nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2016‒10‒30
sixteen papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Technological innovation systems for biorefineries – A review of the literature By Bauer, Fredric; Coenen, Lars; Hansen, Teis; McCormick, Kes; Palgan, Yuliya Voytenko
  2. Absorptive Capability of Japanese and European MNCs: Balance between Autonomy and Control of R&D Subsidiaries in the US By Seiko Arai
  3. Multinational Enterprises and Economic Development in Host Countries: What We Know and What We Don’t Know By Rajneesh Narula; André Pineli
  4. Incorporation of services in Natural Resource-Intensive goods: description and measurement By Enrique Gilles; Marcel Vaillant
  5. Survival of Entrepreneurial Firms: The Role of Agglomeration Externalities By Tavassoli, Sam; Jienwatcharamongkhol, Viroj
  7. Disentangling the Role of Modularity and Bandwidth in Entry Mode Choice: The Case of Business Services Offshoring By Stefano Elia; Rajneesh Narula; Silvia Massini; Antonio Vezzani
  8. Patents as Substitutes for Relationships By Saidi, Farzad; Zaldokas, Alminas
  9. Fiscal Policy, Inequality and Poverty in Iran: Assessing the Impact and Effectiveness of Taxes and Transfer By Ali Enami
  10. Foreign direct investment and international trade in services: an analysis based on balance of payments microdata By Chiara Bentivogli; Francesco Bripi; Andrea Carboni; Luca Cherubini; Eleonora Laurenza; Andrea Locatelli; Paola Monti; Elisabetta Nencioni; Valeria Pellegrini; Diego Scalise
  12. Institutions, Knowledge Accumulation and Productivity Growth in the Second Half of the XXth By Sanchís-Llopis, Juan A.; Sanchís Llopis, M. Teresa; Esteve, Vicente; Cubel Montesinos, Antonio
  13. Entrepreneurship, growth and unemployment: A panel VAR approach By Dellis, Konstantinos; Karkalakos, Sotiris
  14. Determinants of the choice of multi-modes of governance by producers and processors of paddy in Benin By Codjo, Ogoudélé Simon; Fiamohe, Rose; Kpenavoun, Sylvain; Acclassato, Denis; Biaou, Gauthier
  15. Multinational retailers and host countries’ export competitiveness By Cheptea, Angela
  16. Innovation policies for regional structural change: Combining actor-based and system-based strategies By Arne Isaksen; Franz Tödtling; Michaela Trippl

  1. By: Bauer, Fredric (Department of Chemical Engineering, Lund University); Coenen, Lars (CIRCLE, Lund University); Hansen, Teis (Department of Human Geography, Lund University); McCormick, Kes (IIIEE, Lund University); Palgan, Yuliya Voytenko (IIIEE, Lund University)
    Abstract: The concept of a bioeconomy can be understood as an economy where the basic building blocks for materials, chemicals and energy are derived from renewable biological resources. Biorefineries are considered an integral part of the development towards a future sustainable bioeconomy. The purpose of this literature review is to synthesize current knowledge about how biorefinery technologies are being developed, deployed, and diffused, and to identify actors, networks and institutions relevant for these processes. A number of key findings can be obtained from the literature. First, investing more resources in R&D will not help to enable biorefineries to cross the ‘valley of death’ towards greater commercial investments. Second, while the importance and need for entrepreneurship and the engagement of small and medium-sized enterprises (SMEs) is generally acknowledged, there is no agreement how to facilitate conditions for entrepreneurs and SMEs to enter into the field of biorefineries. Third, visions for biorefinery technologies and products have focused very much on biofuels and bioenergy with legislation and regulation playing an instrumental role in creating a market for these products. But there is a clear need to incentivize non-energy products to encourage investments in biorefineries. Finally, policy support for biorefinery developments and products are heavily intertwined with wider discussions around legitimacy and social acceptance.
    Keywords: bioeconomy; biorefineries; biorefinery technology; technological innovation systems
    JEL: L73 O33 Q23 Q55
    Date: 2016–10–19
  2. By: Seiko Arai (Uppsala University, Uppsala, Sweden / National Graduate Institute for Policy Studies, Tokyo, Japan)
    Abstract: This paper analyzes the capability of Japanese and European multinational companies (MNCs) to absorb technological knowledge from the United States through their R&D operation in the US. Employing the notion of gabsorptive capacity h, this research defines the capability of a firm to absorb technological knowledge from abroad as gabsorptive capability (AC), h and aims to examine the components of AC and their interrelationships using patent and sales data in the context of R&D management of Japanese and European MNCs at home and in the US. This paper also presents the taxonomies to show that a balance of autonomy and control is the key to increasing AC in the US and contributing to the US market sales by utilizing the home and host country technologies.
    Date: 2016–10
  3. By: Rajneesh Narula (Henley Business School, University of Reading); André Pineli (Henley Business School, University of Reading)
    Abstract: The attraction of multinational enterprises (MNEs) has become a key component of development policies. Generous incentive packages are offered by governments to attract foreign direct investment (FDI), although few countries perform proper cost/benefit analyses. MNEs can have a decisive influence on the development path of countries, although the effectiveness of an FDI-assisted development strategy depends on a variety of factors. Net benefits depend not only on quantity, but also on the quality of FDI. Quality has to do with the MNE’s investment motivations, the affiliates’ mandate and autonomy, which in turn determine the potential for linkages and spillovers. These effects also depend on the capacity of domestic firms to absorb, internalise and upgrade their knowledge assets. A sound FDI policy must not be exclusively concerned with attracting capital investment, but must prioritise enhancing the local embeddedness of the MNEs. Globalization and subsequent changes in economic organization require both policy makers and scholars to reconsider their understanding of FDI and development. “FDI” and “MNEs” are no longer synonyms, as MNEs are increasingly able to control value chains without ownership through equity. Poor data and weak methodologies mean making realistic estimations of development effects is also increasingly fraught with difficulty. The tools to measure linkages and spillovers are increasingly outdated, as we cannot estimate non-equity engagements or knowledge flows, and this means we are unable to objectively judge if foreign investments have a net positive or negative effect, and whether such effects persist or attenuate over time.
    Keywords: multinational enterprises; foreign direct investment; economic development; developing countries; externalities; spillovers; linkages
    JEL: D62 F23 O14 O19 O24
    Date: 2016–05
  4. By: Enrique Gilles; Marcel Vaillant
    Abstract: South American countries play a key role in international markets of the so called Natural Resource Intensive Goods (NRIGs), in particular mining and food. It has been argued that this specialization pattern has disadvantages in terms of economic development, and both policy makers and academia repeatedly sustain the need to search for new international insertion schemes. In this paper we argue that one such avenue could be based on these comparative advantages themselves, and we ask how services can add value to the production and exports of NRIGs. To measure the relevance of economic infrastructure services on the competitiveness of NRIGs we develop a sectoral approach using domestic input-output tables for six Latin American countries. In particular, we measure Services value added incorporated in NRIGs, and we also analyse the impacts of productivity changes in infrastructure services on NRIGs producer prices. Results allow to identify which services are more important to each NRIG in each country. They also highlight that new instruments in trade and industrial policy must be developed to promote the specialized products services in NRIG. It is necessary to know the nature of the process that generates this new comparative advantage.
    Date: 2016–10–22
  5. By: Tavassoli, Sam (CIRCLE, Lund University); Jienwatcharamongkhol, Viroj (Department of Economics, Lund University)
    Abstract: This paper analyzes the role of various types of agglomeration externalities on the survival rate of entrepreneurial firms. In particular, we trace the population cohort of newly-established and self-employed Swedish firms in the Knowledge-Intensive Business Service (KIBS) sector in 1997 up to 2012 and investigate the role of Marshallian and Jacobian externalities on the survival of these firms. We find that only Jacobian externalities (diversity) is positively associated with the survival of entrepreneurial firms. Not all Jacobian externalities matter though. Only the higher the “related variety” of the region in which an entrepreneurial firm is founded, the higher will be the survival chance of the firm, while “unrelated variety” barely has any significant correlation. The result is robust after controlling for extensive firm characteristics and individual characteristics of the founders. The main message here is: for a newly-established entrepreneurial firm, not only it matters who you are, but also where you are.
    Keywords: Entrepreneurial firms; region; agglomeration externalities; survival analysis; related variety; unrelated variety
    JEL: J24 L26 R12
    Date: 2016–10–19
  6. By: Zouaghi, Ferdaous; Hirsch, Stefan; Garcia, Mercedes Sanchez
    Abstract: Strategic management research has demonstrated the importance of firm resources and industry structure as drivers of profitability. However, less is known about how factors related to firms´ geographical locations affect profitability. In this article, we estimate firm-, industry-, year-, and region-specific effects on agri-food firm profitability in Spain. We apply the multilevel approach of Hierarchical Linear Modeling to a sample of 3,273 agri-food firms operating in different geographical districts during the time span 2006-2013. The results reveal the dominance of firm-specific effects which contribute up to 48.8% to variance in profitability. Moreover, firm size, growth, financial risk as well as innovation activity turn out as significant profit drivers. Although firm-effects have a stronger impact than industry affiliation and location, the results indicate that structural industry factors such as concentration and size as well as territorial factors such as regional education and unemployment influence profitability. Moreover, location in rural districts is not necessarily a handicap for firm profitability.
    Keywords: agri-food profits, hierarchical linear model, location effects, Agribusiness, Industrial Organization, Research Methods/ Statistical Methods,
    Date: 2016
  7. By: Stefano Elia (Politecnico di Milano, Italy); Rajneesh Narula (Henley Business School, University of Reading, UK); Silvia Massini; Antonio Vezzani (Manchester Business School, The University of Manchester, UK)
    Abstract: This paper investigates the role of modularity on entry mode choice of companies’ offshoring of business services. We distinguish between functional modularity, which reflects the possibility to subdivide a function into smaller modules, and architectural modularity, which reflects the interdependence between these modules. Lower architectural modularity requires greater interaction (greater ‘bandwidth’) between the organizational units to reintegrate the individual modules. Using modularity appropriately can decrease transaction costs and reduce the risks of knowledge leakages associated with offshoring, and improve the effectiveness of the sourcing process, thus increasing the probability that firms opt for less hierarchical entry modes. Firms that are less experienced with offshoring tend to underestimate the associated resources and costs of architectural modularity and select entry modes that do not provide sufficient bandwidth to efficiently reintegrate offshored modules, increasing the risk of failure of the offshoring initiatives. Our empirical analysis, which involves 490 offshoring initiatives, supports our arguments, especially in high-tech and knowledge-intensive industries.
    Keywords: Offshoring, entry mode, modularity, value chain fragmentation, outsourcing
    Date: 2015–06
  8. By: Saidi, Farzad; Zaldokas, Alminas
    Abstract: Firms face a trade-off between patenting, thereby disclosing innovation, and secrecy. In this paper, we show how such public-information provision through patents acts as a substitute for private information acquired in financial relationships. As a shock to innovation disclosure, we use the American Inventor's Protection Act that made the content of firms' patent applications public within 18 months after filing, rather than at the grant date. Firms in industries that experienced a greater change in the publicity of their patent applications were significantly more likely to switch lenders. We also consider the reverse link of the substitution relationship, and explore the impact of improved lender informedness following the creation of universal banks on firms' patenting behavior. We find that firms patent less, without negatively altering their investment in innovation and its outcomes, such as new-product announcements.
    Keywords: corporate disclosure; Information Acquisition; innovation; loan contracting; patenting
    JEL: G20 G21 O31
    Date: 2016–10
  9. By: Ali Enami (Department of Economics, Tulane University.; Department of Economics, Tulane University and Commitment to Equity Institute; University of Akron, OH, USA)
    Abstract: Using the Iranian Household Expenditure and Income Survey (HEIS) for 2011/12, we apply the marginal contribution approach to determine the impact and effectiveness of each fiscal intervention, and the fiscal system as a whole, on inequality and poverty. Net direct and indirect taxes combined reduce the Gini coefficient by 0.0644 points and the headcount ratio by 61 percent. When the monetized value of in-kind benefits in education and health are included, the reduction in inequality is 0.0919 Gini points. Based on the magnitudes of the marginal contributions, we find that the main driver of these reductions is the Targeted Subsidy Program, a universal cash transfer program implemented in 2010 to compensate individuals for the elimination of energy subsidies. The main reduction in poverty occurs in rural areas, where the headcount ratio declines from 44 to 23 percent. In urban areas, fiscally-induced poverty reduction is more modest: the headcount ratio declines from 13 to 5 percent. Taxes and transfers are similar in their effectiveness in achieving their inequality-reducing potential. By achieving 40 percent of its inequality-reducing potential, the income tax is the most effective intervention on the revenue side. On the spending side, Social Assistance transfers are the most effective and they achieve 45 percent of their potential. Taxes are especially effective in raising revenue without causing poverty to rise, indicating that the poor are largely spared from being taxed. In contrast, since the bulk of transfers are not targeted to the poor, they are not very effective: the most effective ones achieve 20 percent of their poverty reduction potential. The effectiveness of the Targeted Subsidy Program could be improved by eliminating the transfer to top deciles and re-allocating the freed funds to the poor.
    Keywords: Inequality, poverty, marginal contribution, CEQ framework, policy simulation
    JEL: D31 H22 I38
    Date: 2016
  10. By: Chiara Bentivogli (Bank of Italy); Francesco Bripi (Bank of Italy); Andrea Carboni (Bank of Italy); Luca Cherubini (Bank of Italy); Eleonora Laurenza (Bank of Italy); Andrea Locatelli (Bank of Italy); Paola Monti (Bank of Italy); Elisabetta Nencioni (Bank of Italy); Valeria Pellegrini (Bank of Italy); Diego Scalise (Bank of Italy)
    Abstract: This paper presents some analyses of FDI and international trade in services based on microdata used to produce balance of payments statistics. The microdata reveal and mitigate some informative limitations of official statistics, which no longer satisfy the growing need for internationalization data. The analysis shows that both FDI and trade in services are highly concentrated by size and geographic location; moreover, international trade in services also involves firms in the manufacturing industry, while FDI microdata indicate a significant presence of large companies and holdings. Indeed, the microdata show that internationalization often affects individual firms in different ways and is therefore suited to being studied from a number of perspectives; this opens up new possibilities for the empirical analysis of internationalization.
    Keywords: statistics, internationalization, international trade in services, foreign direct investment, microdata
    JEL: F21 F23
    Date: 2016–04
  11. By: Borge, Laura; Preschitschek, Nina; Bröring, Stefanie
    Abstract: In the bioeconomy, technology transfer from academia to industry may exploit its strong innovation potential. However, this process is challenged by a wide variety of factors. This paper uses the mixed-method approach of concept mapping to investigate the factors as perceived by multiple stakeholders that influence technology transfer in the bioeconomy. Our findings suggest that the interconnectedness and the perceived individual factors vary across the different stakeholders involved. Based on our findings, we discuss practical implications both for the involved stakeholders and particularly for policy makers on how to achieve effective technology transfer in the bioeconomy.
    Keywords: Bioeconomy, factors, multi-stakeholder, perspective, technology transfer, Agribusiness, Research and Development/Tech Change/Emerging Technologies,
    Date: 2016
  12. By: Sanchís-Llopis, Juan A.; Sanchís Llopis, M. Teresa; Esteve, Vicente; Cubel Montesinos, Antonio
    Abstract: This paper studies the relevance of institutional differences in the way knowledge determines productivity for a set of 21 OECD countries in the second half of the XXth century. The relationship between TFP and knowledge related variables is reconsidered after controlling for a new set of institutional variables tailored to represent the post WWII institutions: the Welfare State and international trade and capital flows liberalization. We estimate the impact of innovation variables over productivity during the Golden Age as compared to the whole period 1953-2007, after controlling by these specific institutional variables. Additionally, we distinguish the particular impact of these relationships for five groups of countries following Amable (2006) classification of different kinds of capitalism. Our results suggest institutions determine the response of TFP to the knowledge variables and that the resulting elasticities are higher during the Golden Age. We find that there are not significant differences between the different groups and the market oriented economies with regard to the elasticity of TFP to the indoor innovation, with the exception of Japan. However, the results suggest that in Anglo-Saxon market oriented economies, international spillovers of technology have a higher impact on TFP. Additionally, in continental and Mediterranean European countries and Japan, TFP is more sensitive to human capital accumulation than in the market-oriented economies (the US and the UK).
    Keywords: spillovers; domestic knowledge; institutions; TFP
    JEL: O43 O40 O31
    Date: 2016–10
  13. By: Dellis, Konstantinos; Karkalakos, Sotiris
    Abstract: Technological growth, entrepreneurship, and unemployment influence each other in numerous ways, forming a trio of inter-related components, yet the literature has traditionally emphasized the endogenous determination of one or two components of this trio. In this study we intend to elaborate on the interrelationship between entrepreneurship, unemployment and economic growth in a dynamic context using vector auto-regressions (VAR) with panel data across 30 OECD countries for a period covering 1970 to 2011. We use data from the Compendia dataset for international entrepreneurship to estimate three equations: one each for entrepreneurship, growth, and unemployment. On the right-hand side (RHS) of each are lags of entrepreneurship, unemployment, and growth in our benchmark model, which we later enrich by including control variables according to the relevant literature. Each equation is estimated with Difference GMM and System GMM estimators.
    Keywords: entrepreneurship,growth,unemployment,propensity
    JEL: O4
    Date: 2015–10
  14. By: Codjo, Ogoudélé Simon; Fiamohe, Rose; Kpenavoun, Sylvain; Acclassato, Denis; Biaou, Gauthier
    Abstract: This research aims at analyzing the factors that influence the choice of the multi-modes of governance by producers and processors of paddy in Benin. Unlike previous researches, it analyzes these factors simultaneously for both producers and processors. Furthermore it explains the multiple choices of governance modes by actors. Finally, this research analyses the influence of institutional environment on the governance mode choice by the actors. Data were collected in Benin from 320 producers and 140 processors of rice selected randomly. The results indicate that the majority of producers (78.04%) and processors (92.69%) use the spot market to sell and procure paddy against 32.78% and 26.43% of producers and processors respectively for the contractual marketing and procurement. Nearly 26.35% of producers use at least two modes of governance to market the paddy, against 19.70% of the processors to procure paddy. Producers and processors that belong to an innovation platform use more formal contracts and farmer associations to market and to procure paddy. The quantities of paddy sold by producers and purchased by processors are unstable on the spot market and through informal contracts. In opposite, these quantities are stable for formal contracts. Knowledge of traditional institutions by the actors positively influences participation in formal and informal contracts. Knowledge of modern institutions negatively affects participation in informal contracts. The innovation platforms can be used to facilitate contracts between farmers and rice processors. Modern and traditional institutions may also be used to assist stakeholders in the enforcement of contracts.
    Keywords: Governance mode, Multivariate probit, Producers and processors of rice, Benin., Agricultural and Food Policy, Crop Production/Industries, Farm Management, Production Economics,
    Date: 2016
  15. By: Cheptea, Angela
    Abstract: The paper investigates how the overseas activity of multinational retailers (MRs) affects the global export patters of host country firms. Recent empirical work testifies that the entry of foreign retailers leads to a productivity upgrade in the domestic upstream sectors. Combined with the main result of the new new international trade theory on firm heterogeneity, an increase in the export capacity of local firms should follow. The current paper establishes a connection between these empirically identified effects and the new theory of international trade with heterogeneous firms and intermediaries. Two mechanisms are analyzed. First, the higher productivity at industry and firm level leads to an increase in the overall export capacity of local firms. Second, the expansion of transnational retail networks reinforces trade between host countries.
    Keywords: multinational retailers, export patterns, productivity gains, transnational networks, intermediaries, International Relations/Trade,
    Date: 2016
  16. By: Arne Isaksen; Franz Tödtling; Michaela Trippl
    Date: 2016

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