nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2015‒11‒07
nineteen papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. The Impact of R&D and ICT Investment on Innovation and Productivity: Firm-Level Evidence from Turkey By Yeşim Gürel Üçdoğruk; Yılmaz Kılıçaslan
  2. Top R&D investors and international knowledge seeking: the role of emerging technologies and technological proximity By Mafini Dosso; Antonio Vezzani
  3. Innovation, competition, and productivity growth: Evidence on the impact of growth in Asia's maize seed sector By Spielman, David; Kennedy, Adam
  4. Competitiveness and the Gender Gap among Young Business Professionals By Reuben, Ernesto; Sapienza, Paola; Zingales, Luigi
  5. The Impact of Innovative New Economy Products on Market Competition: Competition Might Decrease By Arzdar Kiracı
  6. Tri-Factorial Structure of Safety-Related Internal Communication (SRIC) within an Air Navigation Service Provider Framework: Assessment of a Second-Order CFA Model in Portugal By Cristina Félix Pereira; Ana Sampaio; Fátima Jorge
  7. FDI and Economic Growth in Developing Countries; A Cross Comparison between Egypt and Turkey By Deena Saleh
  8. Should everybody be in services? The effect of servitization on manufacturing firm performance By Matthieu Crozet; Emmanuel Milet
  9. Drivers of Export Competitiveness in Wine Sector By Balogh, Jeremias; Ferto, Imre
  10. The impact of cultural diversity on firm innovation: evidence from Dutch micro-data By Ceren Ozgen; Peter Nijkamp; Jacques Poot
  11. Smart guide on regional transport innovation strategy: Transport innovation roadmaps By Ana Condeco-Melhorado; Aris Christodoulou; Panayotis Christidis
  12. Wealth, Tastes, and Entrepreneurial Choice By Erik G. Hurst; Benjamin W. Pugsley
  13. Does Competition Matter? The Efficiency of Regional Higher Education Systems and Competition: The Case of Russia By Oleg V. Leshukov; Daria P. Platonova; Dmitry S. Semyonov
  14. Eco-Clusters as Driving Force for Greening Regional Economic Policy By Alina Pohl
  15. Globalization, Technological Change and Labor Demand: A Firm Level Analysis for Turkey By Meschi, Elena; Taymaz, Erol; Vivarelli, Marco
  16. “Spillovers From the United States to Latin American and G7 Stock Markets: a VAR Quantile Analysis” By Helena Chuliá; Montserrat Guillén; Jorge M. Uribe
  17. Women on board and performance of family firms: Evidence from India By Jayati Sarkar; Ekta Selarka
  18. Growth Performance of the Turkish Economy: The Role of the Informal Sector By Ceyhun Elgin; Oguz Oztunalı
  19. Spillover effects of market-based instruments under revenue uncertainty in Jambi Province, Indonesia By Djanibekov, Utkur; Villamor, Grace

  1. By: Yeşim Gürel Üçdoğruk (Dokuz Eylul University, Department of Economics); Yılmaz Kılıçaslan (Anadolu University, Department of Economics)
    Abstract: Measuring the effects of innovative activities on firms’ productivity has been an active area for research for several decades, both as a policy concern and as a challenge for econometric applications. This paper attempts to analyze the relationship among innovation input, output and productivity in Turkish manufacturing firms through CDM model by adding ICT investments together with R&D as an input to innovation. The evidence is based on a panel data sample of Turkish manufacturing firms in the 2003–2010 period, constructed from the waves of the ‘Annual Manufacturing Industry Statistics’ and the four consecutive waves of ‘Community Innovation Surveys’. Regarding the model specification, the first step models the firm R&D decisions in terms of two equations: a selection equation and an intensity equation. The selection equation consists of R&D indicator variable that takes the value 1 if firm decides to perform R&D and explanatory variables affecting R&D decision. The intensity equation consists of firm’s innovative effort and a set of determinants of R&D expenditure. These two equations are estimated by using Heckman selection method. The second step models the firm innovation activity by innovation equation including ICT investment intensity and the latent innovation effort proxied by the predicted value of R&D intensity from the first step model. This equation is estimated as a bivariate probit model, assuming that most of the firm characteristics that affect product and process innovation are the same, although of course their impacts may differ. The last step estimates the productivity equation that is specified as a simple Cobb–Douglas technology with constant returns to scale, and with labor, capital and knowledge inputs, where we have “labor productivity” (real sales per employee, in logs); “investment intensity” that is our proxy for physical capital and “knowledge inputs” that are proxied by the predicted probability of product and process innovation.
    Keywords: R&D, ICT, innovation, productivity, Turkey
    JEL: L60 O31 O33
    Date: 2015
  2. By: Mafini Dosso (European Commission – JRC - IPTS); Antonio Vezzani (European Commission – JRC - IPTS)
    Abstract: This paper sheds new lights on the internationalization of technological activities of the top corporate R&D investors worldwide. In particular, we provide evidence on the technological factors determining their international R&D location strategies. The empirical analysis is based on the patenting activities of the top R&D investors, as reported by the EU Industrial R&D Investment Scoreboard, at the USPTO over the period 2010–2012. The technological proximity to the host country in which these companies seek for new knowledge is a key determinant for their R&D location decision. However, technological proximity has a non-linear effect on the companies' location strategies as they search for new technologies not too close to their knowledge base. Furthermore, top R&D investors worldwide target countries with comparative advantages in emerging technologies. Countries willing to attract high-value investments should create an environment conducive to the creation and development of brand new ideas with a high potential impact on the long term growth.
    Keywords: International Knowledge seeking, Multinational Corporations (MNCs), Patents, Emerging technologies, Technological proximity
    JEL: O30 F23 L20
    Date: 2015–11
  3. By: Spielman, David; Kennedy, Adam
    Abstract: Public policies designed to promote seed industry growth in many developing countries are challenged as much by the nature of its primary consumers—small-scale, resource-poor farmers operating in highly fragmented markets—as by the legacy of the structural legacies of a largely public sector-driven system. Although policymakers introduced a wide range of seed policy reforms in many Asian countries as early as the 1980s and 1990s, there have been only a handful of substantive examples where reforms have effected significant change. One reason for slow progress may be that policymakers are insufficiently informed about the opportunities and trade-offs associated with designing laws and regulations that enable the effective governance of seed industry development. As a result, their decisions—and the analytical tools they rely on—tend to be informed by principles, rather than empirical considerations of seed industry development. This paper explores these issues in the context of Asia’s rapidly growing maize seed sector. The paper explores current gaps in the metrics used to analyze the level of competition and innovation in Asia’s maize industry, and more generally, in seed industries throughout much of the developing world. It provides a finite set of indicators designed to better measure competition and innovation in a country’s seed industry to improve research priority-setting and inform policymaking. In turn, it uses these indicators to characterize future scenarios for Asia’s maize seed industry and to recommend policies and investments that might accelerate further seed industry development in the region.
    Keywords: Seed systems, seed industry, maize, Asia, Crop Production/Industries, Q16, Q18, O31, O33,
    Date: 2015
  4. By: Reuben, Ernesto (Columbia University); Sapienza, Paola (Northwestern University); Zingales, Luigi (University of Chicago)
    Abstract: Important gender differences in earnings and career trajectories persist. Particularly, in professions such as business. Gender differences in competitiveness have been proposed as a potential explanation. Using an incentivized measure of competitiveness, this paper investigates whether competitiveness explains future gender differences in earnings and industry choice in a sample of high-ability MBA graduates. We find that competitive individuals earn 9% more than their less competitive counterparts do. Moreover, gender differences in competitiveness explain around 10% of the overall gender gap. We also find that competitive individuals are more likely to work in high-paying industries nine years later, which suggests that the relation between competitiveness and earnings persists in the long run. Lastly, we find that the competitiveness gap in industry emerges over time when MBAs and firms interact with each other.
    Keywords: gender gap, gender differences, competitiveness, business career
    JEL: J16 D81 D84 I21 C93
    Date: 2015–10
  5. By: Arzdar Kiracı (Siirt University, Department of Economics)
    Abstract: This paper presents a parametric Cournot type of game theoretic model that uses Rogers’ Diffusion of Innovations Theory to construct a model that simulates the strategic interaction between firms. The constructed model simulates the strategic interaction of old economy firms that compete with the adoption of an innovative information and communication technologies based product, which is produced by a monopolistic New Economy firm. The model incorporates the accelerated product innovation process, globalization and interaction of firms in competitive environment. This paper confirms the expected result that innovator firms gain by adopting profitable New Economy products; however, surprisingly, under some circumstances market competition might decrease even when there is globalization. It is proven that this result is valid for markets with large (customer) demands when firms of the New Economy that produce innovative products charge high prices for their products. Firms of the New Economy that produce innovative products are given the privilege to be monopolists for the duration of their patent, but according to the findings of this paper they need to be regulated by competition authorities.
    Keywords: Game Theory, Cost structure, New Economy, Globalization, Competition, Innovative Product
    JEL: C72 O14 O33 D42 L11
    Date: 2015
  6. By: Cristina Félix Pereira (Aluna Doutoramento, Departamento de Gestão, Universidade de Évora); Ana Sampaio (Departamento de Matemática, Universidade de Évora); Fátima Jorge (Departamento de Gestão, Universidade de Évora)
    Abstract: Air navigation safety culture has been associated with organizational internal communication. The main objective of this study is to assess the hypothesized tri-dimensionality of Safety-Related Internal Communication (SRIC), in the context of High Reliability Organization’s (HRO) safety culture framework, as is the case of the Portuguese Air Navigation Service Provider (ANSP). So, and through an extensive literature review, Team Communication (TC), Management Communication (MC) and Safety Self-Attitude (SSA), have been identified as forming the first-order factor structure of the underlying second-order SRIC dimension. To examine whether the implementation of a second-order CFA model for the factorial validity of SRIC is feasible, 207 valid answers have been obtained through the submission, from June 2013 to December 2013, of a questionnaire to the operational staff from three different aeronautical careers in a previously selected European ANSP. In a first stage, maximum likelihood confirmatory factor analysis (CFA) results confirmed that, the proposed first-order structure reflected three distinctive aspects of SRIC dimension and, in a second stage, that the higher-order SRIC structure had an adequate fit to the data. Findings also confirmed that all constructs had good psychometric properties of convergent and discriminant validity. Results were also confirmed through a cross validation procedure.
    Keywords: Safety culture; Internal communication; Air navigation services; Confirmatory factor analysis
    JEL: R41
    Date: 2015
  7. By: Deena Saleh (Hacettepe University, Department of Economics)
    Abstract: The following paper examined the relationship between Foreign Direct Investment and Economic Growth in Developing Countries; the main focus is on Turkey and Egypt due to similarities between two countries in terms of economic, political and historical terms. An overview on FDI; types, motivations and domestic country factors is presented. Strategies attracting FDI are examined: Fiscal and Financial Incentives, Location Strategic and Marketing Strategies. The impact of FDI on host countries is discussed. Finally, the research gap discusses factors related to both Egyptian and Turkish economy.
    Keywords: FDI, Economic Growth, Developing Countries
    Date: 2015
  8. By: Matthieu Crozet; Emmanuel Milet
    Abstract: The servitization of the manufacturing sector refers to the evolution of manufacturers' capabilities to offer services as a complement to or a substitute for the goods that they produce. A vast literature has described these strategies and has shown that this phenomenon is widespread and growing in most developed economies. However, very little systematic evidence of the extent or consequences of servitization based on a comprehensive dataset of firms exists. In this paper, we provide such evidence using exhaustive data for French manufacturing firms between 1997 and 2007. We find that the vast majority of French manufacturers sell services in addition to producing goods. The shift toward services is growing steadily but at a slow pace. We also provide evidence of a causal impact of servitization on firm performance. Controlling for various sources of endogeneity bias, we find that firms that start selling services experience an increase in their profitability between 3.7% and 5.3%, increase their employment by 30%, increase their total sales by 3.7%, and increase their sales of goods by 3.6%. The results hold for most industries, although some heterogeneity exists.
    Keywords: Servitization;Deindustrialisation;Firm performance
    JEL: L23 L25 L6
    Date: 2015–10
  9. By: Balogh, Jeremias; Ferto, Imre
    Abstract: The purpose of this research is to provide insight into the export competitiveness of wine of the 38 countries on global markets. Four revealed comparative advantage indices are used to analyze the levels, evolutions in patterns of development in the export competitiveness of wine and their drivers over the analysed years of 2000 to 2013. The revealed comparative advantages on the global markets are the most robust for France, Italy, Spain, Chile, Australia and United States. Our estimations suggest a divergence in comparative advantage over time at the world market. The results show that GDP and exchange rates have negative effects on the wine export competitiveness, while agricultural employment, grape area harvested and WTO memberships are positively associated with comparative advantages. Our results are relatively robust for alternative revealed comparative advantage indicators.
    Keywords: Agribusiness, Food Consumption/Nutrition/Food Safety,
    Date: 2015
  10. By: Ceren Ozgen (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam); Jacques Poot (University of Waikato)
    Abstract: An important question for firms and policymakers is whether the recruitment of foreign workers can boost innovation. Migration studies have demonstrated positive economic impacts of cultural diversity on productivity and innovation at the regional level, but the impacts at firm level are less well known. Merging data from four different sources, provided by Statistics Netherlands, we construct and analyze a unique linked employer-employee micro dataset of 4582 firms that includes qualitative information on firm innovation. We consider both the number of immigrants these firms employ and their cultural diversity. Potential endogeneity of migrant employment is addressed by an instrumental variables approach that accounts for the past geographic distribution of immigrants and the past culinary diversity of the municipality the firm is located in. We find robust evidence that firms employing relatively more migrants are less innovative. However, there is evidence of integration in that this effect is generall less strong or even absent for second generation immigrants. Moreover, firms employing a more diverse foreign workforce are more innovative, particularly in terms of product innovations. The benefits of diversity for innovation are more apparent in sectors employing relatively more skilled immigrants.
    Keywords: Immigration,Innovation,Cultural diversity, Knowledge spillovers,Netherlands
    JEL: D22 F22 O31
    Date: 2013–12
  11. By: Ana Condeco-Melhorado (European Commission – JRC - IPTS); Aris Christodoulou (European Commission – JRC - IPTS); Panayotis Christidis (European Commission – JRC - IPTS)
    Abstract: This guide provides regions with information and guidelines useful for the development of smart specialisation strategies (RIS3) in transport. The guide follows the six steps for Smart Specialization with a special focus in transport. The six steps include the analysis of the regional context and potential for innovation, the discussion of governance structure, the development of a shared vision about the future of the region, approaches for the selection of transport related priorities for regional development, policy mixes and options for the integration of monitoring and evaluation mechanisms. The recommended process consists of a bottom-up analysis of regional capabilities of the industry and scientific community that needs to be aligned with national and European objectives. At the European level, the Strategic Transport Technological Plan (STTP) identifies ten innovation areas that will be extremely important for the future competitiveness of the transport sector. The guide also analyses different innovation area in the context of RIS3 methodology, showing specific examples and roadmaps on how these could be implemented in the regional innovation strategies. Finally tools are offered to analyse the innovation potential, performance and priorities in the transport sector, such as data and indicators regarding regional transport innovation, as well as methodologies to analyse innovation capabilities of European regions.
    Keywords: transport, industry, competitiveness, research
    JEL: L90 L99 R23 R40 R49
    Date: 2015–11
  12. By: Erik G. Hurst; Benjamin W. Pugsley
    Abstract: The nonpecuniary benefits of managing a small business are a first order consideration for many nascent entrepreneurs, yet the preference for business ownership is mostly ignored in models of entrepreneurship and occupational choice. In this paper, we study a population with varying entrepreneurial tastes and wealth in a simple general equilibrium model of occupational choice. This choice yields several important results: (1) entrepreneurship can be thought of as a normal good, generating wealth effects independent of any financing constraints; (2) nonpecuniary entrepreneurs select into small-scale firms; and (3) subsidies designed to stimulate more business entry can have regressive distributional effects. Despite abstracting from other important considerations such as risk, financing constraints, and innovation, we show that nonpecuniary compensation is particularly relevant in discussions of small businesses.
    Keywords: entrepreneurship, non-pecuniary benefits
    Date: 2015–10
  13. By: Oleg V. Leshukov (National Research University Higher School of Economics.); Daria P. Platonova (National Research University Higher School of Economics.); Dmitry S. Semyonov (National Research University Higher School of Economics.)
    Abstract: This paper explores the relationship between the degree of competition between higher education institutions (HEIs) and the efficiency of regional higher education systems using evidence from the Russian Federation. The choice of the regional system of higher education as a unit of analysis is explained by features of the Russian system of higher education, especially by “closeness” in the borders of regions. Using data envelopment analysis (DEA) we investigate the efficiency of higher education systems in the regions and compare the results with the extent of higher education competition within them. The analysis finds that within the overall sample the correlation is positive, but not striking. However the extent of competition correlates with the efficiency of regional sets of HEIs more in less socio-economically developed regions.
    Keywords: higher education, efficiency, competition, regions, Russia
    JEL: I23 I28
    Date: 2015
  14. By: Alina Pohl
    Abstract: This research investigates eco-clusters as driver for greening regional economic policy and examines necessary incentive structures to foster eco-innovation as well as growth and employment in the eco-industry sector. Eco-clusters are seen in context with sustainability and environmental friendly behavior as means for a socio-ecological transition in the long run. The main hypothesis implies that eco-clusters have to be policy driven and established top-down and therefore differ from cluster structures in other industries. Possible reasons are uncertainty on a developing market as well as external effects of eco-innovations; the latter are seen as radical innovations. Based on theoretic findings for the establishment of clusters and general research findings for eco-clusters and eco-innovations, it is differentiated between a spontaneous cluster emergence from private initiatives through self-reinforcing forces of companies in a region (bottom-up), and the formation of a policy-driven network with primarily regional objectives to stimulate the competitive advantage of the regional industrial location (top-down). The hypothesis will be proofed by empirical results gained through personal interviews and complemented by findings in current research literature. Finally, implications for incentive structures to green economic policy are identified. It is shown that eco-clusters are different to other clusters and crucial for a long-term sustainable change and thus need political commitment and public incentives. For empirical observation, eco-clusters in Austria were selected. This research relates to the ongoing debate on green growth and develops policy incentives for establishment of eco-clusters and thus greening of economic policy.
    Keywords: Cluster Analysis, Ecological Cluster, Ecological Innovations, Regional Economic Policy, top-down vs. bottom-up
    JEL: C38 I31 O31 O44 Q01 Q55 Q58
    Date: 2015–10
  15. By: Meschi, Elena (Università Ca’ Foscari di Venezia); Taymaz, Erol (Middle East Technical University); Vivarelli, Marco (Università Cattolica del Sacro Cuore)
    Abstract: This paper studies the interlinked relationship between globalization and technological upgrading in affecting employment and wages of skilled and unskilled workers in a middle income developing country. It exploits a unique longitudinal firm‐level database that covers all manufacturing firms in Turkey over the 1992‐2001 period. Turkey is taken as an example of a developing economy that, in that period, had been technologically advancing and becoming increasingly integrated with the world market. The empirical analysis is performed at firm level within a dynamic framework using a 2+2 equations model that depicts the employment and wage trends for skilled and unskilled workers separately. In particular, the System Generalized Method of Moments (GMM‐SYS) procedure is applied to a panel dataset of about 15,000 firms. Our results confirm the theoretical expectation that developing countries face the phenomena of skill-biased technological change and skill‐enhancing trade, both leading to increasing the employment and wage gap between skilled and unskilled workers. In particular, a strong evidence of a relative skill bias emerges: both domestic and imported technologies increase the relative demand for skilled workers more than the demand for the unskilled. "Learning by exporting" also appears to have a relative skill biased impact, while FDI imply an absolute skill bias.
    Keywords: skill‐biased technological change, international technology transfer, GMM‐SYS
    JEL: O33
    Date: 2015–10
  16. By: Helena Chuliá (Faculty of Economics, University of Barcelona); Montserrat Guillén (Faculty of Economics, University of Barcelona); Jorge M. Uribe (Department of Economics, Universidad del Valle)
    Abstract: We estimate multivariate quantile models to measure the responses of the six main Latin American (LA) stock markets to a shock in the United States (US) stock index. We compare the regional responses with those of seven developed markets. In general, we document weaker tailcodependences between the US and LA than those between the US and the mature markets. Our results suggest possible diversification strategies that could be exploited by investing in Latin America following a sizable shock to the US market. We also document asymmetrical responses to the shocks depending on the conditioning quantile at which they are calculated.
    Keywords: International Spillovers, Quantile Regression, Emerging Markets, Stock Markets JEL classification: F21; F30; G15
    Date: 2015–10
  17. By: Jayati Sarkar (Indira Gandhi Institute of Development Research); Ekta Selarka (Madras School of Economics)
    Abstract: This paper provides evidence on the effect of women directors on the performance of family firms with a case study of India. Existing literature on the subject has primarily focused on widely held firms, notably in the US. Given that ownership structure and governance environment of family firms are distinctly different from those of non-family firms, the evidence on the relationship between women on board and firm performance in the context of widely held firms may not apply in the context of family firms. India provides an ideal setting for analyzing this question as the presence of family firms is pervasive and since 2013 India has instituted gender quotas on corporate boards. Using a data-set of 10218 firm year observations over a ten year period from 2005 to 2014 which spans the pre-quota and post-quota years, we find robust evidence that women directors on corporate boards positively impact firm value and that this effect increases with the number of women directors on board. However, we find that the positive effect of gender diversity on firm performance weakens with the extent to which the family exerts control through occupying key management positions on the board. In addition, women directors affiliated to the family have no significant effect on firm value, whereas independent women directors do. Our results with respect to profitability are somewhat different; while as in the case of market value, women directors positively impact profitability with the positive effect driven by independent women directors, the effect does not vary with the extent of family control. Taken together, our results suggest that though gender diversity on corporate boards may positively impact firm performance in family firms in general, the extent of family control can have a significant bearing on this relationship. The findings from this study could be instructive for emerging economies like India in promoting gender-based quotas on corporate boards.
    Keywords: board of directors, gender diversity, family ownership and control, gender-quota
    JEL: G32 G34 G38
    Date: 2015–10
  18. By: Ceyhun Elgin (Bogazici University, Economics); Oguz Oztunalı (Bogazici University, Economics)
    Abstract: The presence of informality and its connection with economic growth has been a contentious issue on which the current literature has failed to generate a consensus. In this study, first, we investigate the growth performance of the Turkish economy through the lenses of a simple growth accounting exercise. Moreover, we also extend the growth accounting framework to account for the presence of an informal sector and give emphasis on how the presence of a relatively large informal sector in Turkey (about 28 % of GDP, according to recent estimates) affects growth of the official economy as well as its determinants.
    Keywords: Economic Growth, Growth Accounting, Turkish Economy, Informal Sector
    JEL: E26 O17 O47
    Date: 2015
  19. By: Djanibekov, Utkur; Villamor, Grace
    Abstract: In the case study of Indonesia we investigated possible effects of different types of market-based instruments (MBI), including rewards and taxes, on larger farmer (landlord) that adopts MBI and spillovers on working on his land under sharecropping arrangement another farmer (tenant). Multi-period expected value model with Monte Carlo simulation and Brownian motion was used. Findings showed that high prices of MBI would increase incomes of landlord but would reduce incomes of tenant through reduced working activities at landlord due to less cultivation of labor demanding crops. In most cases the incomes of landlord would be the under the MBI scenarios than in the business-as-usual scenario. If uncertainty in revenues is considered then MBI would reduce variability in incomes of both landlord and tenant. Rewards for increasing supply rather than taxation for reducing provision of ecosystem services resulted in higher rural incomes and provision of ecosystem services.
    Keywords: International Development, Marketing,
    Date: 2015

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