nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2015‒02‒16
nineteen papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. China's Technology Subsidies - Much ado about nothing? By Böing, Philipp
  2. The impact of one of the most highly cited university patents: formalisation and localization By Azagra-Caro,Joaquín M.; Barberá-Tomás,David; Edwards-Schachter,Mónica
  3. Research on open innovation strategy and its performance in Korea smart media industry: Focusing on user innovation strategy By Na, Cheongho; Kim, Eungdo; Hwang, Junseok
  4. R&D, Patenting and Market Regulation: Evidence from EU Electricity industry By Carlo Cambini; Federico Caviggioli; Giuseppe Scellato
  5. Capabilities, Competitiveness, Nations By Fagerberg , Jan; Srholec , Martin
  6. Competition and R&D Financing Decisions: Theory and Evidence from the Biopharmaceutical Industry By Richard T. Thakor; Andrew W. Lo
  7. Measuring Spillovers of Venture Capital By Watzinger, Martin; Schnitzer, Monika
  8. The organization of knowledge in multinational firms By Gumpert, Anna
  9. Technology and the dynamics of comparative advantage By Antonio Navas
  10. The Great Recession, entrepreneurship, and productivity performance By Diez, Federico J.
  12. A Two-Sided Matching Approach for Partner Selection and Assessing Complementarities in Partners’ Attributes in Inter-Firm Alliances By Mindruta , Denisa; Moeen, Mahka
  13. Regional Disparity and Dynamic Development of China: a Multidimensional Index By Bin, Peng
  14. Cross-Border Acquisitions and Restructuring: Multinational Enterprises versus Private Equity-Firms By Baziki, Selva; Norbäck, Pehr-Johan; Persson, Lars; Tåg, Joacim
  15. Can capital grants help microenterprises reach the productivity level of SMEs? Evidence from an experiment in Sri Lanka By Laurin Janes
  16. Capital- and Labor-Augmenting Technical Change in the Neoclassical Growth Model By Tabakovic, Amer; Irmen, Andreas
  17. Strategic Corporate Social Responsibility by Multinational Enterprises By Constantine Manasakis; Evangelos Mitrokostas; Emmanuel Petrakis
  18. The impact of implementation of a modular platform strategy in automobile manufacturing networks. By Jesús F. Lampón; Pablo Cabanelas; Javier González Benito
  19. Community activism and sustainability : a multi-dimensional assessment By Filippo Celata; Venere Stefania sanna

  1. By: Böing, Philipp
    Abstract: This study investigates the allocation and effect of technology subsidies on R&D activities and technology acquisitions of Chinese domestic firms. We exploit novel firm data which includes information on subsidies, R&D, patents, trade, and balance sheet indicators. Conditional difference-in-difference estimation confirms that the innovation policy of China s government follows a picking-the-winner strategy. Technology subsidies are allocated to minority state-owned and privately owned firms which have high-tech inventions, high profitability, and compete with foreign firms in domestic industries. However, we find almost no evidence which confirms that technology subsidies incentivize an increase in R&D intensity or technology acquisition. There is weak evidence for a positive effect of consecutive treatments.
    JEL: O38 O32 O30
    Date: 2014
  2. By: Azagra-Caro,Joaquín M.; Barberá-Tomás,David; Edwards-Schachter,Mónica
    Abstract: This paper examines the underlying mechanisms of knowledge diffusion and interrelationships between formal and informal channels attending to the localisation of spillovers between university and industry. With this aim we present a historical in-depth case study centred in one of the most highly cited university patents, developing and applying a theoretical approach that combines formalisation and localisation analytical dimensions. Our findings show how knowledge diffused through channels with different degrees of formalization (patent licenses, “pure” spillovers and consultancy contracts with the inventors). The case also evidences the pervasive delocalization of several knowledge diffusion channels and the complexity of achieving local impact, even at a privileged environment like California. The crucial diffusion mechanism channel stemmed from bidirectional knowledge flows between the university and a non-regional company, which provided the university with the specific fabrication capabilities needed to create an open-lab programme, which ultimately achieved local impact.
    Keywords: Knowledge flows, Academic patenting, Technology transfer, Geographic R&D spillovers
    JEL: O31 O34
    Date: 2015–01–30
  3. By: Na, Cheongho; Kim, Eungdo; Hwang, Junseok
    Abstract: With the rapid development of ICT, smart society has been arrived. Smart devices also make user's role change and be powerful. In other words, user's power is stronger by smart devices in smart media industry and especially social environment like application market is catalyst for growth of user's role and power. On the other hand, it is hard for a firm to have all abilities and sources in this sudden change. Therefore, firms have to make their strategy considering user's role. For that reason, firms can use networks such as university, researcher, firm and user from the viewpoint of open innovation. I argue that users have some roles as one of the main agents in smart media industry affecting firm's strategy and performance.
    Keywords: Open innovation,smart media industry,strategy,performance,user’,s role
    Date: 2014
  4. By: Carlo Cambini; Federico Caviggioli; Giuseppe Scellato
    Abstract: In this paper we study the effects of the changes in the level of product market regulation on the industry-level innovation intensity in the Electricity sector across 16 European countries during years 1990-2009. We matched data on R&D budgets and EPO patent applications from IEA and Eurostat Databases and indexes of market regulation conditions from OECD, in order to test the impact of deregulatory policies on the propensity to innovate in new energy technologies. Our findings indicate an increase in the aggregated Electricity R&D and in patenting activities following market deregulation. Our measure of market regulation intensity is based on the aggregation of three factors that capture respectively entry barriers, public ownership and vertical integration. Econometric results suggest that policies aimed at a reduction in vertical integration have a positive impact on both industry-level R&D and patenting. The reduction of public ownership of incumbent operators and entry barriers are mostly associated to a significant increase in R&D expenditures. In the paper we discuss the implication of this evidence in light of the current trend in investment in the electricity sector in Europe.
    Keywords: Innovation, Patents, Regulation, Electricity.
    JEL: L94
    Date: 2015
  5. By: Fagerberg , Jan (IKE, University of Aalborg; TIK, University of Oslo; CIRCLE, Lund University); Srholec , Martin (CIRCLE, Lund University; CERGE-EI, Charles University and Economics Institute of the Academy of Sciences of the Czech Republic)
    Abstract: This paper discusses the role of capabilities and competitiveness for the economic growth of nations. The capability concept is commonly used in analyses of firms, however, as this paper shows, it may also be used at the level of nations. Capabilities at the national level may be defined broadly as "social capabilities", as done by the economic historian Moses Abramovitz, or more narrowly as "technological capabilities" as suggested by for instance the development scholar Lin-Su Kim. The paper discusses the relationships between these two dimensions of capabilities and examines recent empirical evidence on this matter for a group of 114 countries worldwide on different levels of development. It also considers the relationship between capabilities and competitiveness, and analyses the effects of capability change and other aspects of competitiveness on economic growth on data for the period 1995-2013. The final section presents the conclusions from the study and raises issues for future research.
    Keywords: Technological capabilities; social capabilities; competitiveness; catching-up; development
    JEL: E11 F43 O30
    Date: 2015–02–06
  6. By: Richard T. Thakor; Andrew W. Lo
    Abstract: R&D-intensive firms such as biotechnology and pharmaceutical companies follow very different corporate financial policies from firms in less R&D-intensive industries. To account for these differences, we propose an equilibrium model for such firms in which their capital structure, amount of R&D investment, and information disclosure policy are all endogenously determined in response to the degree of competition in the industry. The key results are that, as competition increases, such firms will: (1) increase R&D investment and reduce investment in assets-in-place that support existing products; (2) carry more cash and maintain less net debt; and (3) experience declining betas but greater total stock return volatility due to higher idiosyncratic risk. While the focus is on the biopharmaceutical industry, the results are broadly applicable to other R&D-intensive industries as well. We confirm the model's empirical implications using historical data from the biopharmaceutical industry, and our tests also deal with the endogeneity issue introduced by the fact that a firm's R&D investments and the product-market competition it faces influence each other.
    JEL: D82 D83 G31 G32 L11 L15 L25 L65
    Date: 2015–01
  7. By: Watzinger, Martin; Schnitzer, Monika
    Abstract: In this paper we measure knowledge spillovers arising from venture-capital nanced companies on the patenting activities of other companies and com- pare them to spillovers from established rms. We develop a novel measure to to identify the appropriate spillover pool based on backward citations which re ect channels for learning between rms. Using panel data of U.S. rms we show that venture capital investment in start-ups generates signi cant spillovers on the patent quantity and quality of other rms. Counterfactual estimates suggest that these spillovers are larger than those generated by corporate R&D. We address potential concerns about causality with an in- strumental variable strategy using changes in federal and state tax incentives as instrument for R&D and past fund raising as instrument for venture capital investment.
    JEL: O31 O32 G24
    Date: 2014
  8. By: Gumpert, Anna
    Abstract: Employees must learn about firm technologies to use them in production. Within multinational firms, knowledge can be acquired centrally, by managers at headquarters, or locally, by production workers. Local knowledge acquisition increases with the bilateral communication costs with central management, and decreases with local knowledge acquisition costs. This mechanism explains why multinationals foreign sales and their probability of entry decrease in the distance of a country from the multinationals home country, and why multinationals pay higher wages than comparable domestic firms. The selection into foreign destinations and the foreign productivity distribution of German multinationals are consistent with the models predictions.
    JEL: F21 F23 D21
    Date: 2014
  9. By: Antonio Navas (Department of Economics, University of Sheffield)
    Abstract: This paper explores how trade openness affects both product and process innovation in a factor proportions model of trade and firm heterogeneity. Trade openness expands the profit opportunities of the most productive firms and expels the less efficient firms out of the market, making process innovation more attractive for the most productive firms in both industries. Incentives, however, are larger in the industry in which the country has the comparative advantage. Trade also increases the profits of prospective entrants leading to an increase in product innovation in the comparative advantage industry. In addition, I obtain a non-monotonic relationship between trade costs and a country's trade pattern: When the level of trade costs are high, a reduction in trade costs leads to an increase in process innovation in both industries, being stronger in the comparative advantage one; when the trade costs are low the effect is stronger in the comparative disadvantage one. This final result could rationalize recent empirical findings suggesting that in the last half century the Ricardian comparative advantage has become weaker over time.
    Keywords: Innovation, Firm Heterogeneity, Comparative Advantage.
    JEL: F12 F43
    Date: 2015–01
  10. By: Diez, Federico J. (Federal Reserve Bank of Boston)
    Abstract: In recent years, it is argued, the level of entrepreneurial activity in the United States has declined, causing concern because of its potential macroeconomic implications. In particular, it is feared that a lower rate of firm creation may be associated with lower productivity growth and, hence, lower economic growth in the coming years. This paper studies the issue, focusing on the dynamics of entrepreneurship and productivity around the time of the Great Recession. The author looks first at the recent evolution of alternative measures of entrepreneurship and of productivity, and then analyzes the relationship between the two concepts.
    Keywords: entrepreneurship; firm creation; productivity; TFP
    JEL: D24 L26 O47
    Date: 2014–11–01
  11. By: Ettore Bolisani (University of Padua, Vicenza, Italy); Enrico Scarso (University of Padua, Vicenza, Italy); Malgorzata Zieba (Gdansk University of Technology, Gdansk, Poland)
    Abstract: This paper examines the concept of emergent KM approach in small companies. The origins of consideration are grounded in the theory of strategic management literature and in particular in the distinction between deliberate versus emergent approach towards strategic planning. Using the methodology of case study, we carried out an explorative research to analyse the characteristics of KM approach in two small companies located in Italy and Poland. Both companies appeared to follow emergent KM approach and therefore, a detailed analysis of this phenomenon was feasible. A description of the main features of an emergent KM approach is then proposed. On the basis of research results, implications for both managers and researchers are discussed.
    Keywords: knowledge management; KM; SMEs; ICT services providers; Italy; Poland
    JEL: L84 M1
    Date: 2015–01
  12. By: Mindruta , Denisa; Moeen, Mahka
    Abstract: Strategic alliances are undertaken to create value through complementarities of resources and capabilities of the partner firms. The authors develop a matching framework to study strategic alliances, taking a market perspective that explicitly incorporates key features of transactions in strategic alliances: two sided decision making in voluntary collaboration; quest for complementarities between indivisible and heterogeneous partner attributes; and competition on each side for partners on the other side. They assess the relative performance of matching models and binary choice models when estimating parameters within simulations based on a known functional relationship. Within the context of research alliances in the bio-pharmaceutical industry, we hypothesize and find support using the matching model framework for complementarity in partner size, and in upstream research capabilities.
    Keywords: alliances; two-sided matching; maximum score estimator; bio-pharmaceutical industry; complementarity
    Date: 2014–11–22
  13. By: Bin, Peng
    Abstract: This paper investigates the evolution of regional socio-economic disparity in China during the period 1998-2010. A new composite index of development (CIRD) is developed to capture the five main dimensions of regional development: macroeconomic conditions, science and innovation performance, environmental sustainability, human capital accumulation, and public facilities provision. The investigation benchmarks 30 (out of 31) Chinese regions according to such multidimensional index of development and thus improves the understanding of the evolution of regional disparity in China in terms of the various dimensions of socio-economic development. Finally, on the basis of stochastic kernel density estimation, the paper reveals the existence of a triple-clubs pattern of convergence in the period under scrutiny, thereby informing both the literature on regional convergence and the current strategy of balancing the uneven process of growth in China.
    Keywords: regional disparity, multidimensional index of development, stochastic kernel, distribution dynamics, Chinese regions
    JEL: O18 P48 R58
    Date: 2015–02
  14. By: Baziki, Selva (Department of Economics); Norbäck, Pehr-Johan (Research Institute of Industrial Economics (IFN)); Persson, Lars (Research Institute of Industrial Economics (IFN)); Tåg, Joacim (Research Institute of Industrial Economics (IFN))
    Abstract: An increasingly large share of cross-border acquisitions are undertaken by private equity-firms (PE-firms) and not by traditional multinational enterprises (MNEs). We propose a model of cross-border acquisitions in which MNEs and PE-firms compete over domestic assets. MNEs' advantage lies in firm-specific synergies and retained earnings, whereas PE-firms are good at reorganizing target firms. Prevailing interest rates do not work in favor of PE-firms, but a lower risk premium and a better financial market development does. Stronger firm-specific synergies, however, favors MNEs. Performing a welfare analysis, we show that a policy of restricting PE-firms from buying domestic assets can be counterproductive.
    Keywords: Cross-border; International Restructuring; Ownership Efficiency; Private Equity; M&As
    JEL: F23 L13
    Date: 2015–01–26
  15. By: Laurin Janes
    Abstract: Using data from a randomized control trail in Sri Lanka, this paper explores whether cash and in-kind grants helped microenterprises approach the productivity level of SMEs.  The paper first estimates production functions and subsequently treatment effects on TFP levels.  Most significantly, more able and more risk-averse owners benefit from the larger in-kind grant.  Also, the larger in-kind grants allowed for increases in productivity to the least productive firms.  The paper then uses data from a representative sample of formal firms to put the TFP levels and treatment effects in the microenterprises into perspective.  The results suggest that the least productive firms were able to catch up with the average microenterprise and formal SMEs, while a gap remains with large firms.  This finding encourages a positive view of the potential for productivity growth in microenterprises.
    Keywords: Economic development, microenterprises, formal informal, total factor productivity, embodied technology
    JEL: L25 O12 O14 O17 O33
    Date: 2013–11–20
  16. By: Tabakovic, Amer; Irmen, Andreas
    Abstract: The determinants of the direction of technical change and the implications for economic growth are studied in the one-sector neoclassical growth model of Ramsey (1928), Cass (1965), and Koopmans (1965) extended to allow for endogenous capital- and labor-augmenting technical change. For this purpose, we develop a novel micro-foundation for the competitive production sector. It rests upon the idea that the fabrication of the final good requires tasks to be performed by capital and labor. Firms may engage in innovation investments that increase the productivity of capital and labor in the performance of their respective tasks. These investments are associated with new technological knowledge that accumulates over time. We analyze a version of the model with only labor-augmenting and one with capital- and labor-augmenting technical change. When only labor-augmenting technical change is allowed for we find that steady-state growth depends on the efficient capital intensity and, thus, on household preferences. When it is included, capital-augmenting technical change must vanish in the steady state. Moreover, the mere feasibility of capital-augmenting technical change drastically changes the comparative-static properties of the steady state, e.\,g., household preferences loose their effect on steady-state growth.
    JEL: O31 O33 O41
    Date: 2014
  17. By: Constantine Manasakis (Department of Economics, University of Crete, Greece); Evangelos Mitrokostas (University of Portsmouth); Emmanuel Petrakis (Department of Economics, University of Crete, Greece)
    Abstract: We investigate the market and societal effects of a socially responsible multinational enterprise's entry in a host market through exports and through FDI, the determinants of the multinational's decision between exports and FDI, as well as the respective host country's policies. We find that the multinational enterprise, seeking for a competitive advantage in the host market, strategically engages in CSR activities and meets the corresponding demand by socially conscious consumers. The tariff charged by the host government increases with the social consciousness of this country's consumers. We also find that CSR activities are welfare enhancing for consumers and firms and thus, they should be encouraged.
    Keywords: Corporate social responsibility; Multinational enterprises; Foreign direct investment; Exports; Import tariffs
    JEL: D43 F13 F23
    Date: 2015–01–16
  18. By: Jesús F. Lampón; Pablo Cabanelas; Javier González Benito
    Abstract: This paper explores the impact of the implementation of modular platforms, to replace the standard platforms used to date, on the strategic outputs of automobile manufacturing networks. Analysis of the production network of manufacturers in Europe shows that the use of modular architecture improves the coordination of manufacturing networks by increasing manufacturing mobility and thriftiness ability. The changes resulting from this new modular strategy also allow for reorganisation of manufacturing capacity and the partial elimination of current overcapacity. From the point of view of production systems, the adaptation of processes and facilities in manufacturing plants to this new architecture should aim to increase flexibility by integrating production around a single platform, allowing for different dimensions and a large number of models in a single plant.
    Keywords: Modular platforms, manufacturing networks, operational flexibility, economies of scale, economies of scope, automobile sector.
    JEL: L62 L23 L25
    Date: 2015–02
  19. By: Filippo Celata (Department of Methods and Models for Economics, Territory and Finance, Sapienza University of Rome (Italy)); Venere Stefania sanna (Department of Methods and Models for Economics, Territory and Finance, Sapienza University of Rome (Italy))
    Abstract: A growing body of research is exploring the role of community-based initiatives (CBIs) in the promotion of sustainable regional transitions. While existing research and policies acknowledge the relevant contribution of community activism in providing a soft, self-governed and bottom-up path towards sustainability, much of this work has a clear normative intent, it is based on individual case studies and rarely provides a systematic assessment of their actual effects. This paper is an attempt to fill this gap by providing an extensive review of the literature about the social, economic, political and technological impacts of CBIs, in order to define a set of indicators for the monitoring and evaluation of these initiatives. For each of the above mentioned four dimensions, a set of key variables will be proposed for assessing CBIs in a variety of domains: from food production (e.g. community gardens), to food distribution (e.g. solidarity purchasing groups), from recycling, to cohousing, bike/car-sharing, community energy.
    Keywords: community-based initiatives, grassroots activism, sustainability, social innovation, monitoring and evaluation, impact assessment
    JEL: O17 Q56 L30 C18

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