nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2015‒08‒07
twenty-two papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. On the Economic Performance of Nascent Entrepreneurs By Gicheva, Dora; Link, Albert
  2. External dimensions of smart specialisation: Opportunities and challenges for trans-regional and transnational collaboration in the EU-13 By Slavo Radosevic; Katerina Ciampi Stancova
  3. An empirical study of technological leadership and persistence in product innovation By Roberto Fontana; Diana Moriniello; Andrea Vezzulli
  4. The Impact of Innovation in the Multinational Firm By Eduardo Morales; Kamran Bilir
  5. Share of exports to low-income countries, productivity, and innovation: A replication study with firm-level data from six European countries By Joachim Wagner
  6. Producer-Funded Innovation: R&D Spillovers across Levy Programs By Xiao, Zhihua
  7. Innovation and imitation in a product-cycle model with FDI and cash-in-advance constraints By Chen, Hung-Ju
  8. University Research Productivity and its Impact on the Regional Agricultural Economy: The Case of Colorado State University and the Colorado Economy By Lee, Yoo Hwan; Graff, Gregory D.
  9. Do exporting firms benefit from retail internationalization? Evidence from France By Cheptea, Angela; Emlinger, Charlotte; Latouche, Karine
  10. Success factors of innovation networks: Lessons from agriculture in Flanders By Lambrecht, Evelien; Kühne, Bianka; Gellynck, Xavier
  11. Process innovations, patent litigation and time effects By Barrenechea, Martin
  12. Fighting Scarcity: Innovation & Comprehensive Strategies to Address Our Water Challenges By Huminston, Glenda
  13. The structure of steel exports: Changes in specialisation and the role of innovation By Anthony de Carvalho; Naoki Sekiguchi
  14. Beyond Competitive Devaluations: The Monetary Dimensions of Comparative Advantage By Bergin, Paul R; Corsetti, Giancarlo
  15. Determinants of Entrepreneurial Intention By Burney, Shaheer; Davis, Alison F.
  16. Estimating the Role of Technology in Converting to Organic Dairy Production By Skolrud, Tristan D.
  17. The Balanced Scorecard as a Management Tool for Arable Farming By Paustian, Margit; Wellner, Marie; Theuvsen, Ludwig
  18. Geographical Indications, Upgrading and the Competitiveness of Small-scale Producers: A Case Study of the Makó Onion PDO By Gorton, Matthew; Török, Aron; Tregear, Angela
  19. Smart Agriculture in the 21st Century: A Discussion on Innovation, Biotechnology, and Big Data By Cougot, Dale
  20. Cognitive Biases in the Assimilation of Scientific Information on Global Warming and Genetically Modified Food By McFadden, Brandon R.; Lusk, Jayson
  21. Demand Spillovers of Food Recalls in Differentiated Product Markets By Rudi, Jeta; Çakir, Metin
  22. Multinational Pricing: Lessons from IKEA By Anthony Landry

  1. By: Gicheva, Dora (University of North Carolina at Greensboro, Department of Economics); Link, Albert (University of North Carolina at Greensboro, Department of Economics)
    Abstract: This paper assesses the R&D performance of nascent and established technology-based small firms that receive a Phase II R&D award from the U.S. Small Business Innovation Research (SBIR) program. Our empirical analysis is based on a two-stage selection probit model, which is used to estimate the probability of commercialization conditional on the Phase II project having not failed. Our model predicts, and our analysis confirms, that nascent firms are more likely to fail in their SBIR-supported R&D endeavors. Further, we find that nascent firms that do not fail have a higher probability of commercializing their developed technology.
    Keywords: entrepreneurship; R&D; commercialization; innovation; SBIR program
    JEL: L26 O31 O33 O38
    Date: 2015–07–21
  2. By: Slavo Radosevic (University College London); Katerina Ciampi Stancova (European Commission – JRC - IPTS)
    Abstract: The paper explores the issues of trans-regional and transnational collaboration in the context of smart specialisation in regions with the less developed research and development and innovation (R&D&I) systems, identified as the 13 countries (EU-13) that joined the European Union (EU) after 2004. The paper proposes a systematic methodological approach to trans-regional and transnational cooperation and discusses how this can be utilized to build innovation capacities and enhance innovation potential in selected regions. Specifically, paper addresses following questions: what is conceptual approach to trans-regional cooperation within the context of Smart Specialisation? What is the role of regional governments/national authorities? How regional authorities can deal with analysis of trans-regional opportunities, potential competitors and collaborators? Based on the analysis, what steps can policy-makers take to improve trans-regional cooperation? Our discussion is grounded in the key ’stylized facts’ related to EU-13 R&D&I activities, and the complex link between innovation and internationalization. Innovation systems in the EU-13 are fragmented and based on largely public R&D systems and innovation systems based on predominantly production oriented foreign direct investment (FDI). This structural weakness calls for stronger support for innovation oriented activities and for the integration of global value chains (GVCs) and FDI into local innovation systems. We distinguish and discuss the main obstacles to the internationalization of smart specialisation and discuss ways to overcome them. We highlight the policy action areas related to providing support for technology upgrading in relation to the internationalization of smart specialisation. The Paper concludes by offering a discussion of policies to improve trans-regional cooperation in less developed R&I systems in short and long term.
    Keywords: Inter-regional collaboration, smart specialisation, innovation policy, transnational collaboration, (global) value chains, regional development
    Date: 2015–07
  3. By: Roberto Fontana; Diana Moriniello; Andrea Vezzulli
    Abstract: We study how technological leadership affects persistence in product innovation. Relying upon a database of 1818 products marketed between 1990 and 1999 by 265 firms active in three markets of the Local Area Network (LAN) industry we first construct a measure of technological leadership and then relate this measure to persistence in innovation. We find that leaders are systematically more persistent innovators than laggards. We also find that leaders in one market can also systematically innovate in a related and adjacent market. Finally, we find a positive correlation between prior patenting activity and persistence in product innovation.
    Date: 2015–07
  4. By: Eduardo Morales (Princeton University); Kamran Bilir (University of Wisconsin - Madison)
    Abstract: What is the private return to innovation? When firms operate production sites in multiple countries, improvements developed at one site may be shared across others for efficiency gain. We develop a dynamic model that explicitly accounts for such transfer within the firm, and apply it to measure innovation returns for a comprehensive panel of U.S. multinationals during 1989--2009. We find that the data, which include detailed measures of affiliate production and innovation, are consistent with innovation generating returns at firm locations beyond the innovating site. Accounting for cross-plant effects of innovation, our estimates indicate the average firm realizes between 10 and 30 percent of the return to its U.S. parent R&D abroad, suggesting single-plant estimates may understate firms' gain from innovation.
    Date: 2015
  5. By: Joachim Wagner (Leuphana University Lueneburg, Germany)
    Abstract: Crinò and Epifani (2012) report and discuss two empirical regularities they find in a representative sample of Italian manufacturing firms. First, there is a negative correlation between firms’ productivity and their export share to low-income destinations. Second, there is a negative correlation between firms’ innovation activity and their export share to low-income destinations. This note uses recently available comparable high quality firm level data for six European countries (including Italy) and similarly specified empirical models in an attempt to replicate these results. Replication failed completely. The link found between the share of exports to lowincome countries and either productivity or R&D intensity is never in line with the results from Crinò and Epifani (2012).
    Keywords: Exports, low-income destinations, productivity, innovation, EFIGE data
    JEL: F14
    Date: 2015–07
  6. By: Xiao, Zhihua
    Abstract: Agricultural R&D investment is becoming an increasingly important policy issue as food prices push upwards and food security problems emerge. An important source of agricultural R&D funding is from producer check-offs, which are increasingly being used to fund applied agricultural research. Existing studies of producer-funded agricultural R&D indicate that there are high private and social rates of return to agricultural R&D investment by farmers, and thus that farmers are under investing in R&D. An important reason for underinvestment of producer-funded R&D is the spillovers across levy programs – the research benefits of one particular crop can flow to other crops via spillovers. The spillovers across levy programs are particularly important in jurisdictions, such as Canada, where agricultural R&D activity has been organized on a commodity-by-commodity basis. This study developed a theoretical model to capture farmers R&D investment decisions by explicitly specifying spillovers across levy programs.
    Keywords: Innovation, producer organizations, agricultural R&D, spillovers, Research and Development/Tech Change/Emerging Technologies,
    Date: 2015
  7. By: Chen, Hung-Ju
    Abstract: This paper analyzes the effects of monetary policy on innovation and imitation in a North-South product-cycle model with foreign direct investment (FDI) and separate cash-in-advance (CIA) constraints on innovative R&D, adaptive R&D and imitative R&D. We find that if the CIA constraint is applied to innovative R&D, then an increase in the Northern nominal interest will raise the rate of Northern innovation and the extent of FDI while reducing the rate of Southern imitation and the North-South wage gap. Regarding the effects of the Southern monetary policy, the object that is liquidity-constrained plays a significant role. If adaptive (imitative) R&D is subject to the CIA constraint, then an increase in the Southern nominal interest rate will raise (reduce) the rate of Northern innovation and the extent of FDI while reducing (raising) the rate of Southern imitation. We also examine the responses of social welfare for Northern and Southern consumers to monetary policy.
    Keywords: CIA constraint; FDI; Imitation; Monetary policy; R&D.
    JEL: F12 F23 O31
    Date: 2015–04
  8. By: Lee, Yoo Hwan; Graff, Gregory D.
    Abstract: Selected Poster (#7640): 2015 AAEA & WAEA Joint Meeting at San Francisco July 26-28th.
    Keywords: Knowledge production function, University tech transfer, Invention & innovation, Local economies., Community/Rural/Urban Development, Industrial Organization, Production Economics, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies, Research Methods/ Statistical Methods, O13, O31, O33, O34,
    Date: 2015
  9. By: Cheptea, Angela; Emlinger, Charlotte; Latouche, Karine
    Abstract: In this paper, 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 firm from countries with internationalized retail companies benefit more from this process than firms from other countries. The underlying assumption of this paper is that the main benefits are grasped by the retailers' domestic suppliers. In other words, firms that sell their products under retailers' brands benefit more from the overseas expansion of retailers than other firms. We employ French firm-level data to evaluate the effect for the two types of firms. We identify retailers' suppliers using the certification of French agri-food firms with the private IFS standard, granting them the right to sell their products under a retailer's brand. Our empirical objective is to estimate whether firms with IFS certification have better export performance on markets where French retail companies have established outlets. We find that certified French firms export more than non-certified firms to markets where IFS retailers established outlets (mainly outside Europe). The difference is statistically significant and robust to the use of firm- and country-specific fixed effects. Results are similar for the extensive and the intensive margin of exports.
    Keywords: Multinational retailers, Firm-level exports, Private standards., International Relations/Trade, F12, F14, F23.,
    Date: 2015
  10. By: Lambrecht, Evelien; Kühne, Bianka; Gellynck, Xavier
    Abstract: Innovation has been identified as a critical asset for SMEs to survive (Hitt et al., 2001; Lee et al., 2001). However, SMEs that need to improve their innovation process often lack the essential resources to innovate when relying solely on their in-house activities (Batterink et al., 2010). A large body of literature therefore highlights the role of external partnerships, or networks (Lazzarini et al., 2001; Pittaway et al., 2004; Sawhney et al., 2006). Despite the increasing number of studies focusing on the relationship between networking and innovation, there is still considerable ambiguity and debate within literature regarding appropriate network characteristics for successful innovations (Nieto and Santamaria, 2007; Pittaway et al., 2004). Furthermore, the existing studies focus mostly on high tech companies (Edquist 2006, van Galen 2008). The objective of our study is to gain insight into the network characteristics critical for successful innovations within the agricultural sector in Flanders. The study is based on interviews and focus group discussions with farmers and network coordinators active in Flanders. In total, 109 respondents were consulted. This research is based on four innovation characteristics which seem crucial for each innovation (Kanter, 1988). For each of these innovation characteristics, we investigated how networks could contribute, via their network characteristics. The results showed that networks serves as a net for knowledge about e.g. new technologies, or changing legislation in order that farmers are faster aware of developments. When farmers have multiple contacts, they have a higher chance to discover new things. Thereby, it is important that knowledge providers are part of the network and connected with the different actors, and not only provide their information to the farmers as an external actor. Also the face-to-face communication within a network is an essential issue. Furthermore, coalition can play a crucial role for some innovations, as a lot of farmers are not able to implement their idea because for example the retailer or research institute is not supportive or interested. If the farmers set up a self-initiated coalition, it can be easier to initiate the innovative idea. Fourth, it is important that individual actors from the agricultural system revisit their actual role. Successful innovation processes often originate in situations where creativity is not limited within one unit. Based on the findings, recommendations for farmers as well as network coordinators are formulated to increase the innovation capacity.
    Keywords: Innovation, Networks, Success factors, Agriculture, Flanders, Agribusiness,
    Date: 2015–05
  11. By: Barrenechea, Martin
    Abstract: In this work we extend the model developed in (Aoki and Hu, 2003) in order to cover cost reduction innovations, instead of product innovations originally developed on that article. The results show that smaller innovations are more licensable. Regarding the time factors, infringers like faster innovation and patentees prefer bigger innovations and longer imitation periods. Under some suitable situations, litigation time could support innovation and discourage infringement. However the patent life has ambiguous effects and may promote infringement.
    Keywords: Patents, innovation Policy, Applied Game Theory
    JEL: L0
    Date: 2015
  12. By: Huminston, Glenda
    Keywords: Agricultural and Food Policy, Risk and Uncertainty,
    Date: 2015–02–19
  13. By: Anthony de Carvalho; Naoki Sekiguchi
    Abstract: This paper examines changes in the steel-related export structure of the ten largest steelmaking economies between 2004 and 2014, in terms of the steel products exported and the market destination for those exports. To shed light on how exporters’ patterns of specialisation have changed in the period since 2004, indices of “Revealed Comparative Advantage” (RCA) are developed for a number of low, medium and high value-added steel products, indicating that export specialisation patterns may be changing noticeably as some steel producers in emerging economies move up the value chain and begin exporting more sophisticated steel products. The paper also assesses the role of innovation, as measured by patents, in determining the export structure of countries, and finds a positive correlation between innovation activity and export specialisation in higher value-added steel segments.
    Keywords: trade, patents, comparative advantage
    JEL: F14 L6 O34
    Date: 2015–07–29
  14. By: Bergin, Paul R; Corsetti, Giancarlo
    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: firm entry; monetary policy; optimal tariff; production location externality
    JEL: F41
    Date: 2015–07
  15. By: Burney, Shaheer; Davis, Alison F.
    Abstract: Abstract: This poster examines determinants of entrepreneurial intention using a novel dataset representing over 1,400 households generated by the Kentucky Entrepreneurship Survey. Whereas the literature discusses the potential role of entrepreneurial self-efficacy (ESE) and community entrepreneurial climate (CEC) in explaining entrepreneurship, this study provides an empirical model which tests these relationships by including in the econometric analysis both individual and environmental factors, which are quantified using a scale based on each respondent’s ranking of questions regarding their perception of ESE and CEC. Marginal effects from a probit regression suggest that innovativeness and previous experience are significant predictors of entrepreneurial intention in rural and urban areas, among other findings. The results have implications for entrepreneurship and small business development programming in Kentucky and beyond.
    Keywords: Rural, Entrepreneur, Community, Community/Rural/Urban Development, Research Methods/ Statistical Methods,
    Date: 2015
  16. By: Skolrud, Tristan D.
    Keywords: Industrial Organization, Livestock Production/Industries, Production Economics, Productivity Analysis,
    Date: 2015
  17. By: Paustian, Margit; Wellner, Marie; Theuvsen, Ludwig
    Abstract: Management requirements for crop farming are high and will rise in the future. Arable farms are challenged by volatile markets, growing administrative burdens, increasing operating costs and growing competition for land. Management skills have become much more important for farmers in recent years and this trend will continue in the future. There are numerous instruments like accounting software or crop field cards integrated in daily management practice, but there is a deficiency of a fully integrated management system to give an overview of all areas of the farming business. This gap can be closed by the management tool Balanced Scorecard (BSC) that provides an overview of all production and management activities on a farm. Therefore, with the aim to trans-fer the BSC concept to crop farming, German farmers and agricultural advisors were surveyed to get insights into the success factors and key performance indicators in the four BSC perspectives they consider most rele-vant for the operational success of arable farms. By the use of a cluster analysis, three different farm types were identified according to their visions and strategies. For the three farm types the key performance indica-tors that the respondents considered most relevant for farm performance were figured out. Implementation of the BSC to crop farming can result in a big benefit for management practice. The BSC focuses vision and long-term strategy with the main goal to ensure consistency of the farm and increase farm performance.
    Keywords: Balanced Scorecard, performance measurement, cluster analysis, crop farming, Agribusiness,
    Date: 2015–05
  18. By: Gorton, Matthew; Török, Aron; Tregear, Angela
    Keywords: TTIP, GIs, IPRs, Trade, Agribusiness, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, Industrial Organization, Institutional and Behavioral Economics, International Relations/Trade, Political Economy, Public Economics,
    Date: 2015–04
  19. By: Cougot, Dale
    Keywords: Agribusiness, Agricultural and Food Policy, International Development, International Relations/Trade,
    Date: 2015–02–20
  20. By: McFadden, Brandon R.; Lusk, Jayson
    Abstract: The ability of scientific knowledge to contribute to public debate about societal risks depends on how the public assimilates information resulting from the scientific community. Bayesian decision theory assumes that people update a belief by allocating weights to a prior belief and new information to form a posterior belief. The purpose of this study was to determine the effects of prior beliefs on assimilation of scientific information and test several hypotheses about the manner in which people process scientific information on genetically modified food and global warming. Results indicated that assimilation of information is dependent on prior beliefs and that the failure to update beliefs in a Bayesian fashion is a result of several factors including: misinterpreting information, illusionary correlations, selectively scrutinizing information, information-processing problems, knowledge, political affiliation, and cognitive function.
    Keywords: Bayesian updating, beliefs, climate change, biotechnology, Agricultural and Food Policy, Consumer/Household Economics, Environmental Economics and Policy, Food Consumption/Nutrition/Food Safety, Research and Development/Tech Change/Emerging Technologies, D83, Q16, Q54,
    Date: 2014
  21. By: Rudi, Jeta; Çakir, Metin
    Keywords: Agribusiness, Agricultural and Food Policy, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety,
    Date: 2015–05–26
  22. By: Anthony Landry (University of Pennsylvania)
    Abstract: Recent research emphasizes the central role played by large firms with multiple products, both within country (Midrigan (2011), Bernard et al. (2011)) and in dominating international trade (Eaton et al. (2012)). In this paper, we shed light on the way in which a large multinational retailer operates in a setting characterized by multiple products distributed and prices in many countries. Using a novel dataset of products advertized in IKEA catalogs from seven countries between 2002 and 2015, we find that 1. Price spell lengths differ considerably across countries, 2. Price adjustments are not synchronized across countries, and 3. Price adjustment only slightly reduces law-of-one-price deviations. Then, we develop and test a partial equilibrium model of multinational pricing with variable markups. Using actual exchange rate data to simulate the model, we find that the calibration that works best implies persistent marginal costs and relatively stable markups: The model fails to replicate finding #1 and #2 if marginal costs are more volatile than exchange rates or if markups are too volatile.
    Date: 2015

This nep-cse issue is ©2015 by João José de Matos Ferreira. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.