nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2015‒03‒22
23 papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Innovation Strategies and Firm Performance By Karlsson, Charlie; Tavassoli, Sam
  2. Knowlegde Spillovers, absorptive capacity and growth: An industry-level Analysis for OECD countries By Ioannis Bournakis; Dimitris Christopoulos; Sushanta Mallick
  3. Absorptive Capability and Knowledge Tacitness in the Transfer of Knowledge in the Agrifood Cluster of the Southeast of Spain By Sánchez-Pérez, Manuel; Bourlakis, Michael
  4. Firms’ Innovation Strategies Analyzed and Explained By Tavassoli , Sam; Karlsson , Charlie
  5. The role of universities from the north–western Romania in the development of regional knowledge–based economies By Chirodea, Florentina
  6. Factors Influencing the Performance of German Food SME Formal Networks By Deiters, Jivka; Heuss, Esther; Schiefer, Gerhard
  7. Effects of Learning from Distributors on Manufacturers’ Exploitation and Exploration Innovation Strategies in Food and Beverages Industry By López, Cristina Segovia; Pérez, Manuel Sánchez
  8. Innovation and Productivity in Services: Evidence from Chile By Roberto Alvarez; Andrés Zahler; Claudio Bravo-Ortega
  9. Exploration and Exploitation Innovations in the Food Firms By Sánchez-Pérez, Manuel; Marín-Carrillo, María Belén; Bourlakis, Michael
  10. Innovation through Networking: The Case of the Agricultural Sector By Lambrecht, Evelien; Kühne, Bianka; Gellynck, Xavier
  11. Impact of Extensive and Intensive Margins of FDI on Corporate Domestic Performance: Evidence from Japanese automobile parts suppliers By MATSUURA Toshiyuki
  12. Does Competition Spur Innovation in Developing Countries? By Roberto Alvarez; Rolando Campusano
  13. Network proximity in the geography of research collaboration By Laurent R. Bergé; Frank van Oort
  14. Educational Mismatch and Firm Productivity: Do Skills, Technology and Uncertainty Matter? By Mahy, Benoît; Rycx, Francois; Vermeylen, Guillaume
  15. Exchange Rate, Marginal q and Investment Behavior of Small and Medium-Sized Enterprises in Japan: Time Series Evidences of Manufacturing Industries By Masafumi Kozuka
  16. The Moderating Effect of Environmental Turbulence in the Relationship between Entrepreneurial Management and Firm Performance By Pratono, Aluisius Hery; Mahmood, Rosli
  17. Responsible Business and Sustainable Food – A Regional and International Network Model with Linkage between Science and Business By Terlau, Wiltrud; Hirsch, Darya
  18. Competition, Selectivity and Innovation in the Higher Educational Market By Lynne Pepall; Dan Richards
  19. Eco-Innovation and Firm Growth: Do Green Gazelles Run Faster? Microeconometric Evidence from a Sample of European Firms By Alessandra Colombelli; Jackie Krafft; Francesco Quatraro
  20. The 2014 EU Industrial R&D Investment Scoreboard By Hector Hernandez; Fernando Hervas; Alexander Tuebke; Mafini Dosso; Antonio Vezzani; Sara Amoroso; Nicola Grassano
  21. Corporate Governance and Sectoral Patterns of Innovation: Evidence from Italian Manufacturing Industries By Filippo Belloc; Eleonora laurenza; Maria Alessandra Rossi
  22. ’Make or Buy’ as Competitive Strategy: Evidence from the Spanish Local TV Industry By Christian Ruzzier; Ricard Gil
  23. High income inequality as a structural factor in entrepreneurial activity By Antonio Lecuna

  1. By: Karlsson, Charlie (Centre of Excellence for Science and Innovation Studies (CESIS), Jönköping International Business School, & Blekinge Institute of Technology); Tavassoli, Sam (Blekinge Institute of Technology, Centre for Innovation, Research and Competence in the Learning Economy (CIRCLE), & Lund University)
    Abstract: This paper analyzes the effect of various innovation strategies of firms on their future performance, captured by labour productivity. Using five waves of the Community Innovation Survey in Sweden, we have traced the innovative behaviour of firms over a decade, i.e. from 2002 to 2012. We distinguish between sixteen innovation strategies, which compose of Schumpeterian four types of innovations, i.e. process, product, marketing, and organizational (simple innovation strategies) plus various combinations of these four types (complex innovation strategies). The main findings indicate that those firms that choose and afford to have a complex innovation strategy are better off in terms of their future productivity in compare with both those firms that choose not to innovative (base group) and those firms that choose simple innovation strategies. Moreover, not all types of complex innovation strategies affect the future productivity significantly; rather, there are only few of them. This necessitates a purposeful choice of innovation strategy for firms.
    Keywords: Innovation Strategy; firm performance; productivity; firm level; Community Innovation Survey; Panel
    JEL: D22 L20 O31 O32
    Date: 2015–03–16
  2. By: Ioannis Bournakis; Dimitris Christopoulos; Sushanta Mallick
    Abstract: Spillovers have usually been undertaken at the country level, the spillover effects can be more definitive only if the analysis is conducted at the industry-level. This paper therefore attempts to identify spillovers by disentangling technological innovations into intra- and inter-national knowledge innovations at industry level in driving per capita output growth. Our main findings are first, that there is evidence for a robust positive relationship between R&D, human capital and output growth across these countries at industry-level. Second, the potential of international spillover gains is greater in countries with higher human capital and in industries whose pattern of production is more R&D oriented, import intensive, and dependent on vertical FDI. Finally, significant heterogeneity is found between high and low-tech industries with high-tech group displaying greater knowledge spillovers, suggesting that low-tech industries need to be more innovative in order to absorb the technological advancements of domestic and international rivals.
    Keywords: Knowledge spillover, Industry-level productivity, R&D
    JEL: F1 O3 O4
    Date: 2015–03
  3. By: Sánchez-Pérez, Manuel; Bourlakis, Michael
    Abstract: The OECD (1997) conceives a national innovation system (NIS) as “technology and information among people, enterprises and institutions are key to the innovative process” (p. 7). Innovation is conceived as the result of complex set of relationships among actors in the system, which includes companies, universities and research centres. In actual knowledge-based economies, industry-links are essential for economic development and progress (Ahrweiler et al., 2011). They are essential for building up networks of relationships that are necessary for any firm to innovate (Freeman 1987, 1992). In particular, many influential studies have identified the links between firm innovation and competitive advantage at the national level (Porter, 1990). Lundvall (1992) describes characteristics of NIS, emphasizing the importance or learning and how small countries, with limited public budgets and few large corporations, have selected areas of innovation strength and are able to absorb knowledge and innovations from elsewhere (Cooke et al., 1997). Thus, the vision of a NSI is just beyond the technological advances, “but is more broadly on the factors influencing national technological capabilities” (Nelson & Rosenberg, 1993: 4).
    Keywords: Agribusiness,
    Date: 2014–10
  4. By: Tavassoli , Sam (CIRCLE, Lund University and Blekinge Institute of Technology, Karlskrona); Karlsson , Charlie (Blekinge Institute of Technology, Karlskrona, Centre of Excellence for Science and Innovation Studies, KTH, Stockholm and Jönköping International Business School)
    Abstract: This paper analyzes various innovation strategies of firms. Using five waves of the Community Innovation Survey in Sweden, we have traced the innovative behavior of firms over a ten-year period, i.e. between 2002 and 2012. We distinguish between sixteen innovation strategies, which compose of Schumpeterian four types of innovations (process, product, marketing, and organizational) plus various combinations of these four types. First, we find that firms are not homogenous in choosing innovation strategies, instead, they have a wide range of preferences when it comes to innovation strategy. Second, using Transition Probability Matrix, we found that firms also persist to have such a diverse innovation strategy preferences. Finally, using Multinomial Logit model, we explained the determinant of each and every innovation strategies, while we gave special attention to the commonly used innovation strategies among firms.
    Keywords: Innovation strategy; product innovations; process innovations; market innovations; organizational innovations; innovation strategies; heterogeneity; firms; persistence; Community Innovation Survey
    JEL: D22 L20 O31 O32
    Date: 2015–03–19
  5. By: Chirodea, Florentina
    Abstract: Innovation, another important component of this type of economy, constitutes, in turn, an indicator of global competitiveness. In the national and supranational processes and strategies to implementation of regional knowledge–based economy, a leading role is played by universities, turned into spaces of the integrated approach of the triangle education–research–innovation. The study aims to analyze the involvement of higher education institutions in the North–West Development Region in the transformation of the local economy. The data collected will allow us to highlight the mechanisms through which partnerships involving academic communities fail to transform knowledge from publications, patents and prototypes in technologies and “services economically and socially assimilated”.
    Keywords: universities role, knowledge–based economy, North–West Development Region
    JEL: I2 I23 I31 O3
    Date: 2013–10
  6. By: Deiters, Jivka; Heuss, Esther; Schiefer, Gerhard
    Abstract: The food sector in Europe can be characterised as a complex, global and dynamically changing network of trade streams, food supply network relations and related product flows and offers a big spectrum for economic output and employment. Innovation isimportant for the competitivenessof the food industry that is to a large extent comprised by small and medium sized enterprises (SMEs). Furthermore innovation has grown extremely subordinate to interaction in networks. Network initiatives that could provide appropriate support involve social interaction and knowledge exchange, learning and competence development, and coordination (organization) and management of implementation. This paper was designed to assess the factors that affect the performance of German food SME formal networks. It also addressed the consequences at the network and macro level. The analysis was explored by using the laddering technique based on means-end chain theory. These findings will help to build up a “network learning toolbox” that is adapted to the particular requirements of the different segments of the target group of SMEs, network managers and policy makers. The “network learning toolbox” should improve the network learning, which drives to raised innovation, economic growth and sustainable competitive advantage for food SMEs.
    Keywords: Factors, performance, networks, food, Agribusiness,
    Date: 2014–10
  7. By: López, Cristina Segovia; Pérez, Manuel Sánchez
    Abstract: The relevance of innovation as source of competitive advantage is clearly justified in the literature (Adner and Kapoor, 2010; Song and Thieme, 2009). In particular, knowledge, as well as all items related to organizational learning, represents a main factor contributing to the innovation success (i.e., Song and Parry, 1997). In this sense, different authors have emphasized the importance that external sources of knowledge possess for the development and success of the innovation capability (Li and Tang, 2010; Spithoven et al., 2010). The globalization of manufacturing companies is closely linked to the globalization of distribution activities (Mattsson, 2003). It can be said that globalization of retailers drives globalization of manufacturing companies. So the latter will be influenced by the supply conditions of the target markets, the possibilities to supply new markets, or the possible threat to be replaced by alternative suppliers (Ruiz, 2000, Etemad, 2004). At the same time, supply chains have progressively become more international and complex (Monczka and Trent, 2005), representing principal sources of competitive advantage in terms of availability of technological and organizational competencies and access to minor operative costs (Pagano, 2009). The international supply tends increasingly to be considered as a strategic tool chasing to take advantage of the previous advantages. Consequently, organizations should promote this critical organizational relational capability (Kotabe and Murray, 2004).
    Keywords: Agribusiness, Food Consumption/Nutrition/Food Safety,
    Date: 2014–10
  8. By: Roberto Alvarez; Andrés Zahler; Claudio Bravo-Ortega
    Abstract: This paper analyzes empirically the relationship between innovation and productivity in the Chilean services sector. Consistent with recent evidence on developed countries, we find that services firms are as innovative as firms in the manufacturing industry. In the basic model, we also find that both industries have similar determinants of the investment in innovation and the probability of introducing innovations (products or process), such as size and export status. In several extensions we find similar roles for technological and non-technological innovation in labor productivity and for determinants such as skill intensity and financial restrictions. In general, our evidence suggests that that innovation input and output is associated with improvements in productivity in both sectors. As extension of the work of Crespi and Zuñiga (2012) we test whether financial constraints are more relevant for either manufactures or services, finding that these seem to be active just for the services sector. We also test for the role of skills finding that they play a central role on the decision to spend in R&D and labor productivity.
    Date: 2013–10
  9. By: Sánchez-Pérez, Manuel; Marín-Carrillo, María Belén; Bourlakis, Michael
    Abstract: In a context of increasingly intense competition, creating a unique mix of value through innovation has been considered one tenet for creating a competitive advantage (Porter, 1996). During the past decades, innovation has become a central issue of strategic management (Nag et al., 2007). The literature has identified several problems in relation to firm failure innovation decisions, focusing on the supply-side (organizational competence, Henderson 2006; dependence of actual most profitable customers, Christensen, 1997; out-of-date competence due to technological breakthroughs, Tushman & Anderson, 1986), and on the demand-side (market turbulence, Abernathy & Clark 1985; institutional environment, Chesbrough, 2001).
    Keywords: Agribusiness, Food Consumption/Nutrition/Food Safety,
    Date: 2014–10
  10. By: Lambrecht, Evelien; Kühne, Bianka; Gellynck, Xavier
    Abstract: Innovation is widely recognized as being an important strategic tool for companies to increase their competitive advantage. Hereby, networks have become increasingly important as external sources for the necessary knowledge, ideas and financial resources. The main contribution of this paper is to shed light on how different network partners can explain or facilitate the different types of innovations in the agricultural sector. In contrast to other studies, we make a distinction between all four types of innovation: product, process, marketing and organizational innovation. Thus, this study has the objective to gain insight into the innovation process of farmers in terms of how they innovate, which network partners they consult in relation to innovation type, the obstacles they face, and where the network activities could be better aligned with the needs of the farmers, which could help to enable them to optimally support innovation and networking. The study is based on 36 in-depth interviews with farmers spread over five subsectors in Flanders (northern Belgium). Our most important findings are that the consulted partners and the observed barriers are different dependent on the innovation type. Hence, our study delivers a set of valuable insights and implications for farmers, network coordinators and policymakers. Farmers must be aware of the importance of partner suitability and network heterogeneity for the innovation type they are aiming at. Furthermore, farmers have to be aware of the fact that efficient networking is not the optimisation of single relationships independently of each other, but instead the management of synergies and coordination of all relationships in an efficient way. In addition, network coordinators should set up a clear strategy and communicate for which innovations their network can advise and help the farmer. These first conclusions should be further proven and supported by future research in order to draw general conclusions for the agricultural sector. As the sample of our study is limited to 36 respondents spread over five subsectors, it is necessary to conduct a quantitative study to achieve a representable sample and to include more subsectors. In addition, the study is limited to the Flemish region and literature in other countries about this subject is scarce. Hence, other researchers are encouraged to investigate if the results of Flanders can be supported by other regions in Europe and the world.
    Keywords: Farmers, network, innovation, Flanders, qualitative research, Agribusiness,
    Date: 2014–10
  11. By: MATSUURA Toshiyuki
    Abstract: This study investigates the impact of foreign direct investment (FDI) on domestic corporate performance using firm-level data on Japanese automobile parts suppliers. While previous studies used the propensity score matching method and focused mainly on the impact of the extensive margin of FDI, this study uses data on the automobile makers' FDI as an instrumental variable for suppliers' FDI and estimates the impact of both extensive and intensive margins of FDI on domestic corporate performance. Our empirical results reveal that while the impact of intensive margins of FDI has no significant impact on corporate performance, FDI in both developed and developing countries has a positive impact on sales and total factor productivity (TFP) in the case of extensive margins. Furthermore, the impact of the first flow of FDI is more profound than that of subsequent flows.
    Date: 2015–03
  12. By: Roberto Alvarez; Rolando Campusano
    Abstract: Using the Climate Investment Survey from the World Bank, we analyze the effect of competition on technological innovation in developing countries. We deal with endogeneity of competition by using the interaction between industry turnover and entry regulation as an instrument. The basic idea for this instrument is that entry regulations have a negative and more pronounced effect on competition in those industries with more natural turnover. Our results indicate a negative impact of competition on several measures of innovation outputs and inputs, which are robust across industries and using alternative measures of competition.
    Date: 2014–06
  13. By: Laurent R. Bergé; Frank van Oort
    Abstract: This paper deals with the questions of how network proximity influences the structure of inter-regional collaborations and how it interacts with geography. I first introduce a new, theoretically grounded measure of inter-regional network proximity. Then, I use data on European scientific co-publications in the field of chemistry between 2001 and 2005 to assess those questions. The main findings reveal that inter-regional network proximity is important in determining future collaborations but its effect is mediated by geography. Most importantly, a clear substitution pattern is revealed showing that network proximity benefits mostly international collaborations.
    Keywords: network proximity, gravity model, research collaboration, network formation, co-publication
    JEL: D85 O31 R12
    Date: 2015–03
  14. By: Mahy, Benoît (University of Mons); Rycx, Francois (Free University of Brussels); Vermeylen, Guillaume (University of Mons)
    Abstract: The authors provide first evidence on whether the direct relationship between educational mismatch and firm productivity varies across working environments. Using detailed Belgian linked employer-employee panel data for 1999-2010, they find the existence of a significant, positive (negative) impact of over- (under-)education on firm productivity. Moreover, their results show that the effect of over-education on productivity is stronger among firms: (i) with a higher share of high-skilled jobs, (ii) belonging to high-tech/knowledge-intensive industries, and (iii) evolving in a more uncertain economic environment. Interaction effects between under-education and working environments are less clear-cut. However, economic uncertainty is systematically found to accentuate the detrimental effect of under-education on productivity.
    Keywords: educational mismatch, productivity, linked employer-employee panel data, working environments
    JEL: J21 J24
    Date: 2015–02
  15. By: Masafumi Kozuka (Graduate School of Economics, Kobe University)
    Abstract: In this paper, we investigate Grangerfs causality among the exchange rate, Tobinfs marginal q, and investment-capital ratio with quarterly data on firms categorized small and medium-sized enterprises (SMEs) in Japan. We utilize the data of following industries: chemical, iron and steel, production machinery, electric machinery and equipment, automobile and accessories and all manufacturing. The empirical results we obtain show that the null hypotheses of no Grangerfs causality from the exchange rate to other variables, investment and marginal q, are accepted in all industries. The reason is the lower percentage of export by SMEs. Thus, it is considered that the effects of Abenomics on SMEs are limited, and that other kinds of reflation measures for SMEs are needed.
    Keywords: marginal q; small and medium-sized enterprises; LA-VAR model; irreversibility; exchange rate
    JEL: C32 F22
    Date: 2015–03
  16. By: Pratono, Aluisius Hery; Mahmood, Rosli
    Abstract: Contingency theory points out the adaptive management is crucial point to sustainable firm performance. This research aims to determine the relative importance of a set of variables comprising the four entrepreneurial management variables, i.e. strategic orientation, organization culture, organization structure, and reward system, and a set of environmental turbulence variables in predicting firm performance. This research uses firm-level data with observed population of this research is SMEs in Surabaya, Indonesia. Through adopting hierarchical regression approach and partial least square method, this study indicates that moderating effect of environmental turbulence changes the direction of relationship between entrepreneurial management and firm performance. During low environmental turbulence, entrepreneurial management has positive impact on firm performance, but the direction changes. Entrepreneurial management has negative impact on firm performance during high environmental turbulence.
    Keywords: firm performance, entrepreneurial management, environmental turbulence
    JEL: M0 M00 M1 M12 M14 M2 M5 M52
    Date: 2014
  17. By: Terlau, Wiltrud; Hirsch, Darya
    Abstract: Sustainability is a key issue in current research activities and programs. In this conjunction three major functions of research have been identified: Basic research, knowledge reservoirs, and knowledge transfer. With regard to a transmission to the private sector, knowledge transfer is the most important factor. In this process, universities of applied sciences can play an important part as they typically have a long-standing experience in linking science and business in their teaching and research. Another important agent in the process of knowledge transfer are networks and clusters. Their strength lies integrating the different competencies of its partners and using them to a mutual benefit. The International Centre for Sustainable Development (IZNE) – with a major focus on responsible business and sustainable food – takes the advantage of being part of a University of Applied Sciences (Bonn-Rhein-Sieg, BRSU), and being a member of several regional and international clusters and networks. These co-operations aim to establish and strengthen linkages between science and business, in particular by investigating research needs for business and business relevant research activities. Moreover, IZNE established and expanded regional and international co-operations of its own to get more transparency about regional and international value-added chains in the food sector and the issue of responsible business.
    Keywords: Applied and Practice-Oriented Research, Business Sector, Value-Added Chain, Sustainability, Food Safety and Security, Food Process Quality, Spatial Proximity, Agribusiness,
    Date: 2014–10
  18. By: Lynne Pepall; Dan Richards
    Abstract: Recent innovations in digital learning and web-based technologies have enabled scalability in educational services that has previously not been feasible presenting a potential disruption in traditional higher education markets. This paper explores the impact of these innovations in a vertically differentiated higher educational market with both selective and nonselective institutions. Selective institutions are characterized by peer effects and a revenue model that assures quality. Nonselective institutions have open admissions and are tuition driven. Students differ in their ability to benefit from educational services. We describe how selective and non-selective institutions compete for students through tuition and admission criteria and how free non-credentialed educational services such as MOOCs affect the market equilibrium. Our model also helps explain why selective institutions are the main proprietors of MOOCs.
    Keywords: Higher Education, Vertical Differentiation, Network Effects
    JEL: D43 I23
  19. By: Alessandra Colombelli (DIGEP, Politecnico di Torino; GREDEG-CNRS; BRICK, Collegio Carlo Alberto); 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)
    Abstract: This paper investigates the impact of eco-innovation on firms' growth processes, with a special focus on gazelles, i.e. firms' showing higher growth rates than the average. In a context shaped by more and more stringent environmental regulatory frameworks, we posit that inducement mechanisms stimulate the adoption of green technologies, increasing the derived demand for technologies produced by upstream firms supplying eco-innovations. For these reason we expect the generation of green technologies to trigger sales growth. We use firm-level data drawn from the Bureau van Dijk Database, coupled with patent information obtained from the OECD Science and Technology Indicators. The results confirm that eco-innovations are likely to augment the effects of generic innovation on firms' growth, and this is particularly true for gazelles, which actually appear to run faster than the others.
    Keywords: Gazelles, Eco-Innovation, firms' growth, Inducement mechanisms, derived demand, WIPO Green Inventory
    JEL: L10 L20 O32 O33 Q53 Q55
    Date: 2015–03
  20. By: Hector Hernandez (European commission JRC IPTS); Fernando Hervas (European commission JRC IPTS); Alexander Tuebke (European commission JRC IPTS); Mafini Dosso (European commission JRC IPTS); Antonio Vezzani (JRC-IPTS); Sara Amoroso (European commission JRC IPTS); Nicola Grassano (European commission JRC IPTS)
    Abstract: The 2014 "EU Industrial R&D Investment Scoreboard" (the Scoreboard) contains economic and financial data for the world's top 2500 companies ranked by their investments in Research and Development (R&D). The sample contains 633 companies based in the EU and 1867 companies based elsewhere. The Scoreboard data are drawn from the latest available companies' accounts, i.e. usually the fiscal year 2013/14. Key findings of the 2014 Scoreboard comprise: - The world top 2500 R&D investors continued to increase their investment in R&D (4.9%), well above the growth of net sales (2.7%). The 633 EU companies increased R&D by 2.6% and decreased sales by 1.9%. - Volkswagen leads the global ranking for the second consecutive year, showing again a remarkable increase of R&D (23.4%, up to €11.7bn). Second continues to be Samsung, showing also an impressive R&D increase of 25.4%. - EU companies in the automobile sector, accounting for one quarter of the total EU’s R&D, continued to increase significantly their R&D (6.2%). This reflects the good performance of automobiles companies based in Germany (9.7%) that account for three quarters of this sector’s R&D in the EU. - The poor R&D performance of EU companies in high-tech sectors such as Pharmaceuticals (0.9%) and Technology Hardware and equipment (-5.4%) weighed down the total R&D increase of the EU sample. The overall amount invested in R&D by EU companies in high-tech sectors represents 40% of the amount invested by their US counterparts and the gap between the two company samples is increasing with time.
    Keywords: Investment, reseach, development
    Date: 2014–12
  21. By: Filippo Belloc; Eleonora laurenza; Maria Alessandra Rossi
    Abstract: The paper explores the question whether the relationship between corporate governance dimensions and innovation at the firm level is affected by sectoral characteristics, by analyzing Italian manufacturing sectors. We estimate the impact of corporate governance features on patenting activity for two sub-groups of Italian firms, identified on the basis of the well-established distinction between Schumpeter Mark I (creative destruction) and Schumpeter Mark II (creative accumulation) sectors. We use a unique dataset on about 35.000 Italian manufacturing firms over the 2002-2007 period and employ a hurdle model for zero-inflated data in order to study simultaneously (i) the firm's ability to be innovative rather than non innovative and (ii) its ability to be relatively more innovative than the other innovative firms. We find that in Schumpeter Mark I sectors, a concentrated ownership structure has a positive effect on innovation, while the opposite is true for Schumpeter Mark II sectors. We interpret this result, arguing that, in more unstable markets, a concentrated ownership reduces agency costs to a larger extent than it exacerbates asymmetric bargaining problems. We find also that Schumpeter Mark I environments are associated to a negative effect of debt exposure, due to the higher uncertainty and agency costs. These findings are robust to a number of identification issues, including the possible endogeneity of corporate ownership structures. Our results may allow to make sense of the contradictory findings of the literature on corporate governance and innovation.
    Keywords: corporate governance, innovation, Italian manufacturing sectors, hurdle models.
    JEL: C30 G30 L60 O30
    Date: 2015–03
  22. By: Christian Ruzzier (Department of Economics, Universidad de San Andres); Ricard Gil (Johns Hopkins Carey Business School)
    Abstract: This paper empirically investigates whether changes in product market competition affect firm boundaries. Exploiting regulation-induced shocks to entry barriers and differences in regulation enforcement across cities to obtain exogenous variation in competition, we establish a negative causal effect of competition (through reduced entry barriers and a larger number of rival firms) on vertical integration in the setting of the Spanish local television industry between 1995 and 2002.
    Keywords: competition, vertical integration, Spanish television
    JEL: D22 L22 L24 L82
    Date: 2015–02
  23. By: Antonio Lecuna (School of Business and Economics, Universidad del Desarrollo)
    Abstract: Statistical tests on a panel of data from 54 countries over the 2004–2009 period support the proposition that high income inequality and entrepreneurial activity share a positive linear relationship. In a novel approach, the dependent variable is defined from two independent and uncorrelated perspectives: (1) the World Bank Group Entrepreneurship Snapshot, which measures new business entry density based on secondary official sources; and (2) the Total Early Stage Entrepreneurial Activity of the Global Entrepreneurship Monitor project, which is a survey-based measure of formal and informal entrepreneurial participation rates. The empirical strategy is based on the logic that economies with increasing concentrations of wealth tend to encourage entrepreneurial activity because entrepreneurs accumulate more income than workers. Following the disequalizing model, once this inequality appears, it is reinforced in successive generations. The intuition behind this outcome is that a certain level of initial capital is required to establish a new enterprise, which implies that the probability of becoming an entrepreneur increases if an individual has inherited wealth.
    Keywords: Entrepreneurship, income inequality, institutions, public policy.
    JEL: L26
    Date: 2014–12

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