nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2013‒04‒20
37 papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. ICT outsourcing, user-driven and open innovation strategies in the generation of new data-based solution By Koski, Heli
  2. Persistent Exporter Performance: The importance of internal, local and global knowledge By Lööf, Hans; Nabavi, Pardis; Cook , Gary; Johansson, Börje
  3. Knowledge Networks and Their Impact on New and Small Firms in Local Economies: The Case Studies of the Autonomous Province of Trento and Magdeburg By Alessandra Proto; Simone Tani; Joerg Bühnemann; Olaf Gaus; Mathias Raith
  4. From creativeness to innovativeness: a firm-level investigation By Roberto Antonietti
  5. “Do intra- and inter-industry spillovers matter? CDM model estimates for Spain” By Esther Goya; Esther Vayá; Jordi Suriñach
  6. “What Drives the Choice of Partners in R&D Cooperation? Heterogeneity across Sectors” By Erika Badillo; Rosina Moreno
  7. The evolution of innovation networks: The case of a German automotive network By Buchmann, Tobias; Pyka, Andreas
  8. R&D Behaviour in Chinese Firms By Yanrui Wu
  9. Looking into the Innovation Process: How International is Innovation in Multinational Companies? By Jannika Mattes
  10. The Impact of Spatial Externalities: Skills, Education and Firm Productivity By Wixe, Sofia
  11. Towards a Mapping Framework of ICT-enabled Innovation for Learning By Panagiotis Kampylis Author-1-Name-First: Panagiotis Author-1-Name-Last: Kampylis; Stefania Bocconi Author-2-Name-First: Stefania Author-2-Name-Last: Bocconi; Yves Punie Author-3-Name-First: Yves Author-3-Name-Last: Punie
  12. Innovation, Reallocation and Growth By Daron Acemoglu; Ufuk Akcigit; Nicholas Bloom; William R. Kerr
  13. Unveiling Global Innovation Networks By Leonardo Costa Ribeiro; Glenda Kruss; Gustavo Britto; Ricardo Machado Ruiz; Américo Tristão Bernardes; Eduardo da Motta e Albuquerque
  14. International Investment and Firm Performance: Empirical Evidence from Small Open Economies By Kaitila, Ville; McQuinn, John; Siedschlag, Iulia; Zhang, Xiaoheng
  15. Measuring Agglomeration Economies: The Case of the Ethiopian Cut Flower Industry By Mano, Yukichi; Suzuki, Aya
  16. Heterogeneous Combinations of Knowledge Elements: How the Knowledge Base Structure Impacts Knowledge-related Outcomes of a Firm By Yoichi Matsumoto
  17. Patent Citations and Knowledge Spillovers: An Analysis of Chinese Patents Registered in the US By Fei Yu; Yanrui Wu
  18. Internationalization strategies of luxury firms in China: the role of design and marketing capabilities By Marco Bettiol; Maria Chiarvesio; Eleonora Di Maria; Raffaella Tabacco
  19. The Imprinting of Founders' Human Capital on Entrepreneurial Venture Growth: Evidence from New Technology-Based Firms By Luca Grilli; Paul H. Jensen; Samuele Murtinu
  20. Competition and Growth: Reinterpreting their Relationship By Daria Onori
  21. The Role of Services for Competitiveness in Manufacturing By Hildegunn Kyvik Nordås; Yunhee Kim
  22. Network! Network! Network! How global technology start-ups access modern business ecosystems By Tahvanainen, Antti-Jussi; Steinert, Martin
  24. Greening Global Value Chains: Innovation and the International Diffusion of Technologies and Knowledge By Matthieu Glachant
  25. Exploring the Complex Interaction Between Governance and Knowledge in Education By Mihály Fazekas; Tracey Burns
  26. Joining, upgrading and being competitive in global value chains : a strategic framework By Cattaneo, O.; Gereffi, G.; Miroudot, S.; Taglioni, D.
  27. Determinants of Entrepreneurship in French Regions: The Role of Spatial Heterogeneity By Marie-Estelle Binet; François Facchini
  28. Fight or buy? A comparison of internationalization strategies. By Roland Kirstein
  29. What Determines Inward FDI in China? --An empirical study using firm-level data By Bin Ni
  30. Science, technology and innovation for sustainable development By Keun Lee and John Mathews
  31. Efficiency performance of Malaysian Islamic banks By Ab-Rahim, Rossazana; Kadri, Norlina; Ismail, Farhana
  32. Small Is Not Beautiful: Firm-Level Evidence of the Link between Credit, Firm Size and Competitiveness in Colombia By Arturo Galindo; Marcela Melendez
  33. ICT and occupation-based measures of organisational change: Firm and employee outcomes By Böckerman, Petri; Kauhanen, Antti; Maliranta, Mika
  34. The Nature of the Finnish Competitiveness Problem By Maliranta, Mika; Vihriälä, Vesa
  35. Old Technology Upgrades, Innovation, and Competition in Vertically Differentiated Markets By Marc Bourreau; Paolo Lupi; Fabio Manenti
  36. "Location Patterns of Creative Capital and Regional Disparities in Spain" By Ebru Kerimoglu; B. Can Karahasan
  37. Cooperation, Trust, and Economic Development: An Experimental Study in China By Junyi Shen; Xiangdong Qin

  1. By: Koski, Heli
    Abstract: Abstract: The reported empirical findings using survey data from 531 Finnish companies show that for digitalized data-based innovation generated for both firm’s own and market needs, the firm’s ICT-specific absorptive capacity matters more than its general absorptive capacity arising from the firms’ investments in R&D and intangible assets. User-driven innovators differ from companies that do not produce new data-based solutions for their own use in three major dimensions: 1) they tend to use selective ICT outsourcing strategy, 2) they tend to involve more internal units closely to innovation activities and 3) they tend to use wider external knowledge search strategy. In other words, firms using data for producing innovative solutions for their own needs balance their relatively open innovation strategy with the close in-house innovation collaboration among different units, and further employ an ICT strategy that relies selectively on a firm’s own ICT-specific absorptive capacity and external ICT expertise.
    Keywords: user-driven innovation, open innovation, data-based products and services, ICT strategy, outsourcing
    JEL: D22 L20 O31
    Date: 2013–03–21
  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); Cook , Gary (University of Liverpool); Johansson, Börje (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: In this paper we investigate how various innovation strategies, local knowledge sources and global knowledge pipe-lines influence the likelihood that a firm will be a persistent exporter and the productivity growth of such persistently exporting firms. Using a bivariate logit model and a dynamic GMM panel data estimator on Swedish manufacturing firms observed over 12 years, we find that the propensity to be a persistent exporter is strongly related to both highly frequent and more temporary innovativeness and the global openness of the regional industry in the firm’s own line of activity. The growth rate in total factor productivity of persistent exporters, however, increases with intensity of invention activities, accessibility to local business services and the openness of the same regional industry in which the firm operates.
    Keywords: Invention; innovation; productivity growth; exports; spillovers; persistence
    JEL: F21 O30 O31 R11
    Date: 2013–04–08
  3. By: Alessandra Proto; Simone Tani; Joerg Bühnemann; Olaf Gaus; Mathias Raith
    Abstract: New and small firms can be important engines of job creation and local development when they identify and exploit entrepreneurial opportunities. We live in an economy more and more characterised by open innovation methods, where new companies and SMEs are benefitting from innovations, technological and non technological available on the market or from other companies and organisations part of their networks. Knowledge networks, understood as a three-component construction of (i) knowledge generation, (ii) knowledge transfer, and (iii) knowledge application, can play a crucial role in boosting companies performance. As many OECD researches shows, there is often a major networking gap, however, between knowledge sources in universities and research organisations and industry exploitation in new spin-off enterprises and SMEs. The analysis of the actors of the knowledge networks and the way they behave and interact with other component inside and outside the networks is a fundamental support to local policy making in entrepreneurship and innovation. <p>The OECD LEED Programme in cooperation with the University of Trento has prepared this paper to analyse in deep the behaviour of knowledge networks in two specific local contexts: the Autonomous Province of Trento in Italy and the Magdeburg Province in Germany. <p>The aim of this research project is to analyse the relevance of knowledge networks to entrepreneurship and the growth of young and small firms, the role of the different components and their interplay for network effectiveness, impeding and favouring factors, and the role of public policy.
    Date: 2012–01–31
  4. By: Roberto Antonietti (University of Padova)
    Abstract: This paper assesses the existence of knowledge externalities in the form of creative human capital spillovers that affect firm innovative performance. Relying on a large sample of Italian manufacturing firms, a knowledge production function is estimated and the residuals regressed on regional creative workforce indicators interacted with spatial agglomeration variables and measures of knowledge transmission mechanisms. The estimates show that regional density of creative human capital has a positive effect on firm innovativeness only after a critical mass is achieved and only after accounting for the presence of local universities, industrial districts and entrepreneurial activities related to knowledge-intensive services.
    Keywords: creative human capital; innovativeness; knowledge production function; nonlinearity JEL: L60; O31; R10; R15
    Date: 2013–02
  5. By: Esther Goya (Faculty of Economics, University of Barcelona); Esther Vayá (Faculty of Economics, University of Barcelona); Jordi Suriñach (Faculty of Economics, University of Barcelona)
    Abstract: This paper uses a structural model to analyse the impact of innovation activities, including intra- and inter-industry externalities, on the productivity of Spanish firms. To the best of our knowledge, no previous paper has examined spillover effects by adopting such an approach. Here, therefore, we seek to determine the extent to which the innovations carried out by others affect a firm’s productivity. Additionally, firm’s technology level is taken into account in order to ascertain whether there are any differences in this regard between high-tech and low-tech firms both in industrial and service sectors. The database used is the Technological Innovation Panel (PITEC) which includes 8,611 firms for the year 2009. We find that low-tech firms make the most of a range of factors, including funding and belonging to a group, to increase their investment in R&D. As expected, R&D intensity has a positive impact on the probability of achieving both product and, more especially, process innovations. Finally, innovation output has a positive impact on firm’s productivity, being greater in more advanced firms in the case of process innovations. Both intra- and inter-industry spillovers have a positive impact on firm’s productivity, but this varies with the firm’s level of technology. Thus, innovations made by firms from the same sector are more important for low-tech firms than they are for their high-tech counterparts, while innovations made by the rest of the sectors have a greater impact on high-tech firms.
    Keywords: Productivity, innovation, industry spillovers. JEL classification: D24, O33.
    Date: 2012–09
  6. By: Erika Badillo (Faculty of Economics, University of Barcelona); Rosina Moreno (Faculty of Economics, University of Barcelona)
    Abstract: In this paper we analyse the heterogeneity in firms’ decisions to engage in R&D cooperation, taking into account the type of partner (other companies from the same group, suppliers or customers, competitors, and research institutions) and the sector to which the firm belongs (industrial or services). We use information from the Technological Innovation Panel (PITEC) for the years 2006-2008 and estimate multivariate probit models corrected for endogeneity. We find that the determinants of R&D cooperation differ between sectors. In the industrial sector, the perception of risk as an obstacle to innovation reduces the likelihood of cooperating with companies in the same group and competitors, while in the service sector it reduces cooperation with suppliers or customers. For its part, the possibility of accessing additional human resources has a significantly positive effect on cooperation with all types of partner in the service sector, but not for manufactures..
    Keywords: R&D cooperation; Choice of partners; Industrial sector; Service sector; Innovative Spanish firms. JEL classification: O30; O32; L24; L60; L80.
    Date: 2012–07
  7. By: Buchmann, Tobias; Pyka, Andreas
    Abstract: In this paper we outline a conceptual framework for depicting network development patterns of interfirm innovation networks and for analyzing the dynamic evolution of an R&D network in the German automotive industry. We test the drivers of evolutionary change processes of a network which is based on subsidised R&D projects in the 10 year period between 1998 and 2007. For this purpose a stochastic actor-based model is applied to estimate the impact of various drivers of network change. We test hypotheses in the innovation and evolutionary economics framework and show that structural positions of firms as well as actor covariates and dyadic covariates are influential determinants of network evolution. --
    Date: 2013
  8. By: Yanrui Wu (Business School, University of Western Australia)
    Abstract: To cope with the rising labour cost and protect the country’s deteriorating environmental conditions, Chinese policy makers have recently made a series of policy changes to promote innovation and hence the development of a knowledge-based economy in the country in the coming decades. As a result, China’s R&D spending has expanded substantially. This paper contributes to the understanding of R&D behaviour in China’s large and medium-sized firms and hence the role of Chinese firms in innovation. The latter has important implications not only for the transformation of the Chinese economy but also for the rest of the world as Chinese firms become increasingly active internationally.
    Date: 2012
  9. By: Jannika Mattes (University of Oldenburg & ZenTra)
    Abstract: This paper claims that internationalisation of innovation and the involved dispersal of activities in multinational companies needs to be reassessed. It is rarely a uniform phenomenon, but instead selective, sequential and temporal. The paper derives five ideal types of organising innovation in multinational companies: complete concentration, core-periphery concentration, sequential dispersal, modularised dispersal and inclusive dispersal. Empirical case studies illustrate that these different types do not only vary between projects, but are even applied selectively in different functional arenas of one and the same innovation project. This also shows that innovation is organised in a dynamic way and involves constant shifts and re-adjustments. Some general traits of different functional arenas are being derived. One of the core conclusions is that dispersed and internationalised constellations of organising innovation are applied in a far more cautious and less encompassing fashion than commonly expected. Instead, elements of control usually remain concentrated, and even seemingly dispersed settings do not imply extensive interaction and integration between the involved sites. A further result is that the organisation of innovation is not only a strategic phenomenon, but remains subject to emergent, path dependent constellations.
    Keywords: innovation, multinational companies, internationalisation, organisation, micro-level, innovation project, innovation process
    JEL: F23 O32
    Date: 2012–11
  10. By: Wixe, Sofia (Jönköping International Business School)
    Abstract: This paper analyses the role of spatial externalities in explaining the average labour productivity of Swedish manufacturing firms. The empirical findings support MAR and Porter externalities as well as general urbanization economies, but not Jacobs externalities. In addition, the matching between the firm and the regional labour force is found to be productivity-enhancing. However, firm-specific characteristics, including the characteristics of the employees, are not to be forgotten. Especially since externalities are commonly associated with knowledge spillovers, and it is through the employees that the external knowledge is absorbed and channelled to the firm as a whole.
    Keywords: Firm productivity; spatial externalities; manufacturing; Sweden
    JEL: D24 L25 L60 R32
    Date: 2013–04–12
  11. By: Panagiotis Kampylis Author-1-Name-First: Panagiotis Author-1-Name-Last: Kampylis (European Commission – JRC - IPTS); Stefania Bocconi Author-2-Name-First: Stefania Author-2-Name-Last: Bocconi (European Commission – JRC - IPTS); Yves Punie Author-3-Name-First: Yves Author-3-Name-Last: Punie (European Commission – JRC - IPTS)
    Abstract: ICT is regarded as a key enabler of innovation and creativity in E&T and for learning at large. Based on desk research and on previous JRC-IPTS studies, this report provides a definition and classification of ICT-enabled innovation for learning that has significant scale and/or impact at system level, both within formal Education and Training and outside formal settings. A mapping framework is also proposed that can be used for an in-depth analysis of existing initiatives showing how ICT-enabled innovation is implemented on a large scale. Finally, the report provides a preliminary application of four diverse initiatives on the proposed mapping framework.
    Keywords: Europe 2020 Strategy, Learning, Skilling, Innovation & Creativity in Education and Training, ICT-enabled innovation for learning, classifications of innovation for learning, mapping framework of ICT-enabled innovation for learning, Creative Classrooms
    JEL: I20 I28 I29 I21
    Date: 2012–06
  12. By: Daron Acemoglu (Department of Economics, Massachusetts Institute of Technology); Ufuk Akcigit (Department of Economics, University of Pennsylvania); Nicholas Bloom; William R. Kerr (Entrepreneurial Management Unit, Harvard University)
    Abstract: We build a model of firm-level innovation, productivity growth and reallocation featuring endogenous entry and exit. A key feature is the selection between high- and low-type firms, which differ in terms of their innovative capacity. We estimate the parameters of the model using detailed US Census micro data on firm-level output, R&D and patenting. The model provides a good fit to the dynamics of firm entry and exit, output and R&D, and its implied elasticities are in the ballpark of a range of micro estimates. We find industrial policy subsidizing either the R&D or the continued operation of incumbents reduces growth and welfare. For example, a subsidy to incumbent R&D equivalent to 5% of GDP reduces welfare by about 1.5% because it deters entry of new high-type firms. 0n the contrary, substantial improvements (of the order of 5% improvement in welfare) are possible if the continued operation of incumbents is taxed while at the same time R&D by incumbents and new entrants is subsidized. This is because of a strong selection effect: R&D resources (skilled labor) are inefficiently used by low-type incumbent firms. Subsidies to incumbents encourage the survival and expansion of these firms at the expense of potential high-type entrants. We show that optimal policy encourages the exit of low-type firms and supports R&D by high-type incumbents and entry.
    Keywords: entry, growth, industrial policy, innovation, R&D, reallocation, selection
    JEL: E2 L1
    Date: 2013–04–13
  13. By: Leonardo Costa Ribeiro (INPI); Glenda Kruss (HSRC South Africa); Gustavo Britto (Cedeplar-UFMG); Ricardo Machado Ruiz (Cedeplar-UFMG); Américo Tristão Bernardes (UFOP); Eduardo da Motta e Albuquerque (Cedeplar-UFMG)
    Abstract: The role of multinational enterprises in the internationalization of production has been recognized and studied from several points of view. We believe that multinational firms have a similar role in shaping flows of knowledge, technology, and scientific research. Therefore, multinational firms, science and technology could be linked in a way that allows us to identify Global Innovation Networks (GIN), another and important feature of the internationalization of capital. The goal of this paper is to develop a methodology to identify GINs, based on previous work on patents and their citations of scientific papers, which was adapted to track GINs. That is, the main indicators measure interactions between firms and universities. We argue that the links between patenting firms and the authors of cited papers establish connections that allow the identification of several types of GINs. A case study of IBM is presented in this paper, as a well-known leading patent firm with several papers cited in its patents. It may provide an excellent case to demonstrate how the selected indicators describe the knowledge flows between firms and research institutions. The conclusion shows that other GINs can be identified applying the same methodology.
    Keywords: multinational firms, complex networks; diffusion; patents; innovation; technological change
    Date: 2012–10
  14. By: Kaitila, Ville; McQuinn, John; Siedschlag, Iulia; Zhang, Xiaoheng
    Abstract: Abstract: This paper examines the causal link between foreign investment and firm performance in six small open economies in the European Union. Specifically, using micro data for manufacturing and services over the period 2001-2009, we analyse the effects of foreign mergers and acquisitions on labour productivity and employment growth up to five years after acquisition. Our results indicate that foreign investors tend to acquire larger firms in both manufacturing and services. Other characteristics of acquired firms differ across countries and between manufacturing and services. Taken together, our estimates suggest that foreign investment had stronger effects on firm performance in services in comparison to manufacturing.
    Keywords: multinational firms, productivity, employment, propensity score matching
    JEL: F16 F23 J24
    Date: 2013–03–01
  15. By: Mano, Yukichi; Suzuki, Aya
    Abstract: Industrial clusters are ubiquitous, and the associated low transaction costs allow producers to benefit from information spillovers, interfirm division and specialization of labor, and the development of skilled-labor markets. Previous studies, however, have seldom quantified the benefits on business performance. Ethiopia’s cut flower industry provides a rare opportunity to compare agglomerated with dispersed producers. Agglomerated farms frequently share technological knowledge and market information to decide when and even whether products are worth harvesting and shipping and to select product varieties. Econometric results indicate that agglomerated farms export higher valued flowers and achieve higher productivity and profitability. These findings imply that promotion of industrial clusters would further develop the industry.
    Keywords: agglomeration economies, information spillovers, market information, technological knowledge, cut flower, Sub-Sahara Africa, Ethiopia
    JEL: L15 L25 O12 O25
    Date: 2013–04
  16. By: Yoichi Matsumoto (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)
    Abstract: Knowledge is the preeminent resource of a firm. Although many scholars have focused on the firm's knowledge base, few studies have examined the effects of the knowledge base structure—how knowledge elements are linked or separated from each other in clusters—on firm's knowledge-related outcomes. This study examines the knowledge base structure, and tests hypotheses about the effects of heterogeneous combinations of knowledge elements on the outcomes. Through an analysis of the patents related to LCD technology, (1) the usefulness of an organization's inventions correlates positively with the density of the knowledge links between technologically different knowledge components, (2) the average usefulness of a firm's inventions correlates positively with the density of the knowledge links between technologically disparate knowledge components, (3) the number of inventions correlates negatively with the density of the knowledge links between excessively disparate knowledge components.
    Date: 2013–04
  17. By: Fei Yu (Business School, University of Western Australia); Yanrui Wu (Business School, University of Western Australia)
    Abstract: This paper examines US patent citation data and analyzes how different firms in China affect knowledge spillovers. Patents granted by the US patent office to inventors located in China are collected along with their citation counts. Two kinds of patent citations, namely, citations of previous patents and those of non-patent literature, are used to measure knowledge flows. In the empirical analysis, the negative binomial and zero-inflated count models are considered. The regression results suggest the existence of heterogeneity among firms of different ownership. In terms of knowledge spillovers, US multinational corporations (MNC) perform better than those from other western countries; Taiwanese companies outperform their counterparts from Hong Kong; and Chinese private corporations contribute more than Chinese state-owned enterprises (SOEs). These results have important policy implications for the development of a knowledge-intensive economy in China.
    Date: 2013
  18. By: Marco Bettiol (University of Padova); Maria Chiarvesio (University of Udine); Eleonora Di Maria (University of Padova); Raffaella Tabacco (University of Udine)
    Abstract: Studies on emerging markets depicted the economic, social and institutional peculiarities of those markets by emphasizing opportunities and threats for Western companies. China in particular offers growing market chances, even for luxury firms. On the on hand, studies emphasize the global approach to markets in luxury. On the other hand, the uncertainty and cultural distance characterizing the Chinese market increase the risks of a firm's standardized strategy. The paper aims at investigating internationalization strategies of luxury firms in China by exploring the role of design and marketing capabilities, based on the case study of an Italian company - Bisazza. Results highlight the success of a global design-driven brand strategy, but also the need of adapting the distribution and product management to cope with the Chinese context.
    Date: 2013–02
  19. By: Luca Grilli (Department of Management, Economics, and Industrial Engineering, Politecnico di Milano); Paul H. Jensen (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; Intellectual Property Research Institute of Australia, The University of Melbourne); Samuele Murtinu (Department of Management, Economics, and Industrial Engineering, Politecnico di Milano)
    Abstract: This paper tests the presence of an ‘entrepreneurial imprinting effect’ of founders’ human capital on entrepreneurial ventures’ performance. More specifically, we empirically explore the impact of entrepreneurs’ human capital on a firm’s sales growth performance by disentangling the effect of the stock of human capital possessed at foundation from the potential injections and losses of human capital due to exit of founders and/or addition of new owner-managers in the entrepreneurial team over time. Our analysis is based on a panel dataset composed of 338 Italian new technology-based firms (NTBFs) observed from 1995 (or since their foundation) to 2008 (or until their exit from the dataset). We consider the effects of several dimensions of entrepreneurial human capital on firm sales growth and estimate Gibrat law-type dynamic panel data models using OLS estimator and GMM-system estimator to control for endogeneity. Overall, our results point to a positive and significant presence of an ‘entrepreneurial imprinting effect’ exerted by founders’ specific work experience on venture growth which is robust to a series of controls.
    Keywords: Entrepreneurial ventures, imprinting effect, entrepreneurs’ human capital, firm growth, new technology-based firms
    JEL: L25 L26 O31
    Date: 2013–04
  20. By: Daria Onori (AMSE - Aix-Marseille School of Economics - Aix-Marseille Univ. - Centre national de la recherche scientifique (CNRS) - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole Centrale Marseille (ECM), IRES - Université Catholique de Louvain, Departement of Economics and Law, Faculty of Economics - University of Rome “La Sapienza”)
    Abstract: In this paper we modify a standard quality ladder model by assuming that R&D is driven by outsider firms and the winners of the race sell licenses over their patents, instead of entering directly the intermediate good sector. As a reward they get the aggregate profit of the industry. Moreover, in the intermediate good sector firms compete à la Cournot and it is assumed that there are spillovers represented by strategic complementarities on costs. We prove that there exists an interval of values of the spillover parameter such that the relationship between competition and growth is an inverted-U-shape.
    Keywords: quality ladder; Cournot oligopoly; strategic complementarities; competition
    Date: 2013–04
  21. By: Hildegunn Kyvik Nordås; Yunhee Kim
    Abstract: This study analyses the relationships between competitiveness in manufacturing and the quality of key supporting services. Three indicators of competitiveness are considered: the degree of product differentiation, unit prices obtained in export markets and the duration of trade. The density of telecoms networks and the reliability of electricity supply stand out as the most crucial for competitive manufacturing. In addition the ease at which contracts can be enforced and the time it takes to export and import goods are strongly related to competitiveness. Our methodology allows us to go beyond a one size fits all policy analysis. Interestingly, we find that in low-income countries, the impact of services quality and policy on competitiveness is highest in low-technology industries; in middle-income countries it is highest in medium-technology sectors and in high-income countries the impact is highest in medium-high and high-technology industries. This suggests that better services contribute to moving up the value chain in industries where a country already has technological capacity and comparative advantage, but better services alone may not stimulate product differentiation in sectors where a country is far from the competitive edge – at least not in the short run. Policy reforms needed are to simplify procedures for contract enforcement, liberalisation of FDI, strengthen pro-competitive regulation of network services, and eliminate tariffs. It is concluded that new ways of doing business where manufacturers build relationships with customers and compete on the basis of products they are willing to pay a premium for has the potential to become an important driving force for growth after the great recession, provided that adequate support from competitive services markets is in place.
    Keywords: telecommunications, electricity, tariffs, competitiveness, transport costs, new industrial revolution, services liberalisation, services regulatory reform, contract enforcement
    JEL: F12 F13 F14
    Date: 2013–04–05
  22. By: Tahvanainen, Antti-Jussi; Steinert, Martin
    Abstract: to connect to critical stakeholders and, thereby, to integrate into foreign business ecosystems. Reverting to explorative, inductive methodology, the study contributes to the existing body of knowledge by approaching networking from a rare angle; networking as practice. The study examines (i) the precepts and principles that direct the start-ups’ networking efforts, (ii) the practices they employ to identify relevant partners and establish connections to them, (iii) the practices they make use of in the interface of newly established connections to sway and commit the respective partners to their cause and network, and finally (iv), the practices that offshore governmental agency nodes apply to help start-ups assimilate to foreign local ecosystems. We found that firms need to embrace and learn how to exploit serendipitous networking opportunities to gain access to stakeholders that purely ansoffian planning approaches could never uncover. The exploitation of serendipity necessitates flexibility with regard to the start-ups’ existing product or service concepts, strategies and business plans because in the serendipitous mode these are often re- and co-designed with newly encountered stakeholders. Many of the actual networking practices were found to have evolved together with the progress of other dominant megatrends such as the spread and acceptance of social and other digital media. Such progress seems to have endogenously affected some of the conventional cultural tenets of networking, helping to bypass hierarchical gatekeepers in organizations, for instance. In addition, the diffusion and acceptance of more content- and context-rich communication techniques such as social and mobile video, prototyping and story-telling have made pitching a proposal faster, more holistic, experiential and interactive. We further found that offshore governmental agency nodes can play a decisive role in accelerating and facilitating the integration of foreign newcomers into a local ecosystem. Important prerequisite for the capability to provide such services is a respected and established status within the ecosystem, a vast, cross-sectoral network, and professional employees with hands-on industrial experience in the respective ecosystem.
    Keywords: networking, practice, network access, entrepreneurship, ecosystem, globalization
    Date: 2013
  23. By: Rajshree Agarwal; Benjamin A. Campbell; April M. Franco; Martin Ganco
    Abstract: Our study examines the mediating effect of spin-out team characteristics on the relationship between founder quality and parent and spin-out performance. Since the ability to transfer or recreate complementary assets is a critical determinant of performance, we theorize and show that founders with greater ability impact both parent firm and spin-out performance by assembling teams that represent strong complementary human capital. Using linked employee-employer US Census data from the legal services industry, we find founding team size and tenure mediate the founder quality effect. Our findings have practical implications for both managers of existing firms and aspiring founders as it relates to their human resource strategies: the factor most salient to performance is not the individual quality per se, but the manner in which it impacts the transfer and spillover of complementary human capital.
    Date: 2013–04
  24. By: Matthieu Glachant
    Abstract: The objective of the paper is to lay out the state of knowledge on the role of innovation and the diffusion of technologies in the greening of global value chains as well as some of the main policy issues and key research gaps1. A special emphasis will be put on developing countries in which innovation, skills and technological absorptive capacities tend to be lower while green technologies are urgently needed. The structure of the paper is extremely simple. In a first part, we give some concepts and definitions on technology, innovation, and the channels of technology diffusion. In a second part, we use various statistics (green patents, trade flows, and foreign direct investments) and illustrative examples to describe how technology and knowledge is created today and disseminated across countries. For data reasons, we mostly focus on climate-mitigation technologies, but there are good reasons to think that other green technologies do not significantly differ from the “average” climate mitigation technology. Then, we list and discuss key policy challenges (the role of environmental policies, intellectual property rights, capacity building, etc.). The conclusion summarizes the main lessons.
    Date: 2013–04–11
  25. By: Mihály Fazekas; Tracey Burns
    Abstract: Governments in all OECD countries are facing the challenge of governing increasingly complex education systems. There is a growing need for governance structures that can handle this complexity and which can provide actors with the knowledge they need to make decisions. This working paper asks the question: How do governance and knowledge mutually constitute and impact on each other in complex education systems? It provides an answer through a state of the art literature review and original theoretical argumentation. It breaks new ground by combining different schools of academic and policy thinking which traditionally look at various aspects of the relationship between governance and knowledge separately. Research in public management, political science and public policy, sociology, institutional economics, and organisational management (particularly the knowledge transfer literature) is augmented with work from education and other social sciences, including healthcare, law, and social justice. This working paper argues that just as knowledge is crucial for governance, governance is indispensible for knowledge creation and dissemination. It proposes an analytical framework that combines models of governance with modes of learning and types of knowledge, and provides preliminary empirical examples to support this framework. In the context of diverse social, economic and political environments of OECD countries, the interaction between these two focal points – models of governance and types of knowledge – has become increasingly relevant to researchers, policy makers, and education stakeholders more generally.
    Date: 2012–02–08
  26. By: Cattaneo, O.; Gereffi, G.; Miroudot, S.; Taglioni, D.
    Abstract: In recent years, global value chains have played an increasing role in business strategies, profoundly affecting international trade and development paradigms. Global value chains now represent a major source of socio-upgrading opportunities and a new path for development. Trade, competitiveness and development policies should be reshaped accordingly to seize these opportunities and avoid the risks associated with greater participation in global value chains. This paper provides a framework and analytical tools for measuring and improving a country's performance with respect to participation in global value chains. With a clear operational focus, it provides guidance for countries willing to join, maintain participation, and/or move up global value chains. With the ultimate objective to increase the value (the development content) for trade, it also offers strategies to maximize the benefits and minimize the risks of developing countries'participation in global value chains.
    Keywords: Economic Theory&Research,E-Business,Labor Policies,Environmental Economics&Policies,Emerging Markets
    Date: 2013–04–01
  27. By: Marie-Estelle Binet (University of Rennes 1 - CREM UMR CNRS 6211, France); François Facchini (University of Paris-Sud, Faculty Jean Monnet (France))
    Abstract: This paper deals with the determinants of enterprise creation in the 22 French regions from 1994 to 2003. We then estimate a dynamic panel data model which allows spatial heterogeneity to be modelled and which is compared with a specification without spatial heterogeneity. The estimation results show that an appropriate consideration of spatial heterogeneity can lead to new insights. The results show: 1) that the Holcombe effect and the income effect have a statistically significant and positive impact for all regions; 2) that the age of the population and the size of the firms have the same negative effects for all regions with the exception of Ile-de-France; 3) that at the threshold of 10%, the refugee effect only concerns 10 regions out of 22; 4) that the effect of public R&D remains insignificant for 17 of the 22 regions, but becomes statistically significant in five regions and has a positive effect in three regions only, these being those which exhibit the highest per capita public R&D expenditure levels. Globally, Anselin's (1990) hypothesis, according to which the presence of spatial heterogeneity casts doubt upon the generalizability of theories in regional science, is thus in part confirmed.
    Keywords: Creation of enterprises, spatial heterogeneity, dynamic panel data, refugee effect, public R&D
    JEL: M13 O18 J21
    Date: 2013–04
  28. By: Roland Kirstein (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)
    Abstract: The paper evaluates three internationalization strategies of a company that considers invading a foreign market: • It can buy a firm that resides in the target market (acquisition strategy), • it can produce at home and export into the target market (export strategy), • or the two firms can agree upon produce in the invader's home country and sell the products in the target market (OEM strategy). For simplicity, we assume that the incumbent firm in the target country has a monopoly position. Under these circumstances, following the acquisition strategy would allow the newcomer to obtain this monopoly position, whereas the export strategy might result in a duopoly. We compare the outcomes of these two strategies for the two firms involved, allowing for different cost situations, and derive necessary conditions for a mutually beneficial acquisition. This analysis will allow us to derive sufficient conditions under which export would be the better strategy. The case of Lenovo is helpful to illustrate the point made by this paper: Lenovo had the options to set up own production sites in China to conquer the North American and European markets competing against IBM thinkpads, or to buy out IBM and use their production sites (which is what Lenovo actually did).
    Date: 2013–02
  29. By: Bin Ni (PhD Candidate, Graduate School of Economics, Osaka University)
    Abstract: Using firm-level data from an Enterprise Survey of World Bank, this paper is designed to test how policy variables can affect inward foreign direct investment ("FDI") in China. After excluding the problems of sample selection and endogeneity, the result shows that investment promotion agencies (IPAs) and investment incentive zones (IIZs) have significant positive effect on absorbing FDI in China. Other factors such as sales volume and R&D also have significant impact. I also found that both IPAs and IIZs play a more important role in inviting other foreign companies to come to China than they do to Hong Kong, Macau, and Taiwan ("HMT") enterprises. The last finding is that if the city has IPA only, its promotion effect actually outweighs the city with IPA or IIZ combined; on the other hand, if the city has IPA or IIZ, then its positive effect on absorbing FDI will be larger than the city with IIZ solely.
    Keywords: Investment promotion agency, firm-level data, sample selection, China
    JEL: F21 F23
    Date: 2013–04
  30. By: Keun Lee and John Mathews
    Abstract: The paper argues that science, technology and innovation (STI) play a critical role in expediting transition to a sustainable mode of development. Latecomer nations suffer from several disadvantages as they attempt to catch-up with the technological leaders, but they can enjoy latecomer advantages, if appropriate strategies are formulated and executed. One of the key concepts is leapfrogging, whereby the latecomers absorb what the technological leaders have to offer and leap to a new environment-friendly techno-economic paradigm. To facilitate such leap, the current intellectual-property-rights regimes need to evolve to one that fosters technology diffusion and greater use of intellectual property.
    Keywords: leapfrogging, environment-friendly tech-economic paradigm, public-private partnership, Trade Related Aspects of Intellectual Property Rights
    JEL: L52 O32 O34 O38 O53 O55
    Date: 2013–04
  31. By: Ab-Rahim, Rossazana; Kadri, Norlina; Ismail, Farhana
    Abstract: This study examines the efficiency performance of the full-fledged Islamic banks in Malaysia for the period of 2006 to 2011. The Malaysian Islamic banking industry has grown tremendously in terms of assets, deposits and total financing over the study period. Data Envelopment Analysis is employed in this study to measure the cost efficiency as well as the technical efficiency and its decompositions. The results show that, on average the main contributor of cost efficiency for Islamic domestic and foreign banks in Malaysia is allocative efficiency. In addition, the results find that Islamic foreign banks are more efficient than domestic banks with respect to pure technical efficiency and allocative efficiency.
    Keywords: Efficiency; Islamic banks; Malaysia
    JEL: D21 G21
    Date: 2013–04–16
  32. By: Arturo Galindo; Marcela Melendez
    Abstract: Credit has been found to be a catalyst for economic growth, as it spurs investment, enhances productivity, allows costs to be spread out over time, improves resource allocation, and enables investors to cope better with macroeconomic volatility. Most studies focus on the relationship between financial development and growth at the country level, while few analyze the relationship at the firm level. Using a panel-shaped firm-level dataset of Colombian firms and employing the methodology developed by Love and Zicchino (2006), this paper examines whether the response of firms to financial and real shocks varies according to firm size and across different levels of firm productivity. The study finds that financial shocks have a significant positive impact on firm growth, which is larger for larger firms and more productive firms that export. The results indicate that something is preventing smaller firms from taking full advantage of access to external financing.
    JEL: G32 O54
    Date: 2013–04
  33. By: Böckerman, Petri; Kauhanen, Antti; Maliranta, Mika
    Abstract: Abstract: To examine the productivity, employment and wage effects of ICT, we apply novel occupation based measures of organisational change within firms. With these measures, we directly address the complementarities between ICT and organisational changes. Our results support the view that organisational change complements ICT investments in a productivity-enhancing manner. In particular, the ICT-driven productivity gains are associated with the destruction of routine and non-interactive tasks in an organisation. Furthermore, using longitudinal aspects of our linked employer-employee data, we find that whereas ICT does not affect the probability of an employee becoming unemployed, it has a positive impact on the wage growth of retained employees.
    Keywords: ICT, innovation, organisational change, restructuring, productivity, performance, wages
    JEL: J24 J31 L23 M51
    Date: 2013–04–04
  34. By: Maliranta, Mika; Vihriälä, Vesa
    Abstract: We assess Finland’s competitiveness in the light of various, mainly short-term indicators. It turns out that the weak export market performance over the last few years is linked to the deterioration of profitability of production in Finland. A better export and employment performance requires a decline of relative unit labour costs and an improvement of business profitability. Wage moderation would obviously serve this purpose. On the other hand, the determinants of Finland’s long-term competitiveness are quite good and maintaining and developing them should remain a key element of economic policy also in the future. In contrast, it would be a mistake to believe that Finland’s current competitiveness challenges could be solved primarily by improving management skills.
    Keywords: competitiveness, profitability, productivity, export performance, employment
    JEL: F40 E25 E64 J31 O47
    Date: 2013–04–11
  35. By: Marc Bourreau (Telecom Paris); Paolo Lupi (AGCOM); Fabio Manenti (University of Padova)
    Abstract: We study how the migration from an old to a new technology is affected by the access price to the old technology. We show that both the incumbent and the regulator are willing to set a very high access price to accelerate consumers' migration to the new technology. When the quality of the old technology is exogenous and the entrant dominates investment in the new technology, the old technology is completely switched off in equilibrium, whereas the old technology persists when the incumbent dominates investment. When the incumbent can decide on an endogenous upgrade of the old technology, the migration to the new technology is slowed down, and the entrant might be foreclosed.
    Keywords: Access, Investment, Vertical differentiation, Multi-product firms. JEL Codes: L1, L51, L96.
    Date: 2013–02
  36. By: Ebru Kerimoglu (Istanbul Technical University, Department of Urban and Regional Planning); B. Can Karahasan (Okan University, Department of International Trade)
    Abstract: The ‘creative class’ as a source of growth has been afforded increasing attention in recent years. However, creative people are not distributed evenly across space, tending rather to concentrate in particular locations. The location decisions of these creative people have been forwarded as a significant factor in accounting for regional disparities in growth and development (Florida, 2002; Fritsch and Stuetzer, 2009). Inspired by the ongoing debate surrounding the creative class theory, this study investigates the spatial distribution of creative capital and its links with regional disparities by examining the geographical divergence of provincial income in Spain. Our findings indicate that although provinces with low levels of creative capital around 1996 experienced an increase in their creative employment in the years leading up to 2004, they still lag behind the northern (and, in particular, the north-eastern) provinces of Spain. More interestingly we report strong spillover effects among the leading and lagging provinces. This spatial pattern of creative capital also accounts for the north-south divide in Spain. Thus, our empirical evidence shows that the provinces with high levels of creative capital in northern Spain are more developed in terms of provincial income even when controlling for other determinants of the process, including industrial development, regional spillover effects and human capital development.
    Keywords: Creative Capital, Spain, Regional Divergence, Regional Spillover. JEL classification: R11, R12, O10, E24
    Date: 2012–02
  37. By: Junyi Shen (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan); Xiangdong Qin (School of Economics, Shanghai Jiao Tong University, China)
    Abstract: Many previous empirical studies have suggested that cooperation and trust affect economic growth. However, the precise relationship between trust and cooperation (i.e., whether trust leads to cooperation or cooperation leads to trust) remains unclear and it is not known how the level of economic development affects the level of cooperation and trust. Using a combination of public goods experiment, gambling game experiment, and trust game experiment, we investigate the links among cooperation, trust, and economic development in four regions of China. Our results suggest that first, there is a U-shaped or V-shaped relationship between cooperation and economic development; second, on the one hand, cooperation leads to trust, and on the other hand, more cooperative behavior may be created by rewarding trusting behavior; and third, men are more cooperative and trusting than women. Furthermore, we find that the widely used 'GSS trust' question from the General Social Survey (GSS) does not predict either cooperation or trust, whereas the questions 'GSS fair' and 'GSS help' have weak predictive power for trusting behavior but not for cooperative behavior.
    Keywords: Cooperation, Trust, Economic development, Experiment, China
    JEL: C91 H41 I32
    Date: 2013–04

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