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on Economics of Strategic Management |
| By: | Nick Bloom; Mark Schankerman; John Van Reenen |
| Abstract: | The impact of R&D on growth through spillovers has been a major topic of economic research over the last thirty years. A central problem in the literature is that firm performance is affected by two countervailing "spillovers" : a positive effect from technology (knowledge) spillovers and a negative business stealing effects from product market rivals. We develop a general framework incorporating these two types of spillovers and implement this model using measures of a firm's position in technology space and productmarket space. Using panel data on U.S. firms, we show that technology spillovers quantitatively dominate, so that the gross social returns to R&D are at least twice as high as the private returns. We identify the causal effect of R&D spillovers by using changes in federal and state tax incentives for R&D. We also find that smaller firms generate lower social returns to R&D because they operate more in technological niches. Finally, we detail the desirable properties of an ideal spillover measure and how existing approaches, including our new Mahalanobis measure, compare to these criteria. |
| Keywords: | market value; patents; productivity; R&D; spillovers |
| JEL: | O31 O33 O32 L1 F23 |
| Date: | 2013–07–17 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:46852&r=cse |
| By: | Han, Junghee (Chonnam National University); Heshmati, Almas (Centre of Excellence for Science and Innovation Studies (CESIS), Jönköping International Business School, & Sogang University) |
| Abstract: | This paper analyzes the patent propensity as an outcome of innovative activities of regional SMEs. To achieve the aims, we apply robust regression analysis to estimate the models to test 5 research hypotheses using 263 firm level data located at Gwangju region in Korea. Our empirical results show that a firm’s industry characteristics, such as machinery and automotive parts industry, is negatively related with propensity to patent innovation. Also, unlike expectations, the InnoBiz firms designated as innovative SMEs by the government are not performing differently than general firms. Only the CEO’s academic credentials are positively related with propensity to patent. From the findings, we can conclude that patenting propensity is not directly related with a firm’s characteristics but mainly to CEO’s managerial strategy. Also, we cannot find evidence for policy effectiveness from public support given to InnoBiz firms as part of the state policy to nurture photonic industry to boost regional economic development. Given the lack of strong policy effects, a new industry policy should be considered to actively promote SMEs innovativeness. |
| Keywords: | Patent propensity; Photonic Industry; SMEs growth; R&D; innovation; InnoBiz; Korea |
| JEL: | C51 D22 O31 O32 |
| Date: | 2015–01–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0395&r=cse |
| By: | Riccardo Crescenzi; Max Nathan; Andrés Rodríguez-Pose |
| Abstract: | This paper investigates how physical, organisational, institutional, cognitive, social, and ethnic proximities between inventors shape their collaboration decisions. Using a new panel of UK inventors and a novel identification strategy, this paper systematically explores the net effects of all these ‘proximities’ on co-patenting. The regression analysis allows us to identify the full effects of each proximity, both on choice of collaborator and on the underlying decision to collaborate. The results show that physical proximity is an important influence on collaboration, but is mediated by organisational and ethnic factors. Over time, physical proximity increases in salience. For multiple inventors, geographic proximity is, however, much less important than organisational, social, and ethnic links. For inventors as a whole, proximities are fundamentally complementary, while for multiple inventors they are substitutes. |
| Keywords: | innovation; patents; proximities; cities; regions; knowledge spillovers; collaboration; ethnicity |
| JEL: | O31 O33 R11 R23 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:57926&r=cse |
| By: | Mery Patricia Tamayo; Elena Huergo |
| Abstract: | This paper analyzes the determinants of R&D offshoring of Spanish firms using information from the Panel of Technological Innovation. We find that being an exporter, continuous R&D engagement, applying for patents, being a subsidiary, and firm size are factors that positively affect the decision to offshore R&D. In addition, we obtain that the factors that influence this decision for firms that belong to a business group differ depending on whether the firm purchases R&D services within the group or through the market: the lack of information is an obstacle relatively less important for internal R&D offshoring than for external R&D offshoring, while a higher degree of importance assigned to institutional and market sources of information for innovation as compared to internal sources increases the probability of R&D offshoring through the market. |
| Keywords: | R&D offshoring; firms’ strategies; obstacles to innovation; independent firms; sub?sidiaries |
| JEL: | L24 O32 |
| Date: | 2014–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:col:000122:012452&r=cse |
| By: | Saul Estrin; Seçil Hülya Danakol; Paul Reynolds; Utz Weitzel |
| Abstract: | This paper explores the effects of foreign direct investment, measured by mergers and acquisitions, on domestic entrepreneurial entry. We use a micro‐panel of more than two thousand individuals disaggregated by industry in seventy countries including both developed and developing economies, 2000-2009. The theory yields ambiguous predictions about the relationship between FDI and entrepreneurship; positive spillovers via dissemination of technology or negative because of crowding out. Our empirical analysis is conducted at three levels of aggregation. We find the relationship between FDI and domestic entrepreneurship in aggregate and intra-industry to be negative. Policies need to consider how to counteract this effect. |
| Keywords: | Foreign direct investment; entrepreneurship; new firm entry; spillovers |
| JEL: | F23 L29 M13 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60281&r=cse |
| By: | Tom Broekel (1 Institute of Economic and Cultural Geography, Leibniz University of Hanover, Germany, broekel@wigeo.uni-hannover.de); Matthias Brachert (Department Structural Economics, Halle Institute for Economic Research, Germany; Matthias.Brachert@iwh-halle.de); Matthias Duschl (Department of Geography, Philipps University of Marburg, Germany, Matthias.duschl@staff.uni-marburg.de); Thomas Brenner (Department of Geography, Philipps University of Marburg, Germany, Philipps University of Marburg, Germany,Thomas.brenner@staff.uni-marburg.de) |
| Abstract: | Subsidies for R and D are an important tool of public R and D policy, which motivates extensive scientific analyses and evaluations. The paper adds to this literature by arguing that the effects of R and D subsidies go beyond the extension of organizations’ monetary resources invested into R and D. It is argued that collaboration induced by subsidized joint R and D projects yield significant effects that are missed in traditional analyses. An empirical study on the level of German labor market regions substantiates this claim showing that collaborative R and D subsidies impact regions’ innovation growth when providing access to related variety and embedding regions into central positions in cross-regional knowledge networks. |
| Keywords: | collaborative R and D projects, related variety, regional innovation |
| JEL: | L14 O31 R12 |
| Date: | 2015–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:pum:wpaper:2015-01&r=cse |
| By: | Carlo Altomonte; Tommaso Aquilante; Gábor Békés; Gianmarco I. P. Ottaviano |
| Abstract: | We use a representative and cross-country comparable sample of manufacturing firms (EFIGE) to document patterns of interaction among firm-level internationalization, innovation and productivity across seven European countries (Austria, France, Germany, Hungary, Italy, Spain, United Kingdom). We find strong evidence of positive association among the three firm-level characteristics across countries and sectors. We also find that the positive correlation between internationalization and innovation survives after controlling for productivity, with some evidence of causality running from the latter to the former. Our analysis suggests that export promotion per se is unlikely to lead to sustainable internationalization because internationalization goes beyond export and because, in the medium to long term, internationalization is likely driven by innovation. We recommend coordination and integration of internationalization and innovation policies 'under one roof' at both the national and EU levels, and propose a bigger coordinating role for EU institutions. |
| Keywords: | economic integration; European Union; export; globalization; industrial enterprise; industrial policy; innovation; manufacturing; sustainable development |
| JEL: | R14 J01 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:54877&r=cse |
| By: | Kavusan, K. (Tilburg University, School of Economics and Management) |
| Abstract: | As a result of the surging rate of technological innovation in the last decades, firms in high-technology industries increasingly rely on alliances to tap into external knowledge sources and to develop new products and services. While alliances are of vital importance to many firms to develop new capabilities, they also inflict substantial economic costs to firms engaging in these activities, making effective design and management of alliance strategies crucial. Nevertheless, empirical evidence about the specific strategies for firms to benefit from alliances as well as about how firms make alliance formation decisions remains inconclusive. To address these issues, the three studies in this dissertation explore the antecedents and consequences of capability development through alliances in high-technology industries. By illuminating the antecedents and outcomes of different knowledge utilization strategies in alliances, the findings of this dissertation aim to improve the understanding and management of strategic alliances and provide actionable guidelines to managers and other corporate stakeholders in shaping the corporate development strategies of their firms. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutis:8eb736a5-b217-4718-ac13-d8b9759eab74&r=cse |
| By: | Michael Noel; Mark Schankerman |
| Abstract: | Strategic patenting is widely believed to raise the costs of innovating, especially in industries characterised by cumulative innovation. This paper studies the effects of strategic patenting on R&D, patenting and market value in the computer software industry. We focus on two key aspects: patent portfolio size, which affects bargaining power in patent disputes, and the fragmentation of patent rights (‘patent thickets’) which increases the transaction costs of enforcement. We develop a model that incorporates both effects, as well as knowledge spill overs. Using panel data for 121 firms covering the period 1980–99, we show that strategic patenting and spill overs affect innovation and market value of software firms, that there is a patent premium accounting for 20 per cent of the returns to R&D, and that software firms do not appear to be trapped in a prisoners' dilemma of ‘excessive patenting. |
| JEL: | N0 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:57372&r=cse |
| By: | Behncke, Nadine |
| Abstract: | This paper analyzes the effect of different cooperation forms on innovation in small and medium enterprises in Belgium, Germany, Portugal and Spain using Community Innovation Survey data from 2008. We find that vertical cooperation and knowledge cooperation increases the probability to introduce product innovations in all countries. The positive effect is driven by cooperation in the home country in Germany and Spain while it comes from cooperations with foreign countries in Belgium and Portugal. However, our results suggest that SME are not able to capitalize from these cooperations. We find a significant and positive effect of horizontal cooperation on sales due to product innovation only in Germany. |
| Keywords: | networks,SMEs,innovation |
| JEL: | L14 L25 L2 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:229&r=cse |
| By: | Hombert , Johan; Matray , Adrien |
| Abstract: | The authors study whether R&D-intensive firms are more resilient to trade shocks. They correct for the endogeneity of R&D using tax-induced changes to the cost of R&D. On average across US manufacturing firms, rising imports from China lead to slower sales growth and lower profitability. These effects are, however, significantly smaller for firms with a larger stock of R&D -- by about half when moving from the 25th percentile to the 75th percentile of the R&D stock distribution. As a result, while the average firm in import-competing industries cuts capital expenditures and employment, R&D-intensive firms downsize considerably less. |
| Keywords: | R&D; Innovation; Product Market Competition; Trade Shocks |
| JEL: | F14 G31 O33 |
| Date: | 2014–12–24 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:heccah:1075&r=cse |
| By: | Ovtchinnikov , Alexei; Reza , Syed |
| Abstract: | Political activism positively affects firm innovation. Firms that support more politicians, politicians on Congressional committees with jurisdictional authority over the firms’ industries and politicians who join those committees innovate more. The authors employ instrumental variables estimation and a natural experiment to show a causal effect of political activism on innovation. The results are consistent with the hypothesis that political activism is valuable because it helps reduce policy uncertainty, which, in turn, fosters firm innovation. Also consistent with this hypothesis, we show that politically active firms successfully time future legislation and set their innovation strategies in expectation of future legislative changes. |
| Keywords: | political contributions; innovation; investment policy; policy uncertainty |
| JEL: | D72 D80 G31 G38 O31 O38 |
| Date: | 2014–07–24 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:heccah:1053&r=cse |
| By: | Ashish Arora; Sharon Belenzon; Andrea Patacconi |
| Abstract: | Scientific knowledge is believed to be the wellspring of innovation. Historically, firms have also invested in research to fuel innovation and growth. In this paper, we document a shift away from scientific research by large corporations between 1980 and 2007. We find that publications by company scientists have declined over time in a range of industries. We also find that the value attributable to scientific research has dropped, whereas the value attributable to technical knowledge (as measured by patents) has remained stable. These effects appear to be associated with globalization and narrower firm scope, rather than changes in publication practices or a decline in the usefulness of science as an input into innovation. Large firms appear to value the golden eggs of science (as reflected in patents) but not the golden goose itself (the scientific capabilities). These findings have important implications for both public policy and management. |
| JEL: | O31 O32 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20902&r=cse |
| By: | Max Nathan |
| Abstract: | High levels of net migration to the UK have contributed to growing cultural diversity, and researchers are turning their attention to the long-term effects of diversity on productivity. Yet little is known about these issues. This paper asks: what are the links between the composition of firms' top teams and business performance? What role do ethnic diversity and co-ethnic networks play? And do cities amplify or dampen these channels? I explore using a rich dataset of over 6,000 English firms. Owners, partners and directors set firms' strategic direction. Top team demography might generate production externalities through diversity (a wider range of ideas/ experiences, helping problem solving) and/or 'sameness' (via specialist knowledge or better access to international markets). These channels may be balanced by internal downsides (lower trust) and external barriers (discrimination), so that overall effects on business performance are unclear. In addition, urban locations (particularly big cities) may amplify any demographics-performance effects. I create a repeat cross-section of firms from the RDA National Business Survey. I construct measures of diversity and sameness across ethnicity and gender 'bases', alongside information on revenues, product and process innovation. I then regress these measures of business performance on top team demographics, plus firm level controls, area, year and detailed industry fixed effects. My results suggest a non-linear link between diversity and business performance, which is net positive for process innovation and net negative for turnover. Further tests on diverse and minority/female-headed firms find positive links for diverse top teams, negative for minority and female-only top teams. This implies that while diversity has internal and external benefits, penalties from being 'too diverse' probably result from external constraints. Further tests for intervening effects of capital cities, metropolitan hierarchies and urban form find some evidence of amplifying and dampening effects – which are generally stronger in London and larger cities. |
| Keywords: | cities; innovation; entrepreneurship; cultural diversity; migration; gender |
| JEL: | J1 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:59250&r=cse |
| By: | Stefano Bianchini (Sant' Anna School of Advanced Studies; BETA, Université de Strasbourg); Jackie Krafft (Université Nice Sophia Antipolis; GREDEG-CNRS); Francesco Quatraro (Université Nice Sophia Antipolis and GREDEG-CNRS; Collegio Carlo Alberto; Department of Economics and Statistics Cognetti de Martiis, University of Torino); Jacques Ravix (Université Nice Sophia Antipolis; GREDEG-CNRS) |
| Abstract: | This paper investigates the relationship between corporate governance (CG) and innovation according to firms’ age by combining insights from the recent strand of contributions analysing CG and innovation with the lifecycle literature. We find a negative relationship between CG and innovation which is stronger for young firms than for mature ones. The empirical analysis is carried out on a sample of firms drawn from the ISS Risk Metrics database and observed over the period 2003-2008. The parametric methodology provides results that are consistent with the literature and supports the idea that mature firms are better off than young ones. We check for possible non-linearities by implementing a non-parametric analysis and suggest that the negative relationship between CG and innovation is mostly driven by higher values of CG. |
| Keywords: | Corporate governance, Age, Lifecycle, Innovation, Non-parametric regression, ISS Risk Metrics |
| JEL: | G30 L20 L10 O33 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2015-05&r=cse |
| By: | Neil Lee |
| Abstract: | Growing cultural diversity is seen as important for innovation. Research has focused on two potential mechanisms: a firm effect, with diversity at the firm level improving knowledge sourcing or ideas generation, and a city effect, where diverse cities helping firms innovate. This paper uses a dataset of over 2,000 UK SMEs to test between these two. Controlling for firm characteristics, city characteristics and firm and city diversity, there is strong evidence for the firm effect. Firms with a greater share of migrant owners or partners are more likely to introduce new products and processes. This effect has diminishing returns, suggesting that it is a ‘diversity’ effect rather than simply the benefits of migrant run firms. However, there is no relationship between the share of foreign workers in a local labour market and firm level innovation, nor do migrant-run firms in diverse cities appear particularly innovative. But urban context does matter and firms in London with more migrant owners and partners are more innovative than others. |
| Keywords: | cultural diversity; innovation; cities; SMEs; migration |
| JEL: | J61 L21 M13 O11 O31 R23 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:57874&r=cse |
| By: | Nicholas Bloom; Paul M. Romer; Stephen J. Terry; John Van Reenen |
| Abstract: | We explain a counterintuitive empirical finding: Firms facing more import competition do more innovation. In our model, factors are trapped inside a firm. An increase in import competition encourages a firm to innovate by reducing the opportunity cost of inputs. Without trapped factors, trade liberalization leads to a small permanent increase in the worldwide rate of growth. With trapped factors, firms that face more import competition do relatively more innovation. The extra innovation induced by trapped factors induces a small permanent increase in aggregate output, consumption, and welfare, generalizing the appropriate estimate of the gains from trade. |
| JEL: | D21 F14 L21 O31 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:59326&r=cse |
| By: | Mendola Daria (Department of Economics, Business and Statistics (SEAS), University of Palermo); Serena Volo (School of Economics and Management - Free University of Bolzano, Italy.) |
| Abstract: | Composite indicators are a useful tool to synthetize and monitor multidimensional phenomena and in the last decade they are pervading several domains of tourism studies. This study includes a systematic review of destination competitiveness definitions, concepts and measures and the evaluation of existing composite indicators through the application of an enriched version of the OECD technical guideline to build composite indicators. The results and the knowledge gained through the analysis of the selected indicators provide tourism scholars and practitioners involved in measuring destinations’ competitiveness with both an assessment of available indicators´ ability to capture tourism competitiveness complexity and a statistical toolbox to assess their effectiveness in empirical evaluations. |
| Keywords: | destination competitiveness, composite indicators, competitiveness determinants, tourism performance, index. |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:bzn:wpaper:bemps23&r=cse |
| By: | Michael White; Alex Bryson |
| Abstract: | We propose a selective view of human resource management (HRM) that is guided by work motivation theory, arguing that one of the means by which firms achieve higher performance is by investing in certain forms of HRM practice that help fulfil intrinsic work values and thereby influence employees’ attitudes to their jobs and to the firm in a positive direction. Additionally, an accumulation of complementary practices has important communicative functions that intensify positive employee attitudes. Using nationally representative linked employer–employee data for Britain, we investigate the strength and form of the association between the array of practices deployed by the workplace on one hand, and organizational commitment (OC) and intrinsic job satisfaction (IJS) on the other – two types of job attitude that research has shown to be related to a range of performance measures. We find strong evidence that the relationship between employee job attitudes and our measure of HRM is non-linear, rising chiefly at higher levels of HRM. Results are robust to altered composition of the HRM index. Higher OC and IJS emerge at HRM intensity values which are attained by roughly half the British population of workplaces. |
| Keywords: | human resource management; high performance; organizational commitment; intrinsic job satisfaction |
| JEL: | J28 L23 M12 M54 |
| Date: | 2013–03–23 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:51167&r=cse |
| By: | Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Sandra Kublina (School of Economics and Business Administration, Friedrich-Schiller-University Jena) |
| Abstract: | We distinguish four types of regional growth regimes based on the type of relationship between new business formation and economic development. The distinguishing characteristics of these regime types are analyzed in order to identify the reasons for different growth performance. Although growth regimes are highly persistent over time, typical transition patterns between regime types can be identified. We explain these patterns and draw conclusions for policy. The evidence clearly suggests that entrepreneurship is a key driver of economic development, and one that has long-run effects. |
| Keywords: | Entrepreneurship, new business formation, economic development, regional growth regimes |
| JEL: | L26 R11 O11 |
| Date: | 2015–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2015-002&r=cse |
| By: | Luis Garicano; Esteban Rossi-Hansberg |
| Abstract: | We argue that incorporating the decision of how to organize the acquisition, use, and communication of knowledge into economic models is essential to understand a wide variety of economic phenomena. We survey the literature that has used knowledge-based hierarchies to study issues like the evolution of wage inequality, the growth and productivity of firms, economic development, the gains from international trade, as well as offshoring and the formation of international production teams, among many others. We also review the nascent empirical literature that has, so far, confirmed the importance of organizational decisions and many of its more salient implications. |
| Keywords: | Knowledge; hierarchies; wage inequality; international trade |
| JEL: | J1 N0 R14 J01 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60532&r=cse |
| By: | Chiappero-Martinetti, Enrica; Sabadash, Anna |
| Abstract: | The aim of this chapter is to investigate the possibility of combining human capital theory and the capability approach in order to better understand and measure both the instrumental and the intrinsic values of education for individuals, and to trace its relative spillover effects on societies. This chapter discusses a combined human capital - capability approach as a possibility for working with a broader information space in assessing the value of education. It presents three integrated sections discussing the role and value of education for human well-being. The first section reviews the most significant attempts to define and measure education from a human capital (HC) perspective. The second is focussed on education and human capabilities and considers those aspects and empirical facts that are not fully encompassed within or justified by the HC perspective. The third section argues that human capital and the capabilities paradigms can complement each other in measuring the value of education, and discusses some methodological challenges and empirical features associated with this combined view. |
| Keywords: | education; human capital; capabilties |
| JEL: | C81 D60 O15 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:61800&r=cse |
| By: | Varady, David P. (University of Cincinnati); Kleinhans, Reinout (Delft University of Technology); van Ham, Maarten (Delft University of Technology) |
| Abstract: | Through a review of the recent American community development literature, this paper tests the assertion that British community enterprises (CEs) are fundamentally similar to American community development corporations (CDCs), and therefore, that CEs can learn from CDCs. In the context of the current austerity regimes, CEs and community entrepreneurship are increasingly considered as a means to continue small-scale urban regeneration, not only in the UK but also in several other European countries. While the CDC sector has achieved a relatively successful record in affordable housing production in distressed areas, CDCs are fundamentally limited in terms of reversing the processes of community decline. Our comparison of CDCs and CEs reveals similarities, but also differences with regard to organizational characteristics, co-operation on multiple scales, comprehensiveness, targeting and community participation. Apart from outlining lessons that CEs can learn from CDS, we provide recommendations for further research that should cover the lack of empirical evidence in this field. |
| Keywords: | community development corporations, community enterprises, neighborhood revitalization, entrepreneurship, regeneration, United States, United Kingdom |
| JEL: | L26 L31 R23 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8777&r=cse |
| By: | Michel Grabisch (Paris School of Economics - Centre d'Economie de la Sorbonne); Antoine Mandel (Paris School of Economics - Centre d'Economie de la Sorbonne); Agnieszka Rusinowska (Paris School of Economics - Centre d'Economie de la Sorbonne); Emily Tanimura (Centre d'Economie de la Sorbonne) |
| Abstract: | We consider a model of influence with a set of non-strategic agents and two strategic agents. The non-strategic agents have initial opinions and are linked through a simply connected network. They update their opinions as in the DeGroot model. The two strategic agents have fixed opinions, 1 and 0 respectively, and are characterized by the magnitude of the impact they can exert on non-strategic agents. Each strategic agent forms a link with one non-strategic agent in order to alter the average opinion that eventually emerges in the network. This procedure defines a zero-sum game whose players are the two strategic agents and whose strategy set is the set of non-strategic agents. We focus on the existence and the characterization of equilibria in pure strategy in this setting. Simple examples show that the existence of a pure strategy equilibrium does depend on the structure of the network. The characterization of equilibrium we obtain emphasizes on the one hand the influenceability of target agents and on the other hand their centrality whose natural measure in our context defines a new concept, related to betweenness centrality, that we call intermediacy. We also show that in the case where the two strategic agents have the same impact, symmetric equilibria emerge as natural solutions whereas in the case where the impacts are uneven, the strategic players generally have differentiated equilibrium targets, the high-impacts agent focusing on centrality and the low-impact agent on influenceability. |
| Keywords: | Influence networks, beliefs, DeGroot model, strategic player, convergence, consensus, equilibrium. |
| JEL: | C71 D85 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:15006&r=cse |
| By: | Shamel Azmeh; Khalid Nadvi |
| Abstract: | Asian trans-national garment manufacturers are transforming the structure of global value chains in the apparel industry. Recent studies show such first tier suppliers undertaking a greater range of functional activities. In many cases, these firms originate from the so-called ‘Rising Power’ economies, particularly ‘Greater China’ and South Asia. We argue that such, transnational, Asian firms can play a pivotal and strategic role in shaping the geography and organisational restructuring of the global value chain. Drawing on secondary sources and primary research we illustrate how such firms manage complex international production linkages, and ensure the incorporation of Jordan into the global garment industry. The paper contributes to the understanding of the role of these firms and how their behaviour is driven by complex dynamics linked to their own business strategies, their linkages with buyers, and their ability to exploit production and trade opportunities while maintaining high levels of global locational flexibility. |
| Keywords: | apparel industry; Asian transnational suppliers; global value chains; Jordan |
| JEL: | R14 J01 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:56666&r=cse |
| By: | Philip Lage de Sousa; Gianmarco I. P. Ottaviano |
| Abstract: | Especially in developing countries credit constraints are often perceived as one of the most important market frictions constraining firm innovation and growth. Huge amounts of public money are being devoted to the removal of such constraints but their effectiveness is still subject to an intense policy debate. This paper contributes to this debate by analysing the effects of the Brazilian Development Bank (BNDES) loans. It finds that, before receiving BNDES support, granted firms are indeed more credit constrained than comparable non-granted firms. It also finds that BNDES support allows granted firms to achieve the same level of performance as similar non-granted firms that are not credit constrained. However, it does not allow granted firms to outperform similar non-granted ones. |
| Keywords: | Heterogeneous firms; productivity; public policy analysis; credit constraints |
| JEL: | H00 O38 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60529&r=cse |
| By: | Laura Schang; Alec Morton; Philip DaSilva; Gwyn Bevan |
| Abstract: | Purpose: Although information on variations in health service performance is now more widely available, relatively little is known about how healthcare payers use this information to improve resource allocation. We explore to what extent and how Primary Care Trusts (PCTs) in England have used the NHS Atlas of Variation in Healthcare, which has highlighted small area variation in rates of expenditure, activity and outcome. Methods: Data collection involved an email survey among PCT Chief Executives and a telephone follow-up to reach non-respondents (total response: 53 of 151 of PCTs, 35%). 45 senior to mid-level staff were interviewed to probe themes emerging from the survey. The data were analysed using a matrix-based Framework approach. Findings: Just under half of the respondents (25 of 53 PCTs) reported not using the Atlas, either because they had not been aware of it, lacked staff capacity to analyse it, or did not perceive it as applicable to local decision-making. Among the 28 users, the Atlas served as a prompt to understand variations and as a visual tool to facilitate communication with clinicians. Achieving clarity on which variations are unwarranted and agreeing on responsibilities for action appeared to be important factors in moving beyond initial information gathering towards decisions about resource allocation and behaviour change. Conclusions: Many payers were unable to use information on small area variations in expenditure, activity and outcome. To change this what is additionally required are appropriate tools to understand causes of unexplained variation, in particular unwarranted variation, and enable remedial actions to be prioritised in terms of their contribution to population health. |
| Keywords: | resource allocation; small-area analysis; unwarranted variations; regional health planning; organisational decision making; quality indicators |
| JEL: | E6 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:50496&r=cse |
| By: | Oriana Bandiera; Raffaella Sadun |
| Abstract: | CEOs affect the performance of the firms they manage, and family CEOs seem to weaken it. Yet little is known about what top executives actually do, and whether it differs by firm ownership. We study CEOs in the Indian manufacturing sector, where family ownership is widespread and the productivity dispersion across firms is substantial. Time use analysis of 356 CEOs of listed firms yields three sets of findings. First, there is substantial variation in the number of hours CEOs devote to work activities, and longer working hours are associated with higher firm productivity, growth, profitability and CEO pay. Second, family CEOs record 8% fewer working hours relative to professional CEOs. The difference in hours worked is more pronounced in low competition environments and does not seem to be explained by measurement error. Third, difference in diffrences estimates with respect to the cost of effort, due to weather shocks and popular sport events, reveal that the observed difference between family and professional CEOs is consistent with heterogeneous preferences for work versus leisure. Evidence from six other countries reveals similar findings in economies at different stages of development. |
| JEL: | J1 |
| Date: | 2013–12–03 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:58162&r=cse |
| By: | David W. Johnston; Grace Lordan; Michael A. Shields; Agne Suziedelyte |
| Abstract: | We investigate if there is a causal link between education and health knowledge using data from the 1984/85 and 1991/92 waves of the UK Health and Lifestyle Survey (HALS). Uniquely, the survey asks respondents what they think are the main causes of ten common health conditions, and we compare these answers to those given by medical professionals to form an index of health knowledge. For causal identification we use increases in the UK minimum school leaving age in 1947 (from 14 to 15) and 1972 (from 15 to 16) to provide exogenous variation in education. These reforms predominantly induced adolescents who would have left school to stay for one additionally mandated year. Naïve ordinary least squares estimates suggest that education significantly increases health knowledge, with a one-year increase in schooling increasing the health knowledge index by 15% of a standard deviation. In contrast, estimates from instrumental-variable models show that increased schooling due to the education reforms did not significantly affect health knowledge: a one-year increase in schooling is estimated to decrease the health knowledge index by 0.1% of a standard deviation. This main result is robust to numerous specification tests and alternative formulations of the health knowledge index. Further research is required to determine whether there is also no causal link between higher levels of education – such as post-school qualifications – and health knowledge. |
| Keywords: | Education; health; knowledge; compulsory schooling; causality |
| JEL: | I10 I12 I20 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60445&r=cse |