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on Economics of Strategic Management |
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Issue of 2013‒05‒19
sixteen papers chosen by Joao Jose de Matos Ferreira University of the Beira Interior |
| By: | Eleonora Cutrini (University of Macerata); Giacinto Micucci (Bank of Italy); Pasqualino Montanaro (Bank of Italy) |
| Abstract: | This paper studies the case of the Marche footwear districts. Statistical evidence and interviews with entrepreneurs suggest that the traditional inter-firm relationships within these districts have significantly changed during the past decade. Some leading firms have been building up more exclusive relations with their suppliers, including those abroad, along “buyer-driven” value chains. Moreover, firms have been adopting different strategies, following two main paths: the first is a “focusing-on-quality” strategy, based on upgrading the quality of the goods and investing in brands, R&D and specific distribution channels; the second is a “focusing-on-costs” strategy, which aims at minimizing the production costs of a medium-quality range of goods, including outsourcing abroad. This study shows that firms which focused on quality did better than others, both in the years before the crisis of 2008-09 and during the recession. |
| Keywords: | global value chain, industrial districts, internationalization, footwear industry, firms’ organization and strategies |
| JEL: | L23 L25 L67 R11 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_150_13&r=cse |
| By: | Negin Salimi; Rudi Bekkers; Koen Frenken |
| Abstract: | Faced with ever-increasing pressure to innovate and perform, firms consider universities as a significant, external source of knowledge. There is a variety of ways through which such knowledge flow can take place, including academic publications, contract research, staff mobility and university patents and licenses, but also more collaborative modes such as joint research projects. This paper focuses on a specific – and promising – collaborative model, in which firms and universities are together involved in a Ph.D. project, carried out by a doctoral candidate. We model the relationship on the one hand on various aspects of governance, and the success of the collaboration on the other. Here, success is operationalized in a number of different ways, including the successful transfer, the application and the commercialization of knowledge. Our model was tested using a survey conducted at the Eindhoven University of Technology. We conclude that governance decisions have a significant impact on the ultimate success. Among other things, the choice of university supervisor plays a pivotal role. Moreover, success is more likely if there is joint decision-making by both university and partner on the content of the project, and communication between the Ph.D. candidate and their supervisor in the firm has a high frequency and quality. We believe our findings can help universities and firms to collaborate successfully. |
| Keywords: | Collaborative Ph.D. projects; governance of university-industry collaborations; collaboration success. |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:tuecis:wpaper:1305&r=cse |
| By: | Luis Cabral; Zhu Wang; Daniel Yi Xu |
| Abstract: | Taking the early U.S. automobile industry as an example, we evaluate four competing hypotheses on regional industry agglomeration: intra-industry local externalities, inter-industry local externalities, employee spinouts, and location fixed-effects. Our findings suggest that inter-industry spillovers, particularly the development of the carriage and wagon industry, play an important role. Spinouts play a secondary role and only contribute to agglomeration at later stages of industry evolution. The presence of other firms in the same industry has a negligible (or maybe even negative) effect on agglomeration. Finally, location fixed-effects account for some agglomeration, though to a lesser extent than inter-industry spillovers and spinouts. |
| Keywords: | Economic growth ; Regional economics ; Automobile industry and trade |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedrwp:13-04&r=cse |
| By: | Lau, Chi Keung Marco; Suvankulov, Farrukh; Karabag, Solmaz Filiz |
| Abstract: | This article explores determinants of competitiveness in the booming Turkish textile and apparel industry. Using focus groups, nationwide survey data and explanatory factor analysis we identify 27 competitiveness items grouped into eight constructs. According to Turkish managers, the competitiveness of textile and apparel firm is heavily determined by the product differentiation, efforts across foreign markets, and availability of government’s incentive and support programs. In contrast to existing studies, we find little evidence that firm networking in different forms such as close relationship politicians and state employees, clustering, and participating in the industry associations have a large effect on firm competitiveness. |
| Keywords: | firm competitiveness, factor analysis, textile industry, apparel industry, Turkey |
| JEL: | L00 L19 O53 |
| Date: | 2012–02–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:46974&r=cse |
| By: | Andrei Barbos (Department of Economics, University of South Florida) |
| Abstract: | This paper studies information acquisition under competitive pressure and proposes a model to examine the relationship between product market competition and the level of innovative ac- tivity in an industry. Our paper offers theoretical support for recent empirical results that point to an inverted-U shape relationship between competition and innovation. The model presents an optimal timing decision problem where a firm endowed with an idea trades the benefits of waiting for additional information on whether this idea can be converted into a successful project against the cost of delaying innovation: a given firm's profit following innovation is decreasing in the number of firms that invested at earlier dates. By recognizing that a firm can intensify its innovative activity on two dimensions, a risk dimension and a quantitative dimension, we show that firms solve this trade-off precisely so as to generate the inverted-U shape relationship. |
| Keywords: | Innovation, Information Acquisition, Timing Games, Preemption |
| JEL: | D40 L10 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:usf:wpaper:0713&r=cse |
| By: | Hans Koster (VU University Amsterdam); Jos N. van Ommeren (VU University Amsterdam); Piet Rietveld (VU University Amsterdam) |
| Abstract: | This paper examines the effects of specialisation (within-sector clustering) and diversity (between-sector clustering) on business services profitability and location choice. We apply a semiparametric Poisson sorting model allowing for firm-specific effects. We find that for most firms, profitability of business services firms is substantially higher close to specialised clusters of business services firms. A standard deviation increase in business services specialisation leads to on average a 40 percent increase in the probability that a business services firm locates there, supporting theories of Marshall, Arrow and Romer. It is also profitable for most business services firms to locate near a group of firms that belong to the same sector, not necessarily business services firms, so diversity is negatively related to location decisions. Almost all firms either benefit from within-sector clustering or between-sector clustering. Within-sector clusters are particularly profitable for large mature firms, whereas between-sector clusters are relatively more profitable for smaller innovative firms. |
| Keywords: | Sorting; Agglomeration Economies; Specialisation; Diversity; Heterogeneity; Semiparametric Estimation |
| JEL: | R12 R14 R39 |
| Date: | 2011–06–06 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2011085&r=cse |
| By: | Jeroen Hinloopen (University of Amsterdam); Grega Smrkolj (University of Amsterdam); Florian Wagener (University of Amsterdam) |
| Abstract: | We examine the trade-off between the benefits of allowing firms to cooperate in R&D and the corresponding increased potential for product market collusion. For that we utilize a dynamic model of R&D whereby we consider all possible initial marginal cost levels (technologies), including those that exceed the choke price. This global analysis yields four possibilities: initial marginal costs are above the choke price and this technology is, or is not, developed further, and initial marginal costs are below the choke price and the technology is, or is not, (eventually) taken off the market. We show that an extension of the cooperative agreement towards collusion in the product market is not necessarily welfare reducing: if firms collude, they (i) develop further a wider range of initial technologies, (ii) invest more in R&D such that process innovations are pursued more quickly, and (iii) abandon the technology for a smaller set of initial marginal costs. We also dis cuss the implications of our analysis for antitrust policy. |
| Keywords: | Antitrust policy, Bifurcations, Collusion, R&D cooperatives, Spillovers |
| JEL: | D43 D92 L13 L41 O31 O38 |
| Date: | 2013–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2013045&r=cse |
| By: | Mark Humphery-Jenner (University of New South Wales, Tilburg University); Zacharias Sautner (University of Amsterdam, Duisenberg school of finance); Jo-Ann Suchard (University of New South Wales) |
| Abstract: | We study the role of private equity firms in cross-border mergers and acquisitions. We find that private equity-owned firms are more likely to become targets in crossborder M&A transactions. This effect is particularly strong in transactions where the target or its shareholders actively reach out for an acquirer. On average, cross-border deals with private equity-involvement are not associated with higher announcement returns. However, announcement returns are higher if the acquirer is owned by a private equity firm and the target is from a country with poor corporate governance. We provide evidence indicating that the international networks and connections that result from prior cross-border deals can explain why private equity firms create value in such deals. Our findings suggest that private equity firms can help to reduce information asymmetries in certain cross-border M&A deals. We perform several tests to address possible endogeneity concerns. |
| Keywords: | G34, G32, G24 |
| Date: | 2012–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2012031&r=cse |
| By: | Jurjen J.A. Kamphorst (Erasmus University Rotterdam); Otto H. Swank (Erasmus University Rotterdam) |
| Abstract: | In many organizations, reward decisions depend on subjective performance evaluations. However, evaluating an employee's performance is often difficult. In this paper, we develop a model in which the employee is uncertain about his own performance and about the manager's ability to assess him. The manager gives an employee a performance appraisal with a view of affecting the employee's self perception, and the employee's perception of the manager's ability to assess performance. We examine how performance appraisals affect the employee's future performance. The predictions of our model are consistent with various empirical findings. These comprise (i) the observation that managers tend to give positive appraisals, (ii) the finding that on average positive appraisals motivate more than negative appraisals, and (iii) the observation that the effects of appraisals depend on the employee's perception of the manager's ability to assess performance accurately. |
| Keywords: | Subjective Performance Appraisal, Credibility, Cheap Talk |
| JEL: | M52 M54 D82 D83 |
| Date: | 2012–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2012034&r=cse |
| By: | Sander Hoogendoorn (University of Amsterdam); Simon C. Parker (University of Western Ontario, Richard Ivey School of Business); Mirjam van Praag (University of Amsterdam) |
| Abstract: | This paper studies the impact of diversity in cognitive ability among members of a team on their performance. We conduct a large field experiment in which teams start up and manage real companies under identical circumstances. Exogenous variation in - otherwise random - team composition is imposed by assigning individuals to teams based on their measured cognitive abilities. The setting is one of business management practices in the longer run where tasks are diverse and involve complex decision-making. We propose a model in which greater ability dispersion generates greater knowledge for a team, but also increases the costs of monitoring necessitated by moral hazard. Consistent with the predictions of our model, we find that team performance as measured in terms of sales, profits and profits per share first increases, and then decreases, with ability dispersion. Teams with a moderate degree of ability dispersion also experience fewer dismissals due to few er shirking members in those teams. |
| Keywords: | Ability dispersion, team performance, field experiment, entrepreneurship, knowledge pooling, moral hazard |
| JEL: | C93 D83 J24 L25 L26 M13 M54 |
| Date: | 2012–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2012130&r=cse |
| By: | Christiaan Behrens (VU University Amsterdam); Mark Lijesen (VU University Amsterdam) |
| Abstract: | This article analyses the capacity-then-price game for a duopoly market. We add to the literature by explicitly taking product differentiation into account. We study the impact of capacity costs, demand uncertainty, and vertical and horizontal product differentiation on equilibrium capacities, efficiency, and price dispersion. We identify a minimum degree of vertical product differentiation, relative to horizontal product differentiation, for which the subgame perfect Nash equilibrium in pure strategies is guaranteed to exist. We find that if firms' quality differences exactly offset cost differences, asymmetric outcomes in the capacity stage arise, with the low-cost, low-quality firm providing more capacity than its competitor. We show that the highest level of efficiency is reached at the degree of vertical product differentiation where it would be optimal for welfare if firms had equal capacities. Furthermore, our model provides an explanation for ambiguous results in empirical research on price dispersion. |
| Keywords: | Price competition, Capacity choice, Demand uncertainty, Product differentiation, Price dispersion |
| JEL: | D43 L11 L13 |
| Date: | 2012–10–26 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2012113&r=cse |
| By: | Juseuk Kim (College of Education, Seoul National University); Lynn Ilon (College of Education, Seoul National University); Jorn Altmann (College of Engineering, Seoul National University) |
| Abstract: | IPhone and Android technology only became available in Korea in 2010, yet today, nearly every student in Korea¡¯s top university carries either an iPhone or Android enabled phone. Students are plugged in and communicating constantly. One Lifelong Learning class investigated the use of smartphones among Education and Engineering students. Both the process of the class and the outcomes of the research reveal much of how the practices of learning are changing in a dynamic, globally-linked university. Their answers to a set of surveys on smartphone use for learning revealed that smartphones were used extensively by all students. Students had a broad definition of how they used their smartphones for learning. Engineering and Education students varied somewhat on how they used their phones for learning. Most interesting, the heavy users of smartphones were not usually the ones who were the most intensive users of apps that most students agreed were most useful for learning. |
| Keywords: | Smartphones, M-learning, Learning Apps, Collective Learning, Seoul National University. |
| JEL: | C42 D83 L86 O33 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:snv:dp2009:2013101&r=cse |
| By: | David Audretsch (The Georgia State University); Roy Thurik (Erasmus University Rotterdam) |
| Abstract: | The purpose of this paper is to suggest that a fundamental shift in Europe, along with the other OECD countries, is taking place. This shift is from the managed economy to the entrepreneurial economy. While politicians and policy makers have made a plea for guidance in the era of entrepreneurship, scholars have been slow to respond. The purpose of this paper is to make a first step identifying and articulating these differences. We do this by contrasting the most fundamental elements of the newly emerging entrepreneurial economy with those of the managed economy. We identify fifteen trade-offs confronting these two polar worlds. The common thread throughout these trade-offs is the increased role of new and small enterprises in the entrepreneurial economy. A particular emphasis is placed on changes in economic policy demanded by the entrepreneurial economy vis-à-vis the managed economy. We then explore whether restructuring towards the entrepreneurial economy has been conducive to economic growth and job creation. Our empirical analysis links the stage of the transition towards an entrepreneurial economy to the growth rates of European countries over a recent period. We find that those countries which have introduced a greater element of entrepreneurship have been rewarded with additional growth. |
| JEL: | O0 L0 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:0000109&r=cse |
| By: | Paolo Bertoletti (Department of Economics and Management, University of Pavia); Federico Etro (Department of Economics, University of Venice Ca' Foscari) |
| Abstract: | We study monopolistic competition under indirect additivity of preferences. This is dual to the Dixit-Stiglitz model, where direct additivity is assumed, with the CES case as the only common ground. Other examples include (perceived) demand functions that are exponential or linear. Our equilibrium results are generally in contrast with those received by the literature. An increase of the number of consumers never affects prices and firms’ size, but increases proportionally the number of firms, creating pure gains from variety. An increase in individual income increases prices (and more than proportionally the number of varieties) and reduces firms’ size if and only if the price elasticity of demand is increasing. We also study the endogenous market structure with Bertrand competition (in which a pro-competitive effect of market size arises) and the case for inefficient entry. |
| Keywords: | Monopolistic competition, Indirect additivity, Dixit-Stiglitz model, Endogenous entry |
| JEL: | D11 D43 L11 F12 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:pav:demwpp:demwp0043&r=cse |
| By: | Hugo Erken (Ministry of Economic Affairs, The Hague); Piet Donselaar (Ministry of Economic Affairs, The Hague); Roy Thurik (Erasmus School of Economics, Erasmus Universiteit Rotterdam, EIM Business and Policy Research, Zoetermeer) |
| Abstract: | Total factor productivity of twenty OECD countries for a recent period (1971-2002) is explained using six different models based on the established literature. Traditionally, entrepreneurship is not dealt with in these models. In the present paper it is shown that – when this variable is added - in all models there is a significant influence of entrepreneurship while the remaining effects mainly stay the same. Entrepreneurship is measured as the business ownership rate (number of business owners per workforce) corrected for the level of economic development (GDP per capita). |
| Keywords: | Total factor productivity, research and development, entrepreneurship, OECD |
| JEL: | E20 L26 M13 O10 O30 O40 O50 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:0000034&r=cse |
| By: | David E. Allen (Edith Cowan University); Michael McAleer (Econometric Institute, Erasmus University Rotterdam, Complutense University of Madrid, and Kyoto University); R.J. Powell (Edith Cowan University); A.K. Singh (Edith Cowan University) |
| Abstract: | This paper features an analysis of volatility spillover effects from the US market, represented by the S&P500 index to the Australian capital market as represented by the Australian S&P200 for a period running from 12th September 2002 to 9th September 2012. This captures the impact of the Global Financial Crisis (GFC). The GARCH analysis features an exploration of whether there are any spillover effects in the mean equations as well as in the variance equations. We adopt a bi-mean equation to model the conditional mean in the Australian markets plus an ARMA model to capture volatility spillovers from the US. We also apply a Markov Switching GARCH model to explore the existence of regime changes during this period and we also explore the non-constancy of correlations between the markets and apply a moving window of 120 days of daily observations to explore time-varying conditional and fitted correlations. There appears to be strong evidence of regime switching behaviour in the Australian market and changes in correlations between the two markets particularly in the period of the GFC. We also apply a tri-variate Cholesky-GARCH model to include potential effects from the Chinese market, as represented by the Hang Seng Index. |
| Keywords: | Volatility spillovers, Markov-switching GARCH, Cholesky-GARCH, Time-varying correlations |
| JEL: | C22 C32 G11 G15 |
| Date: | 2013–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2013009&r=cse |