nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2016‒10‒16
seventeen papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  2. Respect Differences: Role of National Cultures in subsidiary autonomy in global product development By Thunyamai Thinotai
  3. Network structures as a factor stimulating innovative changes in enterprises By Nicoletta Baskiewicz; Małgorzata Šęgowik-Małolepsza; Michał Dziadkiewicz; Aneta Pachura
  4. Entrepreneurial Leadership: A Theoretical Research By Yusuf ESMER; Faruk DAYI
  5. Industrial diversification in Europe: The differentiated role of relatedness By Jing Xiao; Ron Boschma; Martin Andersson
  6. Industry Global Value Chains, Connectivity and Regional Smart Specialisation in Europe. An Overview of Theoretical Approaches and Mapping Methodologies By Emanuela Todeva; Ruslan Rakhmatullin
  7. Strengthening business ecosystems by bridging social capital: An approach for social entrepreneurs By ALFONSO LÓPEZ LIRA ARJONA; MANUEL VÃ ZQUEZ ZACARÃ AS; MARIO DÃ VILA AGUIRRE
  8. Should the host economy invest in a new industry? The roles of FDI spillovers, development level and heterogeneity of firms By Huu Thanh Tam Nguyen; Ngoc-Sang Pham
  9. Innovative processes in managing the production enterprise By Robert Sałek; Tomasz Szczepanik; Małgorzata Šęgowik-Małolepsza; Jarosław Jasiński
  10. The Effect Of Logistic Businesses’ Green Warehouse Management Practices On Business Performance By GOKHAN AKANDERE
  11. How high-tech entrepreneurs bricole the evolution of business process management for their activities By Severine Le Loarne; Adnane Maalaoui
  12. FDI effects on the labor market of host countries By Hale, Galina; Xu, Mingzhi
  13. Labour practices in India By Nathan, Dev.; Saripalle, Madhuri.; Gurunathan, L.
  14. Does Higher Productivity Dispersion Imply Greater Misallocation?A Theoretical and Empirical Analysis By J. David Brown; Emin Dinlersoz; John S. Earle
  15. Global Value Chains Mapping: Methodology and Cases for Policy Makers. Thematic Work on Value Chain Mapping in the Context of Smart Specialisation By Emanuela Todeva; Ruslan Rakhmatullin
  16. Non-scale endogenous growth with R&D and human capital By Creina Day
  17. Interfirm Relationships and Business Performance By Adam Szeidl; Jing Cai

  1. By: Buzard, Kristy (Syracuse); Carlino, Gerald A. (Federal Reserve Bank of Philadelphia); Hunt, Robert M. (Federal Reserve Bank of Philadelphia); Carr, Jake (Ohio State University); Smith, Tony E. (University of Pennsylvania)
    Abstract: We employ a unique data set to examine the spatial clustering of private R&D labs. Instead of using fixed spatial boundaries, we develop a new procedure for identifying the location and size of specific R&D clusters. Thus, we are better able to identify the spatial locations of clusters at various scales, such as a half mile, 1 mile, 5 miles, and more. Assigning patents and citations to these clusters, we capture the geographic extent of knowledge spillovers within them. Our tests show that the localization of knowledge spillovers, as measured via patent citations, is strongest at small spatial scales and diminishes rapidly with distance.
    Keywords: spatial clustering; geographic concentration; R&D labs; localized knowledge spillovers; patent citations
    JEL: O31 R12
    Date: 2016–10–13
  2. By: Thunyamai Thinotai (Graduate School of Economics and Management, Tohoku University,)
    Abstract: Food industry is an industry that has difficulty differentiating among products, so some product characteristics are easily copied by the competitors which lead a high failure rate among food products and a creativity crisis in the food industry. According to conventional wisdom, product localization with high local responsiveness is considered the lifeblood of establishing global competitiveness among food multinational corporations (MNCs). Within this perspective, a MNCs` subsidiary is considerate as an important source of knowledge for MNCs to be able to pursue charter enhancement and reinforcement initiatives. The research presents two research questions: How the autonomy was granted to MNCs subsidiary according to the national culture? And how a food MNCs develops understanding in national culture for subsidiary autonomy determination in local product development? The purpose of this ongoing research is to raise the importance of respect differences in national cultures aspect for subsidiary autonomy determination.
    Keywords: global product development, subsidiary autonomy, national cultures, food industry
    JEL: M16
  3. By: Nicoletta Baskiewicz (Politechnika Częstochowska); Małgorzata Šęgowik-Małolepsza (Politechnika Częstochowska); Michał Dziadkiewicz (Politechnika Częstochowska); Aneta Pachura (Politechnika Częstochowska)
    Abstract: Network functioning covers all kinds of formal and informal relationships between individuals and organizations. Network structure allows enterprises to reach knowledge quickly, while saving time and money which becomes the determining factor in the changes made in enterprises. In order to define a network one can assume that it includes customers, competitors, suppliers, research organizations, schools, institutions, non - profit organizations that are linked one to another and create innovation. The nature of the network lies in the innovation process, which means creating new technical and organizational solutions as well as their transfer and application in the economy. This is possible thanks to the knowledge generated in the network, which is the result of a process of interaction and cooperation between the participants in the network. The objectives of this paper are to determine the following: what forms of cooperation are taken in business practice that entrepreneurs take together in the network and to what extent this network affects its participants.
    Keywords: network structures, factors stimulating innovative changes, innowative changes
    JEL: M21
  4. By: Yusuf ESMER (Sinop University Vocational School,); Faruk DAYI (Kastamonu University Tosya Vocational School)
    Abstract: In today’s business world, having just leadership qualities by business managers is not enough in order to maintain growth, development and sustainability of enterprises. In addition to this, business managers should be able to seek innovations, opportunities around them and take some risks. Managers with these qualities have both leadership and entrepreneurship characteristics. At this point, the concept of entrepreneurial leadership emerges. Entrepreneurial leadership can be defined as a leader, who is also have the skills of entrepreneurship. In other words, entrepreneurial leadership refers to the managers who can take risks, seize opportunities, pursue innovation and be innovative, producing, interchanging and strategic. In addition, entrepreneurial leadership is creating new products, new processes and expansion opportunities in existing businesses, working in social institutions and dealing with ignored social issues, participating in social and political movements, contributing to the change of current services and policies implemented by civil society organizations and governments. Entrepreneurial leaders know themselves and their environment very well and find new opportunities creating value for businesses, stakeholders and society. The main motivation of leaders is their desire to create social, environmental and economic opportunities. Today, the need for entrepreneurial leaders in businesses is increasing every passing day and the subject of entrepreneurial leadership should investigated by researchers. In this regard, in this study, the concepts of leadership and entrepreneurship are briefly defined in accordance with the earlier studies conducted in this field and the concept of entrepreneurial leadership, which has become increasingly important in the business world, is discussed and the characteristics and dimensions of entrepreneurial leadership and its importance for businesses is emphasized.
    Keywords: Leadership, Entrepreneurship, Administration, Entrepreneurial Leadership
    JEL: L26 L20 M10
  5. By: Jing Xiao; Ron Boschma; Martin Andersson
    Abstract: There is increasing interest in the drivers of industrial diversification, and how these depend on economic and industry structures. This paper contributes to this line of inquiry by analyzing the role of relatedness in explaining variations in industry diversification, measured as the entry of new industry specializations, across 173 European regions during the period 2004-2012. There are significant differences across regions in Europe in terms of industrial diversification. Relatedness has a robust positive influence on the probability that new industry specialization develops in a region. A novel finding is that the influence of relatedness on the probability of new industrial specializations depends on innovation capacity. We find that relatedness is a more important driver of diversification in regions with a weaker innovation capacity. The effect of relatedness appears to decrease monotonically as the innovation capacity of a local economy increases. This is consistent with the argument that high innovation capacity allows an economy to ‘break from its past’ and to develop, for the economy, truly new industry specializations. We infer from this that innovation capacity is a critical factor for economic resilience.
    Keywords: industrial diversification, related diversification, evolutionary economic geography, unrelated diversification, European regions, resilience
    JEL: B52 L16 O14 O18 R11
    Date: 2016–10
  6. By: Emanuela Todeva (BCNED - Business Clusters, Networks and Economic Development); Ruslan Rakhmatullin (European Commission - JRC)
    Abstract: This paper is the second paper in a series of three papers on Global Value Chains (GVCs), developed under the auspices of the Joint Research Centre (JRC) of the European Commission. It provides a clear understanding and comparison of existing theories and methodologies for mapping value chains and offer a demonstration of the use of such methodologies in the context of S3 and strategic interventions at regional, national and cluster level. The paper provides an overview of five distinctive theoretical frameworks to global value chain research, and related to them methodologies for mapping GVCs, and analysis of patterns of industry diversification and integration. The paper highlights that mapping interconnected industry capabilities at a global scale and GVC analysis requires the use of data on the operations of multinational enterprises (MNEs). This discussion is intricately linked to the third paper in the series, which presents a new methodological approach using a bespoke database of the most innovative biopharma MNEs, describing the step-by-step procedure for building the MNE database and mapping the biopharma GVC at country, region and cluster level. Our policy recommendations are co-aligned with the existing framework - EU industrial policy: ‘Towards Industrial Renaissance’, Regional growth through Smart Specialisation Strategy, COSME programme for SME support, building Circular Economy for sustainable and inclusive growth, cluster internationalisation, and other relevant policy initiatives by the European Commission.
    Keywords: global value chains, methodology, mapping, smart specialisation, industrial modernisation, regional policy, European Union
    Date: 2016–10
    Abstract: Social entrepreneurship has been defined as the generation of new ventures involving economic, social and environmental value. In that sense, social impact is aimed through the introduction of products, services, technologies or processes targeted for the improvement of the well-being of the poor, access to education, health services, water, energy, among others. However, social entrepreneurs usually lack the resources to sustain their ventures; thus, inter-firm alliances are often sought for resource provision. Although such alliances are a step towards the achievement of sustainability regarding the new social venture, the main argument of this study relays upon goal alignments among all the pertaining partners towards creating community value through a business ecosystem. Then, contributions of all actors involved could be focused around visions, ideas, volunteering, and resources exchanges. This study presents a conceptual model based on the development of a business ecosystem through bridging social capital with diverse key players (e. g. universities, government, Non-Governmental Organizations, Multinational Corporations, or institutions) in order to assure resource provision for social firms. The model proposes that greater transfer of resources among the players strengthens the sustainability of the new social venture.
    Keywords: Social Entrepreneurship; Social Capital; Business Ecosystems
    JEL: L31 L14 L14
  8. By: Huu Thanh Tam Nguyen (EPEE - Centre d'Etudes des Politiques Economiques - Université d'Evry-Val d'Essonne); Ngoc-Sang Pham (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: We consider a small open economy with two productive sectors (an old and a new). There are two types of firms in the new industry: a well planted multinational firm and a potential domestic firm. Our framework highlights a number of results. First, in a poor country with low return of training and weak FDI spillovers, the domestic firm does not exist in the new industry requiring a high fixed cost. Second, once the host economy has the capacity to create the new firm, the productivity of the domestic firm is the key factor allowing it to enter into the new industry, and even eliminate the multinational firm. Interestingly, in some cases where FDI spillovers are strong, the country should invest in the new industry, but not train specific workers. Last, credit constraints and labor/capital shares play important roles in the competition between the multinational firm and the domestic one.
    Keywords: FDI spillovers,investment in training,heterogeneous firms,entry cost
    Date: 2014–10
  9. By: Robert Sałek (Czestochowa University of Technology); Tomasz Szczepanik (Czestochowa University of Technology); Małgorzata Šęgowik-Małolepsza (Czestochowa University of Technology); Jarosław Jasiński (Czestochowa University of Technology)
    Abstract: The activities of industrial enterprises in the globalized market environment causes the connection of their strategic objectives. The use of modern technologies, organizational and economic innovations or rationalization of production by lowering costs, creates new opportunities for planned activities. Technological, process and organizational aspects of innovation are the driving force for industrial competitiveness. Innovativeness and innovation processes present in the market are an important element contributing to economic growth. The importance of innovativeness in industrial sectors, recognized as products or technologies, must also be seen in the perspective of rational management. This is an important element of business executives who need to develop industrial activities of the enterprise while stimulating and developing innovative activities in other structural areas such as: financing of new technology or technology development of storages. The article presents the theoretical aspects of innovation in terms of factors influencing innovation processes.
    Keywords: innovation processes, management, industry
    JEL: M21
    Abstract: Due to the inevitable effect that businesses are living organisms, the concepts of sustainability and green have become the main values for many businesses. Today, the concept of sustainable green warehouse is commonly related with integration, balancing and management of economic, environmental and social inputs and outputs of operations in warehouses with green buildings. Sustainable green warehouse can be defined as the cluster of technological and organisational solutions designed for the efficiency of warehouse processes by maintaining the highest social standards and minimizing the effect on nature in terms of financial efficiency. However, businesses are aware that it is difficult to get effective and efficient warehousing and distribution services as third party logistics (3PL) for flows in supply chain in the present business environment. In this context, companies offering warehousing and distribution services should have values that provide them with competition advantage, increase their brand equities, and decrease operation costs such as green buildings, lighting systems with motion and time sensors, automatic handlings equipment that uses renewable energy, natural ventilating systems, solar panels, water treatment systems, ISO standards, and 5S philosophy. In near future, it will be understood that maintaining economic and operational efficiency, minimising damage to environment, and creating appropriate working environments can only be possible, and permanent via efficient management of green warehouses. The present study investigates the practice of sustainability principles in terms of warehouse, warehousing and distribution management. This paper explores the GWM practices and performance of the business an empirical analysis of logistic enterprises within Turkey.
    Keywords: Green warehouse management, Green warehousing, Performance, Environment, Green Economy
  11. By: Severine Le Loarne (MTS - Management Technologique et Strategique - Grenoble École de Management (GEM)); Adnane Maalaoui (ESG Paris – School of Business)
    Abstract: Purpose: This paper focuses on how entrepreneurs anticipate and change their company's business process management after developing a radical innovation. The paper is based on a critical approach to business process modelling (BPM) that posits that—in spite of all the claims, guides, and tools that companies employ to help them modelise their processes—business processes are developed and improved (or at least changed) by individuals who negotiate, anticipate, and compromise to make these changes occur. Thus, BPM is more a matter of "bricolage" (Levi-Strauss) than an established and defined plan. Based on this position, our paper analyses how a business process model emerges in the early phases of a high tech new venture when the entrepreneur lacks a valid template to form a conceptual representation of the firm's business processes. Design/Methodology/Approach: We adopt a perspective based on the concept of bricolage. By analysing and comparing the discourse of 40 entrepreneurs—20 involved in an activity based on a radical innovation and 20 involved in an activity based on a more incremental concept—we are able to answer the two research questions.
    Keywords: Discourse Analysis,Bricolage,Strategy as Practice,Entrepreneurship,Business Process Modelling
    Date: 2015
  12. By: Hale, Galina (Federal Reserve Bank of San Francisco); Xu, Mingzhi (University of California, Davis)
    Abstract: This paper surveys literature on impact of foreign direct investments (FDI) on host country’s labor market, including employment, wages, labor productivity, skill premium, and inequality. Meta-analysis of empirical findings suggests that there is solid consensus with respect to wages: in both developing and developed countries FDI leads to higher wages in target firms and industries. Majority of the papers also find positive productivity spillovers as well as increase in skill premium as a result of FDI, especially in developing economies. We analyze all the findings together to address possible mechanisms of FDI effects on labor in target firms, in competing firms, and in vertically related firms. We present a stylized model that is consistent with many empirical regularities found in meta-analysis of empirical literature.
    Date: 2016–09–21
  13. By: Nathan, Dev.; Saripalle, Madhuri.; Gurunathan, L.
    Abstract: It is well-known that labour practices, which cover terms of employment and working conditions in a broad sense, vary greatly amongst firms of the same sector. Much less is known, however, on the factors determining or explaining labour practices at the firm level. To some extent, technology and tasks determine or sets limits to the types of labour practices that can be used by a firm. But the firm’s strategy in product markets, improving services quality and choosing cost saving techniques also play a role in firm decisions on labour practices. This paper analyses case studies of labour practices in a dozen firms in India, as well as explanatory factors of production strategies in these firms. It identifies three main labour practice systems – the operator system, the quality circle of high employee involvement, and that of the semi- autonomous work team. Within each of these labour systems, there are also instances of better practices.
    Keywords: work organization, work performance, skilled worker, labour contract, labour cost, case study, labour policy, India
    Date: 2016
  14. By: J. David Brown; Emin Dinlersoz; John S. Earle
    Abstract: Recent research maintains that the observed variation in productivity within industries reflects resource misallocation and concludes that large GDP gains may be obtained from market-liberalizing polices. Our theoretical analysis examines the impact on productivity dispersion of reallocation frictions in the form of costs of entry, operation, and restructuring, and shows that reforms reducing these frictions may raise dispersion of productivity across firms. The model does not imply a negative relationship between aggregate productivity and productivity dispersion. Our empirical analysis focuses on episodes of liberalizing policy reforms in the U.S. and six East European transition economies. Deregulation of U.S. telecommunications equipment manufacturing is associated with increased, not reduced, productivity dispersion, and every transition economy in our sample shows a sharp rise in dispersion after liberalization. Productivity dispersion under central planning is similar to that in the U.S., and it rises faster in countries adopting faster paces of liberalization. Lagged productivity dispersion predicts higher future productivity growth. The analysis suggests there is no simple relationship between the policy environment and productivity dispersion.
    Date: 2016–01
  15. By: Emanuela Todeva (BCNED - Business Clusters, Networks and Economic Development); Ruslan Rakhmatullin (European Commission - JRC)
    Abstract: This paper is a paper in a series of work on Global Value Chains (GVCs), developed under the auspices of the Joint Research Centre (JRC) of the European Commission. It builds upon the theoretical discussion presented in the first two papers and offers a new methodological approach for mapping GVCs, using a bespoke dataset of the most innovative biopharma MNEs. The paper takes the example of the global biopharma value chain and describes the step-by-step procedure for mapping interconnected capabilities at a global scale, the concentration of biopharma capabilities in Europe, and two cases of regional and national specialisation in this sector. The proposed methodological approach contains two distinctive methodologies – for top-down global value chain mapping of an established industry sector (such as biopharma), and for a bottom-up mapping of capabilities within the GVC that operate at specific locations. Both methodologies can be applied to emerging sectors and segments driven by key enabling technologies, such as photonics, advanced materials, 3D printing, or renewable energy, or any other cross-sectoral value chains. The paper includes two cases of application of this methodology at regional and national level. These are the cases of Bulgaria and the Greater South East of England in the UK. The novel methodology and methods for data collection and visualisation demonstrate the linkages across segments of the biopharmaceutical GVC and the position of firms at the cross-section of biotechnology discovery and pharmaceutical drug development and manufacturing activities, managing a complex network of outsourcing, insourcing and supply relationships, through a vast empire of subsidiaries around the world. Capturing and representing the value-chain within biopharma MNEs enables policy makers to understand the complexity of industry organisation across multiple locations around the world and the global knowledge and resource linkages that drive further growth in the sector.
    Keywords: regional policy, value chains, GVCs, case study, BioPharma, regional level, smart specialisation
    Date: 2016–10
  16. By: Creina Day
    Abstract: This paper examines the conditions under which increasing knowledge, encapsulated in ideas for new technology through R&D and embodied in human capital through education, sustains economic growth. We develop a general model where, consistent with recent literature, growth is non-scale (not increasing in population size) and endogenous (generated by factors within R&D and education). Recent models feature the counterfactual assumption of constant returns to existing knowledge and restrict the substitutability of inputs within R&D and education. We find that non-scale endogenous growth is possible under less stringent conditions. Our findings reconcile sustained economic growth with evidence of diminishing marginal returns in education and R&D, which suggests an ambiguous role for R&D policy.
    Date: 2016–10
  17. By: Adam Szeidl; Jing Cai
    Abstract: We organize regular business meetings for randomly selected managers of young Chinese firms to study the effect of business networks on firm performance. We randomize 2,800 managers into several groups that hold monthly meetings for one year, and a "no-meetings" control group. We find that: (1) The meetings increase firm revenue by 7.8 percentage points, and also significantly increase profit, a management score, employment, and the number of business partners; (2) These effects persist one year after the conclusion of the meetings; and (3) Firms randomized to have better peers exhibit higher growth. We exploit additional interventions to document concrete channels: (4) Peers share exogenous business-relevant information, particularly when they are not competitors, showing that the meetings facilitate learning; (5) Managers create more business partnerships in the regular than in other one-time meetings, showing that the meetings improve firm-to-firm matching.
    Date: 2016

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