nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2015‒04‒02
eighteen papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Innovation and productivity in services and manufacturing : The role of ICT investment By Aboal D.; Tacsir E.
  2. The innovative input mix. Assessing the importance of R&D and ICT investments for firm performance in manufacturing and services By Marina Rybalka
  3. Are High-Growth Firms Overrepresented in High-Tech Industries? By Daunfeldt, Sven-Olof; Elert, Niklas; Johansson, Dan
  4. Knowledge Communication Indicators from Knowledge Management to National Innovation System By Mei-Tai Chu; Sedigheh Rezaeian Fardoei
  5. Inward foreign direct investment and innovation: evidence from Italian provinces By Roberto Antonietti; Raffaello Bronzini; Giulio Cainelli
  6. The location strategies of multinationals from emerging countries in the EU regions By Crescenzi R.; Pietrobelli C.; Rabellotti R.
  7. The Strength of Long Ties and the Weakness of Strong Ties: Knowledge diffusion through supply chain networks By TODO Yasuyuki; Petr MATOUS; INOUE Hiroyasu
  8. Firm Heterogeneity and Location Choice of European Multinationals By Marti, Josep; Alguacil, Maite; Orts, Vicente
  9. Critical Analysis and Redesign of the Linear Models and Diffuse the Study of the Dynamics of Innovation By P. Dyachkina; K. Puzanova; Smolkin, Anton; Stepantsov, Pavel
  10. Spanish Multinational Firm and its Internationalization Process By David de Matías Batalla
  11. Innovative strategies as a determinant of achievement of the goals of enterprise activity By Marlena Grabowska; Iwona Otola; Agata Mesjasz-Lech
  12. From Learning to Knowing: A Psychological-Neurological Approach to Explain the Human Capital Formation Process By Tamilina, Larysa; Tamilina, Natalya
  13. The Italian Firms’ International Activity By Riccardo Cristadoro; Leandro D’Aurizio
  14. Competence Management and Corporate Performance in Austria By Jürgen Mühlbacher
  15. The Impact of Entrepreneurship Education in High School on Long-Term Entrepreneurial Performance By Elert, Niklas; Andersson, Fredrik; Wennberg, Karl
  16. Corporate diversification and board composition in Japanese electronic corporations By Takahiro NISHI
  17. Foreign Ownership and the Export and Import Propensities of Developing-Country Firms By Dominik Boddin; Horst Raff; Natalia Trofimenko
  18. Asset sources of competitive advantage of SMEs from high-tech sector in the region of Greater Poland By Malgorzata Gajowiak

  1. By: Aboal D.; Tacsir E. (UNU-MERIT)
    Abstract: Several studies have highlighted ICT as a driver of firm productivity in developed countries. However, the evidence about the impacts of ICT on services and manufacturing and particularly for developing countries is scarce. This paper focuses on understanding the determinants of investments in ICT at firm level and how this adoption ultimately affects innovation and productivity of Uruguayan services firms vis a vis manufacturing. Results show that ICT investments are more subject to economies of scale than other types of investments, are important for obtaining product or process innovations in services and its absence conspires against non-technological organisational or marketing innovations. Both ICT and other innovation investments are positively associated with productivity in services but only ICT affect productivity in manufacturing. Interestingly, the absence of investment in ICT is associated with lower levels of productivity.
    Keywords: Firm Behavior: Empirical Analysis; Innovation and Invention: Processes and Incentives; Management of Technological Innovation and R&D; Technological Change: Government Policy;
    JEL: O31 O32 D22 O38
    Date: 2015
  2. By: Marina Rybalka (Statistics Norway)
    Abstract: Business innovation is an important driver of productivity growth. In this paper, I assess the importance of R&D and ICT investment for firm performance in the manufacturing and service industries. Explicitly, I use an extended version of the CDM model that treats ICT together with R&D as the main inputs into innovation and productivity, and test it on a large unbalanced panel data set based on the innovation survey for Norway. Four different types of innovation and the number of patent applications are used as innovation output measures. I find that ICT investment is strongly associated with all types of innovation in both sectors, with the result being strongest for product innovation in manufacturing and for process innovation in service industries. The impact of ICT on patenting is only positive in manufacturing. Overall, ICT seems to be less important than R&D for innovation, but more important for productivity. These results support the proposition that ICT is an important driver of productivity growth. Given the high rate of ICT diffusion in Norway, my results also contribute to explaining what is referred to as the ‘Norwegian productivity puzzle’, i.e. the fact that Norway is one of the most productive economies in the OECD despite having relatively low R&D intensity.
    Keywords: Innovation; ICT; R&D; Productivity; CDM model; Manufacturing and Services
    JEL: D24 L60 L80 O3
    Date: 2015–02
  3. By: Daunfeldt, Sven-Olof (HUI Research); Elert, Niklas (Research Institute of Industrial Economics (IFN)); Johansson, Dan (HUI Research)
    Abstract: It is frequently argued that policymakers should target high-tech firms, i.e., firms with high R&D intensity, because such firms are considered more innovative and therefore potential fast-growers. This argument relies on the assumption that the association among high-tech status, innovativeness and growth is actually positive. We examine this assumption by studying the industry distribution of high-growth firms (HGFs) across all 4-digit NACE industries, using data covering all limited liability firms in Sweden during the period 1997–2008. The results of fractional logit regressions indicate that industries with high R&D intensity, ceteris paribus, can be expected to have a lower share of HGFs than can industries with lower R&D intensity. The findings cast doubt on the wisdom of targeting R&D industries or subsidizing R&D to promote firm growth. In contrast, we find that HGFs are overrepresented in knowledge-intensive service industries, i.e., service industries with a high share of human capital.
    Keywords: Entrepreneurship; Firm growth; Gazelles; High-growth firms; High-impact firms; Innovation; R&D
    JEL: L11 L25
    Date: 2015–03–25
  4. By: Mei-Tai Chu (La Trobe University); Sedigheh Rezaeian Fardoei (Iran University of Payam Noor)
    Abstract: Both at firm and national level, particularly in the most developed economies, the increasing importance of knowledge have meant that the net stock of intangible asset has grown more rapidly than the tangible asset. This has unfortunately not yet happened in the developing economies (Mortensen et al., 1997). The world’s economy is becoming ever more dependent on creating, distributing, and using knowledge. Converting knowledge into innovation activity penetrates the entire process including knowledge creation, transmission and application. Knowledge flow facilitates relationship and communication among the subsystems and various main bodies within the innovation system, which prompts the innovation system to be a more dynamic, open, and mutual promotion system. The exchange, flow and allocation of knowledge are the prerequisite for safeguarding the innovation system’s operation efficiency. Therefore, Knowledge Management (KM) construction for Innovation System is the enterprise innovation guarantee factor as well as one essential part for superior national innovation system. Developing countries are not as advanced as developed countries in terms of their knowledge management systems, innovation management systems, and innovation potential. Promoting their innovation management systems will benefit their innovation and will promote them closer to rely on knowledge-based industries. While National Innovation System (NIS) has been studied extensively since 1987, they have not been studied from the perspective of a knowledge management system, and this paper addresses this gap. Innovation system research emphasizes knowledge creation, transmission and application on region-level. It devotes to pull regional overall knowledge creation and innovative activities through innovation system’s institutional arrangements within a region and the network architecture design to influence functional mechanism of the essential elements. According to this context, the paper aims to propose the development of a NIS approach from a knowledge standpoint and modeling the relationship between NIS performance dimensions and items of knowledge management functions to identify how general functions of knowledge management enables NIS. Hence, the work is focusing on contributing a new perspective to the study of national innovation, as it has integrated the approach of knowledge management by summarizing the results from research touching two different aspects of knowledge management (explicit and tacit). Therefore, this paper attempts to make contribution to the nascent body of research on modeling how KM functions enable NIS. Future study can undertake a validation based on the concept model proposed from this paper.
    Keywords: Knowledge Management, National Innovation System, Knowledge Communication Indicator
    Date: 2014–06
  5. By: Roberto Antonietti (University of Padova); Raffaello Bronzini (Bank of Italy); Giulio Cainelli (Unicversity of Padova)
    Abstract: This paper investigates empirically whether inward greenfield foreign direct investment (FDI) is related to greater sectorial innovation in the host Italian provinces. We combine several sources of data to estimate panel count models, regressing the annual number of patents in each province and industry against a series of lagged FDI variables. Our results show that a positive relationship between FDI and local patenting emerges only for services. In particular, we find that greater inward FDI in services positively influences local patenting activity in knowledge-intensive business services. These results are robust to endogeneity and the inclusion of province controls and fixed effects.
    Keywords: inward greenfield FDI, innovation, patents, research and development, panel count models
    JEL: F14 F23 O31 C23
    Date: 2015–03
  6. By: Crescenzi R.; Pietrobelli C.; Rabellotti R. (UNU-MERIT)
    Abstract: This paper contributes to the current debate in both Economic Geography and International Business on the nature and strategies of Multinational Enterprises MNEs from emerging countries EMNEs. The paper fills a very relevant gap in the existing literature by shedding new light on the location strategies of EMNEs at the national and regional level, looking at their investment drivers and systematically comparing them with those of multinationals from advanced countries AMNEs. The empirical analysis looks at the location choices of MNEs in the European Union EU-25 regions and unveils that EMNEs follow distinctive location strategies. Their attraction into large regional markets is similar to AMNEs as well as their irresponsiveness to efficiency seeking motives. Conversely, the most knowledge-intensive investments of EMNEs respond mainly to two attraction factors strategic assets in the form of local technological dynamism and the agglomeration of foreign investments in the same business functions. In addition, both the national and the regional levels are simultaneously relevant to EMNEs decisions.
    Keywords: International Investment; Long-term Capital Movements; Multinational Firms; International Business; Technological Change: Choices and Consequences; Diffusion Processes; Size and Spatial Distributions of Regional Economic Activity; Regional Development Planning and Policy;
    JEL: F21 F23 O33 R12 R58
    Date: 2015
  7. By: TODO Yasuyuki; Petr MATOUS; INOUE Hiroyasu
    Abstract: This paper examines the effect of the structure of supply chain networks on productivity and innovation capability through knowledge diffusion, using large firm-level panel data for Japan. We find that ties with distant suppliers improve productivity, as measured by sales per worker, possibly attributed to intermediates from distant firms embodying more diversified knowledge than from neighboring firms. Ties with neighboring clients also improve productivity, which may be a result of diffusion of disembodied knowledge from neighboring clients being more effective than from distant clients. By contrast, ties with distant suppliers and clients improve innovative capability, as measured by the number of patent applications, suggesting the importance of a diversity of knowledge from distant firms for innovation. In addition, the density of a firm's ego network, which is measured by how densely its supply chain partners transact with each other, is found to have a negative effect on productivity and innovative capability, implying knowledge redundancy in dense networks. Overall, our results emphasize the importance of diversified partners in knowledge diffusion through supply chain networks.
    Date: 2015–03
  8. By: Marti, Josep; Alguacil, Maite; Orts, Vicente
    Abstract: In this paper we investigate how the different characteristics of European multinational firms affect their decision to locate in different foreign markets. Considering the existence of n geographically separated markets with different attributes, in terms of entry or fixed costs, variable production costs and the market potential, our theoretical model shows that both firm and country characteristics determine the location of multinational firms. The model reveals that given the characteristics of the countries, the decision to enter a specific country in order to serve all markets globally will depend on all the sources of a firm’s heterogeneity. In the empirical analysis, we drawn on a dataset comprised of harmonized and detailed firm-level data across European countries for 2008 (EFIGE dataset). The results obtained confirm that firms’ international location decision reflects the underlying dissimilarities of European multinational firms, including the specific industry in which they operate. More specifically, our estimations show that among European firms investing in non-European countries, only the most productive firms invest in Latin America and those that decide to enter North America are more productive than firms that locate in China and India. However, we find that this ranking may vary across industries, depending not only on TFP, but also on the years of establishment and the firms’ human capital and R&D intensity.
    Keywords: multinational firms, firm heterogeneity, location choices, European FDI
    JEL: D24 F14 F21 F23
    Date: 2015–03–05
  9. By: P. Dyachkina (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); K. Puzanova (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Smolkin, Anton (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Stepantsov, Pavel (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: Based on a critical analysis of the explanatory potential of linear and diffuse innovation dynamics models developed an alternative model of diffusion of innovation. The construction of an alternative model of the dynamics of innovation begins with the introduction of new theoretical concepts: 1) the "space", 2 ) "revolutionary potential" of the innovation process, and 3) "innovative potential of the area", 4) "innovative potential of the population", 5 ) "communication abilities of the information field". Summary model not only to compare the rate of diffusion of innovation in different user communities, but also to compare the rate of diffusion of innovation in different territorial units of the country. On the basis of the consolidated model highlights the key socio-cultural barriers to the spread of innovations: 1) centralized network barriers, and 2) the barriers of "friction of space", and 3) organizational barriers. Provides further description of socio-cultural barriers and recommendations to address them.
    Keywords: innovation dynamics
    JEL: O31
    Date: 2013–10
  10. By: David de Matías Batalla (Economics and Business Administration Dept. - University of Alcala)
    Abstract: The article responds to the need to study and analyze the evolution of the Spanish multinational firm in order to be able to identify the characteristics of success and what kind of factors are drivers to internationalize the activities in the Spanish economy. The first part reviews the evolution of the Spanish firm internationalization; meanwhile the second part describes the characteristics of Spanish multinational firm, resulted of a survey of 166 Spanish multinational firms.
    Keywords: Foreign direct investment, multinational firms, internationalization process, Spanish firms
    JEL: M16
    Date: 2015–04
  11. By: Marlena Grabowska (Czestochowa University of Technology); Iwona Otola (Czestochowa University of Technology); Agata Mesjasz-Lech (Czestochowa University of Technology)
    Abstract: The theoretical and empirical investigations presented in the study are focused on the analysis of cause-and-effect relationships between innovative strategies and achievement of the goals of enterprise's activity. The importance of the problems discussed results mainly from the role performed by the innovative activities of enterprises in achievement and reinforcing the competitive advantage and position in a specific entity. Maintaining of the competitive position achieved by the enterprise necessitates not only adequate adjustment to changes that occur in the market but also having the ability to create these changes. Therefore, innovativeness is becoming necessary for competing under contemporary market conditions. With regard to variety and complexity of the problems of the goal of enterprise's activity, the study emphasizes the importance of the concept of value creation, which represents a strategic tool for managing enterprises. However, the empirical studies have demonstrated a dominant role of revenues on sales as a principal aim of enterprise's activity. The study verified the research hypothesis which assumed that the increase of innovativeness of enterprises leads to the increase in revenues on sales. Empirical investigations were carried out based on the data contained in statistical yearbooks of the Central Statistical Office for the years 2005-2012. A logit model was used in order to examine the relationships between the percentage of enterprises which implemented innovations and revenues on all the activities of enterprises.
    Keywords: goals of enterprise's activity, innovative strategies, revenues on sales, value creation
    JEL: D22 D46 O31
    Date: 2014–10
  12. By: Tamilina, Larysa; Tamilina, Natalya
    Abstract: By drawing on neurological and psychological theories of learning, our study introduces a new conceptual framework to analyse the role learning plays in knowledge and skill acquisition. Learning is modelled through four mechanisms defined as individuals' participation in formal, non-formal, and informal learning, as well as learning-by-doing. Our analysis suggests heterogeneity in how various learning mechanisms affect individuals' overall stock of knowledge and skills. Additionally, the proposed analytical framework points to the existence of an optimal sequence in which different learning forms should be pursued in order to maximise overall stocks of human capital. These propositions are tested with the Adult Literacy and Life Skills Survey data (2003) utilising a variety of statistical techniques.
    Keywords: Lifelong learning, skill acquisition, neurology of learning, psychology of learning, economics of learning
    JEL: I21 J01 J24 J28 J88
    Date: 2013–05–01
  13. By: Riccardo Cristadoro (Bank of Italy); Leandro D’Aurizio (Bank of Italy)
    Abstract: We look at business survey data on Italian internationalized firms’ characteristics and performances since the outbreak of the 2008 crisis until 2012. Among Italian firms with 20 employees or more, an increasing share (from 7.1 to 13.2% between 2006 and 2011) owns a foreign productive unit. The main reason for locating units in advanced countries is to be close to outlet markets, this remains true for internationalization in developing countries (where nearly half of such units were located), even though in this case the search for lower costs becomes more important. Italian multinationals are on average more productive and profitable, even when compared to exporting firms not operating abroad. More specifically, the productivity gap compared to these latter firms is 15 percent, closely aligned with that measured by Helpman at al. (2004) on a sample of US firms. Since 2008, internationalized firms’ operating profit was above the average, as well as their planned expansion both in Italy and abroad. In firms’ opinion, the support by Italian public institutions to expand their foreign activity is generally not effective.
    Keywords: internationalization, competitiveness, firm performance, economic crisis
    JEL: F1 F23 C12 C21
    Date: 2015–03
  14. By: Jürgen Mühlbacher (Vienna University of Economics and Business)
    Abstract: Since the first studies focusing on management development, nearly all authors state a positive relationsship between management competencies and corporate performance. Boyatzis (1982) states in his seminal book on competency and performance, that the competency clusters »Goal and Action Management«, »Leadership«, and »Human Resource Management« are the most important ones. Prahalad and Hamel (1990) distinguish between technological and management competencies and only the fit of both will lead to entrepreneurial success. In the following, the assessment center movement focused only on company-specific bundles of competencies to explain success and failure (Woodruffe 1993). After that Bartlett and Goshal (1997) tried to find typical clusters of management competencies for any hierarchical level and McCall (1998) focused on the relationship between competency and corporate strategy as crucial factor for success. More recent literature like Heyse and Erpenbeck (2004) or Mühlbacher (2007) offer multiple-job-models to emphasise the fact that competencies are strongly oriented towards the future. This enables a person or company to tackle upcoming challenges. But most of these models – except Boyatzis (1982) – do not offer any empirical evidence concerning the relationship between management development and corporate performance. Therefore this explorative study tries to give an answer to the following research question: »Which management competencies are influencing the turnover or profit of a company?« A quantitative study based on a questionnaire with a mix of closed and open question and statistical analysis will help to explore and compare the relation between organizational performance and current management competencies.ReferencesBartlett, C.A., Goshal, S., (1997): The Individualized Corporation, Harper Business, New York. | Boyatzis, R. E., (1982): The Competent Manager – A Model for Effective Performance, Wiley, New York. | Heyse, V., Erpenbeck, J., (2004): Kompetenztraining. 64 Informations- und Trainingsprogramme, Schäffer Poeschel: Stuttgart. | McCall, M.W., (1998): High Flyers. Develloping the Next Generation of Leaders, Harvard Business School Press, Boston. | Mühlbacher, J., (2007): Kompetenzmanagement als Grundlage strategischer Wettbewerbsvorteile, Linde, Wien. | Prahalad, C.K., Hamel, G., (1990): The Core Competence of the Corporation, Harvard Business Review, Vol. 68, No. 3, pp. 79-91. | Woodruffe, C., (1993): What is Meant by a Competency?, Leadership & Organization Development Journal, Vol. 14, No. 1, pp. 29 - 36.
    Keywords: Competence Management, Corporate Performance, Management Development
    JEL: M53 I25
    Date: 2014–10
  15. By: Elert, Niklas (Research Institute of Industrial Economics (IFN)); Andersson, Fredrik (Statistics Sweden); Wennberg, Karl (Stockholm School of Economics)
    Abstract: This paper studies the long-term impact of entrepreneurship education and training in high school on entrepreneurial entry, performance, and survival. Using propensity score matching, we compare three Swedish cohorts from Junior Achievement Company Program (JACP) alumni with a matched sample of similar individuals and follow these for up to 16 years after graduation. We find that while JACP participation increases the long-term probability of starting a firm as well as entrepreneurial incomes, there is no effect on firm survival.
    Keywords: Entrepreneurship Education; Quasi-experiment; Performance
    JEL: D22 L25 L26
    Date: 2015–03–26
  16. By: Takahiro NISHI (Meiji University)
    Abstract: In this study, I examine the relationship between board composition and diversification strategy in Japanese electronic corporations. Many Japanese electronics companies have performed sluggishly and instituted major reforms in terms of governance and management. The strategic choice between Focus and Divarication is the foremost issue for Japanese firms aiming to improve their performance. A corporation’s diversification strategy is influenced by the board structure and configuration of corporate governance. Agency theory assumes that financial and other unrelated diversification reinforces the CEO’s power and creates no value for stockholders, a divergence from the owners’ interests. Agency theory also holds that the CEO is a risk-averse agent. When free cash flow is available, the CEO will undertake non-value creating business rather than value creating business that may enhance stockholder value. The alignment of the interests of stockholders and managers reduces financial and unrelated diversification. To enhance the corporate board’s monitoring ability, I propose that the board should have an outsider-dominant composition. On the other hand, a strategic perspective like the resource-based view of the firm holds that related diversification leads to superior firm performance compared with a focused strategy because the company can explore business opportunities and generate additional return. The resource-based context assumes two types of corporate board composition. In the first, it is composed of insiders because they are motivated to pursue company growth regardless of stockholder’s concerns, emphasizing distinctive resources, which are diversified into several business units. In the second configuration, the corporate board is composed of outsiders because the company seeks high-level links with and access to resources in the outside environment I have considered the strategic implications of corporate governance by examining the relationship between diversification and board composition. These hypotheses are tested with multiple or logistics regression model, using a sample of Japanese corporations for the financial year in 2013. This study unravels the relationships among shareholder configuration and board structure, and the board’s strategic choice of diversification using several variables. This study finds that there is slightly negative link between diversification and the number of outsiders in the corporate board. Shareholder-oriented corporate governance does not necessarily mean a less diversified strategy. In addition, it finds that corporate boards with members who have ties to other corporations in the business group positively impacts performance, showing that high-level inter-connected directors could diversify business, leading to enhanced performance.
    Keywords: Corporate Governance, Diversification, Board composition, Strategic Management, Agency theory, Resource Based View.
    JEL: M10 M29
    Date: 2014–12
  17. By: Dominik Boddin; Horst Raff; Natalia Trofimenko
    Abstract: This paper uses micro-data from the World Bank Enterprise Surveys 2002-2006 to investigate how foreign ownership affects the likelihood of manufacturers in developing countries to export and/or import. Applying propensity score matching to control for differences across firms in terms of labor productivity and other characteristics, we find that foreign ownership is an economically important and statistically significant determinant of the likelihood that a firm will export and/or import. Foreign ownership raises the propensity to export by over 17 and the propensity to import by more than 13 percentage points. The effects are even bigger for the lowest-income countries
    Keywords: international trade, multinational enterprise, foreign direct investment, foreign ownership, development, intermediation
    JEL: F12 F14 F23 O19
    Date: 2015–03
  18. By: Malgorzata Gajowiak (Poznan University of Technology)
    Abstract: The article tackles the question of the ever growing importance of soft factors of production in the process of competitive advantage for contemporary enterprises. This condition has resulted of turbulent environment characterized by increasing competition, generalized uncertainty and information asymmetry. Based on the above assumption during 2013-2014 a research project was carried out on the role of intangible resources in the process of gaining advantage over competitors in high-tech companies from Greater Poland. The study was complete for the given population and was conducted using the CATI method. On the basis of responses to the questions in the survey, one can conclude that these companies implement modern management paradigm and its activities are based largely on soft resources which are impossible to be copied and on skills in the form of human capital, propensity for learning and the social capital of employees. The findings of the project can serve as a valuable clue for those companies which at the moment do not represent a prospective approach to achieving entrepreneurial categories in practice.
    Keywords: soft assets, competitive advantage, high-tech sector, innovations, SME’s
    JEL: O31 O32
    Date: 2015–03

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