nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2013‒02‒03
fourteen papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. Impact of external knowledge acquisition strategies on innovation – A comparative study based on Dutch and Swiss panel data By Spyros Arvanitis; Martin Wörter; Pierre Mohnen; Boris Lokshin
  2. Do Entrepreneurs Matter? By Becker, Sascha O.; Hvide, Hans K.
  3. (International) R&D Collaboration and SMEs: The effectiveness of targeted public R&D support schemes By LOPES BENTO Cindy; HOTTENROTT Hanna
  4. Absorptive capacity, innovation cooperation and human-capital. Evidence from 3 European countries By Chiara Franco; Alberto Marzucchi; Sandro Montresor
  5. A New Framework for Learning Approaches toward Social Evolution of Organizations By Kashefi, Mohammad Ali; Sanjaghi, Mohammad Ebrahim
  6. Internationalization choices: an ordered probit analysis at industry-level By Pietrovito, Filomena; Pozzolo, Alberto Franco; Salvatici, Luca
  7. Market value of the firms and R&D investment: Theoretical overview and empirical estimation for the panel of countries By Josheski, Dushko; Magdinceva-Sopova , Marija
  8. The internalization of SMEs operating in the engineering industry By Procházková, Lenka; Kubíčková, Lea
  9. Drivers of Firm Growth: Micro-evidence from Indian Manufacturing By Nanditha Mathew
  10. Determinants of export growth at the extensive and intensive margins : evidence from product and firm-level data for Pakistan By Reis, Jose Guilherme; Taglioni, Daria
  11. The Influence of Voluntary and Mandatory Environmental Performance on Financial Performance: An Empirical Study of Indonesian Firms By Kimitaka Nishitani; Nurul Jannah; Hardinsyah Ridwan; Shinji Kaneko
  12. Export market exit and firm survival: theory and first evidence By Sanne Hiller; Philipp J.H. Schroeder; Allan Sorensen
  13. Multi-sector partnerships for sustainable business development in Indonesia: the role of higher education By Huub Mudde; Dikky Indrawan; Idqan Fahmi
  14. Using interlocks as a corporate strategy: a descriptive analysis of the Spanish case. By Santiago Kopoboru

  1. By: Spyros Arvanitis (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Martin Wörter (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Pierre Mohnen (Maastricht University); Boris Lokshin (Maastricht University)
    Abstract: There is growing evidence that firms increasingly adopt open innovation practices. In this paper we investigate the impact of two such external knowledge acquisition strategies, ‘buy’ and ‘cooperate’, on firm’s product innovation performance. Taking a direct (productivity) approach, we test for complementarity effects in the simultaneous use of the two strategies, and in the intensity of their use. Our results based on large panels of Dutch and Swiss innovating firms, suggest that while both ‘buy’ and ‘cooperate’ have a positive effect on innovation, there is little statistical evidence that using them simultaneously leads to higher innovation performance. Results from the Dutch sample provide some indication, that there are positive economies of scope in doing external and cooperative R&D simultaneously conditional on doing internal R&D.
    Keywords: Open innovation, R&D collaboration, make, buy strategies
    JEL: O31 O32
    Date: 2013–01
  2. By: Becker, Sascha O. (University of Warwick); Hvide, Hans K. (University of Bergen)
    Abstract: In the large literature on firm performance, economists have given little attention to entrepreneurs. We use deaths of more than 500 entrepreneurs as a source of exogenous variation, and ask whether this variation can explain shifts in firm performance. Using longitudinal data, we find large and sustained effects of entrepreneurs at all levels of the performance distribution. Entrepreneurs strongly affect firm growth patterns of both very young firms and for firms that have begun to mature. We do not find significant differences between small and larger firms, family and non-family firms, nor between firms located in urban and rural areas, but we do find stronger effects for founders with high human capital. Overall, the results suggest that an often overlooked factor – individual entrepreneurs – plays a large role in affecting firm performance.
    Keywords: entrepreneurship, firm performance, human capital
    JEL: D21 D24 J23 L11 L25 G39
    Date: 2013–01
    Abstract: This study analyses the effectiveness of targeted public support for R&D investment. In particular, we test whether the specific policy design aiming at incentivizing (international)collaboration and R&D in small and medium-sized firms achieves the desired objectives on input as well as output additionality. Our results show that the targeted R&D subsidies accelerate R&D spending in the private sector, and especially so in the targeted groups. Further, we differentiate between privately financed R&D and subsidy-induced R&D investment to evaluate their respective effects on innovation performance. The results confirm that the induced R&D is productive as it translates into marketable product innovations. While both types of R&D investments trigger significant output effects, we find that the effect of subsidy-induced R&D investment is higher for firms that collaborate internationally as well as for SMEs.
    Keywords: Innovation Policy; Subsidies; R&D; Trestment effect; SMEs; International Collaboration; Innovation Performance
    JEL: C14 C30 G23 O31 O38
    Date: 2012–10
  4. By: Chiara Franco (Catholic University of Milan); Alberto Marzucchi (Catholic University of Milan); Sandro Montresor (JRC-IPTS)
    Abstract: The paper aims at extending the analysis of the firm’s absorptive capacity (AC) by taking stock of its manifold nature. Innovation cooperation is recognised as one of its antecedents, along with R&D, but with different possible outcomes, depending on the kind of partner. Human capital is claimed to be as important as other organisational mechanisms for the AC impact on innovation. The empirical application, carried out on about 10,500 firms located in 3 EU countries (i.e. Germany, Italy and Spain), confirms the role of these factors. Interacting with research organisations, for example, increases the firm’s AC providing it occurs within the national boundaries. The transformation of AC into actual innovation is favoured by the human capital of the firm, while it is actually hampered by socialisation mechanisms of an organisational nature.
    Keywords: Absorptive capacity – Innovation cooperation – Human capital
    JEL: O33 O32 J24
    Date: 2012–11
  5. By: Kashefi, Mohammad Ali; Sanjaghi, Mohammad Ebrahim
    Abstract: This paper addresses a gap in the literature concerning suitability of organizational learning approaches in facing social responsibility challenges, and proposes a developed framework that could proactively bridge this gap. A new framework is designed in order to gain insight on the relationships between the typical organizational learning approaches- which have been discussed extensively so far in the literature- and the brand-new concept of civil learning come out of Corporate Social Responsibility (CSR) studies in very recent years. Comparative analysis is employed to identify well-adjusted organizational learning approaches toward social evolution of organizations. Indeed we are looking to propose a specific learning framework for the firms that are tackling with CSR issues. Hence, we qualitatively bridge between organizational learning models and social learning approaches in order to foster a more advanced framework which recommends the employment of specific learning methods and styles to deal with CSR challenges based on the features of the firm and its business contextual considerations.
    Keywords: Organizational Learning (OL); Corporate Social Responsibility (CSR); Civil Learning; Learning Organization;
    JEL: M14 M10
    Date: 2013–01–25
  6. By: Pietrovito, Filomena; Pozzolo, Alberto Franco; Salvatici, Luca
    Abstract: Trade theory traces back different patterns of internationalization to heterogeneity between firms, measured both through differences in productivity levels and size. In this paper we analyze the link between heterogeneity within sectors and internationalization choices, namely trade and foreign direct investments (FDI) for a large sample of countries and industries between 1994 and 2004. The focus of our paper is on the role played by average productivity level and the distribution of firms by size in explaining differences across sectors and countries in the extensive margin of internationalization (i.e., the number of foreign nations where firms from a given sector and country have expanded abroad). By performing an ordered probit analysis, and controlling for other factors affecting the patterns of internationalization, we confirm that industries with higher productivity levels and with a distribution of firms shifted toward large firms are more prone to internationalize in foreign markets through both trade and FDI. Moreover, the relative impact of average productivity and firm size on FDI is larger than that on trade. These results are robust to different measures of productivity and the distribution of firms.
    Keywords: exports, foreign direct investments, mergers and acquisitions, productivity, distribution of firms, ordered probit
    JEL: D24 F10 F14 F20 F23
    Date: 2013–01–25
  7. By: Josheski, Dushko; Magdinceva-Sopova , Marija
    Abstract: The aim of this paper is to investigate the issue of R&D investment and the market value of the firm. This idea dating back from Arrow paper, later developed by Paul Romer but in the area of economic growth. Zvi Griliches (1979), first introduced the production function, which later would be used in a vast literature from this area (Market value of the firms and R&D investment). In the theoretical section of this paper we are describing Tobin’s original model, and Abel’s (1984) model, this models relates Tobin’s quotient with intangible assets of the company. In the empirical part we develop cross-section time series model (Feasible Generalized Least Squares Model), for a panel of countries in Europe including UK and Turkey, in total of 11 panels. Later we test that model by estimating the marginal effects of R&D investment with Tobin’s q on a small economy such as R. Macedonia. The results exert positive and statistically significant relationship between market value of the firms and R&D investment.
    Keywords: Tobin’s q; R&D; knowledge absorption
    JEL: D46 E22 D92
    Date: 2013–01–31
  8. By: Procházková, Lenka; Kubíčková, Lea
    Abstract: The importance of small and medium enterprises (SMEs) in the national economies of EU countries has been always growing. For these reasons, the increasing attention is paid to small and mediumsized enterprises also in the Czech economy. The paper is focused on the globalization of small and medium enterprises, in particular, identifying the key success factors of small and medium-sized businesses that operate in the engineering industry. For the purpose of fulfi lling the objective of the article, the level of success of SMEs in foreign markets is established with the aggregate indicator of success. Subsequently the results of the primary research among the Czech engineering companies are presented, based on this research the factors aff ecting the success of these entities of engineering industry in foreign markets are defi ned.
    Keywords: small and medium-sized enterprises; foreign markets; success; key success factors; engineering industry
    JEL: M00
    Date: 2012
  9. By: Nanditha Mathew
    Abstract: The paper presents micro evidence on firm dynamics for enterprises in Indian Manufacturing sectors on the grounds of Prowess database provided by the Cen- tre for Monitoring Indian Economy (CMIE) covering the period 1991-2010. The parameterization of the distributions of growth exhibit high level heterogeneity displayed among firms even within the same sector, which widens over time. The transition probabilities matrix reveals the coexistence of firms with very different characteristics and performance within sectors. Given the wide heterogeneities, the paper resorts to quantile regression to identify the differential effect of regressors at different deciles of the conditional distrubution.
    Keywords: Firm Dynamics, AEP Distribution, Heterogeneity, Quantile Regression
    Date: 2012–12–17
  10. By: Reis, Jose Guilherme; Taglioni, Daria
    Abstract: As globalization progresses and investment is mobile, it is ever more important for policy makers to understand drivers of growth and exports at the micro-level: Which products are being produced and exported? Which firms populate the domestic economy? Are they successful in exporting? How are firms affected by exogenous shocks and policy intervention? Through the use of descriptive statistics and econometric analysis, this paper assesses the trade competitiveness of Pakistan using micro-data. The case of Pakistan is interesting since the country's recent trade policy has reverted to a protectionist path since the mid-2000s and trade performance is stagnating, as indicated by a decrease in its trade-to-gross domestic product ratio over the past decade and low levels of sophistication of exports. The main findings of the paper are the following. Like many other countries, Pakistan posts a high concentration of exports in the hands of a limited number of large exporters. The dominance of few exporters has increased over time and it seems associated with the changes in trade policy. Low rates of product innovation and experimentation and a low ability of the Pakistani export sector to enter into new higher growth sectors are other features emerging from the data. All in all, the mediocre performance seems to be associated with internal problems with trade-related incentives, business environment, and governance, in addition to the well-known external constraints.
    Keywords: Economic Theory&Research,Free Trade,Markets and Market Access,Debt Markets,Trade Policy
    Date: 2013–01–01
  11. By: Kimitaka Nishitani (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan); Nurul Jannah (Ministry of the Environment, Indonesia); Hardinsyah Ridwan (Faculty of Human Ecology, Bogor Agriculture University, Indonesia); Shinji Kaneko (Graduate School for International Development and Cooperation, Hiroshima University, Japan)
    Abstract: This paper, using data derived from a questionnaire survey of Indonesian firms, analyzes not only whether a firm's environmental performance improves its financial performance, but also whether this relationship depends on the firm's stance on conducting environmental management voluntarily or mandatorily. The estimation results suggest that a reduction of greenhouse gas (GHG) emissions increases a firm's profit, because firms that conduct environmental management voluntarily are more likely to reduce GHG emissions. However, this is not the case for the reduction of pollution emissions, because firms that conduct environmental management mandatorily are more likely to reduce pollution emissions. These results imply that only firms conducting environmental management voluntarily can improve financial performance through better environmental performance in Indonesia.
    Date: 2013–01
  12. By: Sanne Hiller (Department of Economics, Leuphana University Lueneburg, Germany); Philipp J.H. Schroeder (Aarhus University, School of Business and Social Sciences, Department of Economics and Business, Denmark); Allan Sorensen (Aarhus University, School of Business and Social Sciences, Department of Economics and Business, Denmark)
    Abstract: This paper deploys a dynamic extension of the Melitz (2003) model to generate predictions on export market exit and firm survival in a setting where firms endogenously make exit decisions. The central driver of the model dynamics is the inclusion of exogenous economy wide technological progress. The model predicts – inter alia – that a higher relative productivity not only increases the likelihood of exporting, but also the chances of firm survival and continued export market engagements. We relate these predictions to the empirical stylized facts of export market exit and firm survival based on Danish firm-level data. We find strong evidence that firms experience a decline in market share prior to export market exit and prior to death and that the firms discontinuing their exporting activity or closing down tend to be small. Overall, our empirical results support the central predictions from the model.
    Keywords: Intra-industry trade, entry/exit, heterogeneous firms, technological change
    JEL: F12 F15 O33 L11 L16
    Date: 2013–01
  13. By: Huub Mudde (Senior Project Consultant and Lecturer of Maastricht School of Management); Dikky Indrawan (Lecturer of Department Management Faculty of Economics and Management of Bogor Agricultural University/Institut Pertanian Bogor (IPB)); Idqan Fahmi (Secretary of the Academic Director of the Management Business School Graduate Program of IPB.)
    Abstract: Over a period of three years, Bogor Agricultural University/Institut Pertanian Bogor (IPB) and Maastricht School of Management (MsM) have been executing the multi-annual project Round Table Indonesia, This project aimed at contributing to the improvement of a sustainable business and investment climate in the Indonesian agricultural sector by strengthening the knowledge capacity, formulating concrete investment opportunities, and facilitating partnerships. As a result, IPB and MsM have developed courses on sustainable business development and facilitated business projects in poultry, mangosteen, palm oil, shrimps, and tourism. All projects are based on value chain analyses and roundtable meetings with key stakeholders of government, private sector, academia, and civil society. The article outlines lessons learned in the area of partnership management and the role of academic institutes. It is argued that linking education and applied research with business development will lead to a stronger and more sustainable Indonesian agricultural sector, being of crucial importance for the Indonesian development as a whole. And in which process higher education plays a crucial role.
    Date: 2012–11
  14. By: Santiago Kopoboru (PhD Candidate. Department of Business Organization and Marketing, Universidad Pablo de Olavide)
    Abstract: Organizations may use a number of different strategies to survive, grow, and achieve success. One of the possible strategies is the use of social capital, in particular interlocks by boards of directors, as their benefits can range from political advantages to better access to information. Despite the increasingly importance of social networks, they have received little attention by scholars when analyzing Spanish corporate boards. This paper pretends to fulfill some of this gap by analyzing interlocks of the largest firms in the Spanish stock exchange in the years 2004 and 2009. The main contribution of this study will relate to a better understanding of the mechanisms used by corporate boards to increase the competitiveness of organizations which in turn changes the network previously created. The analysis will be twofold: First, we are concerned with particular features of the network, that is, its structure and its evolution to understand the development of the network. Second, we are concerned with the board and its composition which explain network’s structure. The results show the network large Spanish firms create had minor modifications after the five year period. Also, board size and board composition seem to be variables determinant of firm’s degree centrality in the network, being outsiders in the board those who provide post of the interlocks the firm has. Surprisingly, the Spanish network does not have banks as major players at its core anymore, which is contrary to resource dependence theory since links with banks are an important resource for both, the firm, which may have access to better loans; and the bank, which reduces its monitoring costs.
    Keywords: interlocks, corporate government, Spain, social capital
    Date: 2013–01

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