nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2015‒09‒05
twenty papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Commercial success of innovation: the roles of R&D cooperation and firm age By Koski, Heli
  2. Types of knowledge and diversity of business-academia collaborations: Implications for measurement and policy By Havas, Attila
  3. Innovation, investor sentiment, and firm-level experimentation By Aramonte, Sirio
  4. The role of regional sectoral specialization on the geography of innovation networks: a comparison between firms located in regions in developed and emerging economies By Plechero, Monica; Chaminade , Cristina
  5. ​ Intangible Investment and Technical Efficiency: The Case of Software-Intensive Manufacturing Firms in Turkey By Derya Findik; Aysit Tansel
  6. Did the Reduction of ICT Investment Due to the 2008 Economic Crisis Affect the Innovation Performance of Firms? By Spyros Arvanitis; Euripidis Loukis
  7. The effect of public support on R&D employment in small firms By V. DORTET-BERNADET; M. SICSIC
  8. Are There Trade-offs between the Existing and New Foreign Activities? By ITO Yukiko
  9. Multiregional Firms and Region Switching in the US Manufacturing Sector By Antoine Gervais
  10. Are large firms born or made ? evidence from developing countries By Ayyagari,Meghana; Demirguc-Kunt,Asli; Maksimovic,Vojislav
  11. R&D policies in France: New evidence from a NUTS3 spatial analysis By Montmartin, B.; Herrera, M.; Massard, N.
  12. Startups, Financing and Geography– Findings from a survey By Bjuggren, Per-Olof; Elmoznino Laufer, Michel
  13. Business Practices in Small Firms in Developing Countries By David McKenzie; Christopher Woodruff
  14. Business practices in small firms in developing countries By Mckenzie,David J.; Woodruff,Christopher M.
  15. Ritualization and the Process of Knowledge Transfer By Mira Slavova; Anca Metiu
  16. Measuring Competitiveness of Agro-Food Industries: The Swiss Case By OECD
  17. Family business: management effort and firm performance By Oriana Bandiera; Andrea Prat; Raffaella Sadun
  18. Innovation-related Public Procurement as a Demand-oriented Innovation Policy Instrument By Edquist , Charles
  19. Collaborate to act, collaborate to learn: the case of a primary school accreditation process as an international school in Quebec By Michel Boyer; Lise Corriveau; Brigitte Gagnon; Chantal Majeau; Serge Striganuk
  20. Structural policies and productivity: Evidence from Portuguese firms By Jens Arnold; Natália Barbosa

  1. By: Koski, Heli
    Abstract: Data comprising 1790 Finnish firms and covering the years 2006-2012 suggest that turnover from innovative sales per employee were higher for both young firms - particularly for young innovative companies (or YICs) - and older incumbents that had broad innovation collaboration involving vertical, horizontal and institutional partners. Younger firms with simultaneous horizontal and vertical innovation collaboration tend to also generate higher turnover due new products and services, while this type of collaboration did not appear statistically significant in innovation production function for older incumbents. Our data further indicate that not only the relationship between inventor age and patentable inventions at the inventor level is inversely u-shaped – as previous studies report - but also the relationship between employee age structure and the generation of commercially successful products and services at the firm level follows the same pattern. High education of employees distinguished particularly the top performers from others at the highest 0.9 quantile of turnover from innovative sales per employee. Furthermore, firms with relatively highly educated employees and broad innovation collaboration had clearly higher returns from innovative sales per employee than other firms, while none of the innovation collaboration types was statistically significantly related to the innovation output of firms with relatively low education of employees.
    Keywords: innovation performance, R&D cooperation, human capital
    JEL: L2 O31 O32
    Date: 2015–08–14
  2. By: Havas, Attila
    Abstract: Analysis of business-academia (B-A) collaborations typically relies on a single method, addressing one or two major research questions. In contrast, this article tackles both R&D and innovation collaborations among businesses and academia relying on information using multiple methods and multiple sources of information to offer insights on dynamics and qualitative features of these co-operation processes. Interviews conducted in Hungary – in line with other research findings – have also confirmed that (i) motivations, incentives for, and norms of, conducting R&D and innovation activities diametrically differ in business and academia; and (ii) different types of firms have different needs. Thus, more refined policy measures are to be devised to promote B-A collaboration more effectively, better tuned to the needs of the actors, based on a relevant taxonomy of their co-operations. Evaluation criteria for academics should also be revised to remove some major obstacles, currently blocking more fruitful B-A co-operation. Several findings can be generalised beyond the cases considered, suggesting the need for a deeper understanding of the role of intermediaries in the Triple Helix and for broader comparative analysis of innovation policies. The research design to analyse B-A collaborations always needs to be tailored to the innovation system in question, just as the concomitant policy recommendations.
    Keywords: Types of knowledge; Diversity in business-academia collaboration; Multiple methods to map business-academia collaborations; STI policy implications
    JEL: I23 I28 O33 O38 O52
    Date: 2014–12–20
  3. By: Aramonte, Sirio (Board of Governors of the Federal Reserve System (U.S.))
    Abstract: Due to frictions like informational externalities, firms invest too little in learning the productivity of newly available technologies through small-scale experimentation. I study the effect of investor sentiment on the relation between technological innovation and future firm-level R&D expenses, which include the resources used for small-scale experimentation. I find that rapidly improving investor sentiment strengthens the effect of technological innovation on one-year-ahead R&D expenses, and that the effect is more pronounced for high-tech firms with tighter financing constraints. The results are not driven by sentiment proxying for technological innovation or by sentiment and R&D expenses being jointly determined. The evidence is consistent with the hypothesis that sentiment counteracts frictions in the process of technology diffusion.
    Keywords: Investor sentiment; R&D; Technological innovation
    JEL: G02 G31 O32 O33 O40
    Date: 2015–08–12
  4. By: Plechero, Monica (DEAMS – University of Trieste, Italy & CIRCLE, Lund University); Chaminade , Cristina (CIRCLE, Lund University)
    Abstract: Recently, there has been a rise of contributions in innovation and economic geography studies on how firms from specific industries and regional innovation systems (RISs) rely on international networks to innovate. So far, the focus has been on single cases, firms located in well-known RISs and international linkages, without really distinguishing those with geographically close partners from those with partners from distant locations. Using primary firm-level data, this article compares the patterns of collaboration for innovation in a selection of Swedish, Norwegian, Chinese and Indian regions with an ICT cluster specialization. The results show that firms in RISs in emerging economies tend to link more to innovation networks with a real global character, particularly in relation to new-to-the-world innovation. It also shows that firms in the most successful RISs in ICT clusters rely more than others on networks with organizations in close proximity.
    Keywords: Globalization; innovation networks; developed economies; emerging economies; China; India; Sweden; Norway; regional innovation system; cluster specialization; ICT; new-to-the-world innovation
    JEL: O18 O33
    Date: 2015–08–16
  5. By: Derya Findik (Science and Technology Policy Studies Program, Middle East Technical University 06800 Ankara, Turkey); Aysit Tansel (Cornell University, Ithaca, USA & Middle East Technical University, Ankara, Turkey)
    Abstract: This chapter analyzes the effect of intangible investment on firm efficiency with an emphasis on its software component. Stochastic production frontier approach is used to simultaneously estimate the production function and the determinants of technical efficiency in the software intensive manufacturing firms in Turkey for the period 2003-2007. Firms are classified based on the technology group. High technology and low technology firms are estimated separately in order to reveal differentials in their firm efficiency. The results show that the effect of software investment on firm efficiency is larger in high technology firms which operate in areas such as chemicals, electricity, and machinery as compared to that of the low technology firms which operate in areas such as textiles, food, paper, and unclassified manufacturing. Further, among the high technology firms, the effect of the software investment is smaller than the effect of research and development personnel expenditure. This result shows that the presence of R&D personnel is more important than the software investment for software intensive manufacturing firms in Turkey.
    Date: 2015
  6. By: Spyros Arvanitis (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Euripidis Loukis (University of Aegean, Samos, Greece)
    Abstract: In this paper we investigate empirically, first, the characteristics of the firms that reduced their ICT investment due to the 2008 crisis, particularly the firms’ ICT-related characteristics in terms of ICT budget, skills and applications used. The analysis of the ICT characteristics that may influence the likelihood of having reduced ICT investment as a consequence of the crisis is primarily explorative, thus driven by available data and economic intuition. The second research question we examine empirically refers to the possibility that an economic crisis could affect innovation performance through the ICT investment channel. In connection with this, it is also interesting to analyze the ICT characteristics that are associated with ICT-enabled innovation performance. This is the third research question of this paper. Our study is based on firm data from the glass/ceramics/cement industry in six European countries. We find that ICT-related crisis vulnerability correlates positively with decreasing ICT budgets (pro-cyclical investment behaviour), the existence of skill deficits in ICT, the awareness of and interest in novel ICT applications that presumably request much additional ICT investment, the exposure to strong price competition and the strong presence in international markets, in which activities have significantly decreased due to the crisis. Further, statistically significant negative relationship between ICT-enabled product innovation and crisis vulnerability (pro-cyclical behaviour) is found only for new products or services that contain ICT components, and are therefore directly affected by crisis-related decreasing product demand. Employment of specialized ICT personnel, ICT outsourcing (only for process innovation), competition (only for product innovation), and the use of some ICT applications specific to the kind of innovation pursued are ICT characteristics that positively correlate with ICT-enabled innovation.
    Keywords: economic crisis, information and communication technologies (ICT), innovation, ICT-enabled innovation
    JEL: O31
    Date: 2015–08
  7. By: V. DORTET-BERNADET (Insee); M. SICSIC (Insee)
    Abstract: Between 2003 and 2010, total R&D public support (tax incentives and subsidies) targeted at SMEs increased by more than 300%: in 2010 it amounted to almost 2 billion euros, of which 26% (nearly 500 million euros) were perceived by very small businesses (fewer than 10 employees). This sharp increase is mainly explained by two reforms of the R&D tax credit (in 2004 and 2008) and a new public program dedicated to young innovative enterprises launched in 2004. An aggregate analysis shows that the share of R&D personnel financed by public funding has been multiplied by four for very small businesses, from 14% in 2003 to 49% in 2010. This change was accompanied by a decline of privately funded R&D personnel employed by very small businesses (and other SMEs to a lesser extent). An econometric analysis of a panel of small firms active in R&D intensive sectors tends to confirm this agregate finding at the firm level: R&D public support appears to have a positive impact on highly qualified and R&D employment but the impact on the associated labor costs appears to be significantly lower than the increase of the public financing, particularly from 2008.
    Keywords: R&D tax credit, subsidies, public policy evaluation, difference-in-differences
    JEL: O38 H25 C23
    Date: 2015
  8. By: ITO Yukiko
    Abstract: For each multinational firm, designing a new foreign activity is a sequential choice. In some cases, new foreign businesses complement existing entities. In other cases, new foreign businesses substitute for old entities. These intra-firm changes in allocations of corporate resources are not deeply considered in the literature. In our model, a multinational enterprise (MNE) determines a new location, if any, either as an addition to its existing ones, or as a replacement of an old one. The location is considered under hub-spoke spatial relations. Firms maximize the worldwide corporate profit, taking into account both trade costs and fixed costs. In the empirical analysis, we use a panel data on Japanese-owned foreign affiliates and their parents (Basic Survey of Overseas Business Activities from 1996 to 2012, by METI), supplemented by the Survey of Trends in Business Activities of Foreign Affiliates of the same periods. We measure some key factors to an event of entry and exit, given the network of existing foreign locations. We compare our results with Yeaple (2008), which analyzes "hub and spokes" (central and peripheral locations) of intra-firm networks for U.S. manufacturing. We show some differences between the U.S. MNEs and Japanese MNEs. We also discuss the difference in trade-offs of intra-firm network between manufacturing and the service sectors.
    Date: 2015–08
  9. By: Antoine Gervais
    Abstract: This paper uses data on US manufacturing firms to study a new extensive margin, the reallocation of resources that takes place within surviving firms as they open and close establishments in different regions. To motivate the empirical analysis, I extend existing models of industry dynamics to include production-location decisions within firms. The empirical results provide support for the mechanisms emphasized by the theoretical model. In the data, only about 3 percent of firms make the same product in more than one region, but these multiregional firms are more productive on average compared to single-region firms, and they account for about two-thirds of output. The results also show that "region-switching" is pervasive among multiregional firms, is correlated with changes in firm characteristics, and leads to a more efficient allocation of resources within firms.
    Keywords: Multiregional firms, firm heterogeneity, industry dynamics, monopolistic competition, proximity-concentration tradeoff.
    JEL: L2
    Date: 2015–01
  10. By: Ayyagari,Meghana; Demirguc-Kunt,Asli; Maksimovic,Vojislav
    Abstract: This paper uses survey data from 120 developing countries to compare the role of institutions with firm characteristics at the time of creation of the firm in explaining the size, growth, and productivity of firms over their lifecycle. The study finds that firm-level characteristics have comparable, and sometimes even larger, power than institutional factors in predicting size and growth, but not productivity. In particular, size at birth plays a key role in predicting variation in firm size and growth since birth over the firm lifecycle, whereas country factors dominate in predicting variation in labor productivity over the firm lifecycle. The study also finds that older firms are larger, partly because of the selection of more efficient firms. The findings point to the importance of initial founding conditions in explaining variations in size and growth over the firm lifecycle across countries.
    Keywords: Labor Markets,Science Education,Microfinance,Labor Policies,Scientific Research&Science Parks
    Date: 2015–08–27
  11. By: Montmartin, B.; Herrera, M.; Massard, N.
    Abstract: The French policy-mix for R&D and innovation has deeply evolved in recent years and is nowadays, one of the most generous and market-friendly system in the world. This paper investigates the (evolutive) effects of this policy-mix by using a unique database containing information on the amount of R&D tax credit, regional, national and European subsidies received by firms in all French metropolitan NUTS3 regions over the period 2001-2011. By estimating a Spatial Durbin model with regimes and fixed effects, we provide new evidence on the efficiency of the French policy-mix. First, a yardstick competition between NUTS3 regions for R&D investment driven by negative spatial spillovers is found. Second, it seems that national subsidies are the only instrument able to generate a significant leverage effect on privately-financed R&D. Third, due to the context of spatial competition, the three other policies studied (Tax Credit, Regional and European subsidies) do not generate significant leverage or crowding-out effect. Fourth, we highlight the presence of structural breaks in our data that correspond to the last two important reforms of the French tax credit. Consequently, the effect of R&D policies and especially R&D tax credit are likely to change over time and influence ex-post evaluation results.
    JEL: H25 O31
    Date: 2015
  12. By: Bjuggren, Per-Olof (The Ratio institute and Jönköping School of Economics.); Elmoznino Laufer, Michel (The Ratio institute)
    Abstract: This paper investigates the importance of bank loans for the financing of startups and how location matters for expansion plans and financing. We will show that there has not been sufficient attention paid to legal form when distinguishing between the external and internal financing of startups. The focus will be on the corporate form of business and the implications of this legal form for what can be considered external financing. In the analysis of how location matters, we will draw upon the literature about agglomeration and knowledge spillovers. The two main questions posed are: How does the corporate form matter for what can be considered the external financing of startups, and how does location matter for expansion plans and financing? To provide empirical answers to these questions, both survey data and registry data have been used. The survey data are from a questionnaire sent out to startups listed in the files of the Swedish Jobs and Society Foundation. We looked at corporations founded during the period 2009-2013 that family firms in terms of ownership structure. The survey indicated that bank loans are rare and had to be backed up with personal assets used as collateral and personal guarantees of repayment for the majority of the firms who had used bank loans. Essentially, the entrepreneur personally takes most of the business risk. Bank loans have, to a large extent, the character of internal financing. Combining registry data with the qualitative data from the survey, we used regression analysis to further study differences due to location. The regression analysis showed that the degree of urbanization matters for plans for expansion. In the three most urbanized areas, the startup firms had plans to expand their business both at home and abroad. In the other urbanized areas, the focus was on expansion at home.
    Keywords: startups; bank loans; asymmetric information; the corporate form of business; agglomeration; functional region
    JEL: G21 G32 L26 M13 R12 R58
    Date: 2015–06–12
  13. By: David McKenzie; Christopher Woodruff
    Abstract: Management has a large effect on the productivity of large firms. But does management matter in micro and small firms, where the majority of the labor force in developing countries works? We develop 26 questions that measure business practices in marketing, stock-keeping, record-keeping, and financial planning. These questions have been administered in surveys in Bangladesh, Chile, Ghana, Kenya, Mexico, Nigeria and Sri Lanka. We show that variation in business practices explains as much of the variation in outcomes – sales, profits and labor productivity and TFP – in microenterprises as in larger enterprises. Panel data from three countries indicate that better business practices predict higher survival rates and faster sales growth. The effect of business practices is robust to including numerous measures of the owner’s human capital. We find that owners with higher human capital, children of entrepreneurs, and firms with employees employ better business practices. Competition has less robust effects.
    JEL: L26 M20 O12
    Date: 2015–08
  14. By: Mckenzie,David J.; Woodruff,Christopher M.
    Abstract: Management has a large effect on the productivity of large firms. But does management matter in micro and small firms, where the majority of the labor force in developing countries works? This study developed 26 questions that measure business practices in marketing, stock-keeping, record-keeping, and financial planning. These questions have been administered in surveys in Bangladesh, Chile, Ghana, Kenya, Mexico, Nigeria, and Sri Lanka. This paper shows that variation in business practices explains as much of the variation in outcomes ? sales, profits, and labor productivity and total factor productivity ? in microenterprises as in larger enterprises. Panel data from three countries indicate that better business practices predict higher survival rates and faster sales growth. The effect of business practices is robust to including many measures of the owner?s human capital. The analysis finds that owners with higher human capital, children of entrepreneurs, and firms with employees employ better business practices. Competition has less robust effects.
    Keywords: E-Business,Business Environment,Competitiveness and Competition Policy,Emerging Markets,Business in Development
    Date: 2015–08–27
  15. By: Mira Slavova (Management Department - Essec Business School, Gordon Institute of Business Science - University of Pretoria); Anca Metiu (Management Department - Essec Business School)
    Abstract: We analyze interactions among members of rural communities in Ghana and agriculture development specialists. We find that these participants in the knowledge transfer process are separated by deep knowledge boundaries, as well as by diverging worldviews (one centered on community relations, the other on market relationships). In this context, knowledge transfer is enabled through ritualized interactions and in particular by the use of two types of ritualization strategies: marking strategies (visiting dignitaries and events, praying, gift-giving) and recurring strategies (performing, fabletelling, affirming community values). These findings show that ritualization – understood as a way of acting that distinguishes particular situations from other, usually more mundane, activities – allows encounters between opposing orders and thus enables knowledge transfer. We suggest that this is the case because ritualization speaks to people’s aspirations to change; it is morally redemptive; and it bridges across groups. Ritualized interactions facilitate knowledge transfer by creating a context for learning during mundane interactions, by fostering mechanisms for peer-learning and teaching and by triggering reverse learning on behalf of knowledge workers from rural communities. Our study contributes to the literature on organizational rituals, learning in strong culture contexts, and economic sociology.
    Date: 2015–07
  16. By: OECD
    Abstract: This paper presents an assessment of the competiveness performance of Swiss food industries. The approach taken here is to measure revealed performance, relying on indicators such as market performance, trade success and revealed comparative advantage indicators. The analysis of competitiveness examines the ex post performance of the industry in Switzerland compared to the same industry in benchmark countries in the European Union.
    Keywords: Switzerland, agro-food industry
    JEL: L6 L66
    Date: 2015–08
  17. By: Oriana Bandiera; Andrea Prat; Raffaella Sadun
    Abstract: Might familyowned, familyrun firms be a serious obstacle to productivity growth in Europe? Oriana Bandiera, Andrea Prat and Raffaella Sadun have collected time use data on over 1,000 chief executive officers to explore differences in the hours worked by family and professional managers - and the impact on their firms' performance.
    Keywords: CEO, Time, Family firms, Competition, Productivity
    JEL: M12 L2 D24
    Date: 2015–07
  18. By: Edquist , Charles (CIRCLE, Lund University)
    Abstract: The purpose in this paper is to show how public procurement can be a driver of innovation. The purpose and point of departure when using public procurement as an instrument of innovation policy is always to solve societal and environmental problems, to satisfy human needs or to meet global challenges. The paper is aimed at everyone who is involved or interested in public procurement, and especially in how this can promote innovation processes. Historically innovation policy has been strongly dominated by supply-push oriented instruments (measures). This linear view is actually still dominating in practical innovation policy pursued, but no longer so much in policy analysis – and certainly not among innovation researchers. In other words, the linear view is completely rejected in innovation research, but still dominates innovation policy. Innovation policy is all actions by public organizations that influence innovation processes. The choice of innovation policy instruments is a very important part of the formulation of an innovation policy. There are potentially scores, or perhaps hundreds, of innovation policy instruments to choose from. A combination of two or more instruments must often be used to solve each specific problem. They are thus combined into an “instrument mix”. Demand-based innovation policy instruments are those that influence innovation processes from the demand side. In this paper, we will very much concentrate on one kind of demand-side innovation policy instrument: innovation-related public procurement. The reason for choosing innovation-related public procurement in particular, is that it is potentially by far the most powerful kind of demand-side innovation policy instrument available. It might even potentially be the most powerful instrument among all innovation policy instruments. Public procurement of different types may affect both the speed and path of innovation development.
    Keywords: Innovation policy; innovation system; demand-side innovation policy; innovation policy instruments
    JEL: O25 O30 O31 O32 O33 O38 O49
    Date: 2015–08–16
  19. By: Michel Boyer (Université de Sherbrooke); Lise Corriveau (Université de Sherbrooke); Brigitte Gagnon (Université de Sherbrooke); Chantal Majeau (Université de Sherbrooke); Serge Striganuk (Université de Sherbrooke)
    Abstract: This paper aims to describe how, in the process of accreditation as an international primary school, the practices of teachers, management and an educational consultant, invited to collaborate to act and collaborate to learn, evolve. In this process, each cycle team of teachers is committed to develop, pilot and evaluate collaboration of unreleased teaching modules. Collected through semi-structured interviews, observations, meetings and training activities, the results of this action research indicate that learning is primarily the result of socialization and the action through collaboration in the design and implementation of modules and less through activities deliberately and collectively oriented learning and appropriation of new practices.
    Abstract: Cette communication vise à décrire comment, dans un processus d'accréditation à titre d'école primaire internationale, les pratiques du personnel enseignant, de la direction et d'une conseillère pédagogique, invités à collaborer pour agir et à collaborer pour apprendre, se transforment. Dans ce processus, chaque équipe-cycle d'enseignants est engagée à concevoir, piloter et évaluer en collaboration des modules d'enseignement inédits. Recueillis au moyen d'entrevues semi-structurées, d'observations, de rencontres et d'activités de formation, les résultats de cette recherche-action indiquent notamment que les apprentissages sont surtout le fruit d'une socialisation dans et par l'action à travers une collaboration dans la conception et la réalisation des modules et moins à travers des activités délibérément et collectivement orientées vers les apprentissages et l'appropriation des nouvelles pratiques.
    Date: 2015–06–30
  20. By: Jens Arnold; Natália Barbosa
    Abstract: This paper provides empirical evidence on links between the productivity of Portuguese firms and a number of policy variables in Portugal. The analysis is based on a census of Portuguese manufacturing companies, covering more than 40,000 firms between 2006 and 2011. The results suggest that a number of these variables matter for firm performance, including the number of procedures required to start a business, a more extensive coverage of collective wage bargaining agreements, the tax burden, tax compliance costs and the number of procedures required to enforce a contract.<P>Politiques structurelles et productivité : Résultats empiriques du Portugal<BR>Ce document présente des résultats empiriques sur la productivité des entreprises au Portugal et une série de variables de politiques. L’analyse est basée sur plus de 40 000 entreprises Portugaises entre 2006 et 2011. Les résultats suggèrent une influence significative de ces politiques sur la productivité des entreprises, notamment pour le nombre de procédures requises pour créer une entreprise, l’extension administrative des accords de négociations salariales, les impôts et leur complexité ainsi que le nombre de procédures requises pour exécuter un contrat.
    Keywords: total factor productivity, structural policies, firm-level analysis
    Date: 2015–08–21

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