nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2015‒09‒11
eighteen papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Forms of knowledge and eco-innovation modes: Evidence from Spanish manufacturing firms By Alberto Marzucchi; Sandro Montresor
  2. How Do Native and Migrant Workers Contribute to Innovation? By Fassio, Claudio; Montobbio, Fabio; Venturini, Alessandra
  3. Business science links for a new growth path By Jürgen Janger
  4. KIBS and the Dynamics of Industrial Clusters: a Complex Adaptive Systems Approach By Benoît Desmarchelier; Faridah Djellal; Faïz Gallouj
  5. Open Innovation in a Model à la Hotelling By Bottai, Carlo
  6. Absorptive capacity and space By Mário Alexandre Patrício Martins da Silva
  7. Network Effects in Knowledge Creation: Evidence from Academia By Nelson Sá; Ana Paula Ribeiro; Vitor Carvalho
  8. Regional Economic Integration in Central Asia and South Asia By Lord, Montague
  9. Do we have the right kind of diversity in Innovation Policies among EU Member States? By Reinhilde Veugelers
  10. Regional co-evolution of firm population, innovationand public research? Evidence from the West German laser industry By Ann-Kathrin Blankenberg; Guido Buenstorf
  11. Saving in Latin America and the Caribbean: Performance and Policies By Francesco Grigoli; Alexander Herman; Klaus Schmidt-Hebbel
  12. From Market Fixing to Market-Creating: A New Framework for Economic Policy By Mariana Mazzucato
  13. ‘Good’ Firms, Worker Flows and Local Productivity By Michel Serafinelli
  14. Advancing the Human Capital Perspective on Value Creation by Joining Capabilities and Governance Approaches By Mahoney, Joseph T.; Kor, Yasmine
  15. Capital Market Financing, Firm Growth, and Firm Size Distribution By Tatiana Didier; Ross Levine; Sergio L. Schmukler
  16. Does Public Sector Inefficiency Constrain Firm Productivity: Evidence from Italian Provinces By Raffaela Giordano; Sergi Lanau; Pietro Tommasino; Petia Topalova
  17. Measuring Industry Productivity Across Time and Space and Cross Country Convergence By Diewert, Erwin; Inklaar, Robert
  18. A strategic implementation of the sequential equal surplus division rule for digraph cooperative games By Sylvain Béal; Eric Rémila; Philippe Solal

  1. By: Alberto Marzucchi (Catholic University of Milan (Italy)); Sandro Montresor (Kore University of Enna (Italy))
    Abstract: This paper investigates the relevance of different forms of knowledge for the firm’s propensity to pursue eco-innovation (EI) strategies. The incidence of different types of internal and external knowledge is disentangled in search of specific EI-modes. We employ panel data on around 4,700 manufacturing firms from the Spanish PITEC dataset. Results show that a Science, Technology, EI-mode (STEI) prevails, though generally in an attenuated way, in the use of internal knowledge, with R&D knowledge more pivotal than some (embodied vs. disembodied) non-R&D one. On the other hand, a synthetic kind of external knowledge, typically drawn from business actors, is more important than the analytical one mainly coming from the “world of science”, suggesting a Doing, Using, Interacting EI-mode (DUIEI) in external terms. Overall, a hybrid EI-mode emerges across the internal and external realm of the firm, with interesting qualifications when specific EI strategies (e.g. cleaner production technologies vs. product eco-innovations) are considered.
    Keywords: Eco-innovation, knowledge, innovation modes, DUI, STI
    JEL: Q55 O31 O32
    Date: 2015–09
  2. By: Fassio, Claudio; Montobbio, Fabio; Venturini, Alessandra (University of Turin)
    Abstract: This paper uses the French and the UK Labour Force Surveys and German Microcensus to estimate the effects of the different components of the labour force on innovation at the sectoral level between 1994 and 2005, focusing in particular on the contribution of migrant workers. We adopt a production function approach in which we control for the usual determinants of innovation, such as R&D investments, stock of patents and openness to trade. To address for the possible endogeneity of migrants we implement instrumental variable strategies using both two-stage least squares with external instruments and GMM-SYS with internal ones. In addition we also account for the possible endogeneity of native workers and instrument them accordingly. Our results show that highly educated migrants have a positive effect on innovation even if the effect is smaller relative to the one of the educated natives. Moreover this positive effect seems to be confined to the high tech sectors and among highly educated migrants from other European countries.
    Date: 2015–05
  3. By: Jürgen Janger
    Abstract: Policies towards business science links have been driven by the concept of the entrepreneurial university, i.e. encouraging universities to directly contribute to economic development through commercialization of their discoveries, e.g. through licensing of patents or start-ups, but also through collaborative R&D with firms. However, efforts to increase the entrepreneurship of universities have seldom targeted the first two missions of universities, research and teaching. Evidence shows that any entrepreneurship can only be as strong as the quality of research and teaching. Based on a conceptual model of universities’ role in innovative activity and a review of the evidence, this paper has tried to argue that a narrow focus on linking universities with firms and society without making sure that universities’ first two missions - research and teaching - work well is an ineffective approach towards increasing the contribution of universities to innovative activity, and hence to a new growth path. In particular, the role of training graduates is not stressed enough, while by far the biggest contribution of universities to innovative activities.
    Date: 2015–08
  4. By: Benoît Desmarchelier (Xi'an Jiaotong University [Chine] - Xi'an Jiaotong University); Faridah Djellal (CLERSE - Centre lillois d'études et de recherches sociologiques et économiques - CNRS - Université Lille 1 - Sciences et technologies); Faïz Gallouj (CLERSE - Centre lillois d'études et de recherches sociologiques et économiques - CNRS - Université Lille 1 - Sciences et technologies)
    Abstract: An important and highly debated question in economic geography is how to explain the dynamics of industrial clusters, i.e. their emergence and evolution through time. Two main theories are generally explored, without being confronted: the cluster life cycle theory-which mainly adopts an aggregate point of view-and the network-based approach. Although KIBS are an important actor of industrial clusters, these two theories pay little attention to them as a potential driver of clusters' dynamics. We show in this paper that properly taking KIBS into account requires considering an alternative and integrative approach that conciliates these two theories. In particular, we argue that complex adaptive systems (CAS) constitute a promising basis for such a synthesis. We then operationalize the CAS approach by studying an existing industrial cluster-Skywin (aeronautics in Wallonia region, Belgium)-within this framework. For this purpose, we use an exhaustive list of the innovation projects undertaken within this cluster between 2006 and 2014 and we build temporal innovation networks linking the agents of the cluster. It appears that Skywin's innovation networks exhibit a small-world effect. This implies that any agent who takes part into an innovation project of this cluster can easily benefit from knowledge and information generated within another ongoing project. We argue that this effect is an interesting proxy of a cluster's attractiveness and an appropriate aggregate variable for studying clusters' dynamics as it shows cluster's potential for further growth. We also demonstrate that KIBS are the main responsible for the emergence of this small-world effect in Skywin's innovation networks.
    Date: 2015–05
  5. By: Bottai, Carlo (University of Turin)
    Abstract: This paper shows a model à la Hotelling in which profit-maximizing firms use either an open or a closed strategy to develop their software products. Only in the first case they can freely interchange information about their R&D, and the spillovers are higher the closer they are. What comes out is a clustering force that drives open firms to stay closer one another in the product characteristic space and which lead to believe that a sense of community is essential to work for an organizational model that is decentralized, modular and that cannot be planned in advance, like the Bazaar development model, used by open firms, is.
    Date: 2015–06
  6. By: Mário Alexandre Patrício Martins da Silva (Faculdade de Economia do Porto)
    Abstract: In this paper, we assume that the absorptive capacity of firms located in a given region is positively influenced by territorial-dependent aspects, and analyze the effects of the spatial elements that explain the differences between territories to access and absorb external knowledge on the innovative performance of regions and the possibility of arising local increasing returns.
    Keywords: Absorptive capacity, knowledge spillovers, complementarities, proximity, innovation, R&D
    JEL: O33 R11
    Date: 2015–09
  7. By: Nelson Sá (Department of Economics, Vassar College, Poughkeepsie, New York 12604, USA); Ana Paula Ribeiro (CEF.UP and FEP, Universidade do Porto, Portugal); Vitor Carvalho (CEF.UP and FEP, Universidade do Porto, Portugal)
    Abstract: This paper makes use of a sample of articles published between 1999 and 2013 by economists affiliated in Portuguese institutions to examine the impact of co-authorship over the quality of academic research. We build a unique database to characterize the role played by distinct affiliations and educational backgrounds on this process, while controlling for experience and individual quality levels. Mentoring relations are identified as one possible source of negative bias on the measurement of teamwork productivity, which we proxy for and quantify here for the first time. The empirical results also suggest that co-authorship across domestic institutions does not carry any significant impact on research quality, but international collaboration enhances it. A doctorate earned abroad is shown to directly improve publication outcomes, besides making it easier to establish partnerships across frontiers. These findings underscore the importance of accessing external knowledge networks in academia, offering relevant policy insights for a large number of small and less developed countries.
    Keywords: Knowledge Networks; Co-Authorship; Academic Productivity
    JEL: A11 J44 I23
    Date: 2015–09
  8. By: Lord, Montague
    Abstract: The Central and South Asia regions have a long history of trade relations. There have nearly always been movements of goods and people between the regions, which in turn have linked their cultural and religious ties and impacted political relations. Yet today’s trade between the two regions remains low and significantly below regional trade in Africa, the Middle East, Latin America and Southeast Asia. Using different measures of trade, we estimate that inter-regional trade is only between 0.2 and 4 percent of total trade to all destinations. Even within the regions, trade among countries remains low. Intra-regional trade in Central Asia is less than 5 percent and that of South Asia is 1.5 percent of trade with all countries. The present study explores opportunities and challenges for intra- and inter-regional trade in the Central and South Asia areas by analyzing a wide range of channels impacting trade. Trade enhancing channels are divided into two broad categories. The first set refers to disaggregated or product-level characterizations of trade affecting competitiveness and complementarities between trading partners within and between the regions. The second refers to price, non-price and structural determinants that tend to affect all products traded between countries. The analysis also includes a gravity model to gauge the effect of economic growth, distance and price, non-price and structural determinants of regional trade. The empirical results indicate that, under existing trade patterns, the potential value of trade in the two regions is nearly twice as large as the actual level. The finding is not surprising. Opportunities for regional trade abound and there are numerous policy initiatives that could be taken to help spur trade and investment in and between the two regions. Among the possibilities are regional value chains that could create large gains in terms of higher value additions to exports, technologies transfers and employment generation. The analysis of different types of value chains in this study categorizes industries according to their value added contribution to trade, and it prioritizes industries according to interests ranging from the diversification of industries across resource-intensive, labor-intensive, and technology-intensive industries, as well as the potential participation of Afghanistan due to its comparative advantages in products exported by the industries or its geographic location for transit trade. Based on quantitative analyzes of actual and potential channels of trade, the study ranks the pattern of trade in terms of its adaptability to intra- and cross-regional commerce in the Central and South Asia regions and its predilection for regional value chains. The ranking uses an innovative methodology that takes account of difference preference orderings of stakeholders, such as governments and development partners that have interests in pro-poor trade, or large companies that favor cross-border fragmentation of production for regional and global value chains. Ratings are classified into the following categories: trade complementarities, export diversification, comparative advantages, structural factors, intra-industry trade, price competitiveness, trade costs, economic growth; and regional value chains. The baseline ratings suggest the following: First, the larger economies have higher ratings than the smaller, less developed ones, suggesting that size and level of development matter in the development of regional trade. Second, among the different channels of regional trade development, the most effective ones are (i) measures that promote price competitiveness; (ii) intra-industry trade; (iii) trade complementarities; and (iv) economic growth. Third, the effectiveness of country-specific measures differ, as for example in Afghanistan, where the trade enhancing channels that matter the most are structural factors, price competitiveness and trade complementarities with other countries in South Asia and with Central Asia in general. These findings have important implications for the ability of different trade-related policies, programs and institutional mechanisms to successfully promote greater commerce within and across the two regions. Each of these mechanisms has costs associated with them and different types of mechanisms can be programmed on the basis of their ease of implementation and impact potential. The material in this study is designed in such a way as to provide practical knowledge and methods for businesses to take advantage of Central and South Asia regional opportunities; analytical tools for policymakers and researchers; and policy and program recommendations for governments and development partners. It should be of interest to businesses, governments, international development partners, policymakers and researchers, and others concerned with Central and South Asia’s trade and the potential for developing value chains or so-called ‘trade in tasks’ across the two regions.
    Keywords: Central Asia, South Asia, CAREC, intra-regional trade, inter-regional trade, trade complementarities, export diversification, comparative advantages, structural factors, price competitiveness, trade costs, economic growth; regional value chains, product concentration, export survival rates, product sophistication, real exchange rates, two-way trade, trade facilitation, constant-market-shares analysis bilateral trade agreements, multilateral trade arrangements, modeling regional trade, gravity models, fragmentation of production, econometric modeling of trade
    JEL: F12 F14 F15
    Date: 2015–05–15
  9. By: Reinhilde Veugelers
    Abstract: This contribution focuses on the heterogeneity in innovation capacity within Europe across its different Member State. Who are the leading and who are the lagging EU countries? Is there a trend towards convergence over time? And how has the crisis affected this trend of convergence? We then take a look at the research and innovation policies which the EU countries have in place and try to assess whether these policies match with the heterogeneous EU countries’ innovation capacity positions. We examine both the budgets allocated by EU Member States to R&I as well as the various kinds of R&I policy programmes being deployed. More particularly, we examine how heterogeneous the deployment of policy instruments is across EU member states and whether this matches with the heterogeneity in innovation capacity development among EU countries. Notwithstanding the large and increasing heterogeneity among EU countries in innovation capacity development, the evidence on innovation policies in EU countries shows a relative homogeneity of policy mixes in different countries. Current innovation policy mixes of instruments do not well reflect the countries’ levels of innovation capacity development.
    Keywords: Innovation, Innovation policy, Institutional reforms, Multi-level governance
    JEL: O31 O38
    Date: 2015–08
  10. By: Ann-Kathrin Blankenberg (Chair of Economic Policy and SME Research, University of Göttingen; Platz der Göttinger Sieben 3, 37073 Göttingen, Germany); Guido Buenstorf (Institute of Economics, University of Kassel; Nora-Platiel-Strasse 5, 34109 Kassel, Germany)
    Abstract: We explore the regional co-evolution of firm population size, private-sector patenting and public research in the empirical context of German laser research and manufacturing over more than 40 years from the emergence of the industry to the mid-2000s. Our qualitative as well as quantitative evidence is suggestive of a co-evolutionary process of mutual interdependence rather than a unidirectional effect of public research on private- sector activities.
    Keywords: co-evolution, innovation systems, vector autoregression, laser technology
    JEL: B52 O31 R12
    Date: 2015–08–05
  11. By: Francesco Grigoli; Alexander Herman; Klaus Schmidt-Hebbel
    Abstract: This paper analyzes saving patterns and determinants in Latin America and the Caribbean (LAC), including key policy variables and regimes. The review of previous empirical studies on LAC saving reveals contradictions and omissions. This paper presents empirical results of an extensive search of determinants of private and public saving rates, adding previously neglected variables (including different measures of key external prices and macroeconomic policy regimes), in linear form and in interactions with other saving determinants. It analyzes statistical differences in saving determinants between LAC and the rest of the world in a nested econometric framework, and discusses differences across three country subgroups within LAC. The results highlight commonalities and differences in saving behavior between LAC and other world regions, as well as within LAC, identifying the role of key policy variables and regimes.
    Keywords: Chile;Colombia;Consumption;Costa Rica;Dominica;Dominican Republic;Argentina;Antigua and Barbuda;Bahamas, The;Barbados;Belize;Bolivia;El Salvador;Ecuador;Jamaica;Latin America;Nicaragua;Haiti;Guyana;Guatemala;Grenada;Honduras;Peru;Panama;Paraguay;Saint Kitts and Nevis;Saint Vincent and the Grenadines;Saint Lucia;Uruguay;Suriname;Trinidad and Tobago;private saving, public saving, saving, income, tax, Models with Panel Data, General,
    Date: 2015–05–18
  12. By: Mariana Mazzucato (SPRU (Science Policy Research Unit), School of Business, Management & Economics, University of Sussex, Brighton, BN1 9SL, U.K.)
    Abstract: Many countries are pursuing innovation-led ‘smart’ growth, which requires certain types of long-run strategic investments. This paper argues that such investments require public policies that aim to create markets, rather than just ‘fixing’ market failures (or system failures). Such ‘mission-oriented’ investments have led to men walking on the moon (which created spillovers across the economy) and are today catalyzing investments to tackle climate change around the world. In the two above-mentioned cases, public agencies not only ‘de-risked’ the private sector, but also led the way in terms of shaping and creating new technological opportunities and market landscapes. Only then was the private sector willing to invest. This paper considers four key questions that arise from a ‘market creating’ framework: (1) decision-making on the direction of change; (2) the nature of (public and private) organizations that can welcome the underlying uncertainty and discovery process; (3) the evaluation of mission-oriented and market-creation policies; and (4) the ways in which both risks and rewards can be shared so that ‘smart’ innovation-led growth can also result in ‘inclusive’ growth.
    Keywords: innovation policy, mission-oriented, market failures, system failures, directionality, smart growth, inclusive growth
    JEL: H1 L1 L2 O1
    Date: 2015
  13. By: Michel Serafinelli (Department of Economics, University of Toronto, Canada)
    Abstract: This paper is the first to present direct evidence showing how localized knowledge spillovers arise from workers changing jobs within the same local labor market. Using a unique dataset combining Social Security earnings records and balance sheet information for the Veneto region of Italy, I first identify a set of highly productive firms, then show that hiring workers with experience at these firms significantly increases the productivity of other firms. My findings imply that worker flows explain around 10 percent of the productivity gains experienced by incumbent firms when new highly productive firms are added to a local labor market.
    Date: 2015–08
  14. By: Mahoney, Joseph T. (University of IL); Kor, Yasmine (University of SC)
    Abstract: This paper elaborates on how the human capital perspective on value creation can be advanced by joining the capabilities and governance approaches. Investments in firm-specific human capital can be an important pathway to building and enhancing a firm's core competencies. Thus, it is vital to build mechanisms and systems that encourage the development and safeguarding of these human capital-based capabilities. Our paper unpacks the notion of firm-specific human capital and presents a view on why this form of human capital especially matters in today's business context. We review pitfalls and shortcomings of a traditional shareholder model and its likely impacts on investments in firm-specific human capital. Finally, we discuss mechanisms by which the firm-specific human capital development process can be stimulated and protected.
    Date: 2014
  15. By: Tatiana Didier (World Bank); Ross Levine (University of California at Berkeley and National Bureau of Economic Research); Sergio L. Schmukler (World Bank and Hong Kong Institute for Monetary Research)
    Abstract: How many and which firms issue equity and bonds in domestic and international markets, how do these firms grow relative to non-issuing firms, and how does firm performance vary along the firm size distribution (FSD)? To evaluate these questions, we construct a new dataset by matching data on firm-level capital raising activity with balance sheet data for 45,527 listed firms in 51 countries. Three main patterns emerge from the analysis. (1) Only a few large firms issue equity or bonds, and among them a small subset has raised a large proportion of the funds raised during the 1990s and 2000s. (2) Issuers grow faster than non-issuers in terms of assets, sales, and employment, that is, firms do not simply use securities markets to adjust their financial accounts. (3) The FSD of issuers evolves differently from that of non-issuers, tightening among issuers and widening among non-issuers.
    Keywords: Access to Finance, Bond Markets, Capital Market Development, Capital Raisings, Firm Dynamics, Firm Financing, Stock Markets
    JEL: G00 G10 G31 G32 L25
    Date: 2015–08
  16. By: Raffaela Giordano; Sergi Lanau; Pietro Tommasino; Petia Topalova
    Abstract: This paper studies the effect of public sector efficiency on firm productivity using data from more than 400,000 firms across Italy’s provinces. Exploiting the large heterogeneity in the efficiency of the public sector across Italian provinces and the intrinsic variation in the dependence of industries on the government, we find that public sector inefficiency significantly reduces the labor productivity of private sector firms. The results suggest that raising public sector efficiency could yield large economic benefits: if the efficiency in all provinces reached the frontier, output per employee for the average firm would increase by 9 percent.
    Keywords: Italy;public sector efficiency, firm productivity, public, public sector, government, General
    Date: 2015–07–21
  17. By: Diewert, Erwin; Inklaar, Robert
    Abstract: The paper introduces a new method for simultaneously comparing industry productivity levels across countries and over time. The new method is similar to the method for making multilateral comparisons of Caves, Christensen and Diewert (1982b) but their method can only compare gross outputs across production units and not compare real value added of production units across time and space. The present paper uses the translog GDP methodology for measuring productivity levels across time that was pioneered by Diewert and Morrison (1986) and adapts it to the multilateral context. The new method is illustrated using an industry level data set and shows that productivity dispersion across 38 countries between 1995 and 2011 has decreased faster in the traded sector than in the non-traded sector. In both sectors, there is little evidence of decreasing distance to the productivity frontier.
    Keywords: Productivity, index numbers, Purchasing Power Parities, multilateral comparisons, convergence, value added functions, efficiency, world production fro
    JEL: C43 C82 D24 E01 E23 E31 F14 O47
    Date: 2015–09–03
  18. By: Sylvain Béal (CRESE EA3190, Univ. Bourgogne Franche-Comté); Eric Rémila (Université de Saint-Etienne, CNRS UMR 5824 GATE Lyon Saint-Etienne); Philippe Solal (Université de Saint-Etienne, CNRS UMR 5824 GATE Lyon Saint-Etienne)
    Abstract: We provide a strategic implementation of the sequential equal surplus division rule (Béal et al., 2014). Precisely, we design a non-cooperative mechanism of which the unique subgame perfect equilibrium payoffs correspond to the sequential equal surplus division outcome of a superadditive rooted tree TU-game. This mechanism borrowed from the bidding mechanism designed by Pérez-Castrillo and Wettstein (2001), but takes into account the direction of the edges connecting any two players in the rood tree, which reflects some dominance relation between them
    Keywords: Bidding approach, Implementation, Rooted tree TU-games, Sequential equal surplus division
    JEL: C71
    Date: 2015–06

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