nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2016‒10‒09
seventeen papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Entrepreneurial Human and Social Capital in Small Businesses in Vietnam - An Extended Analysis - By Souksavanh VIXATHEP; Nobuaki MATSUNAGA
  2. Location Choices of Chinese Multinationals in Europe: The Role of Overseas Communities By Bas Karreman; Martijn J. Burger; Frank G. van Oort
  4. Protecting innovation through patents and trade secrets: Determinants and performance impacts for firms with a single innovation By Crass, Dirk; Garcia Valero, Francisco; Pitton, Francesco; Rammer, Christian
  5. Openness and environmental innovation: Does time-horizon matter? By MOTHE Caroline; NGUYEN Thi Thuc Uyen
  6. Why does emissions trading under the EU ETS not affect firms' competitiveness? Empirical findings from the literature By Joltreau, Eugénie; Sommerfeld, Katrin
  7. R&D heterogeneity and its implications for growth By Sigurd Mølster Galaasen; Alfonso Irarrazabal
  8. A Portrait of Firms that Invest in R&D By Lucia Foster; Cheryl Grim; Nikolas Zolas
  9. University Technology Transfer offices : the search for identity to build legimacy By Conor O'Kane; Vincent Mangematin; Will Geoghegan; Ciara Fitzgerald
  10. What kind of entrepreneurs start high productivity businesses? By Maliranta, Mika; Nurmi, Satu
  11. Evolutionary Cournot competition with endogenous technology choice: (in)stability and optimal policy By Lamantia, F.; Negriu, A.; Tuinstra, J.
  12. Innovation Policies and New Regional Growth Paths: A place-based system failure framework By Grillitsch, Markus; Trippl, Michaela
  13. The impact of resource efficiency measures on performance in small and medium-sized enterprises By Horbach, Jens
  14. Effect of Power Supply on the performance of Small and Medium Size Enterprises: A comparative analysis between SMEs in Tema and the Northern part of Ghana By Nyanzu, Frederick; Adarkwah, Josephine
  15. Spatial patterns of manufacturing clusters in Vietnam By Gokan, Toshitaka; Kuroiwa, Ikuo; Nakajima, Kentaro; Sakata, Shozo
  16. Complex Strategic Integration at Nike: Strategy Process and Strategy-as-Practice Combined By Burgelman, Robert A.
  17. Growth impacts of the exchange rate and technology By Márquez-Velázquez, Alejandro

  1. By: Souksavanh VIXATHEP (Graduate School of Economics, Kyoto University); Nobuaki MATSUNAGA (Graduate School of International Cooperation Studies, Kobe University)
    Abstract: Entrepreneurship is viewed as an important mechanism for economic development. It helps entrepreneurs overcome most of the constraints in businesses, encourages innovation, and contributes to employment generation and welfare improvement. The paper addresses the issue of entrepreneurial contribution to economic development at the micro level in Vietnam. The study examines the impact of entrepreneurial human capital on firm's performance (value added, total factor productivity (TFP)) in micro and small enterprises (MSEs). The analysis reveals that owner's formal education (up to upper secondary education) contributes to enhancement of firm value added and TFP in micro businesses. Entrepreneur's technical specialization, including advanced vocational training, university and post-graduate education, enhances performance of small enterprises, but shows some sign of over-education for micro businesses. Accumulated entrepreneurial experience, in form of occupation and self-employment experience, proves crucial for firm performance. Geographical advantages favoring MSEs located in the major metropolitan areas and sectoral advantages favoring 'trade and services' prove to be significant. The findings highlight the importance of human capital in nurturing entrepreneurship and fostering economic development at the micro-level.
    Keywords: entrepreneurship; human capital; social capital; small business; Vietnam
    JEL: C01 D22 L26
    Date: 2015–04
  2. By: Bas Karreman (Erasmus School of Economics, Erasmus University Rotterdam, The Netherlands); Martijn J. Burger (Erasmus School of Economics, Erasmus University Rotterdam, The Netherlands); Frank G. van Oort (Erasmus School of Economics, Erasmus University Rotterdam, The Netherlands)
    Abstract: Overseas Chinese communities are an important determinant in the location choice of greenfield investments made by mainland Chinese multinational enterprises across European regions. Conceptually embedded in a relational approach, this effect is shown through an empirical analysis of an exhaustive set of investment projects across NUTS-1 regions in 26 European countries for the period 2003-2010. When controlling for endogeneity bias and the embeddedness of existing Chinese economic activity, we find that the importance of overseas communities in the location choices of Chinese firms is based on increased access to strategic information. Our results confirm that the relationship between the size of an overseas Chinese community and the probability of Chinese investment is stronger for communities hosting newer generations of Chinese migrants; in addition, they partially corroborate that this relationship is stronger when the education level of the community’s Chinese migrants is higher. Our findings are particularly robust in the context of knowledge-intensive sectors and high value-added functions.
    Keywords: Overseas Chinese communities; China; Europe; greenfield FDI; relational view
    JEL: F20 L20 R30
    Date: 2016–09–30
  3. By: Karen LaPierre (Leading Coach K.K.); Naomi Wakayama (The University of Tokyo); Toshiro Wakayama (International University of Japan)
    Abstract: While business and society may engage in mutually beneficial, synergistic interactions, they also face the challenge of managing contentious, tradeoff interactions when their objectives are not aligned. In the diverse fields of studies in business and society, these two modes of business-society interactions have been conceptualized rather separately: mutual gains and synergies in concepts such as social innovation and shared value creation on one hand, and tensions and tradeoffs in studies that involve, for example, competing dimensions of corporate sustainability, conflicting priorities of various stakeholders, and opposing institutional logics in hybrid organizations on the other hand. Grounded in paradox theory, which views contentious and synergistic relationships of dual elements such as business and society as two sides of the same coin, we develop a framework for capturing the two types of business-society interactions at the fine-grained micro level. Our extensive case studies, based on publicly available information, illustrate the framework in detail, i.e., how contentious and synergistic interactions occur and their interplay over time within a context of a specific firm and its interactions with the society around it. Our key observation is that synergy creation and tension management are mutually-influencing and tightly integrated processes in the discourse of fine-grained, business-society interactions.
    Date: 2016–09
  4. By: Crass, Dirk; Garcia Valero, Francisco; Pitton, Francesco; Rammer, Christian
    Abstract: This paper tests a number of hypotheses on the use and effectiveness of patents and trade secrets designed to protect innovation. While previous studies have often considered patents and trade secrets as substitutes for one another, we investigate the complementary role of the two protection methods. We identify protection strategies for single innovation firms and hence overcome the assignment problem of existing empirical studies, i.e. whether firms using both protection methods do so for the same innovation or for different innovations. Employing firm panel data from Germany, we find fairly few differences between the determinants for choosing secrecy and patenting. Single innovators that combine both strategies, 39% of the group, tend to aim at a higher level of innovation and act in a more uncertain technological environment. Firms combining both protection methods yield significantly higher sales with new-to-market innovations. Using only secrecy has slightly stronger positive impacts on firm profitability.
    Keywords: Patents,Trade Secrets,Performance Impacts,Single Innovation
    JEL: O31 O32 O34
    Date: 2016
  5. By: MOTHE Caroline; NGUYEN Thi Thuc Uyen
    Abstract: The antecedents of environmental innovation and the impact of openness on technological innovation have been well studied, yet the role of external knowledge search remains largely unknown. This study explores whether six dimensions of open search (external R&D, acquisition, R&D cooperation, and three types of external information sourcing) enhance firms? environmental innovation (EI) when used either sporadically or persistently. It shows that the temporal dimension of openness matters. Persistent open knowledge search efforts are associated with a firm?s propensity to introduce EI, more so than sporadic search. Furthermore, the different types of knowledge search have heterogeneous effects on different types of EI. It also shows that persistent innovation is more relevant in the case of radical EI.
    Keywords: Environmental innovation; Incremental/radical; Openness; Persistence; Search
    Date: 2016–10
  6. By: Joltreau, Eugénie; Sommerfeld, Katrin
    Abstract: Environmental policies may have important consequences for firms' competitiveness or profitability. However, the empirical literature shows that hardly any statistically significant effects on firms can be detected for the European Union Emissions Trading Scheme (EU ETS). On the basis of existing literature, we focus on potential explanations for why the empirical literature finds hardly any significant competitiveness effects on firms, least not during the first two phases of the scheme (2005-2012). We also reason why the third phase (2013-2020) could reveal similar results. We show that the main explanations for this finding are a large over-allocation of emissions ertificates leading to a price drop and the ability of firms to pass costs onto consumers in some sectors. Cost pass-through, in turn, partly generated windfall profits. In addition, the relatively low importance of energy costs indicated by their average share in the budgets of most manufacturing industries may limit the impact of the EU ETS. Finally, small but significant stimulating effects on innovation have been found so far. These different aspects may explain why the empirical literature does not find significant effects from the EU ETS on firms' competitiveness.
    Keywords: Cap and Trade system,EU ETS,firm-level competitiveness
    JEL: Q52 Q58 D22
    Date: 2016
  7. By: Sigurd Mølster Galaasen (Norges Bank (Central Bank of Norway)); Alfonso Irarrazabal (Norwegian Business School (BI))
    Abstract: This paper quantifies the determinants of heterogeneity in R&D investment and its implications for growth. Using a panel of Norwegian manufacturing firms we document a negative correlation between R&D intensity and firm size, driven mainly by small firms with high R&D intensity. We estimate a Schumpeterian growth model with heterogeneous firms, that differ with respect to innovation efficiency. The estimated model fits the shape of the R&D investment distribution as well as the negative correlation between R&D intensity and firm size. A larger selection effect contribution to aggregate growth is found when we include R&D moments in the estimation. Finally, we study the link between firm heterogeneity and R&D subsidies, and show that the growth effects of subsidies depend crucially on how the policy influences the equilibrium distribution of firms.
    Keywords: R&D, Heterogeneous Firms, Subsidies, Growth
    JEL: L11 O3 O4
    Date: 2016–09–29
  8. By: Lucia Foster; Cheryl Grim; Nikolas Zolas
    Abstract: We focus on the evolution and behavior of firms that invest in research and development (R&D). We build upon the cross-sectional analysis in Foster and Grim (2010) that identified the characteristics of top R&D spending firms and follow up by charting the behavior of these firms over time. Our focus is dynamic in nature as we merge micro-level cross-sectional data from the Survey of Industrial Research and Development (SIRD) and the Business Research & Development and Innovation Survey (BRDIS) with the Longitudinal Business Database (LBD). The result is a panel firm-level data set from 1992 to 2011 that tracks firms’ performances as they enter and exit the R&D surveys. Using R&D expenditures to proxy R&D performance, we find the top R&D performing firms in the U.S. across all years to be large, old, multinational enterprises. However, we also find that the composition of R&D performing firms is gradually shifting more towards smaller domestic firms with expenditures being less sensitive to scale effects. We find a high degree of persistence for these firms over time. We chart the history of R&D performing firms and compare them to all firms in the economy and find substantial differences in terms of age, size, firm structure and international activity; these differences persist when looking at future firm outcomes.
    Date: 2016–01
  9. By: Conor O'Kane (Department of Management - University of Otago); Vincent Mangematin (MTS - Management Technologique et Strategique - Grenoble École de Management (GEM)); Will Geoghegan (Whitman School of Management - Syracuse University); Ciara Fitzgerald (University College Cork - University College Cork)
    Abstract: Technology transfer offices (TTOs) are of strategic importance to universities committed to the commercialization of academic knowledge. Within the university, TTOs' relationship with academics and management is single agent-multiple principal. When two principals exist in an agency relationship, conflicting expectations can naturally arise. We explore how TTOs build legitimacy by shaping identity with university academics and management. In undertaking this research we draw on 63 interviews with TTO executives across 22 universities in the Ireland, New Zealand and the United States. We find that TTOs use identity-conformance and identity-manipulation to shape a dual identity, one scientific and the other business, with academics and management respectively. We show how this combination of identity strategies is ineffective for legitimizing the TTO. We propose that TTOs' identity shaping strategies are incomplete and need to incorporate a wholly distinctive identity to complement and reinforce preliminary legitimacy claims made through conformance and manipulation. We discuss the potential implications of these findings for scholars, TTO executives and university management.
    Keywords: strategy,Technology transfer office,legitimacy,identity
    Date: 2015
  10. By: Maliranta, Mika; Nurmi, Satu
    Abstract: The Finnish economy is suffering from a prolonged hollow in productivity. For a solid bounce, arguably Finland would need new high productivity firms. To analyze where entrepreneurs of such firms come from and what they are like, we have constructed a novel Finnish Longitudinal OWNer-Employer-Employee (FLOWN) database. Here we focus on limited liability companies with one dominant owner who works in her own firm and who has hired at least one additional employee. We find that these entrepreneurs typically have previous experience as an employee in another high productivity firm and, moreover, this is strongly positively associated with her current firm’s higher productivity and survival probability. In addition, a strong link between the productivity performance and the owner’s formal university education in a technical field is established. These findings are robust to controlling for a number of entrepreneur and employee attributes. Finally, we find that firms that were founded in times of intensive job reallocation currently had superior productivity performance.
    Date: 2016–10–06
  11. By: Lamantia, F. (University of Amsterdam); Negriu, A. (University of Amsterdam); Tuinstra, J. (University of Amsterdam)
    Abstract: We study a dynamic oligopoly market model where quantity setting firms can choose one of two production technologies. We find that boundedly rationality in production (best-reply dynamics) and technology choice (evolutionary selection of better performing technologies) as sources of market dynamics, can generate endogenous instability and complicated dynamics, including chaotic fluctuations and co-existing attractors with fractal basins of attraction. By studying successively more complex versions of our model we analyze these two different sources of instability separately and also investigate their interaction. We find that boundedly rational production decisions amplify technological instability whereas boundedly rational technology decisions do not contribute to the production-driven destabilization of the Nash equilibrium. In any case, whenever the two types of decisions interfere in an endogenously unstable market, fluctuations follow a visibly different pattern compared to the fluctuations of a market with only one source of instability. Finally, we show that an innovation policy that aims to alter the market equilibrium without taking into account off-equilibrium dynamics may, in an intrinsically dynamic world, generate welfare losses by destabilizing a stable equilibrium and/or by raising the amplitude of market fluctuations.
    Date: 2016
  12. By: Grillitsch, Markus (CIRCLE, Lund University); Trippl, Michaela (Department of Geography and Regional Research, University of Vienna)
    Abstract: Regional economies are increasingly facing the challenge to renew their economic structures and generate innovations that break existing development paths. This calls for new innovation policy approaches that are well equipped to foster the modernisation of existing industries and nurture the development of new ones. The aim of this chapter is to provide a comprehensive place-based system failure framework for an innovation policy design that is suitable to initiate and support economic renewal processes in different region-specific contexts. Our framework rests on three pillars. The first one draws a distinction between barriers that relate to rigidities of the current industrial, knowledge and institutional structures on the one hand and impediments that hinder the emergence of new development paths on the other hand. The second conceptual cornerstone differentiates between various forms of new path development, namely path upgrading, modernization, branching, importation and new path creation. Third, to capture varying regional characteristics, we distinguish between thin, thick and specialised and thick and diversified regions. Our conceptual discussion demonstrates that each region type suffers from particular combinations of barriers to structural change. This offers a sound basis for assessing which types of new path development are most likely to occur in thin, thick and specialised and thick and diversified regions and for identifying promising policy approaches to fashion regional structural change in various regional contexts.
    Keywords: regional innovation policy; place-based system failures; regional structural change; new regional industrial path development
    JEL: O33 O38 R11 R58
    Date: 2016–10–04
  13. By: Horbach, Jens
    Abstract: The profitability of green investment is crucial for the diffusion of the resulting technologies but the knowledge about these effects is still limited. Positive performance effects may be based on cost savings stemming from the introduction of cleaner production processes connected with lower material and/or energy use. The present paper empirically analyzes the effects of environmentally active behavior on the performance of a firm. The analysis is based on the 2013 wave of the Eurobarometer data for small and medium-sized firms (SME's). The analysis for SME's seems to be interesting because small firms might be especially affected by the costs of environmental measures as the introduction of resource efficiency measures are costly in the short run. The results of a bivariate probit model show that a high amount in investment in resource efficiency measures triggers the overall performance of the firm. A high selfperceived greenness of the firm and a high share of green employment are positively correlated to performance. In fact, not all measures in improving resource efficiency are connected with positive performance effects: An increased use of renewables leads to a higher performance whereas measures to reduce water consumption are negatively correlated to turnover development.
    Keywords: eco-innovation,bivariate probit model,SME
    JEL: C35 O33 Q55
    Date: 2016
  14. By: Nyanzu, Frederick; Adarkwah, Josephine
    Abstract: Electricity provision in Ghana has been marred by low generation, poor supply and frequent power outages. The situation compel firms to adopt strategies to cope with this poor public supply of power for their business. To this end, this study analysed the effect of power supply on the performance of SMEs: a comparative analysis between two regions in Ghana where Small and Medium firms are located. The study uses the current World Bank 2013 Enterprise Survey on Ghana which consist of 710 firms. The study employs both chi-square and t-test to do pattern analysis. In addition, ordinary regression analysis (OLS) was employed to regress firm performance variable on electricity supply variable and other covariates. The results show that, the presence of power outages, thus, the number of times power outages experienced and hours of power outages negatively affected firms performance (profitability). In addition, it was further realized that power outages (power interruptions) severely affects SMEs located in the Northern part of Ghana than SMEs located elsewhere. The study therefore recommends that government should implement policies and programs such as power mix approach and renewable energy and bring in private sector participation to install competition and efficiency. This is in the interest to mitigate the unreliable electricity supply. Also, SMEs should consider alternative sources of power such as solar power, inverter, biogas, generators, which would help curb the cost power outage brings to their production and to boost output.
    Keywords: Medium and Small Scale Enterprise, Power Supply, Firm Performance, Ghana.
    JEL: M00 M10 M30
    Date: 2016–10–01
  15. By: Gokan, Toshitaka; Kuroiwa, Ikuo; Nakajima, Kentaro; Sakata, Shozo
    Abstract: The formation of industrial clusters is critical for sustained economic growth. We identify the manufacturing clusters in Vietnam, using the Mori and Smith (2013) method, which indicates the spatial pattern of industrial agglomerations using the global extent (GE) and local density (LD) indices. Spatial pattern identification is extremely helpful because industrial clusters are often spread over a wide geographical area and the GE and LD indices—along with cluster mapping—display how the respective clusters fit into specific spatial patterns.
    Keywords: Manufacturing industries, Industrial structure, Industrial agglomeration, Cluster analysis, Vietnam
    JEL: L60 R12 R14
    Date: 2016–08
  16. By: Burgelman, Robert A. (Stanford University)
    Abstract: This paper documents complex strategic integration (CSI) at Nike that helped drive the company toward developing a global women's fitness business, which extended the corporate strategy and required collaboration of multiple business units. The study involved longitudinal field research to document the development of Nike's global women's business (pre-2006) and track its further evolution (2006-2014). The theoretical lens combined tools of strategy process with tools of strategy-as-practice. This helped highlight upward/downward and lateral leadership activities involved in CSI that complement the leadership activities highlighted by strategy process. The paper illuminates the relatively under-researched phenomenon of CSI and adds to knowledge about the structural factors and strategic leadership activities that affect its effectiveness. It also contributes by showing how received strategy process knowledge and strategy-as-process knowledge can be usefully combined to gain more complete and deeper insight in CSI.
    Date: 2015–10
  17. By: Márquez-Velázquez, Alejandro
    Abstract: The aim of this paper is to assess whether the impacts of real exchange rate undervaluation and domestic technological capabilities on growth are stable across development levels. On the one hand, a real exchange undervaluation measure is constructed based on the purchasing-power-parity theory corrected by the Balassa-Samuelson effect. On the other hand, the index of technological specialization is used as a measure of domestic technological capabilities. Time-series-cross-section-growth regressions with development level interactions are used to test the stability of these variables' growth impact. The results show that real undervaluation is a growth driver across all development levels, once technological capabilities are accounted for; however, it is more important for developing and developed countries than for emerging markets. The results also suggest that developing countries grow faster when they are globally competitive in low-technology manufacturing and natural-resource-intensive industries. This research attempts to explain the lack of significance found in previous studies of the growth impact of real undervaluation in middle-income countries by accounting for an explicit role for domestic technological capabilities in the development process.
    Keywords: economic development,economic growth,domestic technological capabilities,real exchange rate undervaluation
    JEL: O11 O14 O33 O47
    Date: 2016

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