nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2015‒07‒18
thirteen papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Innovation and exporting: a study on Eastern European firms By Silvia Bertarelli; Chiara Lodi
  2. System of financing innovation activities in the EU countries; Measuring the Impact of the Financial Crisis By Marek Urbaniak; Ricardo Paes Mamede
  3. Innovation drivers, value chains and the geography of multinational corporations in Europe By Riccardo Crescenzi; Carlo Pietrobelli; Roberta Rabellotti
  4. Agribusiness Firm Resources and Performance: The Mediating Role of Strategic Management Practices By Dominic, Theresia; Theuvsen, Ludwig
  5. Export Experience, Product Differentiation, and Firm Survival in Export Markets By INUI Tomohiko; ITO Keiko; MIYAKAWA Daisuke
  6. Does Design Activity Stimulate Firm Productivity? (Japanese) By KAWAKAMI Atsushi; EDAMURA Kazuma
  7. Uncertainty, flexible labour relations and R&D expenditure By Marco Di Cintio; Emanuele Grassi
  8. Determinants of the Risk Attitude in Entrepreneurship: Evidence from Latin America By Jean P. Sepulveda; Claudio Bonilla
  9. Human Development and Quality of Institutions in Highly Developed Countries By Adam P. Balcerzak; Micha³ Bernard Pietrzak
  10. Do exporting firms benefit from retail internationalization? Evidence from France By Angela Cheptea; Charlotte Emlinger; Katrine Latouche
  11. Beyond Competitive Devaluations: The Monetary Dimensions of Comparative Advantage By Paul Bergin; Giancarlo Corsetti
  12. Creation and Diffusion of Knowledge across Creative Industries in Metropolitan Areas: the cases of Mexico and Spain By Marcos Valdivia López
  13. What do Exporters Know? By Michael J. Dickstein; Eduardo Morales

  1. By: Silvia Bertarelli; Chiara Lodi
    Abstract: This paper provides an empirical analysis about the relationship among innovation, productivity and exporting propensity within manufacturing firms of seven Eastern European Union countries. We analyse marginal effects of product, process and organisational-marketing innovations and test complementarity among them when the objective function is represented by the exporting propensity of a firm. Analysing CIS2008 data, we obtain that productivity improves exporting propensity; the more firms innovate the higher is their exporting probability; complementarity between process and organisational-marketing innovations is accepted in medium high and high technology firms. Complementary innovation strategies are detected for Bulgarian firms, even if Bulgaria is one of the least innovative Eastern European countries.
    Keywords: Propensity to export; Eastern Europe countries; Productivity; Complementarity; Product innovations; Process innovations; Organisational/Marketing innovations
    JEL: F14 O33
    Date: 2015–07–10
  2. By: Marek Urbaniak (Poznan University of Economics); Ricardo Paes Mamede (ISCTE - Lisbon University Institute)
    Abstract: This article represents an attempt to empirically explore the effects of the current financial crisis on R&D and innovation across the European countries and aims to contribute to the knowledge on the impact of the financial crisis on the financing of R&D and innovation in Europe. Using macro data, we investigate the statistics on financing R&D and innovation by sectors of performance and sources of funds. A direct effect of the crisis on R&D and innovation expenditure during the crisis is compared with the pre-crisis period. We demonstrate that the EU member states have improved their innovative activities over the 2004–2012 period. This article makes an attempt at filling in the gaps in analyses of the influence that the financial crisis exerts on the financing of R&D and innovation. It is a contribution to the debate regarding the impact of the financial crisis in Europe on the volume and structure of innovation financing by sectors of the economy.
    Keywords: financing innovation activities, R&D and innovation expenditures
    JEL: G01 E23 O31 O43 O52
    Date: 2015–01–01
  3. By: Riccardo Crescenzi; Carlo Pietrobelli; Roberta Rabellotti
    Abstract: This paper investigates the geography of multinational corporations’ investments in the EU regions. The ‘traditional’ sources of location advantages (i.e. agglomeration economies, market access and labour market conditions) are considered together with innovation and socio-institutional drivers of investments, captured by means of regional ‘social filter’ conditions. This makes it possible to empirically assess the different role played by such advantages in the location decision of investments at different stages of the value chain and disentangle the differential role of national vs. regional factors. The empirical analysis covers the EU-25 regions and suggests that regional socio-economic conditions are crucially important for the location decisions of investments in the most sophisticated knowledge-intensive stages of the value chain.
    Keywords: Innovation; multinationals; systems of innovation; value chains; regions; European Union
    JEL: F21 F23 O33 R12 R58
    Date: 2014–08–12
  4. By: Dominic, Theresia; Theuvsen, Ludwig
    Abstract: This study investigates the relationship between firm resources, strategic management practices and firm performance of small agribusiness firms. Looking at level of managerial expertise and access to market information as primary resources, this research presents various arguments about their contribution to firm performance. The objective is to demonstrate the role of strategic management practices in facilitating the effective use of these resources to achieve agribusiness firm performance. Results from a structural equation model using a sample of 229 agribusiness firms from Tanzania indicate that the investigated resources alone do not directly contribute to firm performance unless there is application of strategic management as a potential mediator. Further investigation based on multigroup analysis shows contingency effects in the resources-performance relationship but significant influence of application of strategic management practices on performance across all groups of firms. The results imply that managers ought to identify a fit between their resources and strategic actions in order to enhance firm performance. The study provides manifold managerial implications for small firms that seek to improve firm performance.
    Keywords: Structural modelling, firm resources, strategic management practices, small firm performance, mediation analysis, Tanzania, Agribusiness, Agricultural and Food Policy, Labor and Human Capital, Marketing, Q13, Q18, M31, J24,
    Date: 2015–03
  5. By: INUI Tomohiko; ITO Keiko; MIYAKAWA Daisuke
    Abstract: This paper examines the determinants of firm survival in export markets by explicitly taking into account the impact of firms' previous export market experience and their product differentiation. Utilizing a 16-year panel data set for Japanese manufacturing firms obtained from the Basic Survey of Japanese Business Structure and Activities compiled by the Ministry of Economy, Trade and Industry, we employ both hazard and panel probit estimations to examine the likelihood of exit from export markets. The results of our estimations show, first, that the exit probability from export markets decreases over the export duration. Second, the probability of exiting from export markets tends to be lower when firms are more research and development (R&D) intensive both prior to and after starting exports. Third, firms in industries that manufacture differentiated products (e.g., machinery) also experience higher survivability in export markets. These results imply that learning from exporting plays an important role in firms' survival in export markets. In addition, our results imply that firms producing differentiated products likely have a greater incentive to make up-front investments to start exporting, and that these investments in turn enable such firms to survive in export markets for a longer period.
    Date: 2015–07
  6. By: KAWAKAMI Atsushi; EDAMURA Kazuma
    Abstract: This paper investigates the influence of firms' design activity to total factor productivity using firm-level data from the Basic Survey of Japanese Business Structure and Activities and the Survey on Research Activities of Private Corporations. We adopt two approaches for calculating design activity. First, we regard registered design as a design activity. Second, we calculate design investment from the Survey on Research Activities of Private Corporations and estimate the relation between design activity and efficiency of design investment.Firms who hold registered designs tend to hold patents. Furthermore, holding both registered designs and patents makes the firms more efficient. On the other hand, a second approach shows that a design strategy for adding value to their products, originality, and valuing the firm's brand is more efficient than for product differentiation. Adopting designers from outside of their firms and training designers from within the firms are also efficient. These results investigated Verganti (2009)'s design driven innovation which focuses on product innovation in the aspect of design.
    Date: 2015–07
  7. By: Marco Di Cintio (Department of Management, Economics, Mathematics and Statistics; University of Salento); Emanuele Grassi (Department of Management, Economics, Mathematics and Statistics; University of Salento)
    Abstract: This paper examines the effects of uncertainty and flexible labour contracts on the Research and Development (R&D) expenditure. Using a panel of Italian manufacturing firms, we find a hump-shaped relationship between workforce flexibility and R&D outlays. Moreover, as predicted by the real options theory, our results suggest that product market uncertainty reduces R&D efforts and that flexible labour contracts countervail the adverse effect of uncertainty on R&D.
    Keywords: real options theory, R&D, uncertainty, temporary workers
    JEL: D22 D81 J41 O31
    Date: 2013–12
  8. By: Jean P. Sepulveda; Claudio Bonilla (School of Business and Economics, Universidad del Desarrollo)
    Abstract: This paper departs from the traditional analysis of the effects of risk aversion in entrepreneurship to study the determinants of entrepreneurial risk aversion in developing a new venture and becoming an entrepreneur. We took fear of failing as a proxy for risk aversion and applied our analysis to the most important Latin American economies. We observed that being male, having more years of formal education and believing to have the necessary skills to develop a new venture decreased the probability of feeling a fear of failing and, thus, eventually increased the probability of developing a new venture. Age affects risk quadratically (first positively, but after some point, negatively), and if there is a prior experience of having shut down a business, risk aversion increases, that is, the probability of feeling a fear of failing, which reduces the probability of becoming an entrepreneur
    Keywords: Risk Aversion, Entrepreneurship, Fear of Failing
    Date: 2014
  9. By: Adam P. Balcerzak (Nicolaus Copernicus University, Poland); Micha³ Bernard Pietrzak (Nicolaus Copernicus University, Poland)
    Abstract: The article concentrates on the problem of influence of quality of institutional system in the context of utilizing the potential of knowledge-based economy on the human development in highly developed countries. In order to measure the quality of institutional system a synthetic measure based on multivariate analysis techniques was proposed. To obtain the institutional measure TOPSIS method was applied. To quantify the institutional factors the data from Fraser Institute was used. As diagnostic variables of quality of institutions 29 variables qualified to four aspects of national institutional systems were used: a) formal regulations influencing entrepreneurship; b) effectiveness of juridical system in keeping low level of transaction costs and supporting effectiveness of market mechanism; c) competitive pressure and effectiveness of labour markets; d) financial markets institutions as a stimulator of development of enterprises with high growth potential. Human Development Index proposed within United Nations Development Programme was used for measuring the quality of life. The estimation of relation between institutions and human development was made with econometric dynamic panel model. The estimation was made for 24 European Union countries for the years 2004-2010. The econometric analysis shows the positive influence of quality of institutions on human development in the context of knowledge-based economy in developed countries.
    Keywords: institutional economics, quality of institutions, Human Development Index, TOPSIS, panel analysis
    JEL: I31 O1 C38
    Date: 2015–07
  10. By: Angela Cheptea; Charlotte Emlinger; Katrine Latouche
    Abstract: We explore the link between globalization of the retail sector and the export activity of firms from their origin country. In a previous paper (Cheptea et al., 2015), we showed that exporting firms from countries with internationalized retail companies benefit more from this process than firms from other countries. Two mechanisms can explain this effect: a trade cost advantage for retailers’ domestic suppliers, or a shift in foreign demand from which benefit all origin country firms. In this paper we question which of the two mechanisms dominates. For that, we test whether retailers’ supplying firms benefit more from the overseas expansion of retailers than other origin country firms. We employ French firm-level data to evaluate the effect for the two types of firms. We identify retailers’ suppliers as firms that sell their products under French retailers’ brands or labels, i.e. French firms certified with the IFS standard. Our empirical objective is to estimate whether firms with IFS certification have better export performance on markets where French retailers operate. We find that certified French firms are more likely to export, and export larger volumes, than non-certified firms to markets where French retailers established outlets. We also show that when French retailers close down their activities in a market, IFS firms face a drop in exports to this market in the subsequent years. The results are robust to the use of different sets of firm- and country-specific fixed effects, are unaffected by possible selection and endogeneity biases, and the presence in export markets of other retailers. This difference in behavior for certified and non-certified exporting firms confirms the trade cost advantage of retailers’ suppliers, which is lost when French retailers exit from the destination country.
    Keywords: Mulitnational retailers, firm-level exports, Private standards
    JEL: F12 F14 F23
    Date: 2015–06
  11. By: Paul Bergin (Economics Department University of California-Davis); Giancarlo Corsetti (Faculty of Economics University of Cambridge)
    Abstract: Motivated by the long-standing debate on the pros and cons of competitive devaluation, we propose a new perspective on how monetary and exchange rate policies can contribute to a country’s international competitiveness. We refocus the analysis on the implications of monetary stabilization for a country’s comparative advantage. We develop a two-country New-Keynesian model allowing for two tradable sectors in each country: while one sector is perfectly competitive, firms in the other sector produce differentiated goods under monopolistic competition subject to sunk entry costs and nominal rigidities, hence their performance is more sensitive to macroeconomic uncertainty. We show that, by stabilizing markups, monetary policy can foster the competitiveness of these firms, encouraging investment and entry in the differentiated goods sector, and ultimately affecting the composition of domestic output and exports. Panel regressions based on worldwide exports to the U.S. by sector lend empirical support to the theory. Constraining monetary policy with an exchange rate peg lowers a country’s share of differentiated goods in exports between 4 and 12 percent.
    Keywords: monetary policy, production location externality, firm entry, optimal tariff
    JEL: F41
    Date: 2015–06
  12. By: Marcos Valdivia López
    Abstract: This study proposes a spatial interaction model to analyze the level of creativity across Metro Areas (MAs) in a country. The model postulates that increasing creativity depends on the proportions of common knowledge and differential knowledge that MAs face when they interact with each other. We rely on an agent-based approach that allows incorporating GIS and spatial interaction between MAs under local and global network conditions. We chose the cases of Mexico and Spain to get a first glance of how the model works with real data. We find that the MAs of Spain (2001) and Mexico (2003) share the same level of common and differential knowledge in the creative industries and, that knowledge spillovers spread better under inter metropolitan conditions of interaction instead of intra ones. The simulations suggest that Spain is better suited to produce higher knowledge externalities under conditions that are not restricted by physical distance, which make policy intervention in Spain more effective to diffuse creative ideas.
    Keywords: Externalities, knowledge spillovers, creative industries, urban spatial models, computational modeling.
    Date: 2015–07
  13. By: Michael J. Dickstein; Eduardo Morales
    Abstract: Much of the variation in international trade volume is driven by firms' extensive margin decision to participate in export markets. To understand this decision and predict the sensitivity of export flows to changes in trade costs, we estimate a standard model of firms' export participation. In choosing whether to export, firms weigh the fixed costs of exporting against the forecasted profits from serving a foreign market. We show that the estimated parameters and counterfactual predictions from the model depend heavily on how the researcher specifies firms' expectations over these profits. We therefore develop a novel moment inequality approach with weaker assumptions on firms' expectations. Our approach introduces a new set of moment inequalities --odds-based inequalities-- and applies the revealed preference inequalities introduced in Pakes (2010) to a new setting. We use data from Chilean exporters to show that, relative to methods that require specifying firms' information sets, our approach generates estimates of fixed export costs that are 65-85% smaller. Counterfactual reductions in fixed costs generate gains in export participation that are 30% smaller, on average, than those predicted by existing approaches.
    JEL: F14
    Date: 2015–07

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