nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2014‒08‒28
seventeen papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. R&D partnerships and innovation performance: Can there be too much of a good thing? By Hottenrott, Hanna; Lopes-Bento, Cindy
  2. Fostering Innovation for Productivity and Competitiveness By World Bank
  3. Toward an Assessment of Impacts from U.S. Technology and Innovation Policies By Bozeman, Barry; Link, Albert N.
  4. Public and private investments in innovation capabilities : structural transformation in the Chilean wine industry By Dutz, Mark A.; O'Connell, Stephen D.; Troncoso, Javier L.
  5. Innovation and Job Creation: A sustainable relation? By Daria Ciriaci; Pietro Moncada-Paternò-Castello; Peter Voigt
  6. Defining Clusters of Related Industries By Mercedes Delgado; Michael E. Porter; Scott Stern
  7. What old stagers could teach us: Examining age complementarities in regional innovation systems By Arntz, Melanie; Gregory, Terry
  8. The Moderating Role of FDI Motives and Embeddedness on the Performance of Foreign and Domestic Firms in Emerging Markets By Tilo F. Halaszovich; Sarianna M. Lundan
  9. Direct and cross-scheme effects in a research and development subsidy program By Hottenrott, Hanna; Lopes-Bento, Cindy; Veugelers, Reinhilde
  10. Intellectual property rights protection in the presence of exhaustible resources By Hori, Takeo; Yamagami, Hiroaki
  11. Effiiciency in regional investments in R&D: implications for territorial growth. By Bergantino, Angela Stefania; Capozza, Claudia; De Carlo, Angela
  12. Innovation in the supply and procurement of rig services By Osmundsen, Petter
  13. Effects of product and supplier criticality on resilience capabilities: An empirical analysis of a global supply chain By Sarker, Sudipa; Engwall, Mats; Trucco, Paolo; Feldmann, Andreas
  14. How Does the Market Value Organizational Management Practices of Japanese Firms? Using interview survey data By KAWAKAMI Atsushi; ASABA Shigeru
  15. The growth potential of startups over the business cycle By Vincent Sterk; Petr Sedlacek
  16. ICT Employment Statistics in Europe: Measuring Methodology By Anna Sabadash
  17. The competition assessment framework for the retail energy sector: some concerns about the proposed interpretation By Stephen Littlechild

  1. By: Hottenrott, Hanna; Lopes-Bento, Cindy
    Abstract: R&D collaboration facilitates pooling of complementary skills, learning from the partner as well as sharing risks and costs. Research therefore repeatedly stressed the positive relationship between collaborative R&D and innovation performance. Collaboration, however, involves transaction costs in form of coordination and monitoring efforts and requires knowledge disclosure. This study explicitly considers a firm's collaboration intensity, that is, the share of collaborative R&D projects in a firms' total R&D projects in a sample of mostly small and medium-sized firms (SMEs). We can confirm previous findings in terms of gains for innovation performance, but also show that collaboration has decreasing and even negative returns on product innovation if its intensity increases above a certain threshold. In particular, costs start outweighing benefits if a firm pursues more than about two thirds of its R&D projects in collaboration. --
    Keywords: innovation performance,product innovation,R&D partnerships,collaboration intensity,SMEs,transaction costs,selection model,endogenous switching
    JEL: O31 O32 O33 O34
    Date: 2014
  2. By: World Bank
    Keywords: Information and Communication Technologies - ICT Policy and Strategies Private Sector Development - E-Business Technology Industry Education - Knowledge for Development Tertiary Education Industry
    Date: 2013–04
  3. By: Bozeman, Barry (Arizona State University); Link, Albert N. (University of North Carolina at Greensboro, Department of Economics)
    Abstract: Five important policy initiatives were promulgated in response to the slowdown in U.S. productivity in the early-1970s, and then again in the late-1970s and early-1980s. These initiatives included the Bayh-Dole Act of 1980, the Stevenson-Wydler Act of 1980, the R&E Tax Credit of 1981, the Small Business Innovation and Development Act of 1982, and the National Cooperative Research Act of 1984. Scholars and policy-makers have long debated the direction and magnitude of impacts from these policies but empirical evidence remains modest, especially evidence of their aggregate effects. Our assessment of these policies is based on quantifying their collective impact on industrial investments in R&D in the post-productivity slowdown period. Our findings support the conclusion that the relative levels of industrial investments in R&D from 1980 forward were significantly higher than before, ceteris paribus.
    Keywords: technology; innovation; R&D; policy assessment
    JEL: H50 O31 O33 O47
    Date: 2014–08–14
  4. By: Dutz, Mark A.; O'Connell, Stephen D.; Troncoso, Javier L.
    Abstract: This paper assembles novel data on the Chilean wine industry to investigate the role of investments in knowledge capital on sales growth in domestic and international markets. The study uses archival data collected from the Government of Chile to compile and categorize public expenditures and programs supporting the Chilean wine industry over the period of 1990-2012 into investment in different types of knowledge capital. These spending categories are related to industry-level sales growth. The paper finds that the most important correlate is spending on research and development. The study also uses data from a new survey of Chilean wine firms to capture information on firm-specific investments in knowledge capital. The findings show that investments in collaboration capital, in particular hiring foreign consultants, as well as participation in international wine fairs are the strongest correlates of growth in export sales, while spending on aspects of branding (local advertising and brand design) are the strongest correlates of domestic market sales growth.
    Keywords: Investment and Investment Climate,E-Business,ICT Policy and Strategies,Markets and Market Access,Economic Theory&Research
    Date: 2014–07–01
  5. By: Daria Ciriaci (JRC-IPTS); Pietro Moncada-Paternò-Castello (JRC-IPTS); Peter Voigt (University of Barcelona, IEB)
    Abstract: This study examines growth patterns of innovative and non innovative firms and, in this regard, whether being an innovator determines company trajectories; i.e. whether there are systematic differences in the persistence of the jobs created by innovating vs. non-innovating firms. For this purpose, a semi-parametric quantile regression approach has been adopted examining serial correlation in employment by drawing on a unique longitudinal dataset of 3,300 Spanish firms over the years 2002-2009, obtained by matching different waves of the Spanish Encuesta sobre Innovacion en las Empresas, the Spanish innovation survey, which is administered every year by the Spanish National Statistics Institute (INE). The empirical results of the study indicate that among those firms experiencing high organic employment growth, smaller and younger innovative firms grow more, at average, than larger innovative firms. Moreover, the jobs created by innovative firms, in general, appear to be rather persistent over time whereas those created by non innovative firms do not. Among declining firms, non-innovators tend to deteriorate faster in terms of economic performance. Overall, evidence suggests that being innovative supports and stabilizes a firm's organic employment growth pattern and being smaller and younger seems to be a sufficient condition to experience high employment growth, i.e. – with regard to the latter – it is not necessary to have a comparably high R&D spending / being an R&D intensive company.
    Keywords: Serial correlation; quantile regression; Spanish firms; firm size, firms age; job creation; YICs
    JEL: L11 L25
    Date: 2013–01
  6. By: Mercedes Delgado; Michael E. Porter; Scott Stern
    Abstract: Clusters are geographic concentrations of industries related by knowledge, skills, inputs, demand, and/or other linkages. A growing body of empirical literature has shown the positive impact of clusters on regional and industry performance, including job creation, patenting, and new business formation. There is an increasing need for cluster-based data to support research, facilitate comparisons of clusters across regions, and support policymakers and practitioners in defining regional strategies. This paper develops a novel clustering algorithm that systematically generates and assesses sets of cluster definitions (i.e., groups of closely related industries). We implement the algorithm using 2009 data for U.S. industries (6-digit NAICS), and propose a new set of benchmark cluster definitions that incorporates measures of inter-industry linkages based on co-location patterns, input-output links, and similarities in labor occupations. We also illustrate the algorithm’s ability to compare alternative sets of cluster definitions by evaluating our new set against existing sets in the literature. We find that our proposed set outperforms other methods in capturing a wide range of inter-industry linkages, including grouping industries within the same 3-digit NAICS.
    JEL: R0 R1
    Date: 2014–08
  7. By: Arntz, Melanie; Gregory, Terry
    Abstract: Concerns have been raised that demographic ageing may weaken the competitiveness of knowledge-based economies and increase regional disparities. The age-creativity link is however far from clear at the aggregate level. Contributing to this debate, we estimate the causal effect of the workforce age structure on patenting activities for local labour markets in Germany using a flexible knowledge production function and accounting for potential endogeneity of the regional workforce structure. Overall, our results suggest that younger workers boost regional innovations, but this effect partly hinges on the presence of older workers as younger and older workers turn out to be complements in the production of knowledge. With demographic aging mainly increasing the older workforce and shrinking the younger one, our results imply that innovation levels in ageing societies may drop in the future. Moreover, differences in the regional age structure currently explain around a sixth of the innovation gap across German regions. --
    Keywords: regional innovation system,demographic ageing,knowledge production function,regional disparities,age complementarities
    JEL: R12 R23 J11
    Date: 2014
  8. By: Tilo F. Halaszovich (University of Bremen - International Management and Governance & ZenTra); Sarianna M. Lundan (University of Bremen - International Management and Governance & ZenTra)
    Abstract: Foreign firms entering emerging markets are usually assumed to be superior to the domestic competitors in the host country. Their superior firm specific advantages (FSAs) allow them to outcompete incumbent rivals and to internalize the gains from foreign direct investment (FDI) entirely. Most of these results are based on resource or efficiency seeking FDI. More recently, the motive for FDI in these markets has shifted to market seeking. A consequence of this shift is the need for foreign firms to get deeper embedded in the institutional envi-ronment of the host country. The institutional environment of emerging markets is consid-erably different from developed countries. Coping with the institutional obstacles of a host country can be assumed to moderate the ability of a foreign firm to exploit its FSAs. We ana-lyze the impact of the firm's degree of embeddedness on its performance in emerging mar-kets using the World Bank’s Enterprise Survey Manufacturing Sector Module data on 15,715 firms from 78 emerging markets. We use the degree of localization of sourcing and sales to measure the degree of embeddedness in the host country market. We find that both dimen-sions are subject to a reversed U-shaped function. That is, by extending the degree of local sales and local sourcing up to a certain percentage, a firm can realize positive performance growth by becoming more embedded into the emerging market, but beyond this point, the performance impact is negative. We also find that foreign firms involved in local sales seem to lose part of their ability to exploit their ownership advantages as compared to foreign firms that export their production.
    Keywords: emerging market FDI, FDI motives, institutional environment
    JEL: F23
    Date: 2014–08
  9. By: Hottenrott, Hanna; Lopes-Bento, Cindy; Veugelers, Reinhilde
    Abstract: This study investigates the effects of an R&D subsidy scheme on participating firms' net R&D investment. Making use of a specific policy design in Belgium that explicitly distinguishes between research and development grants, we estimate direct and cross-scheme effects on research versus development intensities in recipients firms. We find positive direct effects from research (development) subsidies on net research (development) spending. This direct effect is larger for research grants than for development grants. We also find cross-scheme effects that may arise due to complementarity between research and development activities. Finally, we find that the magnitude of the treatment effects depends on firm size and age and that there is a minimum effective grant size, especially for research projects. The results support the view that public subsidies induce higher additional investment particularly in research where market failures are larger, even when the subsidies are targeting development. --
    Keywords: R&D,Complementarity,Research Subsidies,Development Subsidies,Innovation Policy
    JEL: H23 O31 O38
    Date: 2014
  10. By: Hori, Takeo; Yamagami, Hiroaki
    Abstract: We construct a research and development (R&D) based endogenous growth model with exhaustible resources and investigate whether protection of intellectual property rights (IPR) can sustain perpetual growth. We show that relatively weak IPR protection is sufficient to sustain perpetual growth when goods production is more resource-intensive, whereas relatively strong IPR protection is needed for perpetual growth if production is less resource-intensive. If the resource intensity in goods production is medium, even the strictest IPR protection cannot sustain perpetual growth when the quality improvements brought about by innovations are small enough. In this case, we find that R&D subsidies can complement IPR protection in sustaining perpetual growth. We derive the socially optimal level of IPR protection, which is increasing in the resource intensity of goods production. Furthermore, we also consider a case where resource is essential for R&D activities and show a knife-edge condition for perpetual growth.
    Keywords: Endogenous growth; Exhaustible resource; Innovation; Intellectual property rights protection; Patent breadth
    JEL: L50 O30 P28
    Date: 2014–08
  11. By: Bergantino, Angela Stefania; Capozza, Claudia; De Carlo, Angela
    Date: 2013
  12. By: Osmundsen, Petter (UiS)
    Abstract: Substantial elements of innovation have been observable during recent years in rig supply, in particular regarding contracts and organisation. This trend has been driven by the fact that rising costs over many years have put profitability under pressure. On the basis of theory and available empirical insights, the paper outlines the conditions where specific organisational and contractual solutions are best suited. Optimum rig procurement will depend in part on whether the oil companies have time-critical drilling targets, the ability and willingness of the parties to bear risk and the purchaser's competence and capacity to manage and follow up procurement.
    Keywords: Innovation in the supply and procurement of rig services Rig services; contracts; organisation; innovation
    JEL: G34 L60 M10
    Date: 2014–08–01
  13. By: Sarker, Sudipa (KTH Royal Institute of Technology, & Politecnico di Milano); Engwall, Mats (Department of Industrial Economics and Management, Royal Institute of Technology, Stockholm); Trucco, Paolo (Politecnico di Milano); Feldmann, Andreas (Department of Industrial Economics and Management, Royal Institute of Technology, Stockholm)
    Abstract: From resilience perspective, it is important for supply chains to have multiple suppliers in order to maintain a high level of operational performance. On the contrary, keeping multiple suppliers are expensive from purchasing perspective, because, large amount of internal resources are required to maintain numerous suppliers. Moreover, some products may only have a sole source of supply. Against the backdrop, it is important for supply chains to understand, how, different products and supplier compositions affect different resilience capabilities. Hence, drawing from the literature of supply chain resilience, first, conceptual linkages among product criticality, supplier criticality and resilience capabilities are derived. Second, data from four plants of a global manufacturing organization with different supplier and product compositions are collected. Finally, hypothesized relationships are tested by using parametric statistical tests. The empirical data indicate that product and supplier criticality affect different capabilities of supply chain resilience. Theoretical contribution of this research is the conceptual model that is derived from synthesizing the existing literature of supply chain resilience. Practical contribution is the enhanced understanding of the effects of product and supply criticality on different resilience capabilities.
    Keywords: Supply Chain Resilience; Supply Disruption; Business Impact; Time to Recovery; Empirical Study
    JEL: L14 L23
    Date: 2014–08–06
  14. By: KAWAKAMI Atsushi; ASABA Shigeru
    Abstract: This paper examines the extent to which a firm's management practices are valued in the marketplace using the interview survey data which are comparable with that in Bloom and Van Reenen (2007). Kawakami and Asaba (2013) use the same interview data and find that among various management practices, human resources management has a significantly positive impact on Tobin's q, while some of the organizational management variables have a significantly negative impact. The latter result is contrary to Bloom and Van Reenen (2007; 2010; 2012). This paper tries to examine the relationship in more detail between organizational management practice and Tobin's q. We use the raw answers for calculating the organizational management score instead of the organizational management score itself. The detailed analysis suggests three characteristics of management practices: (i) Information sharing and coordination within a unit or a team increases the firm value, while disclosure of information and coordination across units decreases the value; (ii) The impact of quick decision making on a firm's market value varies depending upon the contexts; (iii) Speedy decision making increases the value in the case of new business development, while consultation with the people concerned increases a firm's market value in the case of closing an existing business.
    Date: 2014–08
  15. By: Vincent Sterk (University College London); Petr Sedlacek (Bonn University)
    Abstract: This paper shows that job creation of cohorts of U.S. firms is strongly influenced by aggregate conditions at the time of their entry. Using data from the Business Dynamics Statistics (BDS) we follow cohorts of young firms and document that their employment levels are very persistent and largely driven by the intensive margin (average firm size) rather than the extensive margin (number of firms). To differentiate changes in the composition of startup cohorts from post-entry choices and to evaluate aggregate effects, we estimate a general equilibrium firm dynamics model using BDS data. We find that even for older firms, the aggregate state at birth drives the vast majority of variations in employment across cohorts of the same age. The key force behind this result is fluctuation in choices made by startups that determine their potential to grow large. At the aggregate level, startup decisions account for the large low-frequency fluctuations observed in the employment rate.
    Date: 2014
  16. By: Anna Sabadash (European Commission – JRC - IPTS)
    Abstract: Despite the persistent need to precisely capture and carefully analyze the employment effects associated with the production and deployment of ICT, policy discussion has not been well-supported by good quality statistical information on the ICT employment. In part, this has been due to the absence of an appropriate framework and agreed terminology for describing and quantifying ICT occupations both inside and outside the ICT sector. This paper aims to supply an empirical researcher with some methodological insights on how to describe the ICT employment landscape in the EU countries. It provides background information on the different taxonomies used to capture ICT employment dynamics, and summarises the opportunities and challenges related to the data. This is not a research paper but rather a technical note, intended for empirical economists dealing with the employment statistics. Its primary objective is to stimulate and promote discussion rather than to provide a definitive solution.
    Keywords: ICT, employment, industry, occupation, skills
    JEL: C81 C82 B41
    Date: 2013–12
  17. By: Stephen Littlechild
    Abstract: The framework proposed by Ofgem, OFT and CMA invokes a well-functioning market, but the Competition Commission has not always used such a concept, and when it has done so it has been problematic. Here, the well-functioning market is Ofgem’s vision of a successful market, not anchored in any actual market. Ofgem’s indicators of a competitive market have changed since 2002: tariff variety and products tailored to different customer groups are now a harmful complexity rather than a potential benefit of competition. The proposed “theories of harm” ignore regulatory policy and coordinated conduct facilitated by regulation. The analysis of weak customer response fails to distinguish between competition as an equilibrium state and as the Competition Commission's rivalrous discovery process over time. The framework thus reflects Ofgem’s perspective, but the assessment needs to be independent because regulation is at issue, and because Ofgem is no longer capable of a competition assessment.
    Keywords: Well-functioning market, competition assessment, retail competition
    JEL: L97 L51
    Date: 2014–08–04

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