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on Economics of Strategic Management |
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Issue of 2013‒09‒26
twenty papers chosen by Joao Jose de Matos Ferreira University of the Beira Interior |
| By: | Spyros Arvanitis (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Tobias Stucki (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Florian Seliger (KOF Swiss Economic Institute, ETH Zurich, Switzerland) |
| Abstract: | Human resource management (HRM) practices are generally expected to stimulate a firm’s innovation performance. However, which of these practices do really pay off? Based on a unique dataset that includes detailed information for both a firm’s innovation activities and different types of HRM practices we find that primarily new workplace organization practices seem to enhance a firm’s innovation activities. Flexible practices of working time management and incentive payment schemes show only small effects on both innovation propensity and innovation success. Further training does only affect innovation success, but not innovation propensity. Overall, we find a stronger linkage between innovative HRM practices and innovation propensity than with innovation success. |
| Keywords: | human resource management, workplace organization, innovation performance |
| JEL: | O31 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:13-341&r=cse |
| By: | Les Oxley (University of Waikato); Shangqin Hong (University of Canterbury); Philip McCann (University of Groningen) |
| Abstract: | In this paper we will use case studies to seek to understand the dynamic innovation processes at the level of the firm and to explain the apparent 'enigma' between New Zealand's recent innovation performance and economic growth. A text-mining tool, Leximancer, (version 4) was used to analyse the case results, based on content analysis. The case studies reveal that innovation in New Zealand firms can be best described as 'internalised', and the four key factors that affect innovation in New Zealand firms are ‘Product’, ‘Market’, ‘People’ and ‘Money’. New Zealand may be an ideal place for promoting local entrepreneurship, however, many market/technology opportunities cannot be realized in such a small and isolated economy, hence the poor economic performance. |
| Keywords: | innovation; New Zealand; case study; content analysis |
| Date: | 2013–09–10 |
| URL: | http://d.repec.org/n?u=RePEc:wai:econwp:13/12&r=cse |
| By: | Ratinger, Tomas; Boskova, Iveta |
| Abstract: | A mobilisation of research, knowledge transfer and innovation to deal with the current challenges as raising world food demand while protecting natural resources is a priority area of the EU. The effective knowledge transfer and innovation activities in the agri-food supply chain may push all producers in the vertical to improve their competitiveness while saving resources. In the paper we examine the current level of innovation activities and knowledge transfer in milk processing industry in the Czech Republic, with a particular focus on the collaboration of firms with R&D organisations and other important agents, in order to assess the potential for enhancing sustainable dairy production. Most of the interviewed milk processors confirmed that sustainability objective did not rank high within firms’ strategies while it showed a great potential for innovations. It is apparent from the conducted interviews with stakeholders as well as from the statistics that the level of cooperation for innovations is rather low among the Czech food and particularly dairy processors. The low cooperation level concerns not only research institution but also other agents including farmers. This is in contrast to considering cost as a hurdle for innovations. The lack of cooperation among producers can partly be accounted to property rights protection and the need to get advantage over the competition. The interviews and the statistics showed that companies with in-house R&D staff have higher absorption capacity and thus requirements concerning cooperation with research institutions and that these firms are not satisfied with what is offered in the country and seek support abroad. The current support programme increased the sector innovation activity, but at the same time used-up limited capacities of the national research base. Continuation of the support in the current way seems unsustainable. |
| Keywords: | Sectoral system of innovation, absorption capacity, dairy processing industry, Research and Development/Tech Change/Emerging Technologies, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi13:156130&r=cse |
| By: | Ina Charlotte Jäkel (Department of Economics and Business, Aarhus University) |
| Abstract: | Does the selection effect of trade work solely through competition from imports, or does the export market further contribute to firm selection? This paper provides a re-interpretation of the different mechanisms in terms of selection on profitability - rather than productivity - and derives novel predictions regarding the export market and the role of product differentiation. Empirical results for a sample of Danish manufacturing industries confirm the import-"push" hypothesis as well as the export-"pull" hypothesis, but also reveal differences across industries. The selection effect of trade is mainly driven by the "import-push" if product differentiation is high, whereas it is driven by the "export-pull" if goods are homogeneous. |
| Keywords: | Firm exit, Exports, Import competition, Heterogeneous firms |
| JEL: | F12 F15 D21 |
| Date: | 2013–09–18 |
| URL: | http://d.repec.org/n?u=RePEc:aah:aarhec:2013-20&r=cse |
| By: | Bergin, Paul R; Corsetti, Giancarlo |
| Abstract: | Can a country gain international competitiveness by the design of optimal monetary stabilization rules? This paper reconsiders this question by specifying an open-economy monetary model encompassing a ‘production relocation externality,’ developed in trade theory to analyze the benefits from promoting entry of domestic firms in the manufacturing sector. In a macroeconomic context, this externality provides an incentive for monetary authorities to trade-off output gap with pro-competitive profit stabilization. While helping manufacturing firms to set competitively low prices, optimal pro-competitive stabilization nonetheless results in stronger terms of trade, due to the change in the country’s specialization and composition of exports. The welfare gains from international policy coordination are large relative to the case of self-oriented, strategic conduct of stabilization policy. Empirical evidence confirms that the effects of monetary policy design on the composition of trade predicted by the theory are present in data and are quantitatively important. |
| Keywords: | firm entry; international coordination; monetary policy; optimal tariff; production location externality |
| JEL: | F41 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9616&r=cse |
| By: | Chu, Angus C.; Cozzi, Guido; Furukawa, Yuichi |
| Abstract: | This study analyzes the cross-country effects of monetary policy on innovation and international technology transfer. We consider a scale-invariant North-South quality-ladder model that features innovative R&D in the North and adaptive R&D in the South. To model money demand, we impose cash-in-advance constraints on these two types of R&D investment. We find that an increase in the Southern nominal interest rate causes a permanent decrease in the rate of international technology transfer, a permanent increase in the North-South wage gap, and a temporary decrease in the rate of Northern innovation. An increase in the Northern nominal interest rate causes a temporary decrease in the rate of Northern innovation, a permanent decrease in the North-South wage gap, and an ambiguous effect on the rate of international technology transfer depending on the relative size of the two economies. We also calibrate the model to China-US data and find that the cross-country welfare effects of monetary policy are quantitatively significant. Specifically, permanently decreasing the nominal interest rate to zero in China leads to a welfare gain of 3.37% in China and a welfare gain of 1.25% in the US. Permanently decreasing the nominal interest rate to zero in the US leads to welfare gains of 0.33% in the US and 1.24% in China. |
| Keywords: | Monetary policy, economic growth, R&D, North-South product cycles, FDI |
| JEL: | O30 O40 E41 F43 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2013:19&r=cse |
| By: | Badinger, Harald; Egger, Peter; von Ehrlich, Maximilian |
| Abstract: | This paper assesses the strength of productivity spillovers non-parametrically in a data-set of 12 industries and 231 NUTS2 regions in 17 European Union member countries between 1992 and 2006. It devotes particular attention to measuring catching up through spillovers depending on the technology gap of a unit to the industry leader and the local human capital endowment. We find evidence of a non-monotonic relationship between the technology gap to the leader as well as human capital and growth. Spillovers are strongest for units with a small technology gap to the leader and with abundant human capital. |
| Keywords: | Absorptive capacity; Nonparametric estimation; Technology spillovers; Total factor productivity |
| JEL: | C14 N10 N14 O33 O47 R11 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9425&r=cse |
| By: | William Mullins; Antoinette Schoar |
| Abstract: | Using a survey of 800 CEOs in 22 emerging economies we show that CEOs' management styles and philosophy vary with the control rights and involvement of the owning family and founder: CEOs of firms with greater family involvement have more hierarchical management, and feel more accountable to stakeholders such as employees and banks than they do to shareholders. They also see their role as maintaining the status quo rather than bringing about change. In contrast, professional CEOs of non-family firms display a more textbook approach of shareholder-value-maximization. Finally, we find a continuum of leadership arrangements in how intensively family members are involved in management. |
| JEL: | G3 G32 J62 M5 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19395&r=cse |
| By: | Fons-Rosen, Christian; Kalemli-Ozcan, Sebnem; Sørensen, Bent E; Villegas-Sanchez, Carolina; Volosovych, Vadym |
| Abstract: | We quantify the causal effect of foreign investment on total factor productivity (tfp) using a new global firm-level database. Our identification strategy relies on exploiting the difference in the amount of foreign investment by financial and industrial investors and simultaneously controlling for unobservable firm and country-sector-year factors. Using our well identified firm level estimates for the direct effect of foreign ownership on acquired firms and for the spillover effects on domestic firms, we calculate the aggregate impact of foreign investment on country-level productivity growth and find it to be very small. |
| Keywords: | FDI; Knowledge Spillovers; Multinationals; Selection |
| JEL: | E32 F15 F36 O16 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9434&r=cse |
| By: | Michele Bernini; Tania Treibich |
| Abstract: | In this paper we test whether policies that induce tangible asset growth among domestic companies are effective in increasing their entry into export markets. We solve the endogeneity problem inherent to the empirical investigation of the growth-export relationship by adopting an instrumental variable (IV) strategy that exploits an exogenous policy variation in corporate tax (CT) rate as an instrument for firm growth. A reduction of the CT rate in France is found increasing firm size and promoting through this channel export entry. Our result is robust to two alternative identification strategies: first we compare firms that enjoyed CT reduction against those that did not benefit from it, then we exploit the differential impact of statutory rate reduction on the firm-level effective marginal and average rates of taxation (EMTR and EATR) within the group of firms eligible for tax reduction. We conclude that the fiscal lever has a direct impact on firm size and an indirect impact on export participation. |
| Keywords: | Export, corporate tax, firm growth, SME |
| JEL: | C21 C26 F14 H25 D24 D92 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2013-30&r=cse |
| By: | Ben Shepherd; Susan Stone |
| Abstract: | This paper provides evidence of the links between Global Value Chains (GVCs) and labour market outcomes, focusing on developing economies. The literature generally indicates that firms with international linkages—which we use here as a proxy for GVC involvement—tend to employ more workers, pay higher wages, and employ more skilled workers than firms that deal exclusively with the domestic market. Our results are consistent with existing evidence found in developed economies, with internationalised firms tending to hire more workers and pay higher wages in developing economies as well. We also find a positive significant relationship between the number of skilled workers and firms with international linkages but not in certain key economies. However, this comes more from firms who are importers, exporters and foreign affiliates rather than engaging in any of these activities individually. We attribute this finding to the predominance of assembly work performed in many of the economies under consideration, where unskilled workers tend to dominate. Finally, we see a strong, positive association between shares of female workers and firms with international linkages. Engaging in international activity is shown to provide greater opportunities for women to enter the formal labour market. |
| Keywords: | international trade, employment, wages, global value chains, skills, gender |
| JEL: | F14 F16 F23 |
| Date: | 2013–05–14 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:154-en&r=cse |
| By: | Berg, Erlend; Ghatak, Maitreesh; Manjula, R; Rajasekhar, D; Roy, Sanchari |
| Abstract: | This paper studies the interaction of incentive pay and social distance in the dissemination of information. We analyse theoretically as well as empirically the effect of incentive pay when agents have pro-social objectives, but also preferences over dealing with one social group relative to another. In a randomised field experiment undertaken across 151 villages in South India, local agents were hired to spread information about a public health insurance programme. Relative to flat pay, incentive pay improves knowledge transmission to households that are socially distant from the agent, but not to households similar to the agent. |
| Keywords: | incentive pay; information constraints; knowledge transmission; public services; social proximity |
| JEL: | C93 D83 I38 M52 O15 Z13 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9477&r=cse |
| By: | Fernandes, Ana; Ferreira, Priscila; Winters, L. Alan |
| Abstract: | This paper investigates the effects of firm entry deregulation. We exploit a recent reform that simplified business entry in Portugal as a quasi-natural experiment. We use cross-municipality-year variation in the implementation of the reform for identification. Using matched employer-employee data for the universe of workers and firms, we find that the reform is associated with increased firm entry and competition within industries and regions. The returns to a university degree increased by 5% while the returns to skills increased by 3%. |
| Keywords: | Entry Deregulation; Product Market Competition; Returns to Education; Wage Structure |
| JEL: | J3 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9550&r=cse |
| By: | Russell Cooper; Kalin Nikolov |
| Abstract: | This paper studies the interaction of government debt and interbank markets. Both markets are known to be fragile: excessively responsive to fundamentals and prone to strategic uncertainty. The goal is to understand the channels that link these markets and to evaluate policy measures for their stability. |
| JEL: | E44 G33 H12 H63 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19278&r=cse |
| By: | Tamilina, Larysa; Tamilina, Natalya |
| Abstract: | While formal institutions are recognized as having an effect on trust formation, no theoretical or empirical models exist to formalize this relationship. This study introduces a new conceptual framework to explain trust building by individuals and the role that formal rules and laws may play in this process. Drawing on a social-cognitive theory of psychology, we present trust as composed of internal, interpersonal, and external components with the latter encompassing formal institutions. We further demonstrate that there are three mechanisms – sanction, legitimacy, and autonomy – through which formal institutions may affect trust levels either directly or indirectly. These propositions are tested empirically based on the European Social Survey data (2004) by using a variety of statistical techniques. Our empirical analysis demonstrates evidence of heterogeneity in institutional effects on trust, suggesting that the autonomy dimension of the institutional framework is particularly important for trust formation processes. |
| Keywords: | interpersonal trust, formal institutions, social-cognitive psychology, heterogeneity, trust formation process |
| JEL: | K42 Z10 Z13 |
| Date: | 2013–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:49812&r=cse |
| By: | Ezcurra, Roberto; Rodríguez-Pose, Andrés |
| Abstract: | This paper investigates the relationship between economic globalization and regional inequality in a panel of 47 countries over the period 1990-2007, using a measure of globalization that distinguishes the different dimensions of economic integration. The results show that there is a positive and statistically significant association between economic globalization and the magnitude of regional disparities. Countries with a greater degree of economic integration with the rest of the world tend to register higher levels of regional inequality. This finding is robust to the inclusion of additional explanatory variables and to the choice of the specific measure used to quantify the relevance of spatial inequality within the sample countries. Our analysis also reveals that the spatial impact of economic globalization is greater in low- and middle-income countries, whose levels of regional disparities are on average significantly higher than in high-income countries. |
| Keywords: | Economic globalization; Regional inequality |
| JEL: | F15 R11 R12 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9557&r=cse |
| By: | Dietrichson, Jens (Department of Economics, Lund University) |
| Abstract: | Why are coordination problems common when public sector organizations share responsibilities, and what can be done to mitigate such problems? This paper uses a multi-task principal-agent model to examine two related reasons: the incentives to coordinate resource allocation and the difficulties of measuring performance. The analysis shows that when targets are set individually for each organization, the resulting incentives normally induce inefficient resource allocations. If the principal impose shared targets, this may improve the incentives to coordinate but the success of this instrument depends in general on the imprecision and distortion of performance measures, as well as agent motivation. Besides decreasing available resources, imprecise performance measures also affect agents' possibility to learn the function that determines value. Simulations with a least squares learning rule show that the one-shot model is a good approximation when the imprecision of performance measures is low to moderate and one parameter is initially unknown. However, substantial and lengthy deviations from equilibrium values are frequent when three parameters have to be learned. |
| Keywords: | Public sector organizations; Coordination incentives; Performance measurement; Shared targets; Learning |
| JEL: | D23 D73 D83 H11 H83 |
| Date: | 2013–08–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2013_026&r=cse |
| By: | Førsund, Finn R. (Dept. of Economics, University of Oslo) |
| Abstract: | The distinction between the concepts outputs and outcomes can be made operational based on the consideration of the degree of control a public service producer has over its production activity. Resources are transformed into service outputs under the control of the organisation in question, while outcomes represent some higher social goals than outputs and are determined by the outputs and other exogenous variables, but the production of outcomes is outside the control of the organisation. The link to the calculation of savings potentials and efficiency measurement is provided based on introducing the concept of a benchmark frontier technology for the type of production in question. A new measure of overall preference efficiency is introduced and its decomposition into output-oriented technical efficiency and output mix efficiency is shown. The rather monumental task of providing the necessary information for calculating mix efficiency is highlighted. |
| Keywords: | outputs; outcomes; factorially dete rmined multioutput production; Farrell efficiency measures; savings potentials; overall preference effectiveness; output mix effectivenes |
| JEL: | D24 H40 |
| Date: | 2013–07–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2013_016&r=cse |
| By: | Tamim Bayoumi; Mika Saito; Jarkko Turunen |
| Abstract: | With global supply chains, any value added or production task can be traded as part of goods. This means that competitiveness can be measured either in terms of “tasks†(Bems and Johnson, 2012), or goods, but with goods prices reflecting the cost of tasks embedded in those goods. We show that when measuring competitiveness in goods, the formula used in computing the real effective exchange rates at the IMF (Bayoumi, Lee, and Jayanthi, 2005) needs to be expressed in terms of the price of value added and needs an additional term, which captures a gain or loss in competitiveness of goods due to outsourcing. |
| Keywords: | Global competitiveness;Emerging markets;International trade;Real effective exchange rates;Economic models;Real Effective Exchange Rate; Global Supply Chains |
| Date: | 2013–05–08 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:13/100&r=cse |
| By: | Nicholas Crafts (University of Warwick); Nikolaus Wolf (Humboldt University Berlin) |
| Abstract: | We examine the geography of cotton textiles in Britain in 1838 to test claims about why the industry came to be so heavily concentrated in Lancashire. Our analysis considers both first and second nature aspects of geography including the availability of water power, humidity, coal prices, market access and sunk costs. We show that some of these characteristics have substantial explanatory power. Moreover, we exploit the change from water to steam power to show that the persistent effect of first nature characteristics on industry location can be explained by a combination of sunk costs and agglomeration effects. |
| Keywords: | agglomeration; cotton textiles; geography; industry location |
| JEL: | N63 N93 R12 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:hes:wpaper:0045&r=cse |