nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2012‒10‒06
nineteen papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. How can firm benefit from access to knowledge-intensive producer services? By Johansson , Börje; Lööf , Hans; Nabavi, Pardis
  2. The heterogeneity of the development process of new technology-based firms By Ugo Rizzo; Francesco Nicolli; Laura Ramaciotti
  3. The Evolving Domain of Entrepreneurship Research By Carlsson, Bo; Braunerhjelm, Pontus; McKelvey, Maureen; Olofsson , Christer; Persson , Lars; Ylinenpää, Håkan
  4. A primer on R&D cooperation among firms By Marco Marinucci
  5. The Role of Leading Firms in the Evolution of SMEs Clusters: Evidence from the Leather Products Cluster in Florence By Mauro Lombardi; Filippo Randelli
  6. Agency, Firm Growth and Managerial Turnover By Anderson, Ronald W.; Bustamante, Maria Cecilia; Guibaud, Stéphane
  7. The Role of Proximity to Universities for Corporate Patenting - Provincial Evidence from China By Wan-Hsin Liu
  8. To what extent are knowledge-intensive business services contributing to manufacturing? A subsystem analysis By Daria Ciriaci; Daniela Palma
  9. Does size or age of innovative firms affect their growth persistence? -Evidence from a panel of innovative Spanish firms- By Daria Ciriaci; Pietro Moncada-Paternò-Castello; Peter Voigt
  10. AD/HD Symptoms and Entrepreneurship Intentions By Verheul, I.; Block, J.H.; Burmeister-Lamp, K.; Thurik, A.R.; Tiemeier, H.; Turturea, R.
  11. The study of stakeholder management as way to understand the consequences of economic crisis in the banking sector By Andrea Pérez Ruiz; Ignacio Rodríguez del Bosque
  12. Non-price competitiveness of exports from emerging countries By Benkovskis, Konstantins; Wörz, Julia
  13. The agglomeration of R&D labs By Gerald A. Carlino; Robert M. Hunt; Jake K. Carr; Tony E. Smith
  14. Innovation and spatial inequality in Europe and USA By Lee, Neil; Rodríguez-Pose, Andrés
  15. Efficient Estimation of Approximate Factor Models By Bai, Jushan; Liao, Yuan
  16. Standards and Intellectual Property Management Strategy and Policy (Japanese) By AOKI Reiko; ARAI Yasuhiro; TAMURA Suguru
  17. A note on the links between manufacturing, goods and services exports By Damien Broussolle
  18. Antidumping and Market Competition: Implications for Emerging Economies By Chad P. Bown; Rachel McCulloch
  19. Political Risk, Institutions and Foreign Direct Investment: How Do They Relate in Various European Countries? By Vladimír Benácek; Helena Lenihan; Bernadette Andreosso-O’Callaghan; Eva Michalíková; Denis Kan

  1. By: Johansson , Börje (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); 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 empirically examines how systematic differences in firm productivity can be explained by a firm’s cumulated internal knowledge and access to external knowledge in its environment. To capture this conjunction of internal and external knowledge we use information about 5,000 Swedish firms in 290 municipalities and 72 functional regions and we use detailed information about individual firms’ accessibility to knowledge-intensive producer services. In addition, we observe the long-run frequency of R&D and innovation engagement for all these firms through 74.000 patent applications and three Community Innovation Surveys. Our panel data estimates for the period 1997-2008, suggest that only firms which commit themselves to accumulation of internal knowledge benefit from being located in places with a large mass of external knowledge. We also find strong evidence that innovators are more productive than other firms across all locations.
    Keywords: Innovation; Spillovers; Accessibility; Productivity; Patent; Community Innovation Survey
    JEL: C23 O31 O32
    Date: 2012–09–26
  2. By: Ugo Rizzo; Francesco Nicolli; Laura Ramaciotti
    Abstract: This work investigates the variety of development processes of start up firms in a regional setting. The existing literature on entrepreneurship lacks accurate analysis of the processes that lead an idea of business to become an established firm. The present paper moves one step towards filling this gap by dynamically investigating the process development of a self-contained population of 78 new technology based firms (NTBFs) in the North Italian region of Emilia-Romagna. By clustering the firms in similar organisational configurations at three different points in time, the results show that it is possible to observe that firms develop along different, sometimes overlapping paths. Our findings contributes to the understanding of the dynamics of the entrepreneurial process and lead to important policy implications.
    Keywords: Entrepreneurship; Firm development process; New technology-based firms; Start-ups; Regional policies; Cluster analysis
    JEL: L26 L53 O32 O38
    Date: 2012–09–22
  3. By: Carlsson, Bo (Case Western Reserve University, Weatherhead School of Management, Department of Economics); Braunerhjelm, Pontus (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); McKelvey, Maureen (RIDE and Institute of Innovation and Entrepreneurship); Olofsson , Christer; Persson , Lars; Ylinenpää, Håkan
    Abstract: Research on entrepreneurship has flourished in recent years and is evolving rapidly. This paper explores the history of entrepreneurship research, how the research domain has evolved, and its current status as an academic field. The need to concretize these issues stems partly from a general interest to define the current research domain, partly from the more specific tasks confronting the prize committee of the Global Award for Entrepreneurship Research. Entrepreneurship has developed in many sub-fields within several disciplines - primarily economics, management/business administration, sociology, psychology, economic and cultural anthropology, business history, strategy, marketing, finance, and geography - representing a variety of research traditions, perspectives, and methods. We present an analytical framework that organizes our thinking about the domain of entrepreneurship research, by specifying elements, levels of analysis and the process/context. An overview is provided of where the field stands today and how it is positioned relative to the existing disciplines and new research fields upon which it draws. Areas needed for future progress are highlighted, particularly the need for a rigorous dynamic theory of entrepreneurship that relates entrepreneurial activity to economic growth and human welfare. Moreover, applied work based on more careful design as well as on theoretical models yielding more credible and robust estimates seems also highly warranted.
    Keywords: Entrepreneurship; innovation; evolution; inter-disciplinary
    JEL: B53 L10 L26 O30
    Date: 2012–09–26
  4. By: Marco Marinucci (Banca d'Italia)
    Abstract: This paper provides an introduction to the economic analysis of R&D cooperation among firms. Basing on some stylized facts, we survey the relevant theoretical literature in order to discuss the benefits and the costs that firms face when they cooperate in R&D. We then analyze the pros and the cons of R&D cooperation from a policy-making perspective. We find that R&D cooperation is usually considered welfare improving and can be promoted by several policies. Finally, we discuss paths of research not yet taken in the theoretical literature.
    Keywords: R&D Cooperation, R&D spillovers, Welfare, Innovation
    JEL: O30 L40 L24
    Date: 2012–09
  5. By: Mauro Lombardi (Università degli Studi di Firenze,); Filippo Randelli
    Abstract: Clusters that emerged in the past have changed during the latest decades, so that today the research challenge in economic geography is on their evolution over time. The aim of this paper is to update on the evolutionary path of SMEs Italian clusters, which faced with the economic crisis are undergoing a process of decline in the number of firms. Furthermore changes in the techno-economic landscape and in the competitive environment have generated new challenges. In this context, some leading firm, able to connect local resources (and firms) to global networks, have emerged over time. We argue that within SMEs clusters, the leading firms act as a gatekeeper, linking local networks to global markets. The focus will be on local networks interacting with leading firms and particular attention will be devoted to the pattern of co-evolution and to the geographical dimension of this co-evolutionary process. To empirically verify if others firms in the cluster may co-evolve with the leading firm over time, a deep analysis of the Gucci network in the leather products cluster in Florence will be carried out.
    Keywords: cluster evolution, Italian SMEs clusters, network of firms, coevolution
    JEL: L22 L67 R11 R12
    Date: 2012
  6. By: Anderson, Ronald W.; Bustamante, Maria Cecilia; Guibaud, Stéphane
    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.
    Keywords: agency; compensation policy; firm growth; managerial turnover; optimal contracting; severance pay
    JEL: G30 G35
    Date: 2012–09
  7. By: Wan-Hsin Liu
    Abstract: This paper investigates whether proximity to universities matters for corporate patenting in Chinese provinces. The investigation is based on estimating regional knowledge production functions using a Chinese provincial dataset for the years from 2000 to 2008. Geographic proximity of companies to universities is taken as a key element to measure firms’ accessibility to university research. In addition, quality-adjusted accessibility measures are considered in extended models to take into account quality difference in university research. The results suggest the existence of spatial academic effects on corporate patenting activities in China as found in the previous literature for Western economies. In China, however, these effects are especially strong for realising technologically less demanding non-invention corporate patents than for invention corporate patents. Moreover, companies’ geographic proximity to universities dominates over university research quality difference for determining the relevance of universities as knowledge sources for companies. Extended models are estimated for robustness checks which ascertain the main results
    Keywords: spatial proximity, logsum accessibility, university, corporate patenting, China
    JEL: O31 O53 R11
    Date: 2012–09
  8. By: Daria Ciriaci (JRC-IPTS); Daniela Palma (ENEA)
    Abstract: The rise of knowledge-intensive business services (KIBS) may be considered as one of the decisive trends of economic evolution of industrialised countries in recent decades. This paper uses the concept of vertical integrated sectors and the subsystem approach to input-output matrix analysis to study the vertical integration of knowledge-based business services into manufacturing sectors. To date, companies increasingly rely on outside innovation for new products and processes and have become more active in licensing and selling results of their innovation to third parties. At the same time, they may rely on the marketing and financial consulting offered by third parties. As a consequence, considering manufacturing and KIBS as vertically inter-related sectors, the hypothesis of a virtuous circle can be expressed in the following way: the higher the degree of integration between KIBS and manufacturing sectors along what we could define as a ‘knowledge-based value chain’, the easier the knowledge diffusion and the competitiveness of the economic system as a whole. The study covers Germany, France, Italy, and the United Kingdom over the period 1995-2005. Results decisively support both the existence of structural differences among the countries considered, and a significant heterogeneity to the extent to which manufacturing outsources to knowledge-intensive business services.
    Keywords: Knowledge-intensive business services; subsystem approach; input-output analysis; knowledge diffusion
    JEL: L60 L84 O33 O32 P00
    Date: 2012–07
  9. By: Daria Ciriaci (JRC-IPTS); Pietro Moncada-Paternò-Castello (JRC-IPTS); Peter Voigt (Institut d'Economia de Barcelona, IEB)
    Abstract: This study examines serial correlation in employment, sales and innovative sales growth rates in a balanced panel of 3,300 Spanish firms over the years 2002-2009, obtained by matching different waves of the Spanish Encuesta sobre Innovacion en las Empresas, the Spanish innovation survey conducted annually by the Spanish National Statistics Institute (INE). The main objective is to verify whether the changes (increase/decrease) in these figures are persistent over time, whether such persistence (if any) differs between SMEs and larger firms, and if it is affected by a firm's age. To do so, we adopted a semi-parametric quantile regression approach. This methodology is well suited to cases where outliers (high-growth firms) are the subject of investigation and/or when they have to be assumed as being very heterogeneous. Empirical results indicate that among those innovative firms experiencing high employment growth, the smaller and younger grow faster than larger firms, but the jobs they create are not persistent over time. However, while being smaller and younger helps growing more in terms of employment and sales, it is not an advantage when innovative sales growth is considered: in this case larger firms experience faster growth.
    Keywords: Serial correlation; quantile regression model; Spanish firms; firm size, firm age; job creation; fast growing firms
    JEL: L11 L25
    Date: 2012–09
  10. By: Verheul, I.; Block, J.H.; Burmeister-Lamp, K.; Thurik, A.R.; Tiemeier, H.; Turturea, R.
    Abstract: This study examines the relationship between AD/HD symptoms and entrepreneurship intentions in a sample of 13,121 students in higher education. We show that the degree to which students experience AD/HD symptoms increases the likelihood of intending to start up a business directly after completion of their studies. We also find evidence of partial mediation for two salient motives for entrepreneurship: students with AD/HD symptoms place a relatively high value on independence and innovation, partly explaining their preference for an entrepreneurial career.
    Keywords: entrepreneurship;innovation;AD/HD;career intentions;independ
    Date: 2012–09–01
  11. By: Andrea Pérez Ruiz; Ignacio Rodríguez del Bosque
    Abstract: Financial recessions strengthen the importance businesses give to corporate social responsibility (CSR) in order to enhance credibility and reputation. The multiple case study presented herein aims at disclosing the role of CSR in the current strategic management of banking institutions in Spain. Some of the companies in this country are world leaders and their study can help other international businesses to implement successful corporate strategies. The analysis draws on the theoretical perspective of stakeholder management theory and focuses on practical activities of different kinds of banking institutions to address how they manage their CSR policies. The findings demonstrate that a strategic approach to CSR, derived from a special significance given to customers and employees in the management of stakeholders, leads to profitable CSR policies. This idea underscores the connection between profit maximization and stakeholder management which accounts for the current robustness of banks in the marketplace. Other institutions developing CSR strategies around social stakeholders have encountered solvency and cash-flow problems which have seriously modified the national marketplace.
    Keywords: Responsabilidad social corporativa, grupos de interés, entidades bancarias, estudio de casos
    JEL: M3
    Date: 2012–09
  12. By: Benkovskis, Konstantins (BOFIT); Wörz, Julia (BOFIT)
    Abstract: This analysis of global competitiveness of emerging market economies accounts for non-price aspects of competitiveness. Building on the methodology pioneered by Feenstra (1994) and Broda and Weinstein (2006), we construct an export price index that adjusts for changes in the set of competitors (variety) and changes in non-price factors (quality in a broad sense) for nine emerging economies (Argentina, Brazil, Chile, China, India, Indonesia, Mexico, Russia and Turkey). The highly disaggregated dataset covers the period 19992010 and is based on the standardized 6-digit Harmonized System (HS). Unlike studies that use a CPI-based real effective exchange rate, our method highlights notable differences in non-price competitiveness across markets. China shows a huge gain in international competitiveness due to non-price factors, suggesting that China critics may be overstressing the role of renminbi undervaluation in explaining China’s competitive position. Oil exports account for strong improvement in Russia’s non-price competitiveness, as well as the modest losses of competitiveness for Argentina and Indonesia. Brazil, Chile, India and Turkey show discernible improvements in their competitive position when accounting for non-price factors. Mexico’s competitiveness deteriorates regardless of the index chosen.
    Keywords: non-price competitiveness; quality; relative export price; emerging countries
    JEL: C43 F12 F14 L15
    Date: 2012–09–24
  13. By: Gerald A. Carlino; Robert M. Hunt; Jake K. Carr; Tony E. Smith
    Abstract: We study the location of more than 1,000 research and development (R&D) labs located in the Northeast corridor of the U.S. Using a variety of spatial econometric techniques, we find that these labs are substantially more concentrated in space than the underlying distribution of manufacturing activity. Ripley’s K-function tests over a variety of spatial scales reveal that the strongest evidence of concentration occurs at two discrete distances: one at about one-quarter of a mile and another at about 40 miles. We also find that R&D labs in some industries (e.g., chemicals, including drugs) are substantially more spatially concentrated than are R&D labs as a whole. ; Tests using local K-functions reveal several concentrations of R&D labs that appear to represent research clusters. We verify this conjecture using significance maximizing techniques (e.g., SATSCAN) that also address econometric issues related to “multiple testing” and spatial autocorrelation. ; We develop a new procedure for identifying clusters – the multiscale core-cluster approach, to identify labs that appear to be clustered at a variety of spatial scales. Locations in these clusters are often related to basic infrastructure such as access to major roads. There is significant variation in the industrial composition of labs across these clusters. ; The clusters we identify appear related to knowledge spillovers: Citations to patents previously obtained by inventors residing in clustered areas are significantly more localized than one would predict from a (control) sample of otherwise similar patents. ; This paper supersedes Working Papers 10-33 and 11-42.
    Keywords: Research and development
    Date: 2012
  14. By: Lee, Neil; Rodríguez-Pose, Andrés
    Abstract: Innovation is a crucial driver of urban and regional economic success. Innovative cities and regions tend to grow faster and have higher average wages. Little research, however, has considered the potential negative consequences: as a small body of innovators gain relative to others, innovation may lead to inequality. The evidence on this point is fragmented, based on cross-sectional evidence on skill premia rather than overall levels of inequality. This paper provides the first comparative evidence on the link between innovation and inequality in a continental perspective. Using micro data from population surveys for European regions and US Cities, the paper finds, after controlling for other potential factors, good evidence of a link between innovation and inequality in European regions, but only limited evidence of such a relationship in the United States. Less flexible labour markets and lower levels of migration seem to be at the root of the stronger association between innovation and income inequality in Europe than in the US.
    Keywords: Cities; European Union; Inequality; Innovation; Regions; United States
    JEL: D31 O31 R13
    Date: 2012–09
  15. By: Bai, Jushan; Liao, Yuan
    Abstract: We study the estimation of a high dimensional approximate factor model in the presence of both cross sectional dependence and heteroskedasticity. The classical method of principal components analysis (PCA) does not efficiently estimate the factor loadings or common factors because it essentially treats the idiosyncratic error to be homoskedastic and cross sectionally uncorrelated. For the efficient estimation, it is essential to estimate a large error covariance matrix. We assume the model to be conditionally sparse, and propose two approaches to estimating the common factors and factor loadings; both are based on maximizing a Gaussian quasi-likelihood and involve regularizing a large covariance sparse matrix. In the first approach the factor loadings and the error covariance are estimated separately while in the second approach they are estimated jointly. Extensive asymptotic analysis has been carried out. In particular, we develop the inferential theory for the two-step estimation. Because the proposed approaches take into account the large error covariance matrix, they produce more efficient estimators than the classical PCA methods or methods based on a strict factor model.
    Keywords: High dimensionality; unknown factors; principal components; sparse matrix; conditional sparse; thresholding; cross-sectional correlation; penalized maximum likelihood; adaptive lasso; heteroskedasticity
    JEL: C31 C33 C01
    Date: 2012–09
  16. By: AOKI Reiko; ARAI Yasuhiro; TAMURA Suguru
    Abstract: Strategic technology standardization and management of related intellectual property have become a worldwide phenomenon. Japan is no exception as stressed in policy documents such as the "Industrial Structure Vision 2010" and the "Intellectual Property Promotion Plan 2011". In the first part of this paper, we construct a framework to analyze strategic standard and intellectual property management, focusing on network effects, switching costs and multi-tasking. We categorize several examples according to conditions such as the position in the vertical market structure (upstream, downstream) and the existence and ownership of complementary goods or technologies. Using the framework, we characterize the economic implications of strategic decisions such as open-closed and pricing. In the second half of the paper, we use a survey of standard and patent lengths to understand the relationship between the length of patent protection and standard longevity. While patent length is legally determined, the life of a standard is determined endogenously by firm strategy and industry interaction. We present a framework to measure the two on a common technology lifetime line and derive policy implications.
    Date: 2012–09
  17. By: Damien Broussolle (LaRGE Research Center, Université de Strasbourg)
    Abstract: The paper deals with the links between goods and services exports. First it explains the reasons why services exports are presumably connected with manufacturing exports and altogether to goods exports. The paper scruti-nises the various headings of the services account of the BOP. It points out that firms, whether manufacturing or services-producing tend to exports both goods and services. It then turns to the international division of labour and fragmentation process. Second the paper proposes statistical analyses based on time series of goods and services exports. The first one concerns annual one-digit headings for 13 developed countries. The last one pertains to quarterly data from 1994 to 2011 for 24 developed countries. Not surprisingly, the results tend to ascertain the complementa-rities of the two types of exports, with a correlation of around 60 %. This exploratory study however calls for future improvements and reconsidera-tions that could go beyond basic time series analysis.
    Keywords: services trade, international trade, goods & services exports.
    JEL: F14 L8
    Date: 2012
  18. By: Chad P. Bown (The World Bank); Rachel McCulloch (Department of Economics, Brandeis University)
    Abstract: While the original justification of the antidumping laws in the industrial economies was to protect domestic consumers against predation by foreign suppliers, by the early 1990s the laws and their use had evolved so much that the opposite concern arose. Rather than attacking anti-competitive behavior, dumping complaints by domestic firms were being used to facilitate collusion among suppliers and enforce cartel arrangements. This paper examines the predation and anti-competitiveness issues from the perspective of the “new users” of antidumping—the major emerging economies for which antidumping is now a major tool in the trade policy arsenal. We examine these concerns in light of important ways in which the world economy and international trading system have been changing since the early 1990s, including more firms and more countries participating in international trade, but also more extensive links among suppliers and consumers through multinational firm activity and vertical specialization.
    Keywords: Antidumping, Temporary trade barriers, Competition, Antitrust, WTO
    JEL: F13
    Date: 2012–08
  19. By: Vladimír Benácek (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic); Helena Lenihan (University of Limerick); Bernadette Andreosso-O’Callaghan (University of Limerick); Eva Michalíková (Brno University of Technology); Denis Kan (University of Limerick)
    Abstract: This paper examines theoretically and empirically the extent to which the decision by foreign firms to invest in a group of countries is influenced by economic factors, as opposed to political risk and institutional performance. We consider the importance of these factors as drivers of foreign direct investment (FDI) for 32 European countries (subsequently divided into three pooled clusters) by means of panel regression techniques in two specifications over the 1995-2008 period. Our results suggest that risk and institutional factors considered in both static and dynamic perspectives significantly influence the behaviour of investors. Policies and institutions that vary widely between countries modify their decision-making, so that the purely economic factors have different statistical significance and impacts on the intensity of FDI, as was revealed by clustering countries into three groups according to levels of economic maturity. Additionally, not all factors of risk have an identical impact on FDI decisions in particular groups of countries. However, we find that as measures of political risk, monetary discipline, low regulation, effective government and good education prove to be highly significant for most country groupings. All of these measures reduce political risk and positively affect the level of FDI.
    Keywords: FDI; Political risk; Economic institutions; Panel regression; European Union
    JEL: F2 D81 C23
    Date: 2012–07

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