nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2016‒02‒04
eleven papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. The Effect of Industrial Cluster Policy on Firm Performance in Ethiopia: Evidence from the Leather Footware Cluster By Getahun, Tigabu Degu
  2. In-house versus External Basic Research and First-to-market Innovations By Dolores Añón Higón
  3. Essays on knowledge sourcing and technological capability : A knowledge structure perspective By Li, Zhengyu
  4. The Information Industry: Measuring Russia By International Standards By Gulnara I. Abdrakhmanova; Galina G. Kovaleva; Natalia V. Bulchenko
  5. A Triple Helix Model of Medical Innovation: Supply, Demand, and Technological Capabilities in terms of Medical Subject Headings By Alexander Petersen; Daniele Rotolo; Loet Leydesdor
  6. The Roles of Industry Idiosyncrasy, Cost Efficiency, and Risk in Internationalization: Evidence from the Insurance Industry By Biener, Christian; Eling, Martin; Jia, Ruo
  7. On the role of public policies and wage formation for private investment in R&D:A long-run panel analysis By Tim Buyse; Freddy Heylen; Ruben Schoonackers
  8. The industrial policy experience of the electronics industry in Malaysia By Rajah Rasiah
  9. Resources, experience and perseverance in entrepreneurs' perceived likelihood of success in an emerging economy By Quan Hoang Vuong; Thu Hang Do; Thu Trang Vuong
  10. Deficits and Strengths in Austrian Competitiveness By Karl Aiginger
  11. Local and regional spatial interactions in the analysis of Norwegian farm growth By Storm, Hugo; Heckelei, Thomas

  1. By: Getahun, Tigabu Degu
    Abstract: This paper empirically analyzes the productivity, profitability, innovation and network effects of a public policy promoting micro and small scale industrial clusters in Ethiopia. To this end, firm-level survey data was collected from randomly selected clustered leather shoe manufacturers that have directly benefited from the policy and those that do not, both before and after the cluster policy intervention. The results from econometric analysis suggests that the industrial cluster policy adversely impacts the productivity, profitability, growth, and innovation performance of the small and micro leather shoe manufacturing enterprises that moved to the government created clusters . The analysis of the transmission mechanism further reveals that the relocated cluster policy hampers the treated firms’ collaborative business and knowledge network and aggravates their growth impediments which includes lack of trust, high customer and supplier search and reach cost, lack of market information, imperfect contract enforcement, delays in the supply of raw materials and the lack of skilled labor. The time lag between policy implementation and its impacts may conceal the long-term impact of the cluster policy. The overwhelming majority of the representatives of treatment group firms also continue to believe that their buisness performance will improve over time as a result of their participation in the MSE cluster development program. This study is a pioneer to quantitatively evaluate the productivity, profitability, innovation and network effect of industrial cluster policy in Ethiopia.
    Keywords: Cluster Policy, Productivity, Profitability, Networks, Small and Micro Enterprises, Ethiopia, Institutional and Behavioral Economics, Production Economics, Research and Development/Tech Change/Emerging Technologies, Risk and Uncertainty, D02, D04, D25, D85, L11, L52, L67, O14,
    Date: 2016–01
  2. By: Dolores Añón Higón (Departamento de Economía Aplicada II, Universitat de València)
    Abstract: This paper explores to what extent conducting internal basic research, as opposed to external basic research (i.e. outsourcing and collaboration with universities) encourages firms to bring new products into the market ahead of competitors, and contributes to innovation performance. The analysis is based on a sample of Spanish manufacturing firms over the period 2006-2012. Our findings suggest that conducting in-house basic research affects firm’s propensity to introduce product novelties. Furthermore, performing this activity continuously affects the probability of being product-pioneer in low and medium-low tech sectors. Collaboration with universities also helps in introducing new products ahead of competitors, but contracting scientific research from universities does not lead to a pioneer strategy
    Keywords: basic research, in-house, outsourcing, collaboration, pioneer, imitation
    JEL: D22 L21 O32
    Date: 2016–01
  3. By: Li, Zhengyu (Tilburg University, School of Economics and Management)
    Abstract: In today’s increasingly competitive and rapidly changing markets that depend heavily on innovation, firms are increasingly opt to use external knowledge sourcing strategies to complement their internal efforts in developing technological capabilities. While external knowledge sourcing strategy can bring substantial opportunities for new knowledge generation, it imposes huge challenges to the firms for successful integration of external knowledge, making appropriate execution of external knowledge sourcing strategies crucial. However, the literature and empirical evidence has not yet been able to offer a conclusive indication of what drives the performance variations of different firms in developing technological capabilities from sourcing knowledge externally. To address this under-explored question, this dissertation presents three empirical studies that examine the antecedents of the performance variations in developing technological capabilities through sourcing knowledge externally. By looking at firms’ external knowledge sourcing strategies in the three modes of governance with different levels of hierarchy (i.e. licensing, alliances, and acquisitions), the findings of this dissertation aim to improve our understanding of how external knowledge sourcing strategies can be better managed to develop technological capabilities.
    Date: 2016
  4. By: Gulnara I. Abdrakhmanova (National Research University Higher School of Economics); Galina G. Kovaleva (National Research University Higher School of Economics); Natalia V. Bulchenko (Ministry of Telecom and Mass Communications of the Russian Federation)
    Abstract: Structural changes influenced by ICT are having an impact on production processes and the release of products in the information and communication technology (ICT) sphere and content (on the level of individual enterprises) and are resulting in the pursuit of new approaches to socio-economic development, to increase the competitiveness of the country and to participate in the international division of labour. In order to identify development priorities and prospects in the information industry we therefore need a clear understanding of what the information industry is, what its boundaries are, what forms of economic activity make up this economic segment, and which products form the corresponding market. This working paper summarizes the results of a study to ‘measure’ the information industry as a segment of the economy producing goods and services linked to ICT and content. Methodological approaches are proposed to establish the ‘Information industry’ definitions based on the Russian Classification of Economic Activities (OKVED) and the Russian Classification of Products by Economic Activities (OKPD) in line with international standards and recommendations by the Organization for Economic Cooperation and Development (OECD). Key indicators of the development of the information industry are also tentatively calculated for Russia and compared with countries abroad. The content of this paper is based on research results commissioned by the Ministry of Telecom and Mass Communications of the Russian Federation and the outcome of evaluations and testing at a round table on the subject ‘IT industry: problems of classification and application’ round table (2014) and a session of the statistics section of the Central House of Scientists at the Russian Academy of Sciences on the subject of ‘Developing the “Information industry” and “IT industry” definitions based on the OKVED2 and OKPD2’ ( The paper was also supported by the Basic Research Program at the National Research University Higher School of Economics (HSE) and the subsidy granted to the HSE by the Government of the Russian Federation for the implementation of the Global Competitiveness Program.
    Keywords: Content and Media sector, ICT sector, information and communication technology (ICT), information industry
    JEL: C1 C5 C83 L63 L81 L82 L86 L96 M2 O14
    Date: 2015
  5. By: Alexander Petersen (Laboratory for the Analysis of Complex Economic Systems, IMT Institute for Advanced Studies, Lucca, Italy); Daniele Rotolo (SPRU, Science Policy Research Unit, University of Sussex, Brighton, United Kingdom); Loet Leydesdor (Amsterdam School of Communication Research (ASCoR), University of Amsterdam, Amsterdam, Netherlands)
    Abstract: We develop a model of innovation that enables us to trace the interplay among three key dimensions of the innovation process: (i) demand of and (ii) supply for innovation, and (iii) technological capabil- ities available to generate innovation in the forms of products, processes, and services. Building on triple helix research, we use entropy statistics to elaborate an indicator of mutual information among these dimensions that can provide indication of reduction of uncertainty. To do so, we focus on the medical context, where uncertainty poses signi cant challenges to the governance of innovation. We use the Medical Subject Headings (MeSH) of MEDLINE/PubMed to identify publications classi ed within the categories \Diseases" (C), \Drugs and Chemicals" (D), \Analytic, Diagnostic, and Ther- apeutic Techniques and Equipment" (E) and use these as knowledge representations of demand, supply, and technological capabilities, respectively. Three case-studies of medical research areas are used as representative 'entry perspectives' of the medical innovation process. These are: (i) human papilloma virus, (ii) RNA interference, and (iii) magnetic resonance imaging. We nd statistically signi cant periods of synergy among demand, supply, and technological capabilities (C??D??E) that point to three-dimensional interactions as a fundamental perspective for the understanding and gov- ernance of the uncertainty associated with medical innovation. Among the pairwise con gurations in these contexts, the demand-technological capabilities (C??E) provided the strongest link, followed by the supply-demand (D ?? C) and the supply-technological capabilities (D ?? E) channels.
    Keywords: triple helix; Medical Subject Headings; MEDLINE/PubMed; synergy; innovation; knowledge order; mutual information; dynamic vocabulary; redundancy.
    JEL: O32 O33
    Date: 2016–01
  6. By: Biener, Christian; Eling, Martin; Jia, Ruo
    Abstract: A central matter of dispute in the internationalization literature is the existence and shape of a systematic relationship between the degree of internationalization and firm performance (I-P relationship). Considering the global insurance industry, we show that the I-P relationship depends on the industry’s idiosyncrasies and on the geographical scope of internationalization. The life insurance industry’s idiosyncrasies lead to relatively high liability of foreignness that compromise cost efficiency, and relatively low risk reduction benefits of globalization. Therefore, we observe an overall negative impact of globalization on life insurers’ performance. However, the nonlife insurance industry’s idiosyncrasies render this relationship insignificant.
    Keywords: Industry Dependency, Liability of Foreignness, Risk Reduction, Data Envelopment Analysis, Financial Services
    Date: 2016–01
  7. By: Tim Buyse (Ghent University and SHERPPA); Freddy Heylen (Ghent University and SHERPPA); Ruben Schoonackers (National Bank of Belgium, Research Department, Ghent University)
    Abstract: This paper studies the drivers of business funded and performed R&D in a panel of 14 OECD countries since 1981. More specifically, we investigate the effects of public R&D related policies and wage formation. Following Pesaran (Econometrica, 2006) and Kapetanios et al. (Journal of Econometrics, 2011), our empirical strategy allows for cross-sectionally correlated error terms due to the presence of unobserved common factors, which are otentially non-stationary. We find that tax incentives are effective. Public funding (subsidization) of R&D performed by firms can also be effective if subsidies are not too low, neither too high. R&D performed within the government sector and within institutions of higher education is basically neutral with respect to business R&D. We find no evidence for crowding out, nor for complementarity. The higher education sector may, however, indirectly be of great significance. Our results reveal human capital accumulation at the tertiary level as a key driver of business R&D in the OECD during the last decades. As to the impact of wage formation, using an indicator for wage pres- sure developed by Blanchard (Economic Policy, 2006), we find that wage moderation may contribute to innovation, but only in fairly closed economies and in economies with flexible labour markets. In highly open economies and economies with rigid labour markets rather the opposite holds. In these economies high wage pressure may enhance creative destruction and force firms to innovate as a competitive strategy. Our results show that a careful treatment of the properties of the data is crucial.
    Keywords: R&D, technology policy, wage formation, panel cointegration
    JEL: E22 J30 O31 O38 O57
    Date: 2016–01
  8. By: Rajah Rasiah
    Abstract: Despite the use of industrial policies to stimulate economic growth by several successful developers, latecomers have faced mixed experiences. Hence, this paper analyses the industrial policy experience of the electronics industry in Malaysia. A blend of institutions have guided technological upgrading in the industry, especially in the state of Penang. Smooth coordination between the state government, multinational corporations, national firms, and the federal government helped stimulate technological upgrading in Penang. However, the lack of a critical mass of human capital and support from research and development organizations has discouraged the transformation of firms in the industry to the globe.s technology frontier.
    Keywords: industrial policy, institutions, electronics industry, Malaysia
    Date: 2015
  9. By: Quan Hoang Vuong; Thu Hang Do; Thu Trang Vuong
    Abstract: This paper introduces new results obtained from a statistical investigation into a3071-observation data set collected from a Vietnamese nationwideentrepreneurship survey. From established relationships, such factors aspreparedness, financial resources and participation in social networks areconfirmed to have significant effects on entrepreneurial decisions. Entrepreneurs,both financially constrained and unconstrained, who have a business plan tend tostart their entrepreneurial ventures earlier. Also, financial constraints have aprofound impact on the entrepreneurial decisions. When perceiving the likelihoodof success to be high, an entrepreneur shows the tendency for prompt action onbusiness ideas. But when seeing the risk of prolonging the waiting time to firstrevenue, a prospective entrepreneur would be more likely to wait for morefavorable conditions despite the vagueness of "favorable".Additionally, empirical computations indicate that there is a 41.3% probabilitythat an extant entrepreneur who is generating revenue sees high chance ofsuccess. Past work and entrepreneurial experiences also have positive impactson both the entrepreneurial decisions and perceived chance of success.
    Keywords: Entrepreneurship; new venture; transitional economies
    JEL: L26 M13 P27
    Date: 2016–01–18
  10. By: Karl Aiginger
    Abstract: Wettbewerbsfähigkeit wird noch immer oft rein kostenmäßig definiert (niedrige Löhne, Energiepriese). Für Industrieländer und besonders Topeinkommensländer wie Österreich spielen aber Faktoren wie Innovation, Ausbildung und staatliche und nicht staatliche Institutionen (Sozialpartnerschaft, Vertrauen, schnelle Entscheidungen) eine wichtige Rolle. Und der Wettbewerbserfolg sollte nicht nur an den erzielten Einkommen, sondern auch an sozialen und ökologischen Kriterien gemessen werden. Österreich ist auch nach dieser breiteren Definition des Wettbewerbserfolges - gemessen an der Erreichung von Beyond GDP Zielen - mittelfristig ein Erfolgsmodell.
    Date: 2016–01
  11. By: Storm, Hugo; Heckelei, Thomas
    Abstract: We analyse the importance of farm level spatial interaction for farm growth. We hypothesize that farms compete on local land markets and interact through knowledge transfer leading to positive and negative feedbacks, respectively. One of the main challenges in the analysis of farm level interaction is to distinguish between actual interactions from the effects of spatially correlated omitted variables. We approach this challenge be estimating a spatially lagged explanatory model (SLX) employing two spatial weighting matrix differentiating between a local and regional neighbourhood. Using a spatially explicit dataset for nearly all Norwegian farms in 1999 and 2009, we found that neighbouring effects differ substantially between local and regional neighbourhood. Our results indicate that the behaviour of directly neighbouring farms is indeed important for farm growth decisions.
    Keywords: farm growth, direct payments, land market, spatial competition, spatial interaction, Agricultural and Food Policy,
    Date: 2015

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