nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2014‒02‒15
sixteen papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. The medium-term effect of R&D on firm growth By Capasso M.; Treibich T.G.; Verspagen H.H.G.
  2. Structure, Innovations and Performance of the Czech Dairy Value Chain By Bošková, Iveta; Ratinger, Tomáš
  3. The importance of design for firms' competitiveness: a review of the literature By Beatrice D'Ippolito
  4. How important is industry-specific managerial experience for innovative firm performance? By Balsmeier, Benjamin; Czarnitzki, Dirk
  5. U.S. High-Skilled Immigration, Innovation, and Entrepreneurship: Empirical Approaches and Evidence By William R. Kerr
  6. Information Technology and Competitiveness: Evidence from Micro, Small and Medium Enterprise Survey in Cimahi District, Indonesia By Maman Setiawan; Rina Indiastuti; Peggie Destevanie
  7. Business models for sustainable technologies: Exploring business model evolution in the case of electric vehicles By René Bohnsack; Jonatan Pinkse; Ans Kolk
  8. User innovators and their influence on innovation activities of firms in Finland By Gault F.; Kuusisto J.; Niemi M.
  9. Patents and innovation : Are the brakes broken, or how to restore patents’ dynamic efficiency ? By Christian Le Bas; Julien Pénin
  10. What do patent-based measures tell us about product commercialization? Evidence from the pharmaceutical industry By Stefan Wagner; Simon Wakeman
  11. Measuring performance of small and medium scale agrifood firms in developing countries: Gap between Theory and Practice By Mutonyi, Sarah; Gyau, Amos
  12. Clustering of territoral areas: A multi-criteria districting problem By Rui Fragoso; Conceição Rego; Vladimir Bushenkov
  13. Openness and competitiveness of manufacturing sector: a comparative study of China and India By Santra, Swarup; Bagaria, Nidhi
  14. INSTITUTIONAL THEORY IN TOURISM STUDIES: EVIDENCE AND FUTURE DIRECTIONS By Lavandoski, Joice; Albino Silva, João; Vargas-Sánchez, Alfonso
  15. Changing patterns of export of goods versus macroeconomic competitiveness. A comparative analysis for East-Central European countries in the period 2000-2011. By Lechman, Ewa
  16. Do employers trust workers too little? An experimental study of trust in the labour market By Stefano Caria; Paolo Falco

  1. By: Capasso M.; Treibich T.G.; Verspagen H.H.G. (UNU-MERIT)
    Abstract: This study analyses the medium-term effect of RD expenditure on firm employment growth. Four cross-sectional waves of an innovation survey conducted in the Netherlands have been used to evaluate the effect on firm growth in the five years following the investment. Panel data fixed effect techniques, also allowing for selection bias corrections, indicate a positive influence of RD on growth. Limited dependent variable models have been used throughout the whole analysis to consider explicitly the cases of firms exiting the market in the analysed medium term.
    Keywords: Market Structure, Firm Strategy, and Market Performance: General; Firm Objectives, Organization, and Behavior: General; Management of Technological Innovation and R&D;
    JEL: L20 L10 O32
    Date: 2014
  2. By: Bošková, Iveta; Ratinger, Tomáš
    Abstract: 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 the innovation activities and knowledge transfer in the dairy value chain in the Czech Republic are examined in order to assess the potential for enhancing sustainable dairy production. A particular attention is given to the collaboration with R&D organisations and other important agents. Concurrently the role of the structural changes is considered. The methodological approach builds on the concept of the sectoral system of innovation. Based on statistical figures and face to face interviews the increasing dynamics in the innovation process is observed, however, farmers and processors are in their innovation activities disconnected and their collaboration with research institutions and other companies is rather low. The main innovation objectives as well as drivers and barriers of the collaboration are specified.
    Keywords: innovation system, dairy farms, dairy processing, Agribusiness, O31, Q13, Q16,
    Date: 2014
  3. By: Beatrice D'Ippolito (MTS - Management Technologique et Strategique - Grenoble École de Management (GEM))
    Abstract: Scholars dedicated increasing attention towards appreciating how design has changed individuals' perception of new products, firms' understanding and formulation of strategy, or other relevant actors' approach to innovation and technology management. By emphasising the importance of design for the definition of consumers' needs, the restructuring of firms' organisational structures and strategies, and the evolution of firms' value creation processes, this review paper identifies relevant research gaps and questions that would benefit from future scholarly attention. In particular, it is suggested that such effort should address the analysis of: how design consumption can help better comprehend consumers' needs; what are the implications of design thinking on the skill sets of design professionals; the organisational structure of firms, including the reconfiguration of other business functions, and their strategy; and whether and how design thinking can shape firms' value creation processes and contribute to the formalisation of design tasks.
    Keywords: Design; strategy making; consumers' needs; value creation; literature review; firm competitiveness; research gaps
    Date: 2014–01–28
  4. By: Balsmeier, Benjamin; Czarnitzki, Dirk
    Abstract: This study examines how industry-specific managerial experience affects firms' innovation performance in the context of different institutional environments. Based on firm-level data from 27 Central and Eastern European countries we identify a robust positive relationship between industry-specific experience of the top-manager and the decision to innovate as well as the share of new product-related sales. These effects are particularly pronounced for small firms operating outside the European Union or, more generally, in institutionally less developed countries. The results suggest that managerial experience affects firm innovations largely indirectly, for example, by reducing uncertainty about future returns on innovations or by providing knowledge about how to cope with institutional shortfalls potentially hampering the commercial success of new products. --
    Keywords: Corporate Governance,Innovation,Managerial Experience
    JEL: G38 L25 O32 P26
    Date: 2014
  5. By: William R. Kerr (University, NBER, and Bank of Finland.)
    Abstract: High-skilled immigrants are a very important component of U.S. innovation and entrepreneurship. Immigrants account for roughly a quarter of U.S. workers in these fields, and they have a similar contribution in terms of output measures like patents or firm starts. This contribution has been rapidly growing over the last three decades. In terms of quality, the average skilled immigrant appears to be better trained to work in these fields, but conditional on educational attainment of comparable quality to natives. The exception to this is that immigrants have a disproportionate impact among the very highest achievers (e.g., Nobel Prize winners). Studies regarding the impact of immigrants on natives tend to find limited consequences in the short-run, while the results in the long-run are more varied and much less certain. Immigrants in the United States aid business and technology exchanges with their home countries, but the overall effect that the migration has on the home country remains unclear. We know very little about return migration of workers engaged in innovation and entrepreneurship, except that it is rapidly growing in importance.
    Keywords: Immigration, innovation, entrepreneurship, diaspora
    JEL: F15 F22 J15 J31 J44 L14 L26 O31 O32 O33
    Date: 2014–01
  6. By: Maman Setiawan (Faculty of Economics and Business, University of Padjadjaran); Rina Indiastuti (Faculty of Economics and Business, University of Padjadjaran); Peggie Destevanie (Faculty of Economics and Business, University of Padjadjaran)
    Abstract: This paper investigates the role of information technology in its contribution toward the competitiveness of micro, small and medium enterprises. The data used in the analysis is based on a survey of micro, small and medium enterprises in Cimahi District, West Java Province, Indonesia. Variables to measure the degree of adoption of information technology, competitiveness, and other control latent variables are constructed by Factor Analysis using various relevant indicators. Path Analysis is also undertaken to investigate the effect of the adoption of information technology on competitiveness. It found that there is a lack of use of information technologies among the micro, small and medium enterprises surveyed. The information technologies are used for some purposes such as administration, marketing, production, and other activities related to the business. We also found the adoption of information technology has a positive contribution to competitiveness.
    Keywords: competitiveness; micro, small and medium enterprises; information technology; path analysis; factor analysis
    JEL: O0
    Date: 2014–02
  7. By: René Bohnsack (University of Amsterdam Business School - University of Amsterdam Business School); Jonatan Pinkse (MTS - Management Technologique et Strategique - Grenoble École de Management (GEM)); Ans Kolk (Amsterdam Business School - University of Amsterdam)
    Abstract: Sustainable technologies challenge prevailing business practices, especially in industries that depend heavily on the use of fossil fuels. Firms are therefore in need of business models that transform the specific characteristics of sustainable technologies into new ways to create economic value and overcome the barriers that stand in the way of their market penetration. A key issue is the respective impact of incumbent and entrepreneurial firms' path-dependent behaviour on the development of such new business models. Embedded in the literature on business models, this paper explores how incumbent and entrepreneurial firms' path dependencies have affected the evolution of business models for electric vehicles. Based on a qualitative analysis of electric vehicle projects of key industry players over a five-year period (2006-2010), the paper identifies four business model archetypes and traces their evolution over time. Findings suggest that incumbent and entrepreneurial firms approach business model innovation in distinctive ways. Business model evolution shows a series of incremental changes that introduce service-based components, which were initially developed by entrepreneurial firms, to the product. Over time there seems to be some convergence in the business models of incumbents and entrepreneurs in the direction of delivering economy multi-purpose vehicles.
    Keywords: Sustainable technology; business models, evolution; path dependencies; electric vehicles
    Date: 2014
  8. By: Gault F.; Kuusisto J.; Niemi M. (UNU-MERIT)
    Abstract: Statistics Finland added questions to the Finnish Community Innovation Survey CIS for 2010 on the importance of user innovation. For firms engaged in innovation activity during the three year period, 2008-2010, 30 per cent reported that user modified products were of high or medium importance to them. For user developed products the figure was 13 per cent. These firms, compared with those that did not rank user innovation as highly, had a higher propensity to produce new to the market product innovations and they were more active in producing product innovations by themselves, by collaborating with others, by adapting and adopting products from other firms, and by using products from other firms. The results for user modified and user developed products were found to be consistent with responses to a standard CIS question on whether the product innovation of the firm was done by adapting products developed by others, but the results were not sufficient to say that responses to this question were a consequence, principally, of user innovation. The wider implications of the findings are discussed along with the need for confirmation of the findings in other countries. Both Portugal and Switzerland have incorporated the Finnish CIS 2010 questions into their CIS 2012 and have added additional questions which may show that existing CIS data provide information on the presence of user innovation.
    Keywords: Firm Behavior: Empirical Analysis; Innovation and Invention: Processes and Incentives; Technological Change: Choices and Consequences; Diffusion Processes;
    JEL: D22 O31 O33
    Date: 2014
  9. By: Christian Le Bas; Julien Pénin
    Abstract: The standard view of patents emphasizes their dynamic efficiency. It considers that, by providing firms with incentives to invest in R&D and to disclose their knowledge, patents encourage innovation and increase social welfare in the long run. Yet, a growing body of literature opposes this view and asks for patent reform or even for the abolition of the patent system. In this work, which reviews the most recent literature on patents, we show that patents can have a negative impact on the dynamics of innovation. This is not due to some intrinsic properties of the patent system but to some of its recent evolutions which mean that, nowadays, too many patents are granted and that patent information is bad. The combination of those two elements explains most of the problems induced by modern patent systems such as hold-up (patent trolls), anti-commons (royalty stacking), and high transaction costs in markets for technology. We conclude by showing that realistic reforms can solve those problems and ensure that the patent system becomes again an instrument of dynamic efficiency.
    Keywords: Incentives, Patent, innovation policy, hold-up, trolls, anti-commons, markets for technology.
    Date: 2014
  10. By: Stefan Wagner (ESMT); Simon Wakeman (ESMT)
    Abstract: Patent-based measures are frequently used as indicators in empirical research on innovation and technology as well as on firms’ strategies and organizational choices to characterize inventions or, more generally, innovative activities and the technological capabilities of organizations. A clear correlation between the value of an invention and a number of patent indicators such as the number of citations received has been established. However, there is much less evidence of what patent-based indicators tell us about outcomes beyond patent value. Using data from the pharmaceutical industry, we investigate the relationship between the most frequently used indicators and the outcomes from the product development process. Our findings draw a complex picture regarding the information content of various patent indicators that bear important implications for the use and the proper interpretation of these indicators in settings where they are employed to describe outcomes beyond the patent system itself.
    Keywords: Patent indicators, patent system, product commercialization, pharmaceutical industry, drug development
    Date: 2014–01–30
  11. By: Mutonyi, Sarah; Gyau, Amos
    Abstract: Globalization and increasing population of middle income classes in developing countries has led to increased market opportunities. These markets are associated with demand for traceability, food safety and quality standards (Webber and Labaste, 2010). This requires the chains to be competitive and ability to manage and evaluate the performance of the supply chain becomes paramount. Performance measurement is defined as the process of quantifying efficiency and effectiveness of an action. In the recent literature, performance measurement has gained attention in the agri-food chains. Different methods have been proposed in marketing and supply chain management literature to measure supply chain performance such as Activity-Based Costing (ABC), Balanced Scorecard, Economic Value Added (EVA), Multi-criteria Analysis (MCA), Life-cycle Analysis (LCA), Data envelopment analysis (DEA) and Supply Chain Council’s (SCOR model). Despite the existence of these measurement metrics, there is lack of consensus on what determines the performance of supply chains which complicates the selection of one measurement system in agrifood chains. The measures may not often be applicable for small and medium size agribusiness firms especially producer organizations in developing countries. Since they are not well structured, do not often collect information which are often needed to feed the complex models. We therefore propose a conceptual model for measuring marketing performance based upon five constructs: effectiveness, efficiency, adaptability, food quality and customer satisfaction.
    Keywords: Agribusiness,
    Date: 2014
  12. By: Rui Fragoso (CEAFGE-UÉ and ICAAM-UÉ, Universidade de Évora); Conceição Rego (Department of Economics and CEFAGE-UE, Universidade de Évora); Vladimir Bushenkov (CIMA-UÉ, Universidade de Évora)
    Abstract: Endogenous resources, economic profile and socio-economic issues are the criteria that define the level of development and identifying features of a territorial unit. The territorial units that organize the country, in political and administrative terms – parishes and counties –, have a hierarchical structure, which initially reflected the organization of productive activities as well as the traditional State organization. The success of development policies addressed to territorial agglomerates depends on the homogeneity of their territorial units. In this context, the clustering of territorial areas can be stated as a multi-criteria districting problem. Thus, this paper aims to propose a framework for obtaining homogenous territorial clusters based on a Pareto frontier that includes multiple criteria related to territories’ endogenous resources, economic profile and socio-cultural features. This framework is developed in two phases. First, the criteria correlated with development at the territorial unit level are determined through statistical and econometric methods. Then, a multi-criteria approach is developed to allocate each territorial unit to a territorial agglomerate, according to the Pareto frontier established. The framework is applied to a set of parishes and counties of the Central Alentejo region in southern Portugal. Results are presented and discussed in the scope of a regional development strategy.
    Keywords: Alentejo; Cluster; Districting; Multi-criteria.
    JEL: C31 R12
    Date: 2014
  13. By: Santra, Swarup; Bagaria, Nidhi
    Abstract: FDI may affect the supply of productive resources including (financial capital, equipment and machinery, technology, management and etc.). FDI creates employment where unemployment and underemployment rate is high and thus increases the income of the workers. As a result an additional savings to the host country is created. FDI also has the backward effect. Through buying locally made materials and intermediate goods it creates a good environment for the locally produced goods. For China, the competitiveness of manufacturing sector and Trade Openness are increasing over the year since 1991. However, the Financial Openness of China is showing mixed result, it increased until mid-1990s and it is showing the declining trend. In case of India, the picture is so complex. The Competitiveness of manufacturing sector and Financial Openness are showing the fluctuating path over the year. No as such trend can be found for these two series for India. Only the Trade Openness is showing increasing trend for India.
    Keywords: China, India, Financial Openness, Foreign Direct Investment (FDI), Manufacturing Sector, Revealed Comparative Advantage (RCA), Trade Openness
    JEL: F10 F14
    Date: 2014–01–20
  14. By: Lavandoski, Joice (University of Caxias do Sul); Albino Silva, João (University of Algarve); Vargas-Sánchez, Alfonso (University of Huelva)
    Abstract: The present article focuses on the effective application of the Institutional Theory as a theoretical perspective in scientific studies. The particular goal is to present a literature review about the Institutional Theory applied to the tourism industry, particularly the wine tourism segment. Different research areas are identified among those developed within institutional premises in tourism studies. The present review discusses the influence of the institutional framework in the organizational behavior and the pursuit of social legitimacy of tourism organizations. The Institutional Theory presents itself as a consolidated theoretical perspective used to explain organizational behaviors; however, it has been poorly used in tourism studies. It is in this sense that this article offers significant contributions by gathering a theoretical discussion body of the Institutional Theory in the tourism industry, which could lead to practical implications concerning the public and private management of this sector. This article provides theoretical reflections for future research directions with the Institutional Theory in wine tourism and adds to the few tourism studies developed with an institutional perspective.
    Keywords: Institutional Theory; Tourism; Wine Tourism; Tourism Organizations
    JEL: M10 M20 M21
    Date: 2014–02–07
  15. By: Lechman, Ewa
    Abstract: The paper discusses existing links between changing patterns of export of goods broken down by technology-intensity versus macroeconomic competitiveness. The study covers nine East-Central European economies: Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and Slovak Republic, in the time span 2000-2011. We hypothesize on discovering strong, positive and statistically significant relationship between flows of export of high-tech and ICTs manufactures goods, and level of macroeconomic competitiveness (approximated by Global Competitiveness Index – GCI, see: World Economic Forum). Our methodological approach relies on elaboration of country`s individual export patterns with regard to industries of different technology-intensity, and statistical analysis between macroeconomic GCI variable and variables identifying shares in total export of certain industries. Reversely to what was initially expected, our empirical results do not seem to support the hypothesis on statistically positive links between growing shares of high-tech and ICT manufactures industries in total value of export versus Global Competitiveness Index, in analyzed countries.
    Keywords: competitiveness, export, technology-intensity, comparative analysis
    JEL: F1 F14
    Date: 2014–02
  16. By: Stefano Caria; Paolo Falco
    Abstract: We conduct a field experiment to investigate employers’ trust in workers. A sample of real entrepreneurs and workers from urban Ghana are respectively assigned to the roles of employers and employees. Employers have the option to hire (trust) an employee, who can in turn choose whether to exert effort (trustworthiness) in a real-effort task. By comparing employers’ expectations to workers’ revealed trustworthiness, we are able to detect potential misperceptions leading to sub-optimal hiring. We further devise two randomized treatments to test for the existence of expectation bias against specific worker categories and estimate the elasticity of employers’ beliefs with respect to new information. We find that employers significantly underestimate workers’ trustworthiness and this reduces their profit. Employees are aware of employers’ sub-optimal trust. Expectations are largely inelastic with respect to news and negative signals have a stronger (downward) effect than positive ones. Our results suggest that raising employers’ expectations would have a strong impact on hiring.
    Keywords: trust, trustworthiness, expectations, effort, hiring, microenterprise, learning, discrimination, experiment, African labour markets
    JEL: J23 J71 O15 C9
    Date: 2014

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