nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2014‒04‒05
fifteen papers chosen by
Joao Jose de Matos Ferreira
University of the Beira Interior

  1. Origin of FDI and domestic productivity spillovers: does European FDI have a ‘productivity advantage’ in the ENP countries? By Vassilis Monastiriotis
  2. Knowledge systematisation, reconfiguration and the organisation of firms and industry: the case of design By Beatrice D'Ippolito; Marcela Miozzo; Consoli Davide
  3. Micro-based evidence of EU competitiveness: the CompNet database By Lopez-Garcia, Paloma; di Mauro, Filippo; Benatti, Nicola; Angeloni, Chiara; Altomonte, Carlo; Bugamelli, Matteo; D’Aurizio, Leandro; Navaretti, Giorgio Barba; Forlani, Emanuele; Rossetti, Stefania; Zurlo, Davide; Berthou, Antoine; Sandoz-Dit-Bragard, Charlotte; Dhyne, Emmanuel; Amador, João; Opromolla, Luca David; Soares, Ana Cristina; Chiriacescu, Bogdan; Cazacu, Ana-Maria; Lalinsky, Tibor; Biewen, Elena; Blank, Sven; Meinen, Philipp; Hagemejer, Jan; Tello, Patry; Rodriguez-Caloca, Antonio; Cede, Urska; Galuscak, Kamil; Merikyll, Jaanika; Harasztosi, Peter
  4. Dynamic capabilities for service innovation: conceptualization and measurement By Matthijs Janssen; Carolina Castaldi; Alexander Alexiev
  5. Intellectual Property Rights, the Pool of Knowledge, and Innovation By Joseph E. Stiglitz
  6. Considerations on the intellectual potential creativity By Certan, Simion; Certan, Ion
  7. Institutional Determinants of Japanese Outward FDI in the Manufacturing Industry By Raphaël Chiappini
  8. Firms' energy costs and competitiveness in Italy By Ivan Faiella; Alessandro Mistretta
  9. Performance evaluation of production structures in agricultural holdings – case study By Turek Rahoveanu, Adrian; Turek Rahoveanu, Maria Magdalena
  10. Regulation, Innovation and Technology Diffusion: Evidence from Building Energy Efficiency Standards in Germany By Makram El-Shagi; Claus Michelsen; Sebastian Rosenschon
  11. Does ICT remain a powerful engine of growth? By Cette, G.
  12. The Institutionalization of Socio-Responsible Business: Global Trends and Regional Features By Frolov, Daniil; Shulimova, Anna
  13. Industrial Upgrading in Mixed Market Economies: The Spanish Case By Angela Garcia Calvo
  14. Exploring strategic priorities for regional agricultural research and development investments in southern Africa: By Johnson, Michael E.; Benin, Samuel; You, Liangzhi; Diao, Xinshen; Chilonda, Pius; Kennedy, Adam
  15. Effects of Business Networks on Firm Growth in a Cluster of Microenterprises: Evidence from rural Ethiopia By ISHIWATA Ayako; Petr MATOUS; TODO Yasuyuki

  1. By: Vassilis Monastiriotis
    Abstract: The process of approximation between the EU and its ‘eastern neighbourhood’ has created conditions for deepening economic interactions and market integration, giving to the EU –and to EU businesses– an elevated role in the process of economic modernisation and transition in the neighbourhood countries. This raises the question as to whether European business activity in these countries produces indeed measureable economic advantages both in absolute and in relative terms (e.g., compared to business activity from other parts of the world). Similarly, a question arises as to whether European business activity reduces or amplifies spatial imbalances within the partner countries. This paper examines these issues for the case of capital flows (foreign ownership) and the related productivity spillovers, using firm-level data from the Business Environment and Enterprise Performance Survey (BEEPS) covering 28 transition countries over the period 2002-2009. We estimate the direct and intra-industry productivity effects of foreign ownership and examine how these differ across regional blocks (CEE, SEE and ENP), according to the origin of the foreign investor (EU versus non-EU), across geographical scales (pure industry versus regional spillovers) and for different types of locations (capital-city regions versus the rest). Our results suggest that FDI of EU origin plays a distinctive role in the countries concerned helping raise domestic productivity significantly more than investments from outside the EU. However, this process appears to operate in a spatially selective manner, thus enhancing regional disparities and spatial imbalances. This, then, assigns a particular responsibility for EU policy, as it continues to promote economic integration (and FDI flows) to its eastern neighbourhood, to devise interventions that will help redress these problems.
    Keywords: foreign direct investment
    Date: 2014–01–08
  2. By: Beatrice D'Ippolito (MTS - Management Technologique et Strategique - Grenoble École de Management (GEM)); Marcela Miozzo (MBS - Manchester Business School - University of Manchester); Consoli Davide (INGENIO (CSIC-UPV) - INGENIO)
    Abstract: The paper explores two pathways that are crucial for making knowledge economically useful - knowledge systematisation and knowledge reconfiguration - and analyses how their interplay enables the emergence of a new business function or activity. Knowledge systematisation is the abstraction and diffusion of operative principles to the effect of expanding to broader remits practices that had been initially conceived for a narrow purpose. Knowledge reconfiguration involves the conversion and formalisation of these novel practices within existing firm and industry organisation. Using the design activity as a lens, and drawing on primary and secondary interviews and archival data on the home furnishing sectors in Italy, our case study articulates the processes that facilitate the abstraction of general rules from novel practices and the changes that are necessary, both within firm and industry organisation, to foster their diffusion.
    Keywords: Knowledge systematisation; knowledge reconfiguration; design; firm organisation; industry organisation; routines; capabilities; home furnishing
    Date: 2014–03–21
  3. By: Lopez-Garcia, Paloma; di Mauro, Filippo; Benatti, Nicola; Angeloni, Chiara; Altomonte, Carlo; Bugamelli, Matteo; D’Aurizio, Leandro; Navaretti, Giorgio Barba; Forlani, Emanuele; Rossetti, Stefania; Zurlo, Davide; Berthou, Antoine; Sandoz-Dit-Bragard, Charlotte; Dhyne, Emmanuel; Amador, João; Opromolla, Luca David; Soares, Ana Cristina; Chiriacescu, Bogdan; Cazacu, Ana-Maria; Lalinsky, Tibor; Biewen, Elena; Blank, Sven; Meinen, Philipp; Hagemejer, Jan; Tello, Patry; Rodriguez-Caloca, Antonio; Cede, Urska; Galuscak, Kamil; Merikyll, Jaanika; Harasztosi, Peter
    Abstract: Drawing from confidential firm-level balance sheets in 11 European countries, the paper presents a novel sectoral database of comparable productivity indicators built by members of the Competitiveness Research Network (CompNet) using a newly developed research infrastructure. Beyond aggregate information available from industry statistics of Eurostat or EU KLEMS, the paper provides information on the distribution of firms across several dimensions related to competitiveness, e.g. productivity and size. The database comprises so far 11 countries, with information for 58 sectors over the period 1995-2011. The paper documents the development of the new research infrastructure, describes the database, and shows some preliminary results. Among them, it shows that there is large heterogeneity in terms of firm productivity or size within narrowly defined industries in all countries. Productivity, and above all, size distribution are very skewed across countries, with a thick left-tail of low productive firms. Moreover, firms at both ends of the distribution show very different dynamics in terms of productivity and unit labour costs. Within-sector heterogeneity and productivity dispersion are positively correlated to aggregate productivity given the possibility of reallocating resources from less to more productive firms. To this extent, we show how allocative efficiency varies across countries, and more interestingly, over different periods of time. Finally, we apply the new database to illustrate the importance of productivity dispersion to explain aggregate trade results. JEL Classification: L11, L25, D24, O4, O57
    Keywords: allocative efficiency, competitiveness, cross country analysis, firm-level data, productivity and size distribution, total factor productivity
    Date: 2014–02
  4. By: Matthijs Janssen; Carolina Castaldi; Alexander Alexiev
    Abstract: For both managers and policy makers involved in innovation, capability failures regarding development of new services are a major concern. Efforts to strengthen those capabilities, and evaluation thereof, demand more comprehensive insight in firms’ actual abilities to source ideas and convert them into marketable service propositions. This paper aims to provide clarity by operationalizing a set of dynamic service innovation capabilities (DSICs). We first review how existing conceptualizations adopt recent insights from the dynamic capability view, which emphasizes the need to identify microfoundations corresponding to a limited set of common constructs. One of the encountered conceptualizations, consolidating earlier works in specific service sectors, was found appropriate for gauging DSICs across a wide range of industries. It exemplifies how DSICs can be conceptualized according to the so-called synthesis approach to service innovation by capturing insights on the evolutionary properties of the creation of novel solutions. Secondly, we operationalize a refined version of such DSICs and develop a measurement scale, using two subsamples from a dataset of 391 Dutch firms. The measured capabilities are found to correlate to different extents with performance measures. Our main contribution, a validated scale for five complementary DSICs, opens the way to comparative analyses which are of relevance for further research, management and policy development.
    Keywords: Dynamic capabilities, service innovation, measurement scale
    Date: 2014–03
  5. By: Joseph E. Stiglitz
    Abstract: The pace of innovation is related both to the level of investment in innovation and the pool of knowledge from which innovators can draw. Both of these are endogenous: Investments in innovations are affected by the pool of knowledge and the ability of firms to appropriate the returns to their innovative activity, itself affected by the intellectual property rights (IPR) regime. But as each firm engages in research, it both contributes to the pool, and takes out from it. The strength and design of IPR affects the extent to which any innovation adds to or subtracts from the pool of ideas that are available to be commercially exploited, i.e. to the technological opportunities. We construct the simplest possible general model to explore the resulting dynamics, showing that, under plausible conditions, stronger intellectual property rights may lead to a lower pace of innovation, and more generally, that long run effects may be the opposite of the short run effects.
    JEL: E61 H41 O3 O31 O32 O33 O34 O38
    Date: 2014–03
  6. By: Certan, Simion; Certan, Ion
    Abstract: The functionality of the new economic system of Republic of Moldavia, based on market relations and opened to world, frequently marked by dynamism, often by uncertainty and risk, sometimes even hostility, depends, crucially, on the innovation activity. Innovation activity, formation of innovation potential is definitely influenced by motivational politics and the reward system. The article reflects on the evolution of innovative activity, formation of innovation potential, motivational system and proposes some measures that would boost the intellectual property.
    Keywords: education, innovation, intellect, motivation, performance, rewards, research
    JEL: Q0
    Date: 2013–10–21
  7. By: Raphaël Chiappini
    Abstract: This paper explores the relationship between six indicators of governance and outward foreign direct investment (FDI) in the Japanese manufacturing industry. We estimate a gravity model of FDI for 30 host countries covering the period 2005-2011, employing Heckman's two-step sample selection correction in order to tackle the issue of zero-value observations. The results indicate that Japanese overseas investments are driven by host market size, yen real exchange rate, macroeconomic stability, resource endowments and policy variables. In particular, we find that confidence societal rules, control of corruption, government effectiveness, political stability and private sector policies are important factors driving FDI.
    Keywords: Outward foreign direct investment (FDI), institutions, gravity model, Heckman sample selection model
    JEL: C34 F21 F23
    Date: 2014–03
  8. By: Ivan Faiella (Bank of Italy); Alessandro Mistretta (University of Rome Tor Vergata)
    Abstract: This paper presents a method of estimating the energy expenditure of Italian manufacturing firms with 20 or more employees for the period 2003-11. Use is made of multiple sources in order to impute firm-level energy consumption in the dataset of the Bank of Italy’s Survey of Industrial and Service Firms; the expenditure is then obtained using the market prices of the different energy sources. According to our estimates, in 2011 the average firm spent about €740,000 to purchase energy, 61 percent more than in 2003. Energy expenditure is higher for firms located in the North, for larger firms and for those producing building materials and ceramics or in the chemical and petrochemical industry. In the period 2003-11 energy costs rose from 2.3 to 2.6 per cent as a proportion of turnover and from 27.1 to 30.8 per cent as a proportion of labour costs. Other conditions being equal, the magnitude of energy expenditure is negatively associated with firm’s performance indicators: firms with higher energy costs have both a lower rate of sales volume growth and a lower propensity to export.
    Keywords: energy costs, firms' competitiveness, statistical imputation
    JEL: C53 D24 Q41
    Date: 2014–03
  9. By: Turek Rahoveanu, Adrian; Turek Rahoveanu, Maria Magdalena
    Abstract: The performance of production structures in agriculture is determined by a complex of factors, the most important are: the natural potential of agricultural holdings, financial resources necessary to purchase inputs, ensuring balance in the allocation of factors of production, technical and technological potential, the existing workforce and the readiness of the farm manager. Based on these considerations we want in this paper to analyze the aspects defining application of performance management in order to develop sustainable production structures, increase competitiveness of farms, farmers' income stabilization and Romanian rural development.
    Keywords: production structure, management, efficiency, competitiveness
    JEL: Q1 Q12
    Date: 2013–10–21
  10. By: Makram El-Shagi; Claus Michelsen; Sebastian Rosenschon
    Abstract: The impact of environmental regulation on technology diffusion and innovations is studied using a unique data set of German residential buildings. We analyze how energy efficiency regulations, in terms of minimum standards, affects energy-use in newly constructed buildings and how it induces innovation in the residential-building industry. The data used consists of a large sample of German apartment houses built between 1950 and 2005. Based on this information, we determine their real energy requirements from energy performance certificates and energy billing information. We develop a new measure for regulation intensity and apply a panel-error-correction regression model to energy requirements of low and high quality housing. Our findings suggest that regulation significantly impacts technology adoption in low quality housing. This, in turn, induces improvements in the high quality segment where innovators respond to market signals.
    Keywords: Environmental regulation, innovation, technology diffusion, residential real estate, energy efficiency
    JEL: D2 Q4 R5
    Date: 2014
  11. By: Cette, G.
    Abstract: ICT productive performances have slowed down since the beginning of the 2000s, before the current crisis. This diagnosis could be due, at least partly, to some statistical mis-measurements of ICT improvements. Nevertheless, improvements in ICT performances will probably be positively impacted, in some years, by large technological developments as for example the productive use, in computers, of the 3D chip. The lag of ICT diffusion in non-US developed countries, mainly Europe and Japan, compare to the US, is explained by institutional aspects: a lower education level, on average, of the working-age population and more regulations on labour and product markets. By implementing structural reforms, these countries could benefit from a productivity acceleration linked to a catch-up of the US ICT diffusion level. And they could benefit, without any delay with the US, from the possible ICT productivity growth second wave.
    Keywords: ICT, productivity, growth, innovation.
    JEL: O31 O33 J24 O47 E22
    Date: 2014
  12. By: Frolov, Daniil; Shulimova, Anna
    Abstract: The article describes the dual nature of business social responsibility: global and regional. The increased pressure of globalization produces a new stakeholder expectations and efforts of companies to conform to it. As a result of return reaction the growing requirements of International standards of business ethics create common effect on corporate management and organizational behavior. However, the institutional conditions of the firm evolution are determined by regional basics of institutional environment. It sets up a local differentiation of socio-responsible activities of corporate sector. Focused on the possibilities of institutional transplantation we consider economic benefits of an importation and a further adaptation of business social innovations for developing countries and Russia.
    Keywords: business social responsibility; firm evolution; corporate management and marketing; institutions; institutionalization; transplantation
    JEL: B52
    Date: 2014
  13. By: Angela Garcia Calvo
    Abstract: This paper discusses convergence through the concept of industrial upgrading and its application to the Spanish case. The paper explains the recent rise of Spain’s firms in high value-added service sectors and the fall in capital and skill-intensive manufacturing through the characterisation of Spain’s institutional structure. I argue that Spain’s institutional system is defined by peer coordination (PC), a non-hierarchical form of strategic coordination based on the presence of public-private interdependencies and direct state-business interactions. Under PC, Spanish firms in complex services sectors enabled the state to achieve developmental goals in exchange for sector-specific advantages that facilitated upgrading. The absence of effective intermediary agents hindered the development of PC in manufacturing sectors dominated by small firms. Furthermore, PC limited their access to the patient capital and stable demand necessary to develop new, complex products. The central state and some regional governments were able to circumvent these limitations only in exceptional cases.
    Keywords: industrial policy; Spain
    Date: 2014–03–21
  14. By: Johnson, Michael E.; Benin, Samuel; You, Liangzhi; Diao, Xinshen; Chilonda, Pius; Kennedy, Adam
    Abstract: An in-depth quantitative analysis is undertaken in this paper to assist the Southern African Development Community (SADC) Secretariat, member countries, and development partners in setting future regional investment priorities for agricultural research and development in the SADC region. A primary goal of this work was to identify a range of agricultural research priorities for achieving sector productivity and overall economic growth in southern Africa, at both the country and regional levels. This is accomplished by adopting an integrated modeling framework that combines a disaggregated spatial analytical model with an economywide multimarket model developed specifically for the region.
    Keywords: Agricultural growth, Markets, Agricultural research, yields, Simulation models, Technology transfer, Yield gap, multimarket model, spatial analysis, technology spillovers, staple crops, priority setting,
    Date: 2014
  15. By: ISHIWATA Ayako; Petr MATOUS; TODO Yasuyuki
    Abstract: Poverty reduction in rural Africa necessitates diversification of income sources from agriculture to nonfarm activities. Clustering of micro-enterprises in rural areas can promote nonfarm income. This study examines the determinants of growth in sales and skill levels of microenterprises in a tailor cluster in rural Ethiopia, focusing on the role of business networks. We collected panel data, including measures of business networks through procurement, outsourcing, and financing, for three years from 136 firms, the population in the "survival" cluster. The results show that when firms are closer to the center of business networks, i.e., firms are characterized by a higher centrality measure, they are more likely to increase sales. However, although network centrality is also associated with a higher level of tailoring skills, the skill level itself has no significant effect on sales. The finding implies that consumers in the area are not concerned much about the quality of products. Therefore, while expanding business networks can promote sales and skill levels, incentives to upgrade skills are minimal.
    Date: 2014–03

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