nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2013‒07‒15
twenty papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. The Role of University Scientist Mobility for Industrial Innovation By Ejsing, Ann-Kathrine; Kaiser, Ulrich; Kongsted, Hans Christian; Laursen, Keld
  2. Time to BRIC It? – Internationalization of European Family Firms in Europe, North America and the BRIC Countries By Vivien Procher; Diemo Urbig; Christine Volkmann
  3. Adoption of Waste-Reducing Technology in Manufacturing: Regional Factors and Policy Issues By Giulio Cainelli; Massimiliano Mazzanti; Alessio D'Amato
  4. Do the effects of R&D tax credits vary across industries? A meta-regression analysis By Castellacci, Fulvio; Lie, Christine
  5. Clusters and the New Growth Path for Europe By Christian Ketels; Sergiy Protsiv
  6. Geographical and Industrial Spillovers in entry decisions across export markets By Muñoz Sepulveda, Jesus Angel; Rodriguez, Diego
  7. Proximity strategies in outsourcing relations: the role of geographical, cultural and relational proximity in the European automotive industry By Alexander SCHMITT; Johannes VAN BIESEBROECK
  8. Entrepreneurial activity, industry orientation, and economic growth By Jolanda Hessels; Peter van der Zwan; Mark Sanders
  9. Entry and Post-Entry Dynamics in Developing Countries By Francesco Quatraro; Marco Vivarelli
  10. The road not taken: competition and the R&D portfolio By Igor Letina
  11. R&D, Within and Between Patent Competition in the Pharmaceutical Industry By Magazzini Laura; Fabio Pammolli
  12. Global Governance of International Competitiveness Spillovers By Bernard M. Hoekman
  13. Innovation in the Host Country and the Structure of Foreign Direct Investment: Evidence from Japanese multinationals By JINJI Naoto; Xingyuan ZHANG
  14. Techological capability building in MNE-related social businesses of less developed countries: The experience of Grameen-Danone Foods in Bangladesh By Peerally, Jahan A.; Figueiredo, Paulo N.
  15. Food Standards, Heterogeneous Firms and Developing Countries’ Export Performance By Schuster, Monica; Maertens, Miet
  16. Periodic strategies and rationalizability in perfect information 2-Player strategic form games By Oikonomou, V.K.; Jost, J
  17. Foreign direct investment as a driver of industrial development: why is there so little evidence? By Narula, Rajneesh
  18. Measuring Competition using the Boone Relative Profit Difference Indicator: an application to Banking Systems in Emerging Economies By Meryem Deygun; Mohamed Shaban; Tom Weyman-Jones
  19. Explaining entrepreneurial performance of solo self-employed from a motivational perspective By André van Stel; Werner Liebregts; Nardo de Vries
  20. The Effect of Export Tax on Indonesia’s Cocoa Export Competitiveness By Rifin, Amzul; Nauly, Dahlia

  1. By: Ejsing, Ann-Kathrine (Danish Insurance Association); Kaiser, Ulrich (University of Zurich); Kongsted, Hans Christian (University of Copenhagen); Laursen, Keld (Copenhagen Business School)
    Abstract: Scientific knowledge is an important ingredient in the innovation process. Drawing on the knowledge-based view of the firm and the literature on the relationship between science and technology, this paper scrutinizes the importance of university scientists' mobility for firms' innovative activities. Combining patent data and matched employer-employee data for Danish firms, we can track the labor mobility of R&D workers from 1999 to 2004. We find that new joiners contribute more than long-term employees to innovative activity in the focal firm. Among new firm recruits, we observe that newly hired former university researchers contribute more to innovative activity than newly hired recent graduates or joiners from firms, but only in firms with a high level of absorptive capacity in the form of recent experience of hiring university researchers. We find also that firms' recent experience of hiring university researchers enhances the effect of newly hired recent graduates' contributions to innovation.
    Keywords: innovative activity, science-technology relationship, labor mobility
    JEL: O33 O34 C23
    Date: 2013–06
  2. By: Vivien Procher; Diemo Urbig; Christine Volkmann
    Abstract: For a sample of 1243 European companies, we analyse the link between firm type and foreign direct investment (FDI) locations. We find substantial empirical evidence that being a family firm does not only affect the overall propensity for FDI but that this effect is also specific to target regions. Overall, family firms invest more than managerial-led firms, particularly in Europe and North America. Furthermore the BRIC countries Brazil, Russia, India and China do not constitute a homogenous attractiveness cluster for FDI.
    Keywords: Foreign direct investment; family firms; BRIC
    JEL: D21 F23 L22
    Date: 2013–05
  3. By: Giulio Cainelli; Massimiliano Mazzanti; Alessio D'Amato
    Abstract: We present a joint theoretical-empirical investigation to assess the adoption by manufacturing firms of innovations aimed at increasing recycling and, consequently, reducing the use of material and waste in production processes. According to the recent emphasis on the 'external' factors stimulating innovation which often may be more important than the classic drivers, such as R&D, we address the role of local influences, such as policy environments and regional structural features. First, we analyse firms’ innovation adoption choices in a simplified technology adoption model augmented by discussions in the environmental innovation (EI) literature that rationalize the research hypotheses underlying empirical models. We frame our empirical analysis on an original integration of data from a firm survey (EU CIS2008 survey of manufacturing firms) and regional level waste related information obtained from Italian environmental agency waste reports. The EU CIS2008 was the first of these surveys to ask for information on EI adoption in the waste sector. Our econometric analysis shows that firms adopt EI on the basis of some relational factors, while drivers such as R&D have no impact. The evidence of our study supports the role of regional factors related to waste management and policy. For example, firms located in regions with better separated waste collection and waste tariff diffusion systems are more likely to adopt EI. Networking and agglomeration economies do not seem to have any effect.
    Keywords: waste and material reduction technology; innovation adoption; firm behaviour; waste policy; regional frameworks; agglomeration economies
    JEL: D22 Q53 Q55
    Date: 2013–06–21
  4. By: Castellacci, Fulvio; Lie, Christine
    Abstract: This paper presents a survey of the micro-econometric literature on the effects of R&D tax credits on firms’ innovation activities. We focus on one specific aspect that has not received sufficient attention in previous research: the sectoral dimension. Our meta-regression analysis (MRA) sets up a new database collecting a large number of firm-level studies on the effects of R&D tax credits and investigates the factors that may explain differences in the estimated effects that are reported in the literature. The main result of the MRA analysis is indeed that sectors matter. Micro-econometric studies that have focused on a sub-sample of high-tech industries have on average obtained a smaller estimated effect of R&D tax credits. The paper proposes a simple framework to investigate why the effects of R&D tax credits vary across sectors and points out new directions and hypotheses for future research.
    Keywords: R&D tax credits; R&D policy; sectors; meta-regression analysis
    JEL: H25 H32 O32 O38
    Date: 2013–07
  5. By: Christian Ketels; Sergiy Protsiv
    Abstract: This paper outlines elements of a conceptual framework that clarifies the role that clusters play relative to government policies and actions of individual companies in supporting the emergence of 'High Road'-strategies that lead to better New Growth Path-related outcomes. It then focuses on creating a new set of data that can start shedding light on the empirical relevance of this framework. The first main section of the paper draws on a new set of employment and wage data across European clusters. The data is used to analyze whether cluster presence is significantly correlated with higher wages, which as an indicator of higher productivity, are likely to signal the presence of 'High Road'-strategies. We then take a closer look at the scale of the relationship relative to location-specific and other effects. We find cluster presence to be significantly related to higher wages, with the effect being moderate but meaningful. This suggest that cluster presence enhances the ability of economic activities to deliver high performance, but is unlikely to be able to substitute weak business environment conditions. The second section then deploys a wide range of regional performance data collected for the European Competitiveness Index and the European Cluster Observatory. We create indicators for New Growth Path performance and its main dimensions, and classify European regions by their performance patterns. This provides critical insights into the compatibility of the different economics, social, and ecological objectives pursued. We then relate these outcomes to the presence of strong cluster portfolios and strong business environment conditions. Both are most strongly associated with stronger economic outcomes, with lower impact on other dimensions of the New Growth Path. The third section creates a new dataset of cluster initiative intensity at the regional and cluster category-level. It also classifies close to 1000 cluster initiatives in Europe by their engagement in New Growth Path-related activities. We then deploy this data to test the impact of cluster initiatives on regional New Growth Path-performance. Overall, we find evidence consistent with clusters playing a role in making 'High Road'-strategies more likely to emerge. We also find evidence that European regions differ in their strategies towards these goals, with some being able to pursue all three dimensions in parallel. Cluster initiatives widely engage in New Growth Path-related activities, indicating their potential as a tool in mobilizing joint action in these areas.
    Keywords: Clusters, competitiveness, economic growth path, economic strategy, European economic policy, globalisation, industrial policy, new technologies, SMEs
    JEL: D04 L16 L52 R58
    Date: 2013–07
  6. By: Muñoz Sepulveda, Jesus Angel; Rodriguez, Diego
    Abstract: This paper addresses sequential entry decisions in export markets. It focuses on externalities derived from previous export activity in countries close to those for which a potential entry decision is taken (geographical spillovers) and externalities derived from previous presence of other firms in the same industry (industrial spillovers). The empirical analysis uses Spanish microdata for the period 2000-2010 in a gravity function framework that also integrates country and firm characteristics. The results suggest the positive effect of both geographical and industrial spillovers to explain entry decisions in export markets, though both are smaller in magnitude than the effects coming from previous presence.
    Keywords: Sequential entry, spillovers, export activity
    JEL: F10 F14
    Date: 2013–07–05
  7. By: Alexander SCHMITT; Johannes VAN BIESEBROECK
    Abstract: Trends towards international fragmentation of production and modular process technologies have increased the importance of proximity in the supply chain of sophisticated manufactured goods. Using a rich and novel data set for the European automotive industry, we simultaneously evaluate the relative importance of geographical, cultural and relational proximity in sourcing strategies. The estimates indicate that each dimension provides an independent benefit and also which measures have the largest relative importance. We also find that the positive effects attributed to some measures reflect past relationships rather than predict new ones. In particular, co-location and a low cultural distance should be interpreted as outcomes of a sourcing strategy, not as predictors for sourcing success. We investigate to what extent firms from different countries follow different strategies and which choices suppliers can make to boost their attractiveness as outsourcing partner.
    Date: 2013–02
  8. By: Jolanda Hessels; Peter van der Zwan; Mark Sanders
    Abstract: There is evidence that entrepreneurial activity plays a non-negligible role in driving economic development. In this paper we investigate whether the industry in which the entrepreneurial activity takes place matters for economic growth, both in developed and developing countries. We distinguish between three types of entrepreneurial activity, based on the technology intensity that is involved: entrepreneurship without any technology intensity, low technology entrepreneurship, and high technology entrepreneurship. Data from the Global Entrepreneurship Monitor are used to construct early-stage entrepreneurial activity rates for almost 70 countries and for 9 years (2001-2009). We first show that entrepreneurial activity is heavily concentrated in no-tech industries, even in advanced economies. In our regressions, we then find that entrepreneurial activity in high-tech industries creates more economic growth as compared to no-tech and low-tech industries. This stresses the importance of high-tech entrepreneurship; in addition, we show that entrepreneurs active in high-tech industries are higher educated and have higher job growth expectations than entrepreneurs in no-tech or low-tech industries. Practical implications are formulated in the concluding section.
    Date: 2013–04–23
  9. By: Francesco Quatraro; Marco Vivarelli
    Abstract: The aim of this paper is to provide an updated survey of the "state of the art" in entrepreneurial studies, with a particular focus on developing countries (DCs). In particular, the same concept of "entrepreneurship" will be critically discussed, then moving to the institutional, macroeconomic and microeconomic conditions affecting the entry of new firms and the post-entry performance of newborn firms.
    Keywords: entrepreneurship, new firm, innovation, development
    JEL: L26 O12
    Date: 2013–06
  10. By: Igor Letina
    Abstract: When firms decide to invest in R&D, they have to choose not only the amount of resources to invest, but also which research projects to develop. This paper investigates the market portfolio of research projects. Contrary to most of the literature, which focuses only on the level of investment in innovation, this model captures both the variety of research projects undertaken and the amount of duplication of research. A characterization of the equilibrium market portfolio is provided. It is shown that an increase in the number of firms increases the variety of developed projects and increases the amount of duplication of research. An increase in the intensity of competition among firms leads to an increase in the variety of developed projects and a decrease in the amount of duplication of research. A characterization of the socially optimal portfolio is provided. It is shown under which conditions the market invests suboptimally in the variety and duplication of research projects. Market underinvestment in the variety of R&D projects is demonstrated for a large class of product market models.
    Keywords: Innovation, competition, R&D portfolio, market structure
    JEL: L13 L22 O31
    Date: 2013–07
  11. By: Magazzini Laura (Department of Economics, University of Verona); Fabio Pammolli (IMT Lucca Institute for Advanced Studies Author-Name: Massimo Riccaboni; IMT Lucca Institute for Advanced Studies)
    Abstract: : We analyse the consequences of the increasing complexity of R&D on within- and between-patent competition in the pharmaceutical industry. The intensity of competition is measured by jointly considering the timing from market launch to patent expiry, the strength of between-patent competition as well as competition introduced by generic producers. A simple model is proposed that predicts the shrinking of product lifetimes in the presence of correlated parallel R&D projects and market portfolios. The model is tested using data on pharmaceutical products sold in Europe and in the US. Based on our model we are able to estimate the impact of R&D complexity and relatedness among R&D portfolios on the value of innovative drugs.
    Keywords: Patent value, innovation, R&D competition, Pharmaceutical industry.
    JEL: D23 D83 O34 O31 L13
    Date: 2013–07
  12. By: Bernard M. Hoekman
    Abstract: Reducing public sector deficits and high debt burdens in part will require an increase in net exports – which is only possible if the countries concerned are able to produce goods and services that are ‘competitive’ on world markets. Policies aimed at enhancing competitiveness may be offset by actions taken in other countries and can generate negative international pecuniary spillovers. This paper discusses different approaches towards dealing with (perceived) cross-border externalities. In many cases there will be a significant degree of uncertainty as what the net effects of policies are, taking into account the overall impact of policy measures that have a bearing on firm-level competitiveness. A case is for greater cooperation to enhance the transparency of applied policies; assess their impacts and establish mechanisms to consult and exchange information.
    Keywords: international economic policy, multilateral cooperation, spillovers, competitiveness, economic integration
    JEL: F13
    Date: 2013–06
  13. By: JINJI Naoto; Xingyuan ZHANG
    Abstract: In this study, we investigate how the innovative performance of local firms in host countries affects the structure of foreign direct investment (FDI) by multinational enterprises (MNEs) using Japanese firm-level data and patent application data for host countries of Japanese FDI at the United States Patent and Trademark Office for the period from 1995 to 2006. The structure of FDI is measured by the shares of local transactions and transactions with the source country and a third country by foreign affiliates of Japanese MNEs. Our estimation results imply that innovation by local firms in the same and related industries in host countries in Asia and Europe strengthens forward and backward linkages. We also find that innovation in the host country encourages transactions with the source country when the former is technologically advanced. Finally, our findings suggest that, in Asia, the innovative performance of local firms contributes to the development of regional production networks.
    Date: 2013–06
  14. By: Peerally, Jahan A. (Ecole des Hautes Etudes Commerciales (HEC), Montreal); Figueiredo, Paulo N. (Brazilian School of Public and Business Administration (EBAPE), Getulio Vargas Foundation (FGV), Rio de Janeiro)
    Abstract: Although there has been considerable research on firm-level technological capability building in the context of developing economies, there is a scarcity of studies which examine this issue in multinational enterprises' socially motivated businesses located in less developed economies. This paper examines the latterissue on the basis of first-hand empirical evidence derived from an extensive field research on Grameen-Danone Foods Limited (GDFL) in Bangladesh. The study found that GDFL generated relevant spillovers to the host economy by accumulating production capabilities in association with innovation capabilities at intermediate levels across four technological functions: project management, process and production organization, product centred and equipment-related. Apart from revealing the types of frugal and reverse innovations which emanates from such a business, our study also explores - unlike existing studies which only focus on the financial and social benefits - the technological benefits generated froma social business model.Understanding the nature and dynamics of technological activities in social businesses of less developed economies is relevant for the achievement of enhanced local, autonomous and sustainable economic and social development.
    Keywords: Technological capability building, MNEs, MNE subsidiaries, social businesses, entrepreneurship, bottom of the pyramid, less developed countries, Bangladesh
    JEL: M16 O32 Q16 Q18
    Date: 2013
  15. By: Schuster, Monica; Maertens, Miet
    Abstract: While recent studies emphasize the importance of firm heterogeneous effects in understanding international trade and its gains, these insights have largely been ignored in the literature on standards. In this paper we analyze how the adoption of private food standards by individual firms affects their export performance at the intensive and extensive margins of trade. We use unique 18-year panel data from 95 asparagus export firms in Peru and apply fixed effects and system GMM models. Results indicate that, when export persistence, unobserved heterogeneity and reversed causality are controlled for, certification to private standard schemes does not improve firms’ propensity to export, nor their export volumes and values. This insight puts doubt on the effectiveness of development programs to support developing country exporters to comply with private food standards in order to maintain or improve international market access.
    Keywords: Food standards, Private standards, Firm heterogeneity, New new trade theory, Export performance, Developing countries, Agribusiness, Agricultural and Food Policy, C23, F14, Q17,
    Date: 2013
  16. By: Oikonomou, V.K.; Jost, J
    Abstract: We define and study periodic strategies in two player finite strategic form games. This concept can arise from some epistemic analysis of the rationalizability concept of Bernheim and Pearce. We analyze in detail the pure strategies and mixed strategies cases. In the pure strategies case, we prove that every two player finite action game has at least one periodic strategy, making the periodic strategies an inherent characteristic of these games. Applying the algorithm of periodic strategies in the case where mixed strategies are used, we find some very interesting outcomes with useful quantitative features for some classes of games. Particularly interesting are the implications of the algorithm to collective action games, for which we were able to establish the result that the collective action strategy can be incorporated in a purely non-cooperative context. Moreover, we address the periodicity issue for the case the players have a continuum set of strategies available. We also discuss whether periodic strategies can imply any sort of cooperativity. In addition, we put the periodic strategies in an epistemic framework.
    Keywords: Game Theory;Rationalizability;Solution Concepts, Periodicity;Epistemic Game Theory
    JEL: C0 C02 C70 C72
    Date: 2013–07–08
  17. By: Narula, Rajneesh (J.H. Dunning Centre for International Business, Henley Business School)
    Abstract: This paper examines the role of FDI in promoting industrial development, and raises a rather important question: Why, if FDI is such an important avenue to promote development, is their little evidence on concomitant industrial development in most developing countries? This chapter takes a look at the evidence on FDI and development and explores some of the causes for this ambiguity. The complexities of global value chains and networks have begun to trivialize the simplistic principle that increased MNE activity automatically implies a proportional increase in spillovers and linkages. Policies towards MNEs need to be closely linked and integrated with industrial policy. MNE activity needs to be evaluated by considering the kinds of externalities that are generated; whether and how domestic actors can internalize them, and building up absorptive capacities to achieve this.
    Keywords: MNEs, absorptive capabilities, motives, IDP, services, developing countries
    JEL: F23 O14 O19
    Date: 2013
  18. By: Meryem Deygun (University of Leicester School of Management, UK); Mohamed Shaban (University of Leicester School of Management, UK); Tom Weyman-Jones (School of Business and Economics, Loughborough University, UK)
    Abstract: This paper suggests an operational method for implementing the theoretical relative prot dierence test for intensity of competition due to Boone (2008). We use polynomial quantile regressions for which integral areas and their standard errors can easily be computed and compared using Wald tests. An empirical example is presented which applies the test to a panel data sample of banks in dierent emerging economies. The results indicate that the trend towards more intense competition amongst emerging economy banks continued during the period of the nancial upheaval in 2005-2008, and that India and China among others were leading this process.
    Date: 2013–06
  19. By: André van Stel; Werner Liebregts; Nardo de Vries
    Abstract: This paper investigates whether start-up motivation (opportunity versus necessity) influences entrepreneurial performance of an important subset of entrepreneurs, viz. the solo self-employed. We also explore to what extent human capital measures mediate this relation. We use a unique individual-level panel data set of solo self-employed in the Netherlands for three consecutive years (2009-2011) and construct three separate measures to identify necessitydriven solo self-employment. Our main finding confirms that necessity-driven solo self-employed perform worse than opportunity-driven solo self-employed. Furthermore, start-up motivation seems to have an isolated effect on entrepreneurial performance, considering that we also find that formal education and practical learning hardly mediate the relation. Our results imply that it is important to distinguish between different motivations within the population of solo self-employed in order to understand their entrepreneurial performance.
    Date: 2013–05–30
  20. By: Rifin, Amzul; Nauly, Dahlia
    Abstract: The government of Indonesia implemented an export tax policy on cocoa beans since April 2010 in order to develop cocoa processing industry. The objective of this article is to analyze the effect of export tax on Indonesia’s cocoa export competitiveness. The results indicate that with the implementation of export tax, cocoa export product composition shift from cocoa beans to processed cocoa products. On the other hand, Indonesia’s cocoa export growth is lower than the growth of cocoa world demand which is mainly caused by the decrease of competitiveness. Comparing the three cocoa beans producer, Ghana has gain competitiveness in 2011 compare to 2009.
    Keywords: cocoa, export tax, competitiveness, Crop Production/Industries, Demand and Price Analysis, International Relations/Trade, Production Economics,
    Date: 2013–02

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