nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2014‒02‒21
sixteen papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. Demand-driven innovation policies in the EU By Camilla Jensen; Itzhak Goldberg
  2. Regional productivity effects of multinational firm affiliates By Andersson, Martin; Gråsjö, Urban; Karlsson, Charlie
  3. Identifying European Poles of Excellence: The Methodology By Daniel Nepelski; Giuditta de Prato
  4. Innovation decision of Tunisian service firms: an empirical analysis By Hanen SDIRI; Mohamed AYADI
  5. The effects of production offshoring on R&D and innovation in the home country By Dachs, Bernhard; Ebersberger, Bernd; Kinkel, Steffen; Som, Oliver
  6. An analysis of the knowledge base of Scientific Research & Development Business Services By Consoli,Davide; Elche,Dioni
  7. Shareconomy: Performance-oriented systems as a strategy By Schiederig, Tim; Herstatt, Cornelius
  8. The efficiency of universities’ knowledge transfer activities: A multi-output approach beyond patenting and licensing By Federica Rossi
  9. Terms of Trade, Foreign Direct Investment, and Development: A Case of Intra-Asian “Kicking Away the Ladder”? By Wacker, Konstantin M.; Großkurth, Philipp; Lakemann, Tabea
  10. The impact of venture capital linkages on start-ups? cluster embeddedness By Katja Bringmann; Ann Verhetsel; Thomas Vanoutrive; Jo Reynaerts
  11. How Industry Inventors Collaborate with Academic Researchers: The choice between shared and unilateral governance forms. By Bodas Freitas , Isabel Maria; Geuna, Aldo; Lawson, Cornelia; Rossi, Federica
  12. How agglomeration in the financial services industry influences economic growth: Evidence from Chinese cities By Liang, Lin; Lin, Shanglang; Li, Yong
  13. Human capital, basic research, and applied research: Three dimensions of human knowledge and their differential growth effects By Prettner, Klaus; Werner, Katharina
  14. Surges and stops in FDI flows to developing countries : does the mode of entry make a difference ? By Burger, Martijn J.; Ianchovichina, Elena I.
  15. The influence of CEO departure type and board characteristics on firm performance By Wided Bouaine; Lanouar Charfeddine; Mohamed Arouri; Frédéric Teulon
  16. A bibliometric study on culture research in International Business By Cláudia Frias Pinto; Fernando Ribeiro Serra; Manuel Portugal Ferreira

  1. By: Camilla Jensen; Itzhak Goldberg
    Abstract: The objective of the PICK-ME (Policy Incentives for Creation of Knowledge – Methods and Evidence) research project is to provide theoretical and empirical perspectives on innovation which give a greater role to the demand-side aspect of innovation. The main question is how can policy make enterprises more willing to innovate? This task is fulfilled by identifying what we consider the central or most salient aspect of a demand-side innovation-driven economy, which is the small and entrepreneurial yet fast growing and innovative firm. We use the term ?Gazelle? to signify this type of firm throughout the paper. The main concern of policy-makers should therefore be how to support Gazelle type of firms through various policies. The effectiveness of different policy instruments are considered. For example, venture capitalism is in the paper identified as an important modern institution that renders exactly the type of coordination necessary to bring about an innovation system more orientated towards the demand side. This is because experienced entrepreneurs with superior skills in terms of judging the marketability of new innovations step in as financiers. Other factor market bottlenecks on the skills side must be targeted through education policies that fosters centers of excellence. R&D incentives are also considered as a separate instrument but more a question for future research since there is no evidence available on R&D incentives as a Gazelle type of policy. Spatial policies to foster more innovation have been popular in the past. But we conclude that whereas the literature often finds that new knowledge is developed in communities of physically proximate firms, there is no overshadowing evidence showing that spatial policies in particular had any impact on generating more of the Gazelle type of firms.
    Keywords: Innovation, demand-side driven policies, Gazelles, bottlenecks in factor markets, venture capitalism, ontology of knowledge, education systems, clusters
    JEL: B52 B53 D78 D83 G24 M13 N94 O3 O43
    Date: 2014–02
  2. By: Andersson, Martin (CIRCLE, Lund University); Gråsjö, Urban (University West); Karlsson, Charlie (Jönköping International Business School, and Centre of Excellence for Science and Innovation Studies (CESIS))
    Abstract: Multinational firms (MNFs) have been shown to have a set of defining characteristics. Compared to domestic firms, they have a larger fraction of skilled workers, higher R&D to sales ratios and established networks to knowledge sources in several different countries. As illustrated by the so-called ‘anchor-tenant’ hypothesis, they can be described as “knowledge spillover agents”. MNF affiliates, as defined in this paper, are firms that are part of large domestic and foreign MNFs. In this paper we test whether the local presence of MNF affiliates generate spillover effects on the local industry. The empirical analysis focuses on as¬sessing whether the productivity of the regional manufacturing industry of non-affiliated firms is higher in regions with a large fraction of MNF affiliates. The analysis uses data on Swedish firms and is conducted on regional level as well as on firm level. The regressions show that local presence of MNFs in a region has a positive effect on Gross Regional Product (GRP) from non-MNFs. The paper also shows that regions where the low-productive non-MNFs are located appear to benefit the most from local presence of MNFs. The MNFs have, on the other hand, no effect on non-MNF productivity in regions where the high-productive non-MNFs are located.
    Keywords: Multinational firms; affiliates; productivity; R&D; knowledge; spillovers; skilled workers; region
    JEL: F23 J24 O33 R11
    Date: 2014–02–13
  3. By: Daniel Nepelski (European Commission – JRC - IPTS); Giuditta de Prato (European Commission – JRC - IPTS)
    Abstract: The EIPE project aims to identify ICT R&D&I-related activities which are geographically concentrated and which demonstrate high performance in ICT innovative activities: the European ICT Poles of Excellence. It also aims to help map the dynamics of ICT-related innovation and economic geography in Europe, pointing to the presence and possibly the emergence of agglomerated and globally performing ICT activities. An additional challenge of the EIPE project is that this identification process had to be based only on the analysis of quantitative data, and built on a set of relevant criteria leading to measurable indicators. The present report documents the methodologies and data sources used for this purpose.
    Keywords: ICT; information and communication technologies; innovation, R&D, ICT industry; region; Europe; Poles of Excellence; clusters; indicators; methods
    JEL: O32 O52 R12 R28
    Date: 2014–02
  4. By: Hanen SDIRI; Mohamed AYADI
    Abstract: Innovation is widely recognized as a key driver of economic growth and competitiveness. Previous works dealing with it has specially focused on its effect on the economic performance of innovators. In this context, the literature distinguishes between four kinds of innovation: product, process, radical and incremental. Indeed, despite their importance, the innovation determinants and the innovation making-decision are less studied. Based on a sample of 108 Tunisian service firms, the purpose of this paper is to find out the way by which firms make their decision to innovate: simultaneously (one-stage model) or sequentially (twostage model). We obtain that the two-stage model has a statistically significant advantage in predicting innovation. In practice, we argue that the sequential model illustrates well the innovation making-decision procedures.
    Keywords: Innovation, Decision making, Service sector
    JEL: L80 O31 O32
    Date: 2014–02–12
  5. By: Dachs, Bernhard; Ebersberger, Bernd; Kinkel, Steffen; Som, Oliver
    Abstract: We investigate the effects of production offshoring on the innovation activities of manufacturing firms in the home country. The analysis is based on a dataset of more than 3000 manufacturing firms from seven European countries. We find that offshoring firms on average employ a higher share of R&D and design personnel, introduce new products more frequently to the market, and invest more frequently in advanced process technologies compared to non-offshoring firms. Concerns that offshoring may hurt innovation because of the lost links between production and product development are not supported by the evidence. --
    Keywords: offshoring,R&D,home country effects,investment,product innovation,process innovation
    JEL: F23 O31 O33
    Date: 2014
  6. By: Consoli,Davide; Elche,Dioni
    Abstract: It is argued that the literature on SR&D outsourcing focuses mostly on client firms, that is, the demand side, while little is known of the characteristics of the supplying sector. The present paper tackles this gap by elaborating an exploratory analysis of this business service sector with a view to analyse the main patterns of specialization and their evolution over time. Using data on job content and skill requirements in the United States we explore how different forms of knowledge co-exist and co-evolve within a changing sector.
    Keywords: R&D, Skills, Occupations
    JEL: O32 L84 J24
    Date: 2014–02–10
  7. By: Schiederig, Tim; Herstatt, Cornelius
    Abstract: Within this paper we examine the strategic perspective of the emerging phenomenon of performance-oriented systems (e.g. car-sharing, cloud computing). Based on twenty-seven system examples from four industries, we derive six founding propositions that delineate their strategic characteristics and identify initial enabling factors. Our research qualifies recent work on superior architectural knowledge and provides managerial guidance for system development. --
    Keywords: Strategy,Innovation Management,System Development,Architectural Knowledge
    Date: 2014
  8. By: Federica Rossi (Birkbeck, University of London)
    Date: 2014–02
  9. By: Wacker, Konstantin M. (Vienna University of Economics and Business); Großkurth, Philipp (Rheinisch-Westfälisches Institut für Wirtschaftsforschung); Lakemann, Tabea (University of Göttingen, Department of Economics)
    Abstract: In this paper, we address in more detail the question raised in Wacker (2011b): why does foreign direct investment (FDI) generally have a positive impact on developing countries’ terms of trade except in the case of South Asia? After arguing that such a negative relationship is generally detrimental for a country’s growth strategy in a globalized context, we present some stylized facts about the Asian development experiences and the theoretical and empirical background for our question concerning the relationship of FDI and terms of trade in the development context. From here, we argue that South and East Asia have largely pursued different world market integration strategies that have been fostered by different types of FDI: While horizontally motivated FDI has helped East Asia achieve some market power in certain higher-value product niches, late-coming South Asian economies have successfully operated in global industries via price competitiveness, fueled by vertically motivated FDI. Different endowments in human capital provided a breeding ground for these differing development experiences. Our evidence suggests that latecomers in international markets cannot simply follow the same pathway to development as more advanced countries, but rather they must employ adapted alternatives. In addition, globalization might perpetuate traditional North–South patterns in increasing South–South interactions.
    Keywords: Foreign direct investment (FDI); terms of trade; development; Prebisch–Singer hypothesis
    JEL: F23 O11 O57
    Date: 2014–01–01
  10. By: Katja Bringmann; Ann Verhetsel; Thomas Vanoutrive; Jo Reynaerts
    Abstract: The existing literature on cluster embeddedness largely neglects the impact of finance on the development of firm?s network linkages. This is striking in so far that particularly venture capital is often referred to as ?smart money? providing firms not only with funds but also with network contacts. Thus, in this paper, we intend to quantitatively assess the impact of venture capitalists on start-ups? embeddedness. Embeddedness generally occurs along three dimensions namely the societal, the network and the territorial one. Societal embeddedness refers to the cultural environment economic actions take place in. Network embeddedness representing the structure and nature of relations an organization is maintaining and territorial embeddedness implying the degree of spatial anchoring of a firm in a specific geographical area. It is assumed that for firms and regions there are several advantages arising from deep network and, respectively, territorial embeddedness: Among others, they include local knowledge spillovers which promote innovative thinking and, subsequently, strengthen firms? global competitiveness and thereby fueling regional economic growth. In addition, particularly territorial embeddedness is reckoned as shielding to some extent against firm relocation that is widely regarded as hampering regional development. Due to the riskiness of their business, insufficient hard assets, and an unforeseeable rate of return, innovative startups are generally unable to get capitalized by more conventional sources of money i.e. bank lending and therefore often return to venture capital. Besides providing incumbent innovative firms with funds, venture capitalists, reverting to their vast sectoral knowledge and personal contacts, are frequently facilitating the entry of startups into existing personal and industry networks. Generally, it is anticipated that those network contacts are densest in the immediate neighbourhood of the investor. Summing up, given its ?social? character, it is hypothesized that venture capital is an important driver of start-ups? embeddedness that is nevertheless spatially constraint. In order to answer to what extent venture capital impacts portfolio firms? territorial and network embeddedness and whether the geographical location of the venture capitalist has an effect on start-ups? local anchoring, we conduct an empirical analysis using data on venture capital flows. By reviewing cluster embeddedness from a financial geographic perspective, this analysis complements the literature that hitherto has largely neglected the role of venture capital in this respect.
    Keywords: Venture capital; Industrial Cluster; Embeddedness; Social Networks
    JEL: R12 G24
    Date: 2013–11
  11. By: Bodas Freitas , Isabel Maria; Geuna, Aldo; Lawson, Cornelia; Rossi, Federica (University of Turin)
    Abstract: We investigate under what circumstances firms (industry inventors) are more likely to engage in interactions where governance of the relationship is shared between the firm and the university, as opposed to interactions where the relationship is governed unilaterally by the firm. Using PIEMINV, an original dataset of European industry patents in the Italian region of Piedmont, we analyse the characteristics of inventors with diverse experience in projects involving interactions with universities, governed by institutional contracts or personal contracts. Our results suggest that reliance among inventors of the two forms of governance is almost equal, and that unilateral governance forms are preferred when there are high levels of trust among the parties based on embeddedness in local social and education networks. This is likely because it involves less cumbersome and more direct interactions. We find also that knowledge characteristics are not particularly important discriminants of the choice between governance forms: the advantage of shared governance seems to reside mainly in the possibility to mitigate monitoring and asymmetric information problems in contexts of relatively low levels of mutual knowledge and trust.
    Date: 2014–01
  12. By: Liang, Lin; Lin, Shanglang; Li, Yong
    Abstract: This paper empirically tests the effect of financial knowledge spillovers on agglomeration in China's financial services industry and examines the external effects on cities' economies. The authors apply hierarchical linear modeling to examine a data set that comprises 276 Chinese cities and draw the following conclusions. Firstly, they find that agglomeration in the financial services industry and the Jacobs spillovers of industry diversification both promote financial knowledge spillovers in terms of industry specialization. Secondly, agglomeration in this studied industry has a significant positive influence on a city's economic growth, while financial knowledge spillovers have a significant but negative effect on a city's economic growth. Thirdly, the tendency towards agglomeration in the financial services industry in a few major cities is clear and the clustering significantly influences cities' boundaries. Finally, China's financial services industry is limited by a serious degree of regulation and is dominated by the main banking institutions. --
    Keywords: financial services industry agglomeration,industry specialization,knowledge spillovers,city economies,hierarchical linear modeling
    JEL: G20 O4
    Date: 2014
  13. By: Prettner, Klaus; Werner, Katharina
    Abstract: We analyze the differential growth effects of basic research, applied research, and embodied human capital accumulation in an R&D-based growth model with endogenous fertility and endogenous education. In line with the empirical evidence, our model allows for i) a negative association between long-run economic growth and population growth, ii) a positive association between long-run economic growth and education, and iii) a positive association between the level of per capita GDP and expenditures for basic research. Our results also indicate that raising public investments in basic research reduces the growth rate of GDP in the short run because resources have to be drawn away from other productive sectors of the economy. These short-run costs of basic research might be an explanation for the reluctance of governments to increase public R&D expenditures notwithstanding the long-run benefits of such a policy. --
    Keywords: basic vs. applied science,endogenous schooling decisions,endogenous fertility decisions,R&D-based growth,governmental research policies
    JEL: H41 J11 J24 O32 O41
    Date: 2014
  14. By: Burger, Martijn J.; Ianchovichina, Elena I.
    Abstract: This paper investigates the factors associated with foreign direct investment"surges"and"stops,"defined as sharp increases and decreases, respectively, of gross foreign direct investment inflows to the developing world and differentiated based on whether these events are led by waves in greenfield investments or mergers and acquisitions. Greenfield-led surges and stops occur more frequently than mergers and acquisitions-led ones and different factors are associated with the onset of the two types of events. Global liquidity is the only factor significantly associated with a surge, regardless of its kind, while decline in global economic growth and a surge in the preceding year are the only predictors of a stop. Greenfield-led surges and stops are more likely in low-income and resource-rich countries than elsewhere. Global growth, financial openness, and domestic economic and financial instability enable mergers and acquisitions-led surges. These results differ from those in the literature on surges and stops and are particularly relevant in countries where foreign direct investments dominate capital flows.
    Keywords: Currencies and Exchange Rates,Emerging Markets,Debt Markets,Economic Theory&Research,Achieving Shared Growth
    Date: 2014–02–01
  15. By: Wided Bouaine; Lanouar Charfeddine; Mohamed Arouri; Frédéric Teulon
    Abstract: This paper uses panel data from 271 U.S. firms to empirically examine the relationship between the departure of a firm’s CEO and that firm’s performance. Results of our analysis reveal a significant relationship between CEO departure type and firm performance. Specifically, we found that the departure of entrenched CEOs negatively affects current and future firm performance. Results also demonstrate that board size and the presence of independent administrators moderates the relationship between CEO departure type and firm performance. This suggests that entrenched CEOs can have informal associations with independent administrators.
    Keywords: departure type, current and future performance, board independence,entrenchment.
    Date: 2014–02–12
  16. By: Cláudia Frias Pinto (Instituto Politécnico de Leiria); Fernando Ribeiro Serra (Uninove – Universidade Nove de Julho); Manuel Portugal Ferreira (Instituto Politécnico de Leiria)
    Abstract: National cultures and cultural differences provide a crucial component of the context of international business (IB) research. We conducted a bibliometric study of the articles published in seven leading IB journals, over a period of three decades, to analyze how “national culture” has been impacting in IB research. Co-citation mappings permit us to identify the ties binding works dealing with culture and cultural issues in IB. We identify two main clusters of research each comprising two sub-clusters, with Hofstede’s (1980) work setting much of the conceptual and empirical approach on culture-related studies. One main cluster entails works on the conceptualization of culture and its dimensions and other cluster on cultural distance. This conceptual framework captures the extant IB research incorporating culture-related concepts and influences.
    Keywords: culture, culture in international business, bibliometric study, IB research
    JEL: M0 M1
    Date: 2014–02–07

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