nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2014‒07‒28
twenty-one papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Knowledge Base, Exporting Activities, Innovation Openness and Innovation Performance: A SEM Approach Towards a Unifying Framework By Spyros Arvanitis; Areti Gkypali; Kostas Tsekouras
  2. The innovation process of a privately-owned enterprise and a state-owned enterprise in China By Kang, Byeongwoo
  3. Mobility of Knowledge and Local Innovation Activity By Drivas, Kyriakos; Economidou, Claire; Karkalakos, Sotiris; Tsionas, Efthymios G.
  4. The impact of R&D subsidies on R&D employment composition By Sergio Afcha; Jose García-Quevedo
  5. Small Business, Innovation, and Tax Policy: A Review By Gale, William; Brown, Samuel
  6. Innovation, work Organisation and Systems of Social Protection By Edward Lorenz
  7. Foregign Direct Investment and Regional Economic Growth in Russia: An Econometric Assessment By Iwasaki, Ichiro; Suganuma, Keiko
  8. While explaining cluster internal impacts on cluster development, cluster life cycle theory fails to explain the influence of cluster external factors. Based on a multiscalar approach, this study investigates factors causing change within an agritech cluster applying a qualitative approach. Main shifts in cluster development and their inducing factors from multiple scalar and thematic contexts are investigated. Concluding, incremental changes are mainly induced by knowledge dynamics within the same industry, especially from the local level. Radical change is the result of an exogenous shock from the national institutional environment. In total, specific changes are induced by specific factors from specific scales. By Dominik Santner; Dirk Fornahl
  9. How Innovative is the Education Sector? By OECD
  10. FDI Spillovers and Multinational Firm Heterogeneity By K. LENAERTS; B. MERLEVEDE
  11. Entrepreneurship Capital and Regional Productivity Revisited By Massón-Guerra, José Luis; Ortín-Angel, Pedro
  12. Does private tutoring increase students’ academic performance? Evidence from Turkey By Giray Berberoglu; Aysit Tansel
  13. Innovation and Financial Liberalization: The Case of India By James B. ANG
  14. Measuring the Performance of Banks: Theory, Practice, Evidence, and Some Policy Implications By Joseph P. Hughes; Loretta J. Mester
  15. Organizational form and efficiency of franchise chains By Isabelle Piot-Lepetit; Rozenn Perrigot; Gérard Cliquet
  16. Customers’ adoption of electronic banking: An investigation on the commercial banking industry in Zimbabwe. By Makosana, Musa
  17. Knowledge Economy and Financial Sector Competition in African Countries By Asongu, Simplice A
  18. Gender Issues About Negotiation: A different perception of the most important driving forces? By Claude Alavoine
  19. The origin of spin-offs – A typology of corporate and academic spin-offs By H. FRYGES; M. WRIGHT
  20. Rethinking Policy Intervention for the Transition towards Competitive Trade-Led Green Growth By Bhishma K. Bhusal; Susana Franco; James Wilson
  21. Life Cycle Earnings, Education Premiums and Internal Rates of Return By Bhuller, Manudeep; Mogstad, Magne; Salvanes, Kjell G.

  1. By: Spyros Arvanitis (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Areti Gkypali (University of Patras, Patras, Greece); Kostas Tsekouras (University of Patras, Patras, Greece)
    Abstract: In this paper we demonstrate the complexity that regulates the innovation-exports nexus. In particular we argue that innovation and exports should be treated as latent variables in order to account for as many facets possible thus, accounting for multifaceted heterogeneity. In this context, the role of innovation openness ought to be highlighted within a unified framework, as it is considered an additional activity of firms’ knowledge creation strategy. In this line, innovation and exporting orientation are ruled by the firms' strategic mix comprised of internal knowledge creation processes and the diversity of innovation openness. Theoretical and empirical links between these major components are identified and measured employing a Structural Equation Modelling (SEM) approach on a sample of Greek R&D-active manufacturing firms. Empirical findings corroborate the complexity of relationships and indicate that the firms’ knowledge base and open innovation strategy regulate via complementary and substitution relationships firms’ innovation and export performance.
    Keywords: SEM, endogeneity, open innovation strategy, knowledge base, innovation performance, export performance
    JEL: O31
    Date: 2014–07
  2. By: Kang, Byeongwoo
    Abstract: This study compares the innovation process of a privately-owned enterprise and a state-owned enterprise in China using their patent data. Huawei and ZTE were selected for this study because they experienced the same historical environment in the same industry from the same region in China leaving their owner types as their critical difference. This study investigates the difference in the innovation process in R&D between a privately-owned and a state-owned enterprise by analyzing (1) domestic and international patent application pattern, (2) co-application and co-applicants, (3) knowledge accumulation inside Huawei and ZTE, and (4) knowledge spillover to domestic and foreign firms.
    Keywords: China, Business enterprises, Government enterprises, Telecommunication, Research & development, Technological innovations, Patent data, Privately-owned enterprise, State-owned enterprise
    JEL: L25 L96 O31
    Date: 2014–07
  3. By: Drivas, Kyriakos; Economidou, Claire; Karkalakos, Sotiris; Tsionas, Efthymios G.
    Abstract: This paper studies the diffusion of knowledge and its consequences for local innovation production. In a common framework, we analyze the geographic reach of different channels of knowledge flows that thus far have been studied separately in the literature. To jointly estimate these flows, we develop and apply novel econometric techniques appropriate to the nature of the data. We find that geographic along with technological proximity to be more essential to the operation of market than to non-market channels of knowledge flows. External accessible disembodied knowledge has a strong positive effect on local innovation production as large as that of homegrown knowledge.
    Keywords: knowledge flows, patents, citations, inventor mobility, trade, non-linear regression systems
    JEL: C11 C33 O30 O51
    Date: 2014–07–21
  4. By: Sergio Afcha (Pontificia Universidad Católica del Perú); Jose García-Quevedo (University of Barcelona & IEB)
    Abstract: In this paper we examine the impact of subsidies granted at national and regional levels on a set of R&D employment variables and, specifically, we seek to identify the existence of the behavioural additionality effects of these public subsidies on firms’ R&D human resources. We begin by assessing the effects of public funds on R&D private expenditures and on the number of R&D employees, and then focus on their impact on the composition of human resources engaged in R&D as classified by occupation and level of education. The data used correspond to the Spanish Technological Innovation Panel for the period 2006-2011. To control for selection bias and endogeneity, a combination of non-parametric matching techniques are implemented. After ruling out the existence of crowding out effects, our results show that R&D subsidies increase the number of R&D employees. However, no increase is found in the average level of qualification of R&D staff members in subsidized firms. All in all, the effects of public support are heterogeneous being dependent on the source of the subsidy and the firms’ characteristics.
    Keywords: R&D subsidies, R&D employment, matching estimators, technology policy
    JEL: O38 J24 H25 C14
    Date: 2014
  5. By: Gale, William; Brown, Samuel
    Abstract: Small businesses occupy an iconic place in American public policy debates. This paper discusses interactions between the federal tax code, small business, and the economy. We summarize the characteristics of small businesses, identify the tax provisions that most affect small businesses, and review evidence on the impact of tax and other policies on entrepreneurial activity. We also examine evidence suggesting that it is young firms, not small ones, where job growth and innovation tend to occur. Policies that aim to stimulate young and innovative firms are likely to prove different than policies that subsidize small businesses.
    Keywords: entrepreneurship, tax policy, innovation, small business
    JEL: H2
    Date: 2013–04–08
  6. By: Edward Lorenz (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - Université Nice Sophia Antipolis (UNS) - CNRS : UMR6227)
    Abstract: Much of the core research on the determinants of innovation traditionally has focused on the role of formal processes of R&D and on the importance of the skills and expertise of scientists and engineers with third-level education. In research on national innovation systems there has been a parallel tendency to focus on the institutions and organisations responsible for the production and diffusion of formal scientific and technical knowledge. At the level of measurement these emphases are reflected in the classic definition of innovation developed in the Oslo Manual as technical product and process innovation (TPP), and at the level of innovation policies they can be seen in the continuing importance attached to increasing national R&D intensity. More recently there have been notable efforts to widen the scope of innovation research so as to more fully take into account the role of work processes, systems of labour market protection and more generally the impact of welfare state institutions. This chapter focuses on these changes in scope and seeks to identify key challenges for researchers in innovation studies. The chapter begins by examining how work organisation has been analysed in the developing field of innovation studies including the factors that account for the growing interest in the 2000s in measuring and analysing processes of organisational innovation. It is argued that a key challenge still facing researchers in innovation studies is developing an adequate understanding of the interdependencies between work organisation and processes of technical change and innovation. The chapter then turns to the analysis of national systems, arguing that there is a need for developing more robust typologies of innovation systems that integrate the role of labour market and welfare state institutions. A related challenge is developing multi-level governance frameworks that serve to clarify the interconnections between these social institutions at the levels of nations and regions. The chapter concludes by discussing the obstacles to putting work organisation and organisational innovation more firmly on the EU policy agenda.
    Keywords: Innovation studies, Work Organisation, Social Protection
    Date: 2013–12–31
  7. By: Iwasaki, Ichiro; Suganuma, Keiko
    Abstract: In this paper, we estimate the growth-enhancing effect of foreign direct investment (FDI) in Russian regions, paying special attention to the country’s investment boom and the remarkable regional gaps in terms of cumulative direct investments in and after 2003. We also examine possible synergistic effects between FDI and local R&D potential to test the absorptive capacity hypothesis. Our estimation results strongly suggest the remarkable role of FDI in the regional economic growth in Russia. In addition, we found that the positive effect of FDI on growth is not limited to the regions that received a relatively large amount of foreign capital. Furthermore, we detected a surprisingly robust and positive synergistic effect between FDI and local R&D potential, indicating that the absorptive capability is essential for linking FDI and regional economic development in Russia.
    Keywords: foreign direct investment (FDI), regional economic growth, R&D potential, absorptive capacity hypothesis, Russia
    JEL: F21 O11 P25 P33 R11
    Date: 2014–06
  8. By: Dominik Santner (Centre for Regional and Innovation Economics, University of Bremen); Dirk Fornahl (Centre for Regional and Innovation Economics, University of Bremen)
    Keywords: endogenous factors, exogenous factors, cluster development, multiscalarity, cluster life cycle
    JEL: L64 O31 O33 R11
    Date: 2014–07–14
  9. By: OECD
    Abstract: Education has one of the highest shares of innovative jobs for tertiary graduates of all sectors of the economy in Europe, and a higher proportion than in other public sector areas such as health and public administration. Innovation in knowledge or methods is the most common form of innovation, with education outperforming all sectors of the economy on this measure. Within education, higher education is much more innovative than the primary and secondary levels – and is one of the most innovative sectors of the economy in terms of innovation in knowledge or methods.
    Date: 2014–07
    Abstract: Theoretical work implies that more investment promotion will attract less productive foreign firms. We analyze to what extent less productive foreign firms are capable of generating positive spillover effects. We find that only sufficiently productive foreign firms generate positive backward spillover effects. When we combine foreign and domestic firm heterogeneity, more productive multinationals, and especially those that are more than two standard deviations more productive than an individual domestic firm, are found to be the main source of positive backward spillover effects for the latter. More productive domestic firms benefit from larger positive effects. Supplying less productive multinationals results in negative spillover effects. Lower productivity levels of domestic and foreign firms generally lead to a more negative impact. If investment promotion aims at technology transfer to domestic firms, policy makers should be aware that attracting additional foreign investment might result in zero or negative spillover effects.
    Keywords: FDI spillovers, multinationals, firm heterogeneity, technology transfer
    JEL: F23
    Date: 2014–04
  11. By: Massón-Guerra, José Luis; Ortín-Angel, Pedro
    Abstract: Entrepreneurship capital has been considered in the literature to be a public good, so it will positively affect a region’s total factor productivity. There is evidence confirming a positive relationship between entrepreneurship capital measures and regional production. This paper argues that the number of firms in a region will be positively related with the regional production in the presence of decreasing returns to scale in firms’ production technology. So if we do not control for the number of firms (and entrepreneurship capital is positively related with the stock of firms) we may be mixing both effects, returns to scale and public goods. This paper provides a methodological benchmark for distinguishing between both effects. The analysis conducted using a sample of 52 Spanish provinces for eleven years suggests major differences and conclusions between methodologies. In our data, previous methods overestimate the effect of regional entrepreneurship capital on the economy.
    Keywords: Entrepreneurship Capital, Regional Productivity, Scale Economies
    JEL: L26 O4 R11
    Date: 2014
  12. By: Giray Berberoglu (Department of Secondary Mathematics and Science Education, METU); Aysit Tansel (Department of Economics, METU; Institute for the Study of Labor (IZA) Bonn, Germany; Economic Research Forum (ERF) Cairo, Egypt)
    Abstract: This paper investigates the effectiveness of private tutoring in Turkey. The authors introduce their study by providing some background information on the two major national examinations and three different kinds of tutoring. They then describe how they aimed to analyse whether attending private tutoring centres (PTCs) enhances Turkish students’ academic performance. By way of multiple linear regression analysis, their study sought to evaluate whether the impact of private tutoring varies in different subject areas, taking into account several student-related characteristics such as family and academic backgrounds as well as interest in and perception of academic success. In terms of subject areas, the results indicate that while private tutoring does have a positive impact on academic performance in mathematics and Turkish language, this is not the case in natural sciences. However, as evidenced by the effect sizes, these impacts are rather small compared to the impacts of other variables such as interest in and perception of academic success, high school graduation fields of study, high school cumulative grade point average (CGPA), parental education and students’ sociocultural background. While the authors point out that more research on the impact of further important variables needs to be done, their view is that school seems to be an important factor for determining students’ academic performance.
    Keywords: Private tutoring, Academic Performance, Regression analysis, Turkey.
    JEL: I20 I21 I22
    Date: 2014–07
  13. By: James B. ANG (Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, Singapore, 637332.)
    Abstract: This paper attempts to shed some light on the role of financial sector policies in generating new knowledge, drawing on the experience of one of the fastest growing and largest developing countries. Using time series data for India over the period 1963-2005, the results indicate that interest rate restraints help generate ideas. Other financial repressionist policies, in the form of high reserve and liquidity requirements, as well as significant directed credit controls, appear to have a dampening effect on ideas production. These results lend some support to the argument that some form of financial sector reforms may help stimulate economic growth via increasing technological innovation.
    Keywords: financial liberalization; Schumpeterian growth
    JEL: O30 O40 O53
    Date: 2014–04
  14. By: Joseph P. Hughes (Rutgers University); Loretta J. Mester (Federal Reserve Bank of Philadelphia)
    Abstract: The unique capital structure of commercial banking – funding production with demandable debt that participates in the economy’s payments system – affects various aspects of banking. It shapes banks’ comparative advantage in providing financial products and services to informationally opaque customers, their ability to diversify credit and liquidity risk, and how they are regulated, including the need to obtain a charter to operate and explicit and implicit federal guarantees of bank liabilities to reduce the probability of bank runs. These aspects of banking affect a bank’s choice of risk vs. expected return, which, in turn, affects bank performance. Banks have an incentive to reduce risk to protect the valuable charter from episodes of financial distress and they also have an incentive to increase risk to exploit the cost-of-funds subsidy of mispriced deposit insurance. These are contrasting incentives tied to bank size. Measuring the performance of banks and its relationship to size requires untangling cost and profit from decisions about risk versus expected-return because both cost and profit are functions of endogenous risk-taking. This chapter gives an overview of two general empirical approaches to measuring bank performance and discusses some of the applications of these approaches found in the literature. One application explains how better diversification available at a larger scale of operations generates scale economies that are obscured by higher levels of risk-taking. Studies of banking cost that ignore endogenous risk-taking find little evidence of scale economies at the largest banks while those that control for this risk-taking find large scale economies at the largest banks – evidence with important implications for regulation.
    Keywords: efficiency
    JEL: G1
    Date: 2013–08–01
  15. By: Isabelle Piot-Lepetit (Marchés, Organisations, Institutions et Stratégies d'Acteurs, INRA); Rozenn Perrigot (Graduate School of Management, Université Rennes 1; Ecole Supérieure de Commerce de Rennes; Center for Research in Economics and Management, Université Rennes 1); Gérard Cliquet (Graduate School of Management, Université Rennes 1; Center for Research in Economics and Management, Université Rennes 1)
    Abstract: The purpose of this paper is to develop a new model allowing the implementation of a benchmarking process that jointly measure the efficiency of franchise chains and determine their optimal organizational form. The methodology is based on a non-econometric technique developed by management scientists on economic concepts for evaluating the performance of decision-making units and implementing a benchmarking process. An extended model is developed in the paper for evaluating the efficiency and determining the optimal percentage of company-owned outlets (PCO) of each franchise chain. First, results showed that the PCO has a positive impact on franchise chain efficiency; even if other chain characteristics have a larger impact. Second, the optimization of the PCO allows for additional improvements in efficiency. Even though this study has some limitations (e.g. sample and variable selection), it contributes to the literature on franchising by providing an approach allowing us to answer to the question of Shane (1998) on the optimal proportion of franchised units given other firm characteristics. By developing a model that allows for the joint evaluation of franchise chain efficiency and optimal PCO, this study offers to franchisors a new benchmarking process allowing for both a competitive and functional benchmarking. The originality of this research can be found in the new model developed for allowing a benchmarking of franchise chains that allows an evaluation of efficiency jointly with a determination of their optimal organizational form.
    Keywords: data envelopment analysis, efficiency, franchising, percentage of company-owned outlets, pco, performance, plural form, organisation, franchise, analyse comparativeperformance
    Date: 2014
  16. By: Makosana, Musa
    Abstract: The advent of electronic banking offers banking firms a new frontier of opportunities and challenges. This study investigates how social factors, awareness, consumer perceptions and attitudes towards electronic banking influence the adoption of electronic banking in Zimbabwe. In Zimbabwe little is known and understood about the emergence of electronic banking, this is because electronic banking is new, and so consumer acceptance and use of electronic banking is still limited. This study has reviewed current literature and opinions about factors influencing electronic banking, thus including consumer perceptions towards electronic banking characteristics and social influences that affect consumer adoption of this mode of banking. This study also explains the methodology used in conducting interviews to obtain primary information for this study. This study presents both the results of the interviews and the analysis of these results, with figures to determine the extent that the factors studied influence customer adoption of electronic banking. Psychological factors including, compatibility, complexity, risk, convenience, security, privacy and cost were found to influence the adoption of electronic banking. The theoretical contributions and the practical implications of the findings are discussed and suggestions for future research are presented.
    Keywords: electronic banking, consumer awareness, consumer perceptions, adoption
    JEL: M31
    Date: 2014–07–01
  17. By: Asongu, Simplice A
    Abstract: The goal of this paper is to assess how knowledge economy (KE) plays out in financial sector competition. It suggests a practicable way to disentangle the effects of different components of KE on various financial sectors. The variables identified under the World Bank’s four knowledge economy index (KEI) are employed. An endogeneity robust panel instrumental variable fixed-effects estimation strategy is employed on data from 53 African countries for the period 1996-2010. The following findings are established. First, education and innovation in terms of scientific and technical publications broadly bear an inverse nexus with financial development. Second, the incidence of information and communication technologies is positive on all financial sectors but increases the non-formal sectors to the detriment of the formal sector. Third, economic incentives have positive implications for all sectors though the formal financial sector benefits most. Fourth, institutional regime is positive (negative) for the semi-formal (informal) financial sector. The findings contribute at the same time to the macroeconomic literature on measuring financial development and respond to the growing fields of informal sector importance, microfinance and mobile banking by means of KE promotion. Policy implications and future research directions are discussed.
    Keywords: Financial development; Knowledge Economy; Africa
    JEL: G21 O10 O34 P00 P48
    Date: 2014–07–10
  18. By: Claude Alavoine
    Abstract: Negotiation is a specific form of interaction based on communication in which the parties enter into deliberately, each with clear but different interests or goals and a mutual dependency towards a decision due to be taken at the end of the confrontation. Consequently, negotiation is a complex activity involving many different disciplines from the strategic aspects and the decision making process to the evaluation of alternatives or outcomes and the exchange of information. While gender differences can be considered as one of the most researched topic within negotiation studies, empirical works and theory present many conflicting evidences and results about the role of gender in the process or the outcome. Furthermore, little interest has been shown over gender differences in the definition of what is negotiation, its essence or fundamental elements. Or, as differences exist in practices, it might be essential to study if the starting point of these discrepancies does not come from different considerations about what is negotiation and what will encourage the participants in their strategic decisions. Some recent and promising experiments made with diverse groups show that male and female participants in a common and shared situation barely consider the same way the concepts of power, trust or stakes which are largely considered as the usual driving forces of any negotiation. Furthermore, results from Human Resource self-assessment tests display and confirm considerable differences between individuals regarding essential behavioral dimensions like capacity to improvise and to achieve, aptitude to conciliate or to compete and orientation towards power and group domination which are also part of negotiation skills. Our intention in this paper is to confront these dimensions with negotiation’s usual driving forces in order to build up new paths for further research.
    Date: 2014–07–15
  19. By: H. FRYGES; M. WRIGHT (-)
    Abstract: We provide a typology of corporate and academic spin-off types, distinguish-ing spin-offs involving new ventures from those that concern existing activities. We summa-rize the papers published in this special issue, relating them to the typology we develop. We conclude by developing an agenda for further research on spin-offs.
    Keywords: spin-offs, typology
    JEL: L26 M13 L33
    Date: 2013–11
  20. By: Bhishma K. Bhusal; Susana Franco; James Wilson
    Abstract: A neo-classical trade-led growth model supported by rapid technological advancement and the WTO regime has been instrumental to achieving higher growth and prosperity during the last few decades. However, it struggles to cope with critical societal challenges such as environmental degradation, inequality, social disharmony and poor quality of life. The green growth approach is gaining momentum to overcome these issues. Since two thirds of world production is traded, trade should be competitive, inclusive and environmentally sustainable in a green growth regime. Through an extensive review of trade and competitiveness theories, alongside the human development and environmental sustainability literature, the paper analyses three trade-offs: sustainability-competitiveness; inclusiveness-sustainability; and inclusiveness-competitiveness. From this analysis a core strategy mix for transition to competitive, trade-led green growth is identified, setting up an agenda for future research into the role of systems of policy instruments/incentives in catalysing this transition.
    Keywords: Competitiveness, Green economy, sustainability, inclusiveness
    JEL: O15 O19 Q56
  21. By: Bhuller, Manudeep (Statistics Norway); Mogstad, Magne (University of Chicago); Salvanes, Kjell G. (Norwegian School of Economics)
    Abstract: What do the education premiums look like over the life cycle? What is the impact of schooling on lifetime earnings? How does the internal rate of return compare with opportunity cost of funds? To what extent do progressive taxes attenuate the incentives to invest in education? This paper exploits Norwegian population panel data with nearly career long earnings histories to answer these important questions. We provide a detailed picture of the causal relationship between schooling and earnings over the life cycle, following individuals over their working lifespan. To account for endogeneity of schooling, we apply three commonly used identification strategies. Our estimates show that additional schooling gives higher lifetime earnings and steeper age-earnings profile, in line with predictions from human capital theory. These estimates imply an internal rate of return of around 10 percent, after taking into account income taxes and earnings-related pension entitlements. Under standard conditions, this finding suggests it was financially profitable to take additional schooling because the rates of return were substantially higher than the market interest rates. By comparison, Mincer regressions understate substantially the rates of return. We explore the reasons for this downward bias, finding that it is driven by Mincer's assumptions of no earnings while in school and exogenous post-schooling employment.
    Keywords: education premium, internal rate of return, life cycle earnings
    JEL: J24 J31
    Date: 2014–07

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