nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2013‒11‒29
forty-nine papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. Impact of external knowledge acquisition strategies on innovation - A comparative study based on Dutch and Swiss panel data By Arvanitis, Spyros; Lokshin, Boris; Mohnen, Pierre; Wörter, Martin
  2. The Impact of Cooperation on R&D, Innovation andProductivity: an Analysis of Spanish Manufacturing and Services Firms By Verónica Fernández Gual; Agustí Segarra Blasco
  3. Plant productivity dynamics and private and public R&D spillovers: Technological, geographic and relational proximity. By Belderbos, Rene; Ikeuchi, Kenta; Fukao, Kyoji; Kim, Young Gak; Kwon, Hyeog Ug
  4. Doing R&D in a closed or open mode: Dynamics and impacts on productivity By Rosa, Julio Miguel; Mohnen, Pierre
  5. Complementarity between internal knowledge creation and external knowledge sourcing in developing countries By Hou, Jun; Mohnen, Pierre
  6. Innovation for economic performance: The case of Latin American firms By Arias Ortiz, Elena; Crespi, Gustavo; Tacsir, Ezequiel; Vargas, Fernando; Zuniga, Pluvia
  7. Heterogeneity in innovation strategies, evolving consumer preferences and market structure: An evolutionary multi-agent based modelling approach By Cevikarslan, Salih
  8. Technological spillovers and industrial growth in Chinese regions By Wang, Lili; Meijers, Huub; Szirmai, Eddy
  9. Firms' innovation capability-building paths and the nature of changes in learning mechanisms: Multiple case-study evidence from an emerging economy By Figueiredo, Paulo N.; Cohen, Marcela; Gomes, Saulo
  10. How do ICT firms in Turkey manage innovation? Diversity in expertise versus diversity in markets. By Akçomakn Semih; Akdeve, Erdal; Findik, Derya
  11. Dynamic models of R&D, innovation and productivity: Panel data evidence for Dutch and French manufacturing By Raymond, Wladimir; Mairesse, Jacques; Mohnen, Pierre; Palm, Franz
  12. Regional systems of innovation in the Arab region By Nour, Samia Satti Osman Mohamed
  13. Internationalization and Performance of Italian Enterprises By Valeria Gattai
  14. FDI Technology Spillovers and Spatial Diffusion in the People’s Republic of China By Lin, Mi; Kwan, Yum K.
  15. Innovation systems framework: still useful in the new global context? By Iizuka, Michiko
  16. Women entrepreneurs in the informal economy: Is formalization the only solution for business sustainability? By Ramani, Shyama V.; Thutupalli, Ajay; Medovarski, Tamas; Chattopadhyay, Sutapa; Ravichandran, Veena
  17. Innovation and survival of new firms in Chinese manufacturing, 2000-2006 By Zhang, Mingqian; Mohnen, Pierre
  18. Technological competencies and firm performance: Analyzing the importance of internal and external competencies By Grillitsch, Markus; Nilsson , Magnus
  19. Are clusters more resilient in crises? Evidence from French exporters in 2008-2009 By Philippe MARTIN; Thierry MAYER; Florian MAYNERIS
  20. Exploring the paradox of competence-creating subsidiaries: balancing bandwidth and dispersion in MNEs By Narula, Rajneesh
  21. Optimal patent length and patent breadth in an R&D driven market with evolving consumer preferences: An evolutionary multi-agent based modelling approach By Cevikarslan, Salih
  22. A value network development model and implications for innovation and production network management By Vermeulen, Ben; De Kok, Ton
  23. Government support, innovation and productivity in the Haidian (Beijing) District By Huang, Can; Wu, Yilin; Mohnen, Pierre; Zhao, Yanyun
  24. Intellectual Property Rights and Foreign Direct Investment: A Welfare Analysis By Hitoshi Tanaka; Tatsuro Iwaisako
  25. Beyond technological catch-up: An empirical investigation of further innovative capability accumulation outcomes in latecomer firms with evidence from Brazil By Figueiredo, Paulo N.
  26. Innovation management in Russia’s foreign manufacturing subsidiaries: a pilot exploration of creation and implementation of effective innovation routines By Igor Gurkov; Sergey Filippov
  27. Innovation processes in the Russian manufacturing subsidiaries of MNCs – an integrated view from case studies By Igor Gurkov; Sergey Filippov
  28. 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.
  29. Foreign direct investment as a driver of industrial development: why is there so little evidence? By Narula, Rajneesh
  30. ICT and Productivity: A Review of the Literature By Federico Biagi
  31. Understanding the diversity of cooperation on innovation across countries: Multilevel evidence from Europe By Srholec , Martin
  32. International Corporate Governance Spillovers: Evidence from Cross-Border Mergers and Acquisitions By Rui Albuquerque; Luis Brandao-Marques; Miguel A. Ferreira; Pedro Matos
  33. Management practices in Russian multinational subsidiaries: the Case of knauf cis By Igor Gurkov; Vladimir Kossov; Sergey Filippov
  34. Innovation diffusion, technological convergence and economic growth By R. Andergassen; F. Nardini; M. Ricottilli
  35. A suitable 'GPS' for SME's: the strategic planning and organizational learning nexus By Baltar, Fabiola
  36. The importance and impacts of knowledge at the macro-micro levels in the Arab Gulf countries By Nour, Samia Satti Osman Mohamed
  37. Leadership and Creativity in the Indian R&D Laboratories: Examining the Role of Autonomous Motivation, Psychological Capital and Justice Perceptions By Gupta, Vishal
  38. Human capital, creative class and regional economic performance: A dynamic panel analysis By Esubalew Alehegn; Silvia Sacchetti; Ermanno Tortia
  39. Values and Attitudes towards Innovation among Canadian, Chinese and Russian Students By Nadezhda Lebedeva; Peter Schmidt
  40. Revisiting the porter hypothesis: An empirical analysis of green innovation for the Netherlands By Leeuwen, George van; Mohnen, Pierre
  41. The growth of outward FDI and the competitiveness of the underlying economy: the case of India By Narula, Rajneesh; Prasad Kodiyat, Tiju
  42. Innovation and productivity: An update By Mohnen, Pierre; Hall, Bronwyn H.
  43. Money for nothing: how firms have financed R&D-projects since the Industrial Revolution By Bakker, Gerben
  44. A Note on the Link between Firm Size and Exports By Hernandez, Pedro J.
  45. Foreign Direct Investments in Southeast Asia By Sjöholm, Fredrik
  46. The Role of Foreign Direct Investment (FDI) in a Dualistic Growth Framework: An Application of Smooth Coefficient Semi-parametric Approach By Aurangzeb Zeb; Thanasis Stengos
  47. IPR, Product Complexity and the Organization of Multinational Firms By Alireza Naghavi; Julia Spies; Farid Toubal
  48. Do Faculty Matter? Effects of Faculty Participation in University Decisions By Kathleen Carroll; Lisa M. Dickson; Jane E. Ruseski
  49. Formal and Informal Markets: A Strategic and Dynamic Perspective By Nejat Anbarci; Pedro Gomis-Porqueras; Marcus Pivato

  1. By: Arvanitis, Spyros (KOF, ETH Zürich); Lokshin, Boris (School of Business and Economics, Maastricht University); Mohnen, Pierre (UNU-MERIT/MGSoG); Wörter, Martin (KOF, ETH Zürich)
    Abstract: There is growing evidence that firms increasingly adopt open innovation practices. In this paper we investigate the impact of two such external knowledge acquisition strategies, 'buy' and 'cooperate', on firm's product innovation performance. Taking a direct (productivity) approach, we test for complementarity effects in the simultaneous use of the two strategies, and in the intensity of their use. Our results based on large panels of Dutch and Swiss innovating firms, suggest that while both 'buy' and 'cooperate' have a positive effect on innovation, there is little statistical evidence that using them simultaneously leads to higher innovation performance. Results from the Dutch sample provide some indication, that there are positive economies of scope in doing external and cooperative R&D simultaneously conditional on doing internal R&D.
    Keywords: Innovation, Open innovation, R&D collaboration, make, buy strategies
    JEL: O31 O32
    Date: 2013
  2. By: Verónica Fernández Gual (CREIP, XREAP, Industry and Territory Research Group, Reus, Spain); Agustí Segarra Blasco (CREIP, XREAP, Industry and Territory Research Group, Reus, Spain)
    Abstract: This paper investigates relationships between cooperation, R&D, innovation and productivity in Spanish firms. It uses a large sample of firm-level micro-data and applies an extended structural model that aims to explain the effects of cooperation on R&D investment, of R&D investment on output innovation, and of innovation on firms’ productivity levels. It also analyses the determinants of R&D cooperation. Firms’ technology level is taken into account in order to analyse the differences between high-tech and low-tech firms, both in the industrial and service sectors. The database used was the Technological Innovation Panel (PITEC) for the period 2004-2010. Empirical results show that firms which cooperate in innovative activities are more likely to invest in R&D in subsequent years. As expected, R&D investment has a positive impact on the probability of generating an innovation, in terms of both product and process, for manufacturing firms. Finally, innovation output has a positive impact on firms’ productivity, being greater in process innovations.
    Keywords: innovation sources; productivity; R&D Cooperation
    Date: 2013–11
  3. By: Belderbos, Rene; Ikeuchi, Kenta; Fukao, Kyoji; Kim, Young Gak; Kwon, Hyeog Ug
    Abstract: We examine the effects of R&D spillovers on total factor productivity in a large panel of Japanese manufacturing plants matched with R&D survey data (1987-2007). We simultaneously examine the role of public (university and research institutions) and private (firm) R&D spillovers, and examine the differential effects due to technological, geographic and relational (buyer-supplier) proximity. Estimating dynamic long difference models and allowing for gradual convergence in TFP and geographic decay in spillover effects, we find positive effects of technologically proximate private R&D stocks, which decay in distance and become negligible at around 500 kilometres. In addition to knowledge spillovers from technologically proximate R&D stocks, ‘relational’ spillovers from buyer and supplier R&D stocks exert positive effects on TFP growth that are similar in magnitude. The elasticity of TFP is highest for public R&D (corrected for industrial relevance), in particular for plants operated by R&D conducting firms. We do not find evidence of geographic decay in the impact of public and relational spillovers. Over time, declining R&D spillovers appear to be responsible for a substantial part of the decline in the rate of TFP growth. The exit of proximate plants operated by R&D intensive firms plays a notable role in this process and is an important phenomenon in major industrial agglomerations such as Tokyo, Osaka, and Kanagawa.
    Keywords: R&D; spillovers; plant productivity; distance;
    Date: 2013–11
  4. By: Rosa, Julio Miguel (Industry Canada, Economic Research and Policy Analysis Branch); Mohnen, Pierre (UNU-MERIT / MGSoG, and CIRANO)
    Abstract: On the one hand, firms prefer to perform R&D in an open mode (letting R&D be performed extramurally or even selling their R&D services) to benefit from knowledge spillovers and complementarities between internal and external R&D. On the other hand, they may also like to perform R&D in a closed mode (funding and executing their R&D intramurally) to minimize outgoing externalities. We examine the dynamic process by which firms change the way of doing R&D and how these strategic choices of doing R&D affect their productivity growth. This study is based on the Statistics Canada Research and Development in Canadian Industry survey (RDCI), which collects data on R&D performed in the business sector in Canada. The paper is based on data for the period 1997 to 2006. The panel dimension of the data allows to control for unobserved characteristics of R&D performers by estimating a multinomial Logit model with unobserved heterogeneities using maximum simulated likelihood (MSL) method.
    Keywords: R&D, State Dependence, Dynamic Multinomial Logit, Panel-data, Maximum Simulated Likelihood, Open Innovation
    JEL: C35 L23
    Date: 2013
  5. By: Hou, Jun (UNU-MERIT/MGSoG); Mohnen, Pierre (UNU-MERIT/MGSoG, and Maastricht University)
    Abstract: In developing countries, innovation is to a large extent a matter of adoption of advanced technologies but also of conducting internal R&D to be able to better assimilate existing technologies. This paper, based on firm level data from 24 developing countries, examines the roles of internal R&D efforts (MAKE) and external technology sourcing (BUY) in fostering productivity in manufacturing firms. Is MAKE a substitute for BUY or are the two strategies complementary as evidenced in some developed countries? Our empirical investigation highlights the critical role of external technology acquisition in manufacturing industries in low-income countries and exhibits signs of complementarity only in middle-income countries.
    Keywords: innovation, make and buy, complementarity, developing countries
    JEL: O13 O33 D22
    Date: 2013
  6. By: Arias Ortiz, Elena (Education Division, Inter-American Development Bank); Crespi, Gustavo (Competitiveness and Innovation Division, Inter-American Development Bank); Tacsir, Ezequiel (UNU-MERIT / MGSoG, and Competitiveness and Innovation Division, Inter-American Development Bank); Vargas, Fernando (Competitiveness and Innovation Division, Inter-American Development Bank); Zuniga, Pluvia (UNU-MERIT / MGSoG)
    Abstract: In this paper, a wide range of innovation indicators are analysed in order to describe the innovation behaviour of manufacturing firms in LAC using the recently released Enterprise Surveys 2010. The Enterprise Surveys define innovation rates as the share of firms introducing product and process innovations. The survey also measures the proportion of firms investing in research and development (R&D) and filing for intellectual property rights (IPRs). The aim of this note is to understand the main characteristics of innovative firms and to gather new evidence with regard to the nature of the innovation process in the region. Statistics about the performance of LAC firms are provided using different types of indicators to measure firms' innovative behaviour. In particular, differences in innovation performance and effort by country, sector, and key firm characteristics, such as being a multinational or exporter, are explored. Those firms in LAC that are top R&D performers are identified, and the analysis closes with an exploration of firm characteristics that strongly correlate with the probability of being a top R&D performer in the region.
    Keywords: innovation, research and development, Latin America, enterprise surveys
    JEL: D22 O31 O33 O34
    Date: 2013
  7. By: Cevikarslan, Salih (UNU-MERIT, and SBE, Maastricht University)
    Abstract: The aims of this paper are twofold. The first is to analyse the interaction between research and development (R&D) activities of firms and heterogeneous consumer preferences in structuring the evolution of an industry. The second is to explore the heterogeneity in firms' innovation strategies. Is heterogeneity sustainable in the long-term and what happens to the market shares of firms having different innovation strategies when a structural market characteristic (market size) or a behavioural rule (R&D intensity) is changed? To answer these research questions, an evolutionary, multi-agent based, sector-level innovation model is designed. The model addresses supply and demand sides of the market simultaneously with the co-evolution of heterogeneous consumer preferences, heterogeneous firm knowledge bases, and technology levels at the micro level.
    Keywords: Heterogeneity, innovation strategies, evolutionary economics, agent-based modelling
    JEL: B52 L11 O33
    Date: 2013
  8. By: Wang, Lili (UNU-MERIT/MGSoG); Meijers, Huub (School of Business and Economics, Maastricht University); Szirmai, Eddy (UNU-MERIT/MGSoG)
    Abstract: This paper focuses on the role of interregional technology spillovers in the process of industrial growth in Chinese regions in the period 1990-2005. Inflows of FDI increased rapidly from 1990 till 1998, slowing down thereafter. Domestic R&D investment accelerated after 1998. Regional industrial growth benefits from both interregional R&D spillovers and after 1998 from international FDI spillovers. However, in contrast to R&D spillovers, FDI spillovers contribute conditionally, mainly in areas where local R&D stocks are high enough. Interestingly, indirect interregional FDI spillover effects are negative. Foreign investment in one region attracts resources from regions with less FDI, thus having a negative influence on growth of industrial output in neighbouring regions.
    Keywords: Technological spillovers, Interregional spillovers, R&D, Foreign direct investment, Industrial growth, Regional growth, Chinese industry
    JEL: F43 O14 O33 R11 R12
    Date: 2013
  9. By: Figueiredo, Paulo N. (Brazilian School of Public and Business Administration, Getulio Vargas Foundation); Cohen, Marcela (Brazilian School of Public and Business Administration, Getulio Vargas Foundation); Gomes, Saulo (Brazilian School of Public and Business Administration, Getulio Vargas Foundation)
    Abstract: Although much has been written about organizational-level learning, there is a dearth of empirical studies that explore the role of changes in the nature of firm-centred learning mechanisms in affecting inter-firm differences and similarities in the accumulation of innovation capabilities, especially among firms from emerging economies, known as latecomers. By examining the relationships between these issues based on fieldwork evidence from 13 natural resource-processing firms in Brazil (1950-2000s), this study found that: (1) firms that combined the use of external and internal learning mechanisms with increased intensity and quality achieved higher innovation capability levels than firms that used these learning mechanisms with limited frequency and unchanged quality over time; (2) the relative importance of both external and internal learning mechanisms changed as firms' capabilities approached world-leading levels; (3) some combinations of external and internal learning mechanisms were associated with the attainment of particular innovation capability levels. Therefore, if latecomer firms expend limited efforts in using and deliberately changing the intensity and, mainly, the quality of both external and internal learning mechanisms over time, they will deepen their innovation capabilities slowly and will remain innovation 'followers' rather than becoming world-leading innovators. Using a novel approach that explores the relationship between latecomer firms' innovation capability-building and the extent of changes in the underlying learning mechanisms, this paper furthers our understanding of the nature and dynamics of learning and its role as a primary source of firms' international innovation performance. It also challenges recent approaches that seem to over emphasize open learning processes and post-Chandlerian forms of learning as the leading sources of firms' innovation capabilities.
    Keywords: Innovation capability building, learning mechanisms, latecomer firms, natural resources, multiple case-study, Brazil
    JEL: O12 O32 O33 M10 Q20
    Date: 2013
  10. By: Akçomakn Semih (TEKPOL, Middle East Technical University, and UNU-MERIT); Akdeve, Erdal (School of Management, Yıldırım Beyazıt University); Findik, Derya (TEKPOL, Middle East Technical University)
    Abstract: This paper provides a novel taxonomy of firms based on specialization versus diversification in production and markets. Firms may choose to specialize on few production activities or alternatively may build expertise in many activities. There is an accompanying decision when firms sell their products: whether to serve few or many markets. We argue that the location on the specialization-diversification spectrum significantly affects how firms manage innovation. For a sample of 90 innovator ICT firms in Ankara we find that cooperation structure, sources of innovation and funding of R&D display statistically significant different patterns according to the specialization-diversification taxonomy.
    Keywords: management of innovation, core competency, expertise building, R&D, ICT
    JEL: O32 L22 L86
    Date: 2013
  11. By: Raymond, Wladimir (STATEC Luxemburg); Mairesse, Jacques (CREST-INSEE, UNU-MERIT, Maastricht University, and NBER); Mohnen, Pierre (UNU-MERIT / MGSoG, SBE, Maastricht University, and CIRANO); Palm, Franz (SBE, Maastricht University and CESifo)
    Abstract: This paper introduces dynamics in the R&D to innovation and innovation to productivity relationships, which have mostly been estimated on cross-sectional data. It considers four nonlinear dynamic simultaneous equations models that include individual effects and idiosyncratic errors correlated across equations and that differ in the way innovation enters the conditional mean of labour productivity: through an observed binary indicator, an observed intensity variable or through the continuous latent variables that correspond to the observed occurrence or intensity. It estimates these models by full information maximum likelihood using two unbalanced panels of Dutch and French manufacturing firms from three waves of the Community Innovation Survey. The results provide evidence of robust unidirectional causality from innovation to productivity and of stronger persistence in productivity than in innovation.
    Keywords: R&D, innovation, productivity, panel data, dynamics, simultaneous equations
    JEL: C33 C34 C35 L60 O31 O32
    Date: 2013
  12. By: Nour, Samia Satti Osman Mohamed (Faculty of Economic and Social Studies, Khartoum University, and UNU-MERIT/MGSoG)
    Abstract: This paper employs both the descriptive and comparative approaches and uses the definition of systems of innovation used in the literature to examine the existence, characteristics and implications of the regional systems of innovation in the Arab region. We examine three hypotheses, that the regional systems of innovation exist but are characterized by serious weaknesses in the Arab region compared with other world regions, that the structure of the economy has a significant effect in the performance of innovation systems in the Arab region, and that the poor Arab systems of innovation have serious implications in the Arab region. We explain two common characteristics of Arab regional systems of innovation concerning poor subsystems of education, S&T, R&D and ICT institutions in the Arab region and concentration of R&D activities within public and universities sectors and small contribution of the private sector in R&D activities. We find that the major implications are the poor performance of the Arab region in terms of S&T indicators, competitiveness indicators, technology achievement index and poor integration in the knowledge economy index. Therefore, it is essential for the Arab region to enhance the institutions of higher education, S&T, R&D and ICT to build the Arab regional systems of innovation and to achieve economic development in the Arab region.
    Keywords: Education, S&T, R&D, Systems of innovation, economic structure, Arab region
    JEL: O10 O11 O30
    Date: 2013
  13. By: Valeria Gattai
    Abstract: This paper surveys recent contributions about internationalization and performance of Italian enterprises. It covers both theoretical and empirical studies taking a microeconomic perspective and studying a potential link between firms’ global involvement and heterogeneity in economic, human capital & innovation and financial measures. The discussion is organized in an intuitive and non-technical way. More than 40 papers are analyzed from a multifaceted perspective, considering their research outline, internationalization measures, performance indicators, causality and results.
    Keywords: Internationalization, Performance, Italy, Firm-level data, Survey
    JEL: F1 F2 L2
    Date: 2013–11
  14. By: Lin, Mi (University of Lincoln); Kwan, Yum K. (Department of Economics & Finance, City University of Hong Kong)
    Abstract: This paper investigates the geographic extent of foreign direct investment (FDI) technology spillovers and diffusion in the People’s Republic of China (PRC). We employ spatial dynamic panel econometric techniques to detect total factor productivity (TFP) innovation clusters, uncover the spatial extent of technology diffusion, and quantify both the temporal and spatial dimensions of FDI spillovers. Our empirical results show that FDI presence (measured as employment share) in a locality will generate negative and significant impacts on the productivity performance of domestic private firms in the same location. Nevertheless, these negative intra-regional spillovers are found to be locally bounded. Domestic private firms enjoy positive FDI spillovers through interregional technology diffusion via labor market channels; these interregional spillovers appear in spatial feedback loops among higher-order neighboring regions. In the long run, the positive interregional spillovers outweigh the negative intra-regional spillovers, bestowing beneficiary total effects on domestic firms through labor market channels. FDI spillovers measured as sales income share, however, are negative in both intra-regional and interregional dimensions.
    Keywords: FDI spillovers; spatial diffusion; spatial dynamic panel; PRC economy
    JEL: F21 O33 R12
    Date: 2013–11–01
  15. By: Iizuka, Michiko (UNU-MERIT/MGSoG)
    Abstract: The innovation systems approach has proven useful in explaining the reasons behind varying economic performance in developing countries. The systemic understanding of the innovation process, which pays attention to the knowledge flow among interactive actors, serves as a useful 'focusing device' for elaborating effective policy to accelerate the innovation process and to contribute to economic development. The existing use of the innovation system may need to change substantially to address present-day societal challenges. The emerging types of innovation-such as user innovation, public sector innovation, social innovation and innovation for inclusive development-have different features from those of existing types. This paper examines the features of emerging types of innovation to assess whether and how the current innovation system can be remodelled to explain emerging social agendas, with particular focus on developing countries.
    Keywords: innovation system, user innovation, public sector innovation, social innovation, innovation for inclusive development, developing countries
    JEL: O20 O21 O31 O32 O33 O38
    Date: 2013
  16. By: Ramani, Shyama V. (Brunel University, UNU-MERIT, and STI4Change); Thutupalli, Ajay (UNU-MERIT); Medovarski, Tamas (STI4Change); Chattopadhyay, Sutapa (UNU-MERIT); Ravichandran, Veena (IDRC)
    Abstract: The existing marketing, strategy and economics literature have little to offer by way of recommendations to promote entrepreneurship in the informal economy, except to advocate that multinationals, local firms, state and public agencies should work together to bring the informal economy into the fold of the formal economy. In contrast, this paper argues that the business sustainability of women entrepreneurs in the informal economy depends upon their engagements or business partnerships with other women (and men) and women-focussed intermediaries. More than formalization, women entrepreneurs need 'spaces' for dialogue with other women (and men) to learn and build business capabilities. Both the State and firms wanting to penetrate the informal economy can create such spaces through partnerships with NGOs and women-focussed organizations. While formalization of entrepreneurial activity is favourable under some circumstances, it can be detrimental under others - necessitating a case by case evaluation rather than a general rule. In order to ensure the business sustainability of women's ventures in the informal economy, any sort of formalization must occur through a gradual process accompanied by intermediaries. These results are formulated through the compilation and analysis of the existing literature and the study of six detailed case studies of women entrepreneurs from developing countries validated by extensive interviews. The results are then used to propose a closed model of linkages between formal and informal economies which has novel organizational implications for firms competing to establish consumer bases and business partnerships in the Base of Pyramid (BoP) markets of developing countries.
    Keywords: Informal economy, entrepreneurship, gender, business sustainability
    JEL: L26 B54 E26
    Date: 2013
  17. By: Zhang, Mingqian (Shanghai International Studies University); Mohnen, Pierre (UNU-MERIT / MGSoG)
    Abstract: Using a large dataset of over 100,000 Chinese firms created between 2000 and 2006, we explore whether there is a link between innovation effort (R&D) or innovation output (the share of innovative sales) and the firm's duration of survival. We estimate a complementary log-log model with time-varying explanatory variables controlling for individual heterogeneity. We find that innovative firms tend to survive longer, more so because of R&D than because of introducing new products. There seems to be an inverted-U relationship between R&D or innovation output and long-term survival, suggesting that too much R&D or product innovation can cause firms to die, perhaps because of excessive risk. Survival has a cyclical behaviour, and it varies across provinces. It also varies with ownership. State-owned firms have a higher hazard rate than privately-owned firms, which have a higher hazard rate than foreign-owned firms.
    Keywords: firm survival, complementary log-log duration models, China, innovation
    JEL: L25 O32 O38
    Date: 2013
  18. By: Grillitsch, Markus (CIRCLE, Lund University); Nilsson , Magnus (CIRCLE, Lund University)
    Abstract: In this paper, we analyze the relationship between technological competencies (TC) and firm performance. Theoretically, the importance of TC is well established and widely accepted. Therefore, it is surprising that a number of empirical studies have been unable to confirm a substantial positive relationship between TC and firm performance. We identify two major reasons for this: [i] affected by the availability and choice of indicators existing studies are often biased towards large firms; and [ii] they frequently do not consider both internal and potential access to firm-external TC. This paper discusses conceptually the interplay between firm-internal and firm-external TC as well as the mediating effect of firm size. These relationships are then analyzed empirically using Swedish micro data on 15,682 firms in 290 Swedish municipalities. Novel indicators based on occupational statistics are combined with measures of time-distance accessibility to study internal and external TC. The results provide evidence for a positive relationship between firm growth and TC. In particular, the combination of firm-internal and firm-external competencies seems to be conducive for growth. Lastly, our study suggests that firm size is an important factor to further our understanding about these relationships. Based on this we identify a number of future research questions to be addressed.
    Keywords: technological competencies; firm performance; accessibility; knowledge; innovation; geography
    JEL: L25 O18 O30
    Date: 2013–09–19
  19. By: Philippe MARTIN (Sciences-Po and CEPR); Thierry MAYER (Sciences-Po, CEPII and CEPR); Florian MAYNERIS (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches économiques et sociales (IRES) andCenter for Operations Research and Econometrics (CORE))
    Abstract: Clusters have already been extensively shown to favor firm-level economic performance (productivity, exports, innovation etc.). However, little is known about the capacity of firms in clusters to resist economic shocks. In this paper, we analyze whether firms that agglomerate in clusters and firms that have been selected to benefit from the \competitiveness cluster" industrial policy, implemented in France in 2005, have performed better on export markets during the recent economic turmoil. We show that, on average, both agglomeration and the cluster policy are associated with a higher survival probability of firms on export markets, and conditioning on survival, a higher growth rate of their exports. However, these effects are not stronger during the 2008-2009 crisis; if anything, the opposite is true. We then show that this weaker resilience of competitiveness cluster firms is probably due to the fact that firms in clusters are more dependent on the fate of the \leader", i.e. the largest exporter in the cluster.
    Keywords: Clusters, Competitiveness clusters, Exports, Crisis, Resilience
    JEL: F1 R10 R11 R12 R15
    Date: 2013–09–19
  20. By: Narula, Rajneesh (John H. Dunning Centre for International Business, Henley Business School, University of Reading)
    Abstract: This paper seeks to synthesise the various contributions to the special issue of Long Range Planningon competence-creating subsidiaries (CCS), and identifies avenues for future research. Effective competence-creation through a network of subsidiaries requires an appropriate balance between internal and external embeddedness. There are multiple types of firm-specific advantages (FSAs) essential to achieve this. In addition, wide-bandwidth pathways are needed with collaborators, suppliers, customers as well as internally within the MNE. Paradoxically, there is a natural tendency for bandwidth to shrink as dispersion increases. As distances (technological, organisational, and physical) become greater, there may be decreasing returns to MNE spread. Greater resources for knowledge integration and coordination are needed as intra- and inter-firm R&D cooperation becomes more intensive and extensive. MNEs need to invest in mechanisms to promote wide-bandwidth knowledge flows, without which widely dispersed and networked MNEs can suffer from internal market failures.
    Keywords: R&D, globalization, dispersion, embeddedness, knowledge flows
    JEL: F23 Z13 M21
    Date: 2013
  21. By: Cevikarslan, Salih (UNU-MERIT, and SBE, Maastricht University)
    Abstract: The aims of this paper are twofold. The first is to analyse the interaction between research and development (R&D) activities of firms and heterogeneous consumer preferences in structuring the evolution of an industry. The second is to explore the effects of patent life and patent breadth on market outcomes. To answer these research questions, an evolutionary, multi-agent based, sector-level cumulative innovation model is designed. The model addresses supply and demand sides of the market simultaneously with the co-evolution of heterogeneous consumer preferences, heterogeneous firm knowledge bases and technology levels at the micro level. In line with the evolutionary modelling tradition, we have a search algorithm-innovation and imitation of products by firms - a selection of algorithm-revealed preferences of the consumers - and a population of objects in which variation is expressed and on which selection operates: namely, firms (Windrum, 2004). Firms compete on quality and price of their products in an oligopolistic market whereas consumers, constrained by their computational limits, act to maximize their utility with their product choices in a boundedly rational way. There is continuous firm entry and exit depending on the competitive performance of the firms.
    Keywords: Patents, industrial dynamics, evolutionary economics, agent-based modelling
    JEL: B52 L11 O34
    Date: 2013
  22. By: Vermeulen, Ben; De Kok, Ton
    Abstract: In managing their value network, firms have to balance current and future value concerns and own and network partners' concerns. Firms generate immediate value through manufacturing and selling the current generation of products together with other firms in their production network. Firms generate future value by developing a new product generation with other firms and research institutes in their innovation network. Product innovation and production often take place simultaneously and recurrently. We take the discernible production and innovation activities to occur in co-evolving layers of the same network. We formulate a biplex value network development model that lays out the temporal pattern of production and innovation activities in the value network. We introduce terminology to pinpoint temporal interactions between the innovation and production activities. We study several exemplary complications in the cross-table of inter- and intragenerational interactions versus interactions within and across network layers.
    Keywords: value network; network management; network development; innovation network; production network; temporal complication
    JEL: D85 L14 L23 M11 O32
    Date: 2013–07
  23. By: Huang, Can (; School of Management, Zhejiang University); Wu, Yilin (School of Statistics, Renmin University of China); Mohnen, Pierre (; UNU-MERIT / MGSoG); Zhao, Yanyun (School of Statistics, Renmin University of China)
    Abstract: This paper examines whether the government support in favour of firms located in the Haidian district of Beijing, which includes the Zhongguancun Science Park, was effective in terms of innovation and economic performance. We use a dataset of 500 manufacturing firms that results from a merger of the 2007 nation-wide innovation survey and the Annual Survey of Industrial Enterprises databases from the National Bureau of Statistics. We find that among all firms (state- or collectively-owned, non-state- or collectively-owned and Hong Kong, Macau, Taiwan or other foreign-funded firms) that received direct government support for innovative activities only the non-state- or collectively-owned domestic firms invested more in innovation than the firms that did not receive such support. However, despite higher government support, domestic firms have lower labour productivity than foreign-funded firms, including those funded from Hong Kong, Macau, or Taiwan.
    Keywords: CDM, innovation policy, Haidian, evaluation
    JEL: O32 O38
    Date: 2013
  24. 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. Our findings also indicate that strengthening IPR protection promotes both innovation and FDI. Moreover, a strengthening of IPR protection can also improve welfare if the initial IPR protection in the South is weak and the R&D subsidy rate is not too high.
    Keywords: foreign direct investment, innovation, intellectual property rights protection
    JEL: F43 O33 O34
    Date: 2013–07
  25. By: Figueiredo, Paulo N. (EBAPE, Brazilian School of Public and Business Administration)
    Abstract: This article examines outcomes that are achieved by latecomer firms from the accumulation of innovative capabilities. Drawing on fieldwork evidence from pulp and paper firms in Brazil (1950-2010), it was found that: (1) the firms accumulated innovative capabilities that turned them into world leaders in the segment of the global pulp and paper industry based on eucalyptus forestry; (2) besides this technological catch-up, the accumulation of these innovative capabilities resulted in outcomes that generated benefits within these firms such as (i) implemented inventive and innovative activities; (ii) consistent improvement of several parameters of operational and environment-related performance; (iii) varied patterns of corporate growth; (3) these outcomes were achieved not only by research-based and patent-related capabilities but mainly by a mix of innovative capability levels, with differing degrees of novelty and complexity for diverse technological functions. Therefore, the accumulation of a wide range of types and levels of innovative capabilities does pay off for the innovative firms, their industries and, ultimately, their economies. By combining a novel approach to examining firm capabilities with findings from an inductive fieldwork, this article provides new empirical and methodological insights for the long-standing debate on innovative capabilities as the fundamental source of firm competitive performance. The article draws managers' attention to the importance of a multiplicity of types and levels of capabilities to achieve relevant outcomes, and policy makers in developing economies to adopt a comprehensive view on innovative activities and place firm-centred innovation capability accumulation at the centre of industrial innovation policies.
    Keywords: innovative capability accumulation, latecomer firms, catch-up, competitive performance, Brazil
    JEL: M16 O32 Q16 Q18
    Date: 2013
  26. By: Igor Gurkov (D.Sc., National Research University Higher School of Economics (Moscow, Russia)); Sergey Filippov (Ph.D., Delft University of Technology (Delft, The Netherlands), Assistant Professor)
    Abstract: Subsidiaries of foreign multinational companies are essential part of the modern Russian economy. In many sectors, they enjoy dominant positions. Innovation is an important driver and determinant of this dominance. Yet, little research has been done on innovation strategies and innovation processes in foreign subsidiaries in Russia. The paper aims to fill this gap. On the basis of qualitative evidence, it explores the goals, patterns and challenges of innovation activities in Russian subsidiaries. Our findings suggest that that manufacturing subsidiaries have implemented numerous effective innovation routines that are an integral part of daily ‘routine’ management. This is driven by the two-faceted objective – to achieve global quality standards and low production costs.
    Keywords: manufacturing, subsidiaries, multinational corporations, innovation, Russia, surveys.
    JEL: F23 L21 L22 L23 L60 M11 O31 O32
    Date: 2013
  27. By: Igor Gurkov (D.Sc., National Research University Higher School of Economics (Moscow, Russia)); Sergey Filippov (Ph.D., Delft University of Technology (Delft, The Netherlands), Assistant Professor)
    Abstract: The extant literature acknowledges the role of overseas subsidiaries in the growth and development of multinational companies (MNCs). Such subsidiaries are viewed as critical players in the innovation process at MNCs. Although this topic has gained importance, it remains largely under-researched in the Russian context. This study aims to fill this gap by examining the dynamics of the innovation process in Russian-based subsidiaries of global MNCs. It seeks to explore and understand motivation and drivers of innovation, key participants, and impact and outcomes of innovation, with a specific reference to the peculiarities of the Russian institutional environment. We present qualitative findings from several case studies of Russian manufacturing subsidiaries of foreign MNCs, which indicate that Russian subsidiaries are not only recipients of knowledge and technology developed elsewhere in the MNCs, but are active developers of innovative products and solutions that are later applied in other units of the respective MNCs
    Keywords: Innovation, Subsidiaries, Russia, Manufacturing, MNCs, Technologies.
    JEL: F23 L21 L22 L23 L60 M11 O31 O32
    Date: 2013
  28. 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
  29. 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
  30. By: Federico Biagi (European Commission – JRC - IPTS)
    Abstract: In this report we review the literature on the relationship between ICT and productivity. In Sect. 1 we discuss in broad terms the theoretical relationship between ICT and productivity, while in Sect. 2 we present the growth accounting methodology, which tries to measure the contributions to growth from difference sources (ICT and non ICT capital, human capital, total factor productivity). Within the growth-accounting methodology, in Sect. 3, we discuss the U.S. - E.U. productivity gap and the role of ICTs, and we show that the latter are responsible for the U.S. acceleration in productivity growth observed in the period 1996-2006 and for the widening of the U.S. – E.U. productivity gap in the same period. Then, in Sect. 4, we move to regression based studies, and we review the literature that uses macro, meso (sectoral) and firm/plant level data. While the overall message on the importance of ICT for growth coming from this literature is consistent with the findings of the studies based on growth accounting, the econometric approach allows researchers to investigate a wider set of questions. In particular, we focus on the role of ICT as a General Purpose Technology aspects and we review the literature studying the role of ICT and complementary assets in firms' productivity and the literature exploring the positive externalities related to ICT capital and the impact of ICT usage on the innovative capability of firms. Finally, we also review the literature on the relationship between ICT infrastructures and GDP growth.
    Keywords: ICT, labour productivity, total factor productivity, innovation
    JEL: D22 D24 E01 O30 O47
    Date: 2013–09
  31. By: Srholec , Martin (CIRCLE, Lund University)
    Abstract: Much has been written about innovation cooperation. But little research has been done to explain national differences thereof. Using macro and micro evidence from the fourth Community Innovation Survey, we econometrically investigate the extent to which national framework conditions account for the propensity of firms to cooperate on innovation at home and abroad. The results indicate strong differences across countries in the latter. Firms operating in countries with less developed research infrastructure are shown to be more likely to cooperate with foreign partners, hence supporting the thesis that in this context the foreign linkages tend to be diasporic. Size and openness of the economy matters too. But characteristics of firms that explain cooperation have not been found to differ much by country. In this respect, the results draw attention to limits of the existing micro datasets on innovation cooperation.
    Keywords: Innovation; cooperation; innovation system; multilevel model; Europe
    JEL: D21 F23 L16 O23
    Date: 2013–11–19
  32. By: Rui Albuquerque; Luis Brandao-Marques; Miguel A. Ferreira; Pedro Matos
    Abstract: We develop and test the hypothesis that foreign direct investment promotes corporate governance spillovers in the host country. Using firm-level data on cross-border mergers and acquisitions (M&A) and corporate governance in 22 countries, we find that cross-border M&As are associated with subsequent improvements in the governance, valuation, and productivity of the target firms’ local rivals. This positive spillover effect is stronger when the acquirer is from a country with stronger shareholder protection and if the target’s industry is more competitive. We conclude that the international market for corporate control promotes the adoption of better corporate governance practices around the world.
    Keywords: Foreign direct investment;Corporate governance;Spillovers;Competition;Foreign direct investment, Corporate governance, Cross border mergers and acquisitions, Spillovers
    Date: 2013–11–12
  33. By: Igor Gurkov (D.Sc., National Research University Higher School of Economics (Moscow, Russia)); Vladimir Kossov (D.Sc., National Research University Higher School of Economics (Moscow, Russia), Professor); Sergey Filippov (Ph.D., Delft University of Technology (Delft, The Netherlands), Assistant Professor)
    Abstract: This paper analyzes the growth and evolution of Knauf CIS Group from 1992 to 2012. The study defines the features and characteristics of the firm’s corporate policies including production and operations, marketing, HR management, and societal engagement. These policies have enabled Russian industrial enterprises, Knauf’s subsidiaries, to achieve global standards of efficiency and quality with a high level of profitability. This study focuses on the measures that can be employed to increase production efficiency and have the potential to be replicated by other Russian companies
    Keywords: Industry, Advanced practices, Multinational corporations, Subsidiaries, Innovations
    JEL: F23 L21 L22 L23 L60 M11 O31 O32
    Date: 2013
  34. By: R. Andergassen; F. Nardini; M. Ricottilli
    Abstract: The paper investigates the mechanics through which novel technological principles are developed and diffused throughout an economy consisting of a technologically heterogeneous ensemble of firms. In the model entrepreneurs invest in the discovery and in the diffusion of a technological principle and their profit flow depends on how many firms adopt the innovation and on how long it takes other entrepreneurs to improve it. We show that technological convergence emerges from the competition among entrepreneurs for the profit flow and characterize the economy's growth rate.
    JEL: O31 O33 O41 E19
    Date: 2013–11
  35. By: Baltar, Fabiola
    Abstract: The aim of the article is to examine the relationship between organizational learning and strategic planning actions in SMEs. The hypothesis is that those firms that think strategic planning as an organizational learning process may encourage the design of 'long-term objectives', keeping SMEs flexible and adaptive. Thus, it allows the exploitation of opportunities and the accumulation of specific and competitiveinternal resources. A structural equation model is proposed, based on 147 argentinean SMEs surveys. The main conclusion is that firms involving in strategic planning are more likely to improve knowledge management and increase competitive resources and capabilities.
    Keywords: Aprendizaje; Planificación Estratégica; Teoría de Recursos y Capacidades; Gestión del Conocimiento; Ventajas Competitivas; Pequeñas y Medianas Empresas
    Date: 2013
  36. By: Nour, Samia Satti Osman Mohamed (Faculty of Economic and Social Studies, Khartoum University, and UNU-MERIT/MGSoG)
    Abstract: In this paper, we use the data from the firm survey (2002) at the micro level and some recent and update current secondary data at the macro level to examine the importance (impacts) of tacit and codified sources of knowledge at firm and aggregate levels respectively. Our results at the macro level are consistent with the notion that tacit knowledge is complementary with schooling, while tacit knowledge and codified knowledge are positively correlated with GDP. Moreover, at the macro/aggregate level, our results show a significant complementary relationship between codified knowledge and the number of Full Time Equivalent Researchers (FTER) and between them and publications, cooperation and technology (patents). Our findings at the micro level indicate positive correlations between tacit knowledge, ICT, training, profit, output and output diversification. In addition, our findings illustrate that tacit skill/knowledge inside the firm increases with market size: total investment, capital, firm size and age. Our results are consistent with the findings in the knowledge literature and are also useful to indicate the importance of good education at both the micro and macro levels.
    Keywords: Tacit knowledge, codified knowledge, economic growth, Arab Gulf countries
    JEL: O10 O11 O30
    Date: 2013
  37. By: Gupta, Vishal
    Abstract: The present study investigates the association between R&D-specific leadership approach developed in the Indian context using a combination of qualitative and quantitative data analyses, employee autonomous motivation, psychological capital, fairness perceptions and creativity. Creativity construct was conceptualized as comprising of both behaviors and outcomes. Creative behaviors comprise of idea development (generation and promotion) behaviors and work engagement, while creative performance was measured using quantifiable outputs. Using survey data from 482 scientists in the Indian R&D laboratories, the study found that leader behaviors are directly related to autonomous motivation and justice perceptions that, in turn, are positively related to psychological capital and creative behaviors. Psychological capital is also positively related to creative behaviors. The study found significant positive relationship between work engagement and creative performance. The results of this study provide support for the leadership model and its association with employee perceptual variables, behaviors and objective performance.
  38. By: Esubalew Alehegn; Silvia Sacchetti; Ermanno Tortia
    Abstract: Though the measurement and implication of human capital on economic growth has been well established since the works of Becker in the 1960s, recently Florida has argued that creative class is superior to human capital in explaining economic growth. The underlying difference between the two scholars is a measurement approach in which while Becker uses education as indicator of human capital Florida employs occupation as an identifier of the creative class. We exploit administrative data from the Institute for Employment Research (IAB) over the years 1998-2008 and employ system GMM to estimate and compare the effects on regional economic performance of human capital and creative class in Germany where economic performance is measured by GDP growth, employment growth and wage growth. The estimation unveils that analysis of regional economy through creative class in place of human capital can be used as an alternative approach yet the creative class, as has been praised by Florida, is not found to be superior to human capital in explicating economic performance of regions. Indeed, albeit the share of creative class (creative core and creative professionals) and university graduates have positive and robust impacts on GDP growth it is by no means the share of university graduates that have a far greater impact on economic growth. The opposite holds for employment growth and is inconclusive for wage growth. This finding may imply that the creative class driven economic development is directed towards more labor intensive forms of development whilst human capital is directed towards the form of development characterized by specialization and high capital intensity.
    Keywords: Creative class, human capital, economic performance and dynamic panel.
    JEL: R11 O31 O52
    Date: 2013–11–11
  39. By: Nadezhda Lebedeva (National Research University Higher School of Economics, Russia (Moscow)); Peter Schmidt (National Research University Higher School of Economics (Moscow, Russia). International Laboratory of Socio-Cultural research, The Co-Head; Giessen University, Germany)
    Abstract: This study investigated relations of basic personal values to attitudes towards innovation among students in Russia, Canada, and Ñhina. Participants completed a questionnaire that included the SVS measure of values (Schwartz, 1992) and a new measure of attitudes towards innovation (Lebedeva, Tatarko, 2009). There are significant cultural and gender-related differences in value priorities and innovative attitudes among the Canadian, Russian, and Chinese college students. As hypothesized, across the full set of participants, higher priority given to Opennes to change values (self-direction, stimulation) related to positive attitudes toward innovation whereas higher priority given to Conservation values (conformity, security) related negatively. This is compatible with the results reported by other researchers (Shane, 1992, 1995; Dollinger, Burke & Gump, 2007). There were, however, culture-specific variations in some of these associations, which may be explained by cultural differences in value priorities or meanings and in implicit theories of creativity and innovation. Applying the Multiple-Group Multiple Indicators Multiple Causes Model (MGMIMIC) (Muthen 1989) has shown that the type of Values-Innovation mediation is different in the three countries. Whereas in Russia and Canada the effects of gender and age are fully mediated by the values, this is not true for China, where a direct effect of gender on innovation was found. The cultural differences in values, implicit theories of innovation, and their consequences for attitudes to innovation and personal well-being is finally discussed
    Keywords: culture, values, innovation, attitudes, cross-cultural comparison, Multiple Group MIMIC Model.
    JEL: A13
    Date: 2013
  40. By: Leeuwen, George van (Centraal Bureau voor Statistiek); Mohnen, Pierre (UNU-MERIT/MGSoG)
    Abstract: Almost all empirical research that has attempted to assess the validity of the Porter hypothesis has started from reduced-form models, e.g. by using single-equation models for estimating the contribution of environmental regulation (ER) to productivity. This paper addresses the Porter Hypothesis within a structural approach that allows us to test what is known in the literature as the "weak" and the "strong" version of the Porter hypothesis. Our "Green Innovation" model includes three types of eco investments and non-eco R&D to explain differences in the incidence of innovation. Besides product and process innovations we recognize eco-innovation as a separate type of innovation output. We explicitly model the potential synergies of introducing the three types of innovations simultaneously and their synergy in affecting total factor productivity (TFP) performance. Using a comprehensive panel of firm-level data built from four surveys we aim to estimate the relative importance of energy price incentives as a market based type of ER and the direct effect of environmental regulation on eco investment and firms' decisions regarding the introduction of several types of innovations. The results of our analysis show a strong corroboration of the weak version of the Porter hypothesis but not of the strong version of the PH, in this case on TFP performance.
    Keywords: Porter Hypothesis, green innovation, environmental regulation, innovation complementarities, productivity
    JEL: H23 L5 O32 O38 Q55
    Date: 2013
  41. By: Narula, Rajneesh (John H. Dunning Centre for International Business, Henley Business School, University of Reading); Prasad Kodiyat, Tiju (Centre for Research in Economics and Finance, Cranfield School of Management)
    Abstract: There has been an impressive spurt in the outward FDI activity of Indian MNEs since the 1990s. However, despite the rhetoric, this growth has not been exceptional, when compared to other similarly developed countries. Received economic arguments propose that successful outward investors tend to be the most competitive domestic firms in their home economy. Their firm-specific assets tend to be a function of the political economy and economic structure of the home economy. In IB terms, this means that the ownership-specific assets of Indian multinationals are a subset of the ownership assets of their parent companies, which in turn are largely determined by the location-specific assets of the home economy. The evidence suggests that the strengths and weaknesses in the location assets of India have caused pockets of excellence to emerge, but that these conditions do not lend themselves to a broader growth in competitiveness, meaning that further rapid growth is ultimately not sustainable. Systematic upgrading and radical policy changes are needed to build up India's knowledge infrastructure and institutions to support a shift in India's competitive advantages to new sectors outside these pockets. This ultimately means a policy emphasis on the manufacturing sector, and within that, promoting a shift from low-tech to higher technology manufacturing sectors, and a strengthening of the formal sector.
    Keywords: India, innovation systems, comparative advantage, competitiveness, MNEs, infrastructure, globalization, location advantages
    JEL: F23 O32
    Date: 2013
  42. By: Mohnen, Pierre (UNU-MERIT, and SBE, Maastricht University); Hall, Bronwyn H. (University of California at Berkeley, NBER, UNU-MERIT, and SBE, Maastricht University.)
    Abstract: This paper reviews the existing evidence regarding the effects of technological and non-technological innovations on the productivity of firms and the existence of possible complementarities between these different forms of innovation.
    Keywords: innovation, productivity
    JEL: O30 O31 O33 O40
    Date: 2013
  43. By: Bakker, Gerben
    Abstract: We investigate the long-run historical pattern of R&D-outlays by reviewing aggregate growth rates and historical cases of particular R&D projects, following the historical-institutional approach of Alfred Chandler (1962), Douglass North (1981) and Oliver Williamson (1985). We find that even the earliest R&D-projects used non-insignificant cash outlays and that until the 1970s aggregate R&D outlays grew far faster than GDP, despite five well-known challenges that implied that R&D could only be financed with cash, for which no perfect market existed: the presence of sunk costs, real uncertainty, long time lags, adverse selection, and moral hazard. We then review a wide variety of organisational forms and institutional instruments that firms historically have used to overcome these financing obstacles, and without which the enormous growth of R&D outlays since the nineteenth century would not have been possible.
    Keywords: R&D-project financing–-history; R&D-financing institutions; sunk costs; historical R&D-project cost case studies Britain; United States
    JEL: F3 G3
    Date: 2013–07
  44. By: Hernandez, Pedro J.
    Abstract: This paper re-examines the link between firm size and exports in order to study the proposal that consists of increasing the firm size to raise exports as a way out of the current economic crisis. The elasticity of export propensity (percentage of exported sales) with respect to firm size depends on several firm characteristics. The new theories of international trade emphasize the firm heterogeneity as the theoretical basis of this behaviour. In the context of such heterogeneity, this paper uses the quantile regression methodology to analyze the effect of firm size on export propensity of the firms, confirming the existence of a positive relationship that becomes less important as export propensity increases. The traditional estimate of this elasticity on the average of the export propensities distribution underestimates the effect in the bottom of the distribution and overestimates the effect on most of it.
    Keywords: Exports, Firm Size
    JEL: F14 L25
    Date: 2013–11–19
  45. By: Sjöholm, Fredrik (Research Institute of Industrial Economics (IFN))
    Abstract: Foreign direct investment has been of great importance in economic growth and global economic integration over the last decades. South East Asia has been part of this development with rapidly increasing inflows of FDI. However, there are large variations over time and between countries in the region as regard to the policies towards FDI, and in actual inflows of FDI. This chapter aims at examining the size of FDI in South East Asia and the trends in it. The main determinants of FDI in Southeast Asia as well as their effect on the host countries are also discussed and examined.
    Keywords: Foreign direct investment; Multinational firms; Southeast Asia; Economic development
    JEL: F21 F23 O53
    Date: 2013–11–14
  46. By: Aurangzeb Zeb (University of Greenland, Denmark); Thanasis Stengos (University of Guelph, Canada; The Rimini Centre for Economic Analysis (RCEA), Italy)
    Abstract: This paper examines the relationship between Foreign Direct Investment (FDI) and economic growth. We extend the dualistic growth framework by Feder (1982), whereby we divide the economy into an exports and a non-exports sector and assume that the FDI is mainly entering the former. In order to empirically estimate the effects of FDI on economic growth, we employ a smooth coefficient semi-parametric approach. Our results show that countries with higher levels of FDI inflows experience higher productivity in the exports sector as compared with those with low level of FDI inflows. In general, we provide some evidence that FDI inflows play an important role during the development process: Initially, as an important determinant of growth, later on, by helping improve factor productivity in the exports sector and finally, through spillover effects due to fostering the linkages between the Multinational Corporations (MNC) and their host economy partners.
    Keywords: FDI; dualistic growth model; spillovers; productivity; smooth coefficient
    JEL: O47 F10 F21
    Date: 2013–09
  47. By: Alireza Naghavi; Julia Spies; Farid Toubal
    Abstract: This paper studies how the Intellectual Property Right (IPR) regime in destination countries influences the way multinationals structure the international organization of their production. In particular, we explore how multinationals divide tasks of different complexities across countries with different levels of IPR protection. The analysis studies the decision of firms between procurement from related parties and from independents suppliers at the product level. It also breaks down outsourcing into two types by distinguishing whether or not they involve technology sharing between the two parties. We combine data from a French firm-level survey on the mode choice for each transaction with a newly developed complexity measure at the product level. Our results confirm that firms are generally reluctant to source highly complex goods from outside firm boundaries. By studying the interaction between product complexity and the IPR protection, we obtain that (i) for technology-sharing outsourcing IPRs promote outsourcing of more complex goods to a destination country by guaranteeing the protection of their technology, (ii) for non-technologyrelated-outsourcing IPRs attract the outsourcing of less complex products that are more prone to reverse engineering and simpler to decodify and imitate.
    Keywords: outsourcing;product complexity;intellectual property rights;technology sharing
    JEL: F12 F23 O34
    Date: 2013–10
  48. By: Kathleen Carroll (UMBC); Lisa M. Dickson (UMBC); Jane E. Ruseski (West Virginia University)
    Abstract: This paper models faculty participation in university decision-making and the effects on enrollment, academic quality and non-academic quality. The model predicts that faculty participation positively academic quality and non-academic quality. The model predicts that faculty participation positively affects student enrollment and investments in academic quality. Without faculty involvment in decision making, universities may choose to overinvest in non-academic quality (e.g. athletics, recreational activities) relative to academic quality. If academic quality provides positive externalities as the economic literature indicates, then faculty involvment in decision-making is socially preferred to having decisions made only by university administrators.
    Keywords: higher education; faculty governance; university decision making; incentives; nonprofit organization; public organization; organizational behavior.
    JEL: D23 D73 I23 L31 L38
    Date: 2013–10
  49. By: Nejat Anbarci; Pedro Gomis-Porqueras; Marcus Pivato
    Abstract: In formal markets, to attract buyers, sellers must publicly advertise their prices and locations. But in informal markets, sellers must remain anonymous from government authorities. Since agents' payoffs depend on the ratio of buyers and sellers in each of these markets, all agents try to position themselves in the market which can yield them the highest possible payoff. This strategic interaction in turn critically affects the time evolution of these two markets. In our benchmark model, in which only sellers can switch between these markets, there exists a unique stable dynamic equilibrium where formal and informal markets co-exist. Sellers switch from the formal to the informal market whenever costs of trading in the informal market decrease, and vice versa. In a richer environment, where both sellers and buyers can switch between markets, and the sellers' and buyers' costs of trading in the formal market net of those in the informal market have opposite signs, there exists a unique stable dynamic equilibrium where formal and informal markets co-exist.
    Keywords: Price posting, bargaining, matching, formal sector, informal sector
    JEL: C7 D49
    Date: 2013–11–20

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