nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2012‒12‒10
fifteen papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. In the Need of Speed - The Impact of Organizational Learning on the Competitiveness of Born Transnationals By Joerg Freiling; Mareike K. Schmidt
  2. The Global Fragmentation of R&D Activities: The Home Region Perspective By Lorena M. D'Agostino; Grazia D. Santangelo
  3. Learning in MNCs: How subsidiary managers do (and do not) create global solutions By Esther Tippmann; Pamela Sharkey Scott; Vincent Mangematin
  4. Strategic Timing in R&D Agreements By Marco Marini; Maria Luisa Petit; Roberta Sestini
  5. Productivity growth and job creation in the development process of industrial clusters By Sonobe, Tetsushi; Higuchi, Yuki; Otsuka, Keijiro
  6. Research cooperation within and across regional boundaries. Does innovation policy add anything? By Alberto Marzucchi; Davide Antonioli; Sandro Montresor
  7. The evolution toward vagueness of industrial district concept and its impact on regional innovation policy By López-Estornell, Manuel; Tortajada Esparza, Enrique; Martinez-Chafer, l
  8. Assessing the determinants of Firms’ Competitiveness in Greece: A Structural Equation Modeling Analysis By Metaxas, Theodore; Economou, Athina
  9. Determinants of Greenfield Investment in Knowledge Intensive Business Services By Martin Falk
  10. Cross-Border Mergers and Greenfield Foreign Direct Investment By Ignat Stepanok
  11. 2013 Budget Initiatives to SMEs and Entrepreneurship in Sri Lanka By Dissanayake, D.M.N.S.W.
  12. Innovation, Exports and Productivity: Learning and Self selection in Chile By Claudio Bravo-Ortega; Jose Miguel Benavente; Álvaro González
  13. Changing the rules: Applying a more economic approach to dynamic telecom markets By Krancke, Jan; Vidal, Miguel; Fier, Andreas
  14. Credibility and Legitimacy in Policy-driven Innovation Networks: Resource dependencies and expectations in Dutch electric subsidies By Frank J. van Rijnsoever; Leon Welle; Sjoerd Bakker
  15. An investigation into medium-sized multinational enterprises By Musca, Maria; Schilirò, Daniele

  1. By: Joerg Freiling (University of Bremen - Faculty of Business Studies and Economics & ZenTra); Mareike K. Schmidt (University of Bremen - Faculty of Business Studies and Economics)
    Abstract: The globalization process stimulates more and more start-ups entering international markets at their earliest convenience. Supported by modern IT and logistics systems, this option is available for many ventures that become more and more independent from their country of origin. For transnational companies, as heterarchical networks without typical internal hub structures and a high degree of responsiveness, this holds particularly true. This is the reason why this paper focuses the 'born transnational' type of international entrepreneurship. The question arises how international ventures achieve international competitiveness. This paper argues that the pace and the alignment of processes of external and internal learning are of utmost importance. Knowledge generation, absorption, integration, and company-wide transfer play a pivotal role in this regard. Insofar, the research question of the paper is: What are the factors that accelerate organizational learning of 'born transnationals'? Based on competence-based theory and a particular model of organizational learning, the paper presents research propositions on the learning process of Ôborn transnationals'.
    Keywords: Transnational company, Born Transnational, Globalization, Start-ups, competence based theory of the firm, organizational learning
    JEL: D23 D29 D74 K12 K40 L22 M52
    Date: 2012–11
  2. By: Lorena M. D'Agostino; Grazia D. Santangelo
    Abstract: R&D offshoring has increasingly involved emerging countries as host locations and promoted a greater fragmentation of R&D activities across borders. As a result, a subtle international division of labor in knowledge production has yielded a fine-slicing of R&D activities with the highest valueadded activities located in the most advanced countries and the lowest value-added activities in emerging countries. However, no study, to our knowledge, has investigated whether finely sliced foreign R&D activities complement each other in terms of greater knowledge production at home. Drawing on a rich dataset, we estimate a regional knowledge production function and apply a direct complementarity test. Our results suggest that the global fragmentation of R&D activities produces synergic effects on the knowledge production of the home investing OECD regions when R&D activities are optimally rather than randomly located.
    Keywords: R&D fine-slicing; R&D optimal location; home region knowledge production; emerging countries
    Date: 2012
  3. By: Esther Tippmann (University College Dublin - University College Dublin); Pamela Sharkey Scott (Dublin Institute of Technology - Dublin Institute of Technology); Vincent Mangematin (MTS - Management Technologique et Strategique - Grenoble École de Management (GEM))
    Abstract: It is widely acknowledged in international business (IB) that the task of subsidiaries in multinational corporation (MNC) learning is to adapt, create and diffuse new knowledge. Departing from the common focus on the subsidiary's assigned mandate, this study takes a problemistic search perspective to explore subsidiary managers' actions in detail. A qualitative study was conducted into 38 solution finding processes employed in four subsidiaries. The paper's main contribution is a framework of subsidiary managers' roles in MNC learning, depicting how the framing of the problem influences knowledge search and solution finding activities, and how different activities result in learning at local and global levels. Further implications for MNC knowledge and organizational learning, the management of interdependencies and integration, and for economic geography literatures are discussed.
    Keywords: Multinational Corporations (MNCs) and Enterprises (MNEs); Organizational Learning; Knowledge Seeking Behavior, Knowledge Transfer and Innovation in MNCs/MNEs; Global Learning, Case Theoretic Approaches
    Date: 2012
  4. By: Marco Marini (Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza"); Maria Luisa Petit (Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza"); Roberta Sestini (Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza")
    Abstract: We present a model of endogenous formation of R&D agreements among firms in which also the timing of R&D investments is made endogenous. The purpose is to bridge two usually separate streams of literature, the endogenous formation of R&D alliances and the endogenous timing literature. This allows to consider the formation of R&D agreements over time. It is shown that, when both R&D spillovers and investment costs are sufficiently low, firms may find difficult to maintain a stable agreement due to the strong incentive to invest noncooperatively as leaders. In such a case, the stability of an R&D agreement requires that the joint investment occurs at the initial stage, thus avoiding any delay. When instead spillovers are sufficiently high, cooperation in R&D constitutes a profitable option, although firms also possess an incentive to sequence their investment over time. Finally, when spillovers are asymmetric and the knowledge mainly leaks from the leader to the follower, to invest as follower becomes extremely profitable, making R&D alliances hard to sustain unless firms strategically delay their joint investment in R&D.
    Keywords: R&D Investment; Spillovers; Endogenous Timing; R&D Alliances; Endogenous Research Cartels
    Date: 2012–07
  5. By: Sonobe, Tetsushi; Higuchi, Yuki; Otsuka, Keijiro
    Abstract: Poor management has long been suspected as a major constraint on job creation in the manufacturing sector in low-income countries. In this sector, countless micro and small enterprises in industrial clusters account for a large share of employment. This paper examines the roles of industrial clusters, managerial capacities, and entrepreneurship in improving productivity and creating jobs, by reviewing the literature and case studies, including recent experiments. It finds that managerial capacities are a major determinant of firms'employment sizes and productivity growth, and that it is high innovative capacities, accompanied by high managerial capacities, that boost cluster-based industrial development.
    Keywords: Labor Policies,Labor Markets,E-Business,Microfinance,Economic Theory&Research
    Date: 2012–11–01
  6. By: Alberto Marzucchi (Catholic University of Milan); Davide Antonioli (University of Ferrara); Sandro Montresor (JRC-IPTS)
    Abstract: The paper aims to show how policy makers can stimulate firms' cooperation with research organisations in innovation. We argue that the administration of an R&D subsidy can be effective. Furthermore, this should be more so for extra-regional than intra-regional cooperation. The firms' propensity to extend cooperation across the region is assumed to increase with the amount of support. However, the support must overcome a threshold, for firms to cover the fixed costs of distant interactions. These research hypotheses are tested with respect to a sample of firms in a region of Italy. Propensity score matching is applied to identify the impact of the subsidy receipt. A generalised propensity score technique is employed to investigate the effect of an increasing amount of support. All the hypotheses are not rejected. Firms' cooperation is policy sensitive, but the size of the support is crucial for its effects.
    Keywords: Industry-Research Cooperation, Regional Innovation Systems, Behavioural Additionality
    JEL: O32 O38 R11 R58
    Date: 2012–11
  7. By: López-Estornell, Manuel; Tortajada Esparza, Enrique; Martinez-Chafer, l
    Abstract: The paper discusses the development of the industrial district policy in Italy and the different roles of regions in its implementation, and provides an initial assessment of the relationship between regional districts and innovation policies. First, we provide an overview of Italian national legislation on industrial districts since 1991 and the changes that have resulted. Next, we examine the evolution of industrial district policy in Veneto, in the context of the Italian framework. The regional government implemented its industrial district policy in the late 1990s and it has yielded some results which deserve attention. Second, we look at the benefits and limitations of district policy governance in Veneto region and focus on the links between regional district and innovation policies. To achieve a first assessment of district preferences in terms of policy, the paper discusses the specific arrangements in five industrial districts in different sectors, and the support provided by regional government. Our findings show that innovation projects are of limited relevance in strategies of industrial districts. A recommendation for policy is that cluster initiatives should be aligned to the specific economic features of the territory. Problems arise when national governments and international organizations assume that ‘one size fits all’.
    Keywords: industrial district policy, innovation policy
    Date: 2012–11–29
  8. By: Metaxas, Theodore; Economou, Athina
    Abstract: The paper investigates the importance of territorial characteristics/assets (i.e. agglomeration economies, urban infrastructure, factors of labor and cost, development policies, qualitative factors, inter alia) on small- and medium-sized firms’ competitiveness. The analysis uses primary data from 204 small- and medium-sized firms located in Thessaloniki (Greece). These firms operate in the sectors of industry, commerce and services. Through the use of Structural Equation Modeling (SEM) analysis, the importance of particular factors for the competitiveness of firms has been analyzed, coming out in valuable conclusions not only for the firms and the city of Thessaloniki considered but also for firms and areas with similar characteristics in Greece and the wider area of Balkans.
    Keywords: firms’ competitiveness; territorial characteristics/assets; Structural Equation Modeling (SEM) analysis; Greece
    JEL: R50 O18 R11
    Date: 2012
  9. By: Martin Falk
    Abstract: This study investigates the determinants of bilateral Greenfield FDI projects and flows in knowledge intensive business services from OECD/BRIC countries to the EU countries for the period 2003-2010. Greenfield FDI projects are distinguished by type of activity: (i) business services, (ii) design, development and testing activities, (iii) headquarters activities and (iv) R&D services. Another aim of this study is to provide new empirical evidence on the patterns of Greenfield investments in knowledge intensive business services over time, source country and destination country. For Austria, the number of Greenfield investments in headquarter functions remains stable over time whereas Greenfield investments in R&D and related activities declined during the sample period. The same holds true for the number of jobs generated through greenfield investments. The results using panel count data models show that wage costs, tertiary education, corporate taxes, having a common border and sharing a common language all play a significant role in determining bilateral Greenfield FDI projects in knowledge intensive services. However, the impact of corporate taxation and labour costs differs widely across the functions and does not play a role in Greenfield investments in R&D and development, design and testing services.
    Keywords: Greenfield foreign direct investment, knowledge intensive business services, headquarter functions, R&D activities, gravity equation, panel data, FDI determinants
    JEL: F23
    Date: 2012–12
  10. By: Ignat Stepanok
    Abstract: I present a model of international trade and foreign direct investment (FDI), where FDI is comprised of greenfield FDI and mergers and acquisitions (M&A). Working in a monopolistically competitive environment, merging firms do not reduce competition. Mergers are motivated by efficiency gains and transfer of technology and expertise. Following empirical evidence, I model greenfield investors as the more productive group relative to M&A firms, which are in turn more productive than exporters. The model has two symmetric countries and generates two-way flows of both M&A and greenfield FDI. Greater proximity to a market makes more firms choose greenfield FDI over M&A when investing there. Empirical evidence supports this result
    Keywords: Foreign direct investment, mergers, acquisitions, greenfield, firm heterogeneity
    JEL: F12 F23
    Date: 2012–11
  11. By: Dissanayake, D.M.N.S.W.
    Abstract: This paper provides facts pertaining to Entrepreneurship in Sri Lanka and existing constraints on entrepreneurial initiatives. Perhaps most notably the author trying to suggest that inventions & innovations happen in Sri Lanka and absolutely it requires a certain support to proliferate entrepreneur’s business ideas from authoritative bodies. Finally, the author postulates recent budget proposals to enhance SME performances in Sri Lanka.
    Keywords: Entrepreneurship; SME; Sri Lanka
    JEL: L26
    Date: 2012–11–17
  12. By: Claudio Bravo-Ortega; Jose Miguel Benavente; Álvaro González
    Abstract: Since long ago economists have shown that research and development (R&D) and business innovation are key factors for the growth of firms and the development of the economies. There is also some consensus that greater degrees of trade openness are beneficial for the long-term growth of countries. Nonetheless, there is still no evidence on the combined impact of both factors even though the link between them seem of particular relevance, especially for developing countries. This article examines the relationship between productivity, expenditure in R&D and exports at a plant level for the case of Chile. The main results show that firms that actually spend on R&D are considerably more likely to export but the reverse is not true. Moreover, we observe that both R&D and exports have a joint effect on the improvement in productivity in the Chilean plants. These results allow us to recover the private return to R&D and to learning by exporting across different sectors.
    Date: 2012–12
  13. By: Krancke, Jan; Vidal, Miguel; Fier, Andreas
    Abstract: Traditionally, neoclassical economics has been the guiding framework in the development of legislative and regulatory rules in the telecommunication markets. The regulatory perspective has long assumed a static environment. However, telecommunication markets have evolved into extremely dynamic, innovative and technology-driven markets. At the same time, economic theory has moved well beyond simple, static concepts of neo-classical analysis. Inter alia, Schumpeterian Economics, Institutional Economics and modern Industrial Organization provide a broader framework more suitable to analyze modern telecom markets. Drawing on an extended theoretical baseline and on major industry trends, we propose a more comprehensive framework for telecom regulation - the new regulatory pentagon - based on the cornerstones competition, investment and innovation, convergence and platformization, macroeconomics and growth and, lastly, commitment and credibility. --
    Keywords: Telecommunications,Regulation,Network investments,Platforms,Innovation,Next generation networks
    Date: 2012
  14. By: Frank J. van Rijnsoever; Leon Welle; Sjoerd Bakker
    Abstract: The aim of this paper is to empirically examine the influence of different types of credibility on the legitimacy to grant individual actors within consortia an innovation subsidy. Theorizing from the viewpoint of resource dependence theory and the sociology of expectations, we hypothesize that four types of credibility are related to legitimacy: scientific credibility, market credibility, expectation track record, and social capital. We operate on two levels of analysis, the actor and the consortium. We quantitatively analyze the Dutch electric vehicle subsidy program as case. We develop a model that accurately forecasts which consortia are most likely to receive subsidies. We demonstrate that social capital and market credibility positively influence the likelihood of receiving innovation subsidies, while scientific credibility sources and expectation track record have a negative influence. Based on these findings we provide policy recommendations and avenues for further research.
    Keywords: Electric Vehicle Technology; Expectations; Resource Dependence Theory; Credibility; Legitimacy; Innovation Policy
    Date: 2012
  15. By: Musca, Maria; Schilirò, Daniele
    Abstract: The paper provides an investigation of medium-sized Italian industrial enterprises that have become multinational companies. It concetrates on the set of medium and medium-large enterprises who seem to grow more in foreign markets, either through exports or through foreign direct investment. The work also offers an empirical descriptive picture of the performance of medium-sized Italian multinationals, which is compared with the performance of large corporations. From this analysis, which is based on a number of sources, it is possible to outline a profile regarding the medium-size italian multinational enterprises, as to understand the complex strategy towards internationalization of these companies, where the dimension of production is important and, therefore, innovation has a key role. But where also the commercial dimension is crucial, because it leads to point to the direct supervision of foreign markets and to look very carefully to customers, offering them a wide range of services. Finally, the paper points out some critical issues that the medium sized multinational enterprises have to face to compete such as the stagnant productivity, the high taxation, the insufficient institutional support for internationalization, the bureaucracy and its high costs, the lack of skilled human capital available in the labor market due to inadequate policy training.
    Keywords: medium-sized Italian enterprises; multinational companies; innovation; internationalization
    JEL: L16 F23 O30 L10
    Date: 2012–10

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