nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2013‒07‒20
twenty-two papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. Network Formation: R&D Cooperation Propensity and Timing Among German Laser Source Manufacturers By Muhamed Kudic
  2. Determinants and Policy Simulation of Firms Cooperation in Innovation By Heshmati, Almas; Lenz-Cesar, Flávio
  3. Regional characteristics, opportunity perception and entrepreneurial activities By Stuetzer, Michael; Obschonka, Martin; Brixy, Udo; Sternberg, Rolf; Cantner, Uwe
  4. Industry in the South of Italy and the crisis By Raffaello Bronzini,; Luigi Cannari; Alessandra Staderini; Laura Conti; Leandro D’Aurizio; Alessandro Fabbrini; Andrea Filippone; Giuseppe Ilardi; Giovanni Iuzzolino; Pasqualino Montanaro; Marco Paccagnella; Valeria Pellegrini; Raffaele Santioni
  5. Intellectual Property Rights and Foreign Direct Investment: A Welfare Analysis By Hitoshi Tanaka; Tatsuro Iwaisako
  6. Serial entrepreneurship, learning by doing and self-selection By Vera Rocha; Anabela Carneiro; Celeste Amorim Varum
  7. Putting firms in context : the role of embeddedness in shaping corporate strategies. By ROMANO, Livio
  8. Price vs. Quantity in duopoly with strategic delegation: Role of network externalities By Trishita Bhattacharjee; Rupayan Pal
  9. Path Dependent Patterns of Persistence in Productivity Growth. By Antonelli, Cristiano; Crespi, Francesco; Scellato, Giuseppe
  10. Resource reallocation and innovation : converting enterprise risks into opportunities By Dutz, Mark A.
  11. Where do entrepreneurial skills come from? By Stuetzer, Michael; Obschonka, Martin; Davidsson, Per; Schmitt-Rodermund, Eva
  12. The impact of government support on firm R&D investments : a meta-analysis By Correa, Paulo; Andres, Luis; Borja-Vega, Christian
  13. The Italian industrial system between globalization and crisis By Antonio Accetturo,; Antonio Bassanetti; Matteo Bugamelli; Ivan Faiella; Paolo Finaldi Russo; Daniele Franco; Silvia Giacomelli; Massimo Omiccioli
  14. An empirical investigation into the determinants and persistence of different types of subjective well-being By Chrostek, Pawel
  15. Competition and the Efficiency of Markets for Technology By Allain, Marie-Laure; Henry, Emeric; Kyle, Margaret
  16. Technology Diffusion: Measurement, Causes and Consequences By Diego Comin; Martí Mestieri
  17. Determinants of job creation in eleven new EU member states : evidence from firm level data By Oberhofer, Harald; Vincelette, Gallina A
  18. Globalization Localized Technological Change and the Knowledge Economy. By Antonelli, Cristiano
  19. European Integration and Knowledge Flows across European Regions By Cappelli, Riccardo; Montobbio, Fabio
  20. How Do Banking Crises Affect Bilateral Exports? By Youssouf KIENDREBEOGO
  21. Productivity dispersion and the roles of quality of labour input and competition: A case of Vietnamese manufacturing sector By Doan, Tinh; Nguyen, Ha
  22. The Spatial Diffusion of Technology By Diego Comin; Mikhail Dmitriev; Esteban Rossi-Hansberg

  1. By: Muhamed Kudic
    Abstract: Empirical evidence on the evolution of innovation networks within high-tech industries is still scant. We investigate network formation processes by analyzing the timing of firms to enter R&D cooperations, using data on laser source manufacturers in Germany, 1990-2010. Network measures are constructed from a unique industry database that allows us to track both the formation and the termination of ties. Regression results reveal that a firm's knowledge endowment (and cooperation experience) shortens the duration to first (and consecutive) cooperation events. The previous occupation of strategic network positions is closely related to the establishment of further R&D cooperations at a swift pace. Geographic co-location produces mixed results in our analysis.
    JEL: O32 C41 D85
    Date: 2013–07
  2. By: Heshmati, Almas (Sogang University); Lenz-Cesar, Flávio (Brazil Ministry of Communications)
    Abstract: This research introduces an agent-based simulation model representing the dynamic processes of cooperative R&D in the manufacturing sector of South Korea. Firms' behavior is defined according to empirical findings on the Korean Innovation Survey 2005 and captured in a multivariate probit regression model. The econometrics model identifies the determinants on firms' likelihood to participate in cooperation with other organizations when conducting innovation activities. These determinants are translated into simulation parameters which are calibrated to the point that the simulated artificial world are equivalent to the one observed in the real world. The aim of the simulation game is to investigate the differences in sector responses to internal and external changes, including cross-sector spillovers, when applying three different policy strategies to promote cooperation in innovation. The findings indicate possible appropriate (or non-appropriate) policy strategies to be applied depending on the target industries.
    Keywords: agent-based simulation, collaborative R&D, innovation networks, simulation game, policy strategy
    JEL: C15 C71 D21 D85 L20 O31
    Date: 2013–07
  3. By: Stuetzer, Michael; Obschonka, Martin; Brixy, Udo; Sternberg, Rolf; Cantner, Uwe
    Abstract: This paper seeks to better understand the link between regional characteristics and individual entrepreneurship. We combine individual-level GEM data for Western Germany with regional-level data, using multi-level analysis to test our hypotheses. We find no direct link between regional knowledge creation, the economic context and an entrepreneurial culture on the one side and individual business start-up intentions and start-up activity on the other side. However our findings point to the importance of an indirect effect of regional characteristics as knowledge creation, the economic context and an entrepreneurial culture have an effect on the individual perception of founding opportunities which in turn predicted start-up intentions and activity.
    Keywords: Regional entrepreneurship; nascent entrepreneurship; opportunity perception; creative class; Global Entrepreneurship Monitor (GEM)
    JEL: J24 L26 M13
    Date: 2013
  4. By: Raffaello Bronzini, (Banca d'Italia); Luigi Cannari (Banca d'Italia); Alessandra Staderini (Banca d'Italia); Laura Conti (Banca d'Italia); Leandro D’Aurizio (Banca d'Italia); Alessandro Fabbrini (Banca d'Italia); Andrea Filippone (Banca d'Italia); Giuseppe Ilardi (Banca d'Italia); Giovanni Iuzzolino (Banca d'Italia); Pasqualino Montanaro (Banca d'Italia); Marco Paccagnella (Banca d'Italia); Valeria Pellegrini (Banca d'Italia); Raffaele Santioni (Banca d'Italia)
    Abstract: In the last decade, and especially in the course of the recent global economic slowdown, the gap between southern and northern industry has widened. Industrial investment and employment decreased more sharply in the South than in the rest of Italy, and the contribution of the southern regions to the total industrial value added diminished. In this report we analyse southern industry micro- and macro-economically, showing that the area suffers from the same structural problems that affect the Italian economy overall, but more severely: small firm size, specialization in relatively low-tech sectors, and scant innovation and internationalization. Although the weaknesses prevail over the strengths, there are signs of vitality for some local productive systems and types of firms, mainly large enterprises.
    Keywords: industry dynamics, regional growth, agglomeration
    JEL: L60 R00 D20
    Date: 2013–07
  5. By: Hitoshi Tanaka (Faculty of Economics, Hokkai-Gakuen University); Tatsuro Iwaisako (Graduate School of Economics, Osaka University)
    Abstract: This paper examines how intellectual property rights (IPR) protection affects innovation and foreign direct investment (FDI) using a North-South quality-ladder model incorporat- ing the exogenous and costless imitation of technology and subsidy policies for both R&D and FDI. We show that for the interior steady state to be stable, either R&D or FDI sub- sidy rates must be positive in the costless imitation model. Our findings also indicate that strengthening IPR protection promotes both innovation and FDI. Moreover, a strengthen- ing of IPR protection can also improve welfare if the initial IPR protection in the South is weak.
    Keywords: foreign direct investment, innovation, intellectual property rights protection
    JEL: F43 O33 O34
    Date: 2013–07
  6. By: Vera Rocha (Universidade do Porto, cef.up and CIPES); Anabela Carneiro (Universidade do Porto and cef.up); Celeste Amorim Varum (Universidade de Aveiro, DEGEI and GOVCOPP)
    Abstract: It remains a question whether serial entrepreneurs typically perform better than their novice counterparts owing to learning by doing e¤ects or mostly because they are a selected sample of higher-than-average ability entrepreneurs. This paper tries to unravel these two effects by exploring a novel empirical strategy based on continuous time duration models with selection. We use a large longitudinal matched employer-employee dataset that allows us to track almost 220,000 individuals who have left their first entrepreneurial experience. Over 35,000 serial entrepreneurs are identified and followed in their second business, in order to evaluate how entrepreneurial experience acquired in the previous business improves persistence by reducing their exit rates. Our results show that serial entrepreneurs are not a random selection of ex-business-owners. The positive association found between prior experience and serial entrepreneurs' survival is mainly due to selection on ability, rather than the result of learning by doing.
    Keywords: Serial Entrepreneurship, Entrepreneurial Experience, Learning, Selection
    JEL: D83 J24 L26
    Date: 2013–07
  7. By: ROMANO, Livio
    Abstract: This thesis investigates the social dimension of entrepreneurial activity, showing the importance of embeddedness with local communities and institutions in affecting corporate strategies. The first two chapters contribute to the literature on family firms. The focus on family businesses allows us to study the importance of non-pecuniary benefits and costs attached to control, which are tightly linked to the degree of personal accountability that shareholders have for the actions of the company. The two chapters both use a difference-in-difference identification strategy to study how employment policies, and access to bank lending, differed between family and non-family firms during the recent economic and financial crisis. In particular, the first chapter looks at the geographical distribution of workforce adjustments, finding evidence of a systematic preference in family firms for job preservation and job creation close to their headquarters. The second chapter shows how the presence of a family block-holder had a positive effect in mitigating the adverse effects of the credit crunch. The third chapter of the thesis instead studies the importance of shared norms and values arising at the level of local social networks in reducing the uncertainty involved in hiring new workers. Specifically, it shows that a shared community of origin between employers and employees positively affects both the likelihood of retaining a job after a takeover and the economic performance of the acquiring firm.
    Keywords: Social responsibility of business; Social entrepreneurship;
    Date: 2013
  8. By: Trishita Bhattacharjee (Indira Gandhi Institute of Development Research); Rupayan Pal (Indira Gandhi Institute of Development Research)
    Abstract: This paper examines the implications of network externalities on equilibrium outcomes in a differentiated products duopoly under strategic managerial delegation through relative performance based incentive contracts. It shows that Miller and Pazgal (2001)'s equivalence result does not go through in the presence of network externalities. Instead, Singh and Vives (1984)'s rankings of equilibrium outcomes under Cournot and Bertrand hold true under relative performance based delegation contracts as well, if there are network externalities. However, when firms can choose whether to compete in price or in quantity, there are two pure strategy Nash equilibria and one mixed strategy Nash equilibrium. Interestingly, in pure strategy Nash equilibria asymmetric competition occurs, where a firm competes in price and its rival firm competes in quantity. Further, the mixed strategy Nash equilibrium probability of a firm to compete in terms of price increases with the strength of network effects and is always greater than the probability to compete in terms of price.
    Keywords: Symmetric competition, Price competition, Network externalities, Quantity competition, Relative performance contract, Strategic delegation
    JEL: D43 L22 L13 D21
    Date: 2013–05
  9. By: Antonelli, Cristiano; Crespi, Francesco; Scellato, Giuseppe (University of Turin)
    Abstract: This paper contributes to the analysis of the persistence of firm productivity, here measured by the total factor productivity (TFP), and highlights its path dependent characteristics. The study contributes to the literature on persistence in productivity along four main lines. First, it develops a conceptual framework that links the persistence in productivity performance to persistence at the firm level in innovative activities, which include the adoption and imitation of innovations introduced by third parties. Second, it shows how the internal characteristics of companies, including the propensity of managers to leverage dynamic capabilities, can shape the dynamics of the process. Third, it confirms that external factors, such as the access to local pools of knowledge and the dynamics of economic activity, have relevant effects on persistence and shape its evolution along its path. Fourth, the use of Multiple Transition Probability Matrices (MTPMs) and the subsequent econometric analysis provides substantial evidence on the relevance of the crucial distinction, within non-ergodic dynamics, between past dependent processes, characterized by full hysteretic irrever sibility, and path dependent processes in which events that take place along the process may affect its direction and pace.
    Date: 2013–05
  10. By: Dutz, Mark A.
    Abstract: This paper argues that the increased flow and management of knowledge permitted by knowledge-based capital, supported by appropriate policies, can be an important factor in reducing the decision risk facing enterprises due to uncertainty and imperfect information, helping improve the resilience of development outcomes. Enterprises are conceptualized as information platforms that manage risk through investments in knowledge-based capital and complementary assets, providing them with the knowledge, protection/enabling, insurance, and coping/leveraging abilities to make better decisions in response to shocks. Investments in knowledge-based capital allow enterprises to better convert voluntary but risky reallocation and innovation decisions into productivity and wealth-enhancing opportunities. They can help the enterprise sector as a whole and most people to self-protect and realize better jobs, earnings, and consumption outcomes by adapting to shocks. However, absent appropriate policies, knowledge-based capital can have adverse distributional effects -- including a skewed industrial concentration of productivity gains and more unequal consumption and income-earning outcomes between rich and poor people. The paper discusses the role of policy in facilitating risk management by enterprises, ultimately to reduce poverty and boost shared prosperity. Insufficient enterprise risk-taking is costly for the enterprise sector and the economy as it results in too little experimentation and learning. The paper argues that governments should create business environments that stimulate entrepreneurial risk-taking to invest in market and social opportunities that combine new technologies with appropriately-skilled workers. Policies allowing people to better confront and manage their risks include: (1) spurring entrepreneurial experimentation; (2) supporting skills upgrading; and (3) promoting mechanisms for joint learning through global collaboration.
    Keywords: Environmental Economics&Policies,Labor Policies,Economic Theory&Research,E-Business,Debt Markets
    Date: 2013–07–01
  11. By: Stuetzer, Michael; Obschonka, Martin; Davidsson, Per; Schmitt-Rodermund, Eva
    Abstract: Applying Lazear’s jack-of-all-trades theory we investigate the formation of entrepreneurial skills in two datasets on innovative new firms. Our results suggest that traditional human capital indicators individually have little or no influence on entrepreneurial skills. However, consistent with Lazaer’s theory those entrepreneurs who exhibit a varied set of work experience have higher entrepreneurial skills relevant for starting and growing a firm. This supports the notion that a varied set of work experiences rather than depth of any particular type of experience or education is important for the development of entrepreneurial skills.
    Keywords: Entrepreneurial skills; jack-of-all trades; new venture creation; human capital
    JEL: J24 L26 M13
    Date: 2013
  12. By: Correa, Paulo; Andres, Luis; Borja-Vega, Christian
    Abstract: This paper applies meta-analysis techniques to a sample of 37 studies published during 2004-2011. These papers assess the impact of direct subsidies on business research and development. The results show that the effect of public investment on research and development is predominantly positive and significant. Furthermore, public funds do not crowd out but incentivize firms to revert funds into research and development. The coefficient of additionality impacts on research and development ranges from 0.166 to 0.252, with reasonable confidence intervals at the 95 percent level. The results are highly sensitive to the method used. The high heterogeneity of precision is explained by the wide variety of methodologies used to estimate the impacts and paper characteristics.
    Keywords: Scientific Research&Science Parks,Science Education,E-Business,Statistical&Mathematical Sciences,Teaching and Learning
    Date: 2013–07–01
  13. By: Antonio Accetturo, (Banca d'Italia); Antonio Bassanetti (Banca d'Italia); Matteo Bugamelli (Banca d'Italia); Ivan Faiella (Banca d'Italia); Paolo Finaldi Russo (Banca d'Italia); Daniele Franco (Banca d'Italia); Silvia Giacomelli (Banca d'Italia); Massimo Omiccioli (Banca d'Italia)
    Abstract: This paper describes recent developments in the Italian industrial system and investigates the main factors affecting its competitiveness. Our analysis provides a picture of widespread weaknesses. Production levels in all industries are lower than those before the crisis; with the exception of the pharmaceutical and the food industries, the magnitude of production losses is alarming. These trends are indicative of a long-term decline that is shaping both the “traditional” industries (textile, clothing and leather products) as well as those that take advantage of complex technologies and achieve significant economies of scale (electronic products and motor vehicles). Our study links unsatisfactory productivity gains and the loss of international competitiveness to the difficulties of our industries to adapt to changes in the international economy during the last two decades; This has been due to factors that are both internal and external to firms’ activities and which are affecting the technological and organizational progress of the whole economic system.
    Keywords: Italian Industrial System, Great Recession, Globalization, Productivity.
    JEL: L11 L25 O4 O30
    Date: 2013–07
  14. By: Chrostek, Pawel
    Abstract: A comparison of three measures of subjective well-being indicates two areas of difference. First, life evaluation is less dependent on external circumstances than evaluation of the past year. Temporary changes in health, labor market status and income have a smaller impact on life evaluation than on evaluation of the past year. Second, measures concerning the whole life exhibit a significant positive relation between current and past levels of well-being, but there is no such relation in case of evaluation of the past year. Moreover, external factors have a greater impact on the emotional dimension of life evaluation than on cognitive.
    Keywords: hedonic adaptation, subjective well-being, determinants of happiness
    JEL: I31
    Date: 2013–05
  15. By: Allain, Marie-Laure; Henry, Emeric; Kyle, Margaret
    Abstract: The sale of R&D projects through licensing facilitates the division of labor between research and development activities. This vertical specialization can improve the overall efficiency of the innovative process. However, these gains depend on the timing of the sale: the buyer of an R&D project should assume development at the stage at which he has an efficiency advantage. We show that in an environment where the seller is overconfident about the value of the project, she may delay the sale to the more efficient firm in order to provide verifiable information about its quality, though this delay implies higher total development costs for the project. We obtain a condition for the equilibrium timing of licensing and examine how factors such as the intensity of competition between potential buyers influence it. We show that a wide array of different explanations, based on differences in information, beliefs or risk profiles, lead to the same qualitative results. We present empirical evidence from pharmaceutical licensing contracts that is consistent with our theoretical predictions.
    Date: 2013–07
  16. By: Diego Comin; Martí Mestieri
    Abstract: This chapter discusses different approaches pursued to explore three broad questions related to technology diffusion: what general patterns characterize the diffusion of technologies, and how have they changed over time; what are the key drivers of technology, and what are the macroeconomic consequences of technology. We prioritize in our discussion unifi ed approaches to these three questions that are based on direct measures of technology.
    Date: 2013–05–08
  17. By: Oberhofer, Harald; Vincelette, Gallina A
    Abstract: This paper builds on the analysis of job creation developed in World Bank (2013) to provide an empirical investigation of the industry and firm-specific determinants of the job creation process in eleven new European Union (EU11) economies. It relies on the Amadeus dataset of firms during 2002-2009. The main results indicate that during the years prior to the global financial crisis, traditional industries were crucial for the net creation of jobs in EU11. However, traditional industries were the ones most severely affected by the financial crisis. By contrast, services firms were less vulnerable to the economic downturn. At the firm level, small and young firms registered the highest employment growth rates. The empirical results also indicate that more productive firms tended to be less vulnerable to economic downturns. Moreover, the results demonstrate that the perceived quality of the business climate by the EU11 enterprises is correlated with not only the firms'employment growth, but also their productivity. In the post-crisis period, poor business restrictions were negatively associated with the creation of jobs. All these findings hold for the group of high-growth firms that disproportionately accounted for the creation of new jobs in the EU11 economies.
    Keywords: Labor Markets,Microfinance,Small Scale Enterprise,Environmental Economics&Policies,Labor Policies
    Date: 2013–07–01
  18. By: Antonelli, Cristiano (University of Turin)
    Abstract: This work elaborates a dynamic version of the H-O model based upon the hypothesis that technological change is endogenous and biased towards the most intensive use of production factors that are locally most abundant in comparative terms. In the standard H-O model, the difference in the levels of the output elasticity of inputs is assumed to be exogenous. In this dynamic version, instead, this difference is fully endogenous. This approach rests upon the localized technological change approach that integrates the advances of the new economic of knowledge with the Schumpeterian notion of creative reaction, the analysis of induced technological change and technological congruence. According to the Schumpeterian notion of innovation as the result of the creative reaction, firms caught in out-of-equilibrium conditions by the changing conditions of both factor and product markets might try and react by means of the introduction of biased technological changes directed towards the most intensive use of inputs that are locally most abundant in relative terms. Their success and hence the actual introduction of technological innovations will depend upon the availability of appropriate knowledge externalities. According to this framework, countries exposed the out-of-equilibrium conditions engendered by the globalization of product markets can react with the successful introduction of innovations aimed at increasing the intensity of capital -the most abundant input- with the increase of its output elasticity. For the same token they can contrast the twin globalization of capital and product markets with the introduction of the technology production function that makes intensive use of technological knowledge as the most abundant input. Technological knowledge in fact is characterized by its strong collective and systemic character that limits its dissemination and use outside its context of origin.
    Date: 2013–05
  19. By: Cappelli, Riccardo; Montobbio, Fabio (University of Turin)
    Abstract: Using data on inventor citations and inventor collaborations, this article analyses changes in geographical patterns of knowledge flows between European regions during the period 1981-2000. It shows that inventor collaborations become less geographically localized, while inventor citations become more localized. The European integration process has a significant effect on reducing barriers to knowledge flows between new and old EU members. For inventor citations, this effect relates only to the EU enlargement of 1995 and is confined to knowledge flows from Austria, Finland and Sweden to old EU members.
    Date: 2013–05
  20. By: Youssouf KIENDREBEOGO (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: This paper investigates whether banking crises are associated with declines in bilateral exports. We first develop a simple open economy model in which banking crises translate into negative liquidity shocks, leading to collapses in exports through supply-side and demand-side shocks. We then estimate a gravity model using a sample of developed and developing countries over the period 1988-2010. The results suggest that crisis-hit countries experience lower levels of bilateral exports, particularly in developing countries where supply-side shocks are found to be relatively more important than demand shocks. In developing countries, exports of manufactured goods are disproportionately hurt by banking crises and this negative effect is stronger in industries relying more on external finance. These findings are robust to correcting for potential endogeneity, to changes in the sample, and to alternative estimation methods.
    Keywords: Banking Crises;Exports;Trade Finance F14;G01
    Date: 2013–07–10
  21. By: Doan, Tinh; Nguyen, Ha
    Abstract: This paper examines the roles of cost of labour input and competition on productivity dispersion in the Vietnamese manufacturing sector. We look at the effect accounting for labour input quality has on explaining productivity dispersion. This paper tests the hypothesis that mismeasurement of labour input may play a role in large productivity dispersion. We use the cost of labour input of firms as a proxy measure of labour input quality to examine whether incorporating this measure accounts for a part of the productivity dispersion. The paper also examines the role of competition in the extent of productivity dispersion.
    Keywords: productivity dispersion, competition, labour input, transition economies
    JEL: J24 L1 L25 P27
    Date: 2013–07–16
  22. By: Diego Comin; Mikhail Dmitriev; Esteban Rossi-Hansberg
    Abstract: We study technology diffusion across countries and over time empirically. We …find signi…cant evidence that technology diffuses slower to locations that are farther away from adoption leaders. This effect is stronger across rich countries and also when measuring distance along the south- north dimension. A simple theory of human interactions can account for these empirical …ndings. The theory suggests that the e¤ect of distance should vanish over time, a hypothesis that we con…rm in the data, and that distinguishes technology from other ‡ows like goods or investments. We then structurally estimate the model. The parameter governing the frequency of interactions is larger for newer and network-based technologies and for the median technology the frequency of interactions decays by 73% every 1000 Kms. Overall, we document the signi…cant role that geography plays in determining technology diffusion across countries.
    Date: 2013–03–27

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