestyén; Attila Varga
  6. What makes cities more competitive ? spatial determinants of entrepreneurship in India By Ghani, Ejaz; Kerr, William R.; O'Connell, Stephen D.
  7. What do lean managers do? Modeling management behaviors in lean production environments By Arnaldo Camuffo; Fabrizio Gerli
  8. Environmental Shocks, Collaborative Networking, and Organizational Performance:Evidence from Hurricane Rita By Sangyub Ryu
  9. Individualism and the cultural roots of management practices By Hoorn, André van
  10. Risk Management strategies in a highly uncertain environment: undesrtanding the role of common unknown By Olga Kokshagina; Pascal Le Masson; Benoit Weil; Patrick Cogez
  11. Agency, Firm Growth, and Managerial Turnover By Ronald W. Anderson; M. Cecilia Bustamante; Stéphane Guibaud
  12. Foreign ownership structure, technology upgrading and exports: Evidence from Chinese firms By Surafel Girma; Yundan Gong; Holger Görg; Sandra Lancheros
  13. Non-Price Competitiveness of Exports from Emerging Countries By Konstantins Benkovskis; Julia Wörz
  14. Ports and Regional Development: A European Perspective By Claudio Ferrari; Olaf Merk; Anna Bottasso; Maurizio Conti; Alessio Tei
  15. What are we learning from business training and entrepreneurship evaluations around the developing world ? By McKenzie, David; Woodruff, Christopher
  16. Institution-Driven Comparative Advantage and Organizational Choice By Ferguson, Shon; Formai, Sara
  17. Strategic product R&D investment policy under international rivalry in the presence of demand spillover effects By Tsuyoshi Toshimitsu
  18. Efficiency of World Ports in Container and Bulk Cargo (oil, coal, ores and grain) By Olaf Merk; Thai Thanh Dang

  1. By: Reig-Otero,Y.; Edwards-Schachter,M.; Feliú-Mingarro,C.; Fernández De Lucio,I.
    Abstract: This paper provides an in-depth case study of the ink-jet printing (IJP) technology that emerged from a mature industrial sector in the Castellon region (Spain) in the first decade of 2000. We propose an analytical framework that combines the theoretical perspectives of Industrial Districts and Innovation Systems, and exploit a qualitative methodology that includes information from patent and scientific article databases, technical literature and 21 interviews. Our results show that IJP is a major innovation that breaks with the tradition of machinery innovations in this industry in Spain. We provide micro-level evidence of the complex external and internal relationships in the innovation process. Internal ties, trust relations and strong in-house R&D were the determinants of the IJP innovation. In contrast to the literature, we find that secrecy and patenting play key roles in the sharing of knowledge and the innovation strategy.
    Keywords: innovation system, industrial district, learning region, technology, ceramic tile, ink-jet printing
    JEL: O31 O33 Q55
    Date: 2012–09–20
  2. 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); Bazzazian , Navid (Strategy and Business Policy, HEC, Paris)
    Abstract: This paper analyzes how different innovation-strategies of incumbent firms affect the quantity and quality of their entrepreneurial spawning. Using a data set that comprises almost all patent applications by firms in Sweden for the period 1997-2008, we distinguishes between firms that are engaged in innovation activities persistently, occasionally and not at all. We do not find any statistically significant evidence that the chance of survival for a new firm can be linked back to the innovation strategy of the parent firm. In contrast, we provide strong evidence that employee start-ups from persistent innovators are more productive during the first five year on the market than other new ventures, everything else equal.
    Keywords: Patent; R&D; Spinoff; Productivity; Employment
    JEL: C23 O31 O32
    Date: 2012–09–17
  3. By: Olaf Merk; Olli-Pekka Hilmola; Patrick Dubarle
    Abstract: This working paper offers an evaluation of the performance of the Port of Helsinki, as well as an analysis of the port?s impact on its territory and an assessment of relevant policies and governance. It examines declining port performance in the last decade and identifies the principal factors that have contributed to it. In addition, the report studies the potential for synergies between the Helsinki and HaminaKotka ports. The study also considers the effect of these ports on economic and environmental questions. Specifically, the paper outlines the impact of the Helsinki port?s operations, and shows how its activities spill over into other regions. The report also assesses major policies governing the port, as well as transport and economic development, the environment and spatial planning. These policies include measures instituted by the Helsinki Port Authority and local, regional and national governments. Governance mechanisms at these different levels are described and analysed. Based on the report?s findings, proposed recommendations aim to improve port performance and increase the positive effects of the port on its territory.
    Keywords: transportation, ports, regional development, regional growth, urban growth, inter-regional trade
    JEL: D57 L91 R11 R12 R15 R41
    Date: 2012–09–11
  4. By: Iván Arribas (ERI-CES); Penélope Hernández (ERI-CES); Jose E. Vila (ERI-CES)
    Abstract: This paper analyzes the role played by two dimensions of entrepreneurs’ private social capital in the survival, growth and innovativeness of entrepreneurial service ventures: local size and preferential attachment degree. We build a bi-dimensional measure of social capital based on network models and a methodology to estimate this measure for any group of entrepreneurs. Based on a survey of service entrepreneurs who launched their business in the city of Shanghai, we show that roles played by each dimension are quite different. A large local size of the network increases the chances of survival of the new venture. However, the chance to become a dynamic venture is only related to entrepreneurs’ preferential attachment degree. This finding has relevant political and managerial implications.
    Keywords: social capital, networks, innovation, entrepreneurship
    Date: 2012–09
  5. By: Tamás Sebestyén (Department of Economics and Regional Studies, University of Pécs); Attila Varga (Department of Economics and Regional Studies, University of Pécs)
    Abstract: This paper estimates the impact of interregional knowledge flows on the productivity of research at the regional level. We develop the novel index of ’ego network quality’ in order to measure the value of knowledge that can be accessed from a particular region’s global knowledge network. Quality of interregional knowledge networks is related to the size of knowledge accumulated by the partners (‘knowledge potential’), the extent of collaboration among partners (‘local density’) and the position of partners in the entire knowledge network (‘global embeddedness’). Ego network quality impact on the productivity of research in scientific publications and patenting at the regional level is tested with co-patenting and EU Framework Program collaboration data for 189 European NUTS 2 regions.
    Keywords: patents, scientific publications, knowledge networks, R&D productivity, regional knowledge production function, European regions
    JEL: O33 R11 R58
    Date: 2012–06
  6. By: Ghani, Ejaz; Kerr, William R.; O'Connell, Stephen D.
    Abstract: Policy makers in both developed and developing countries want to make cities more competitive, attract entreprepreneurs, boost economic growth, and promote job creation. The authors examine the spatial location of entrepreneurs in India in manufacturing and services sectors, as well as in the formal and informal sectors, in 630 districts spread across 35 states/union territories. They quantify entrepreneurship as young firms that are less than three years old, and define entry measures through employment in these new establishments. They develop metrics that unite the incumbent industrial structures of districts with the extent to which industries interact through the traditional agglomeration channels. The two most consistent factors that predict overall entrepreneurship for a district are its education and the quality of local physical infrastructure. These patterns are true for manufacturing and services. These relationships are much stronger in India than those found for the United States. The authors also find strong evidence of agglomeration economies in India's manufacturing sector. This influence is through both traditional Marshallian economies like a suitable labor force and proximity to customers and through the Chinitz effect that emphasizes small suppliers. India's footprints in structural transformation, urbanization, and manufacturing sector are still at an early stage. At such an early point and with industrial structures not yet entrenched, local policies and traits can have profound and lasting impacts by shaping where industries plant their roots.
    Keywords: Microfinance,Labor Markets,Labor Policies,Private Participation in Infrastructure,Small Scale Enterprise
    Date: 2012–09–01
  7. By: Arnaldo Camuffo (Department of Management, Bocconi University); Fabrizio Gerli (Department of Management, Università Ca' Foscari Venezia)
    Abstract: Developing existing literature on Lean Thinking as a management system and a dynamic capability, this study investigates the management behaviors and competencies associated with successful processes of lean transformation. We applied non-parametric statistical analysis to an original dataset coming from field research on 26 processes of lean transformation in North Italian small and medium manufacturing enterprises and tested if a repertoire of lean management behaviors drawn from the literature captures the essence of management in lean production environments. We found that these behaviors actually correlate with the degree of advancement of the lean transformation process and that managers of lean firms are particularly focused on the development of standards, have wider responsibilities and extended assignments, act more responsibly, pay more attention to the horizontal flow of value along the whole supply chain, evaluate performance referring to the state of the organizational processes rather than on end of year results, and conceive their role as that of a teacher. Research implications are drawn about the evolution of lean management and its relationship with organization and management theory. Insights are provided on how lean practitioners ought to integrate systematically management behaviors into the design of lean transformation processes.
    Keywords: Lean thinking, Management behaviors, Toyota production system, Dynamic capabilities, Routines, Competencies
    JEL: M10 M11 L23
    Date: 2012–08
  8. By: Sangyub Ryu (International University of Japan)
    Abstract: The literature has found that there is a link between an organization's environment and its performance. Some organizational theorists argue that management plays only a marginal role in this link. The present study objects to this argument. The literature on public management has observed that stability in an administrative system and collaborative networking with external actors can manage environmental influences. In an emergency context, public management literature has given more emphasis on collaborative networking than stability due to the need for timely application. Focusing on the role of collaborative networking in the environmentperformance link in an emergency context, this study examined the negative influences of Hurricane Rita on organizational performance. Furthermore, this study investigated how collaborative networking with emergency-relevant actors moderates the negative relationship. From Texas school district data, it was found that days of school closure due to Hurricane Rita (environmental shocks) lowered the overall students' academic achievement (organizational performance), but superintendents' regular meetings with external actors in preparation for emergencies (collaborative networking) moderated the decrease in students' academic performance. The findings of this study support the proposition that management matters to organizational performance.
    Keywords: collaborative networking, public management, emergency management, organizational performance
    Date: 2012–09
  9. By: Hoorn, André van (Groningen University)
    Abstract: We study the cultural foundations of management practices, which are increasingly recognized as important determinants of firm performance. This research closes the loop on two developing literatures, one seeking cultural explanations for economic development and the other seeking to account for differences in firm performance from differences in how firms are managed. Theoretically, we expect individualist culture to improve management practices because it formalizes the labor relation. Results show higher individualism is strongly associated with more sophisticated management practices. Several robustness checks confirm our findings and using historical presence of pathogens as an instrument affirms the causal effect of culture on management practices. In a direct test, culture is a much more important determinant of management practices than are key formal institutions. This evidence moves us forward in opening up the black box of culture-performance linkages, helping us to understand better the channels through which culture can affect economic prosperity.
    Date: 2012
  10. By: Olga Kokshagina (CGS - Centre de Gestion Scientifique - Mines ParisTech, ST-CROLLES - STMicroelectronics (Crolles) - STMicroelectronics); Pascal Le Masson (CGS - Centre de Gestion Scientifique - Mines ParisTech); Benoit Weil (CGS - Centre de Gestion Scientifique - Mines ParisTech); Patrick Cogez (ST-CROLLES - STMicroelectronics (Crolles) - STMicroelectronics)
    Abstract: This work deals with strategies of risk management techniques in projects and portfolios in the situation of radical innovation. Existing literature suggests different methods of risk management at the level of 1) projects (S1) (unknown reduction by selecting a priori the less uncertain projects, depending on the identified market and technological risk) 2) portfolio (S2) (consists in using an existing platform core to construct several options. This strategy increases chances to succeed by increasing the size of the sample, maximizing the total economic value of the portfolio of derivatives). These methods consider different level of uncertainties and are independent from each other. We will show that there exists another strategy (S3) of working on "common unknown" of multiple options but its managerial implementation is not obvious. By testing the proposed framework in two cases of Advanced R&D (explorative phase of new technologies development for unknown markets with fixed budget) in semiconductor industry, we compare identified S3 strategy with existing S1' lead by S2'. The paper demonstrates that management of "common unknown" is possible and could be implemented in the context of largely unknown exploration. The proposed strategy of working on common unknown opens a new way to portfolio risk management in the context of radical innovation. Using S3 framework of knowledge gap identification to construct common unknown core, company can build its innovative capabilities through knowledge management and better position to innovate in emerging fields.
    Keywords: Risk management, uncertainty, common unknown, project portfolio, platform core, platform derivatives
    Date: 2012–06–17
  11. By: Ronald W. Anderson; M. Cecilia Bustamante; Stéphane Guibaud
    Abstract: We study managerial incentive provision under moral hazard in a firm subject to stochastic growth opportunities. In our model, managers are dismissed after poor performance, but also when an alternative manager is more capable of growing the firm. The optimal contract may involve managerial entrenchment, such that growth opportunities are foregone after good performance. Firms with better growth prospects have higher managerial turnover and more front-loaded compensation. Firms may pay severance to incentivize their managers to report truthfully the arrival of growth opportunities. By ignoring the externality of the dismissal policy onto future managers, the optimal contract implies excessive retention.
    Date: 2012–09
  12. By: Surafel Girma; Yundan Gong; Holger Görg; Sandra Lancheros
    Abstract: We examine the role of foreign ownership structure in stimulating technology and skill upgrading, and exporting in Chinese manufacturing firms that were taken over by foreign owners. The analysis considers the period 2001 to 2007. We use a propensity score reweighted least squares estimation to control for the possible endogeneity of the acquisition decision. Our results indicate that there are strong effects on export activity post-acquisition for all types of ownership share. We also find that targets that are taken over with a less than 100 per cent foreign ownership share experience increases in new product development and R&D upgrading due to the acquisition. Overall, our results suggest that joint ventures between foreign owners and Chinese firms can contribute positively to China’s “science and technology take-off”
    Keywords: Chinese manufacturing
    JEL: O14
    Date: 2012–08
  13. By: Konstantins Benkovskis; Julia Wörz
    Abstract: We analyse EMEs global competitiveness whereby we explicitly take account of non-price aspects of competitiveness building on the methodology developed in Feenstra (1994) and Broda and Weinstein (2006) and the extension provided in Benkovskis and Wörz (2012). We construct an export price index which adjusts for changes in the set of competitors (variety) and changes in non-price factors (quality in a broad sense) for a set of nine large emerging economies (Argentina, Brazil, Chile, China, India, Indonesia, Mexico, Russia and Turkey). We use a highly disaggregated data set at the detailed 6-digit HS level over the period 1999-2010. In contrast to the conclusions based on the CPI-based real effective exchange rate we find that there are rather pronounced differences between individual markets. As a first and important result, China shows a huge gain in international competitiveness due to non-price factors thus suggesting that the role of Renminbi undervaluation for China’s competitive position may be overstressed. The strong improvements in Russia's non-price competitiveness are exclusively due to developments in the oil sector as are the competitive losses observed for Argentina and Indonesia. Further, Brazil, Chile, India, and Turkey show discernible improvements in their competitive position when accounting for non-price factors while Mexico's competitiveness has deteriorated regardless of the index chosen.
    Keywords: non-price competitiveness, quality, relative export price, emerging countries
    JEL: C43 F12 F14 L15
    Date: 2012–08
  14. By: Claudio Ferrari; Olaf Merk; Anna Bottasso; Maurizio Conti; Alessio Tei
    Abstract: This paper studies the impact of port activity on regional employment, analysing approximately 560 western European regions, including the largest OECD European ports (116 ports), from 2000-06. The empirical analysis is based on a set of employment equations using the Blundell and Bond (1998) GMM-System estimator that takes into account persistence effects in employment, regional unobserved time-invariant heterogeneity and endogeneity of port activity.<P> Our main findings are (1) regional employment is positively correlated to port throughput, while the number of passengers is not; (2) the impact of port throughput on employment might depend on the institutional characteristics of each port, with private ports having the largest impact on regional employment of the host region if compared with those operating under different governance models (“Hanseatic”, “Latin”); (3) there is a higher impact of port throughput when liquid bulk is not considered; and (4) the main results are confirmed when service and manufacturing employment rather than total employment are considered.
    Keywords: transportation, ports, regional development, regional growth
    JEL: H54 L91 O47 R11 R41
    Date: 2012–09–11
  15. By: McKenzie, David; Woodruff, Christopher
    Abstract: Business training programs are a popular policy option to try to improve the performance of enterprises around the world. The last few years have seen rapid growth in the number of evaluations of these programs in developing countries. This paper undertakes a critical review of these studies with the goal of synthesizing the emerging lessons and understanding the limitations of the existing research and the areas in which more work is needed. It finds that there is substantial heterogeneity in the length, content, and types of firms participating in the training programs evaluated. Many evaluations suffer from low statistical power, measure impacts only within a year of training, and experience problems with survey attrition and measurement of firm profits and revenues. Over these short time horizons, there are relatively modest impacts of training on survivorship of existing firms, but stronger evidence that training programs help prospective owners launch new businesses more quickly. Most studies find that existing firm owners implement some of the practices taught in training, but the magnitudes of these improvements in practices are often relatively modest. Few studies find significant impacts on profits or sales, although a couple of the studies with more statistical power have done so. Some studies have also found benefits to microfinance organizations of offering training. To date there is little evidence to help guide policymakers as to whether any impacts found come from trained firms competing away sales from other businesses versus through productivity improvements, and little evidence to guide the development of the provision of training at market prices. The paper concludes by summarizing some directions and key questions for future studies.
    Keywords: Financial Literacy,Primary Education,Access&Equity in Basic Education,Education For All,Competitiveness and Competition Policy
    Date: 2012–09–01
  16. By: Ferguson, Shon (Research Institute of Industrial Economics (IFN)); Formai, Sara (Bank of Italy)
    Abstract: The theory of the firm 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 contract enforcement institutions determine international trade patterns. We find that the benefits of judicial quality for the exports of contract-intense goods are more muted in industries that have a greater propensity towards vertical integration arrangements with input suppliers. We show that our results are not driven by primitive industry characteristics. Our results confirm the role of judicial quality 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; Vertical Integration
    JEL: D23 F10 F14 L22 L23
    Date: 2012–09–11
  17. By: Tsuyoshi Toshimitsu (School of Economics, Kwansei Gakuin University)
    Abstract: This paper first presents the optimal conditions for strategic R&D investment policy in the cases of noncooperative and cooperative R&D investment policies with international rivalry. Then we deal with a model of strategic product (i.e., quality-improving) R&D investment competition. In particular, we analyze an optimal R&D investment policy with regard to the two cases in the presence of demand spillover effects associated with improving the quality of a product. We show how optimality depends on the strength of demand spillover effects. We also consider the same problems assuming heterogeneous consumers and alternative utility functions.
    Keywords: strategic R&D investment policy; quality choice; international rivalry; demand spillover effects
    JEL: F12 F13 L13
    Date: 2012–09
  18. By: Olaf Merk; Thai Thanh Dang
    Abstract: Port efficiency is an important indicator of port performance; more efficient ports lower transportation costs and facilitate imports and exports of a country. Despite the importance of the subject, the exisiting port efficiency studies have almost exclusively focused on container ports. This Working Paper aims to fill that gap by calculating efficiency scores of world ports per cargo type (containers, oil, coal, iron ore and grain). These calculcations have been made using a database constructed for this purpose. Several findings can be derived from these calculations. Significant improvements can be made when the technical efficiency of ports is increased. Among the sample, gaps between terminal efficiency mostly reflected gaps in pure technical efficiency. When comparing the level of efficiency achieved by ports across commodities, technical gaps were more marked for container and oil terminals. Promoting policies to raise throughput levels in order to minimise production scale inefficiencies is another important area for improvement. Production scale inefficiencies arise when throughput levels are below or above optimal levels given the current capacity of terminal infrastructure. Such inefficiencies were mostly found in a substantial number of ports handling crude oil and iron ore, suggesting that efficiency is more sensitive and driven by exogenous factors related to traffic flows. The analysis also shows that the size of ports matters for port efficiency. The crude oil, iron-ore and grain ports have higher efficiency scores at larger total port size, suggesting that this size is more efficient because they can drive technological development. Finally, there are regional patterns emerging across commodities. Terminals in China are among the most efficient in handling coal bulk and containers with terminals in Southeast Asia. By contrast, the most efficient grain and iron-ore terminals are located in Latin America, and the most efficient crude-oil transhipment terminals are mostly found in the Gulf region. Further, Australia is also found to perform well in handling coal bulk and grains.
    Keywords: transportation, ports, port efficiency
    JEL: L91 R11 R41
    Date: 2012–09–13

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.