nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2016‒11‒27
twenty-one papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Innovation, creative destruction and structural change: Firm-level evidence from European Countries By Dachs, Bernhard; Hud, Martin; Koehler, Christian; Peters, Bettina
  2. “Breakthrough innovations: The impact of foreign acquisition of knowledge” By Damián Tojeiro-Rivero; Rosina Moreno; Erika Badillo
  3. Knowledge Licensing in a Model of R&D-Driven Endogenous Growth By Vahagn Jerbeshian
  4. The Impact of Emerging Market Competition on Innovation and Business Strategy By Lorenz Kueng; Nicholas Li; Mu-Jeung Yang
  5. The Determinants of Foreign Direct Investment in Transition Economies: A Meta-Analysis By Masahiro Tokunaga; Ichiro Iwasaki
  6. Human resources management at Bulgarian sea ports – problems and perspectives for development By Koralova, Petya
  7. Foreign Direct Investment and Value Added in Indonesia By Sjöholm, Fredrik
  8. Spillover from the haven: Cross-border externalities of patent box regimes within multinational firms By Schwab, Thomas; Todtenhaupt, Maximilian
  9. Measuring network proximity of regions in R&D networks By Iris Wanzenböck
  10. EU corporate R&D intensity gap: Structural features calls for a better understanding of industrial dynamics By Pietro-Moncada- Paternò-Castello
  11. How Much Is That Star in the Window? Professorial Salaries and Research Performance in UK Universities By De Fraja, Gianni; Facchini, Giovanni; Gathergood, John
  12. Tuning in RBC Growth Spectra By Szilard Benk; Tamas Csabafi; Jing Dang; Max Gillman; Michal Kejak
  13. Business-Linkage Volatility Spillover between US Industries By Linh Xuan Diep Nguyen; Simona Mateut; Thanaset Chevapatrakul
  14. Conceptualising the Future of HRM and Technology Research By Tanya Bondarouk; Chris Brewster; ;
  15. The Determinants of TFP Growth in the Portuguese Manufacturing Sector By Daniel Gonçalves; Ana Martins
  16. Does energy policy hurt international competitiveness of firms? A comparative study for Germany, Switzerland and Austria By Rammer, Christian; Gottschalk, Sandra; Peneder, Michael; Wörter, Martin; Stucki, Tobias; Arvanitis, Spyros
  17. Does Managerial Capital also Matter Among Micro and Small Firms in Developing Countries? By Axel Demenet
  18. The workforce composition of young firms and product innovation: Complementarities in the skills of founders and their early employees By Müller, Bettina; Murmann, Martin
  19. The Impact of Management Quality on Innovation Performance of Firms in Emerging Countries By Oleg Sidorkin
  20. Economics meets Psychology:Experimental and self-reported Measures of Individual Competitiveness By Werner Bönte; Sandro Lombardo; Diemo Urbig
  21. Employment effects of innovations over the business cycle: Firm-level evidence from European countries By Dachs, Bernhard; Hud, Martin; Koehler, Christian; Peters, Bettina

  1. By: Dachs, Bernhard; Hud, Martin; Koehler, Christian; Peters, Bettina
    Abstract: The shift of employment from lower to higher productive firms is an important driver for structural change and industry dynamics. We investigate this reallocation in terms of employment gains and losses from innovation. New employment created by product innovation may be offset by employment losses in related products, known as 'cannibalisation' or 'business stealing' effects in the literature, by employment losses from process and organisational innovation and by general productivity increases. The paper investigates this effect empirically with a large dataset from the European Community Innovation Survey (CIS). We find that employment gains and losses increase with technology intensity of the sector. High-technology manufacturing shows the strongest employment gains and losses from innovation, followed by knowledge-intensive services, low-technology manufacturing and less knowledge-intensive services. The net contribution of innovation to employment growth is mostly positive, an exception being manufacturing industries in recession periods.
    Keywords: innovation,employment,reallocation,technology intensity,compensation effect,displacement effect,cannibalisation effect
    JEL: O33 J23 C26 D2
    Date: 2016
  2. By: Damián Tojeiro-Rivero (AQR-IREA, University of Barcelona); Rosina Moreno (AQR-IREA, University of Barcelona); Erika Badillo (AQR-IREA, University of Barcelona)
    Abstract: Based on the Spanish Technological Innovation Panel, this paper explores the role of R&D offshoring on innovation performance from 2004 to 2013. Specifically, we focus our attention on the impact of different types of offshoring governance models on the profitability of developing breakthrough innovations. Using a novel methodology for panel data sets, we control for the heterogeneity of firms as well as for the sample selection and endogeneity. Our study provides evidence that firms developing breakthrough innovations tend to benefit more from the external acquisition of knowledge than those engaged in incremental innovations. We also find evidence that acquiring knowledge from firms outside the group is more profitable than doing so with firms within the group. Moreover, the external acquisition of knowledge tends to present a higher return on breakthrough innovation in the case of taking such knowledge from the business sector rather than from universities or research institutions. Finally, the recent financial crisis has led to an increase in the return of the foreign acquisition of knowledge on the generation of breakthrough innovations.
    Keywords: Endogeneity; Panel data; R&D offshoring; Spanish firms; Sample selection; Technological and organizational space JEL classification: -
    Date: 2016–11
  3. By: Vahagn Jerbeshian
    Abstract: I model knowledge (patent) licensing and evaluate intellectual property regulation in an endogenous growth framework where the engine of growth is in-house R&D performed by high-tech firms. I show that high-tech firms innovate more and economic growth is higher when there is knowledge licensing, and when intellectual property regulation facilitates excludability of knowledge, than when knowledge is not excludable and there are knowledge spillovers among high-tech firms. However, the number of high-tech firms is lower, and welfare is not necessarily higher, when there is knowledge licensing than when there are knowledge spillovers.
    Keywords: knowledge licensing; in-house R&D; intellectual property regulation; endogenous growth; welfare;
    JEL: O31 O34 L16 L50 O41
    Date: 2016–06
  4. By: Lorenz Kueng; Nicholas Li; Mu-Jeung Yang
    Abstract: How do firms in high-income countries adjust to emerging market competition? We estimate how a representative panel of Canadian firms adjusts innovation activities, business strategies, and exit in response to large increases in Chinese imports between 1999 and 2005. On average, process innovation declines more strongly than product innovation. In addition, initially more differentiated firms that survive the increase in competition have better performance ex-post, but are ex-ante more likely to exit. Differentiation therefore does not ensure insulation against competitive shocks but instead increases risk.
    JEL: F14 L2 O3
    Date: 2016–11
  5. By: Masahiro Tokunaga (Faculty of Business and Commerce, Kansai University); Ichiro Iwasaki (Institute of Economic Research, Hitotsubashi University)
    Abstract: In this paper, we conduct a meta-analysis of studies that empirically examine the relationship between economic transformation and foreign direct investment (FDI) performance in Central and Eastern Europe and the former Soviet Union over the past quarter century. More specifically, we synthesize the empirical evidence reported in previous studies that deal with the determinants of FDI in transition economies, focusing on the impacts of transition factors. We also perform meta-regression analysis to specify determinant factors of the heterogeneity among the relevant studies and the presence of publication selection bias. We find that the existing literature reports a statistically significant nonzero effect as a whole, and a genuine effect is confirmed for some FDI determinants beyond the publication selection bias.
    Keywords: foreign direct investment (FDI), FDI determinants, transition economies, meta-analysis, publication selection bias
    JEL: E22 F21 P33
    Date: 2016–11
  6. By: Koralova, Petya
    Abstract: The organization and management of human resources in maritime transport have their characteristics as they are an integral part both of the transportation process and the efficient and productive carrying out of the main and secondary services at ports. In this regard the main objective of the current paper is to examine the human resources management at Bulgarian sea ports Varna and Burgas in order their specifics to be revealed, the main problems to be outlined and measures to be proposed. The proposed model for analysis could be successfully applied in studying the human resources management system in the other transport modes or in other countries with transition economies.
    Keywords: human resources; sea ports; effective management
    JEL: J21 R49
    Date: 2016–11–05
  7. By: Sjöholm, Fredrik (Department of Economics, Lund University)
    Abstract: Foreign Direct Investment (FDI) has increased in importance over the last decades, globally as well as in Indonesia. We examine how such inflows of FDI affects value added in Indonesia. The effect is positive: foreign firms generate relatively high levels of value added and they also seem to have a positive impact on value added in local firms. Moreover, FDI contribute to a structural change of the economy towards more high-value added activities. High value added could lead to increased investments and higher tax revenues for the government. High value added could also benefit labor through higher wages, an effect that is empirically confirmed in Indonesia.
    Keywords: Foreign Direct Investment; Multinational Firms; Value Added; Industrial Development
    JEL: F23 F61 F63
    Date: 2016–11–18
  8. By: Schwab, Thomas; Todtenhaupt, Maximilian
    Abstract: This paper analyzes externalities of patent box regimes in Europe. Tax reductions in foreign affiliates of a firm that also provide a profit shifting opportunity reduce the user cost of capital and thereby increase domestic investment. We test this mechanism for the case of research activity. By combining information on patents, firm ownership data and specific characteristics of patent box regimes, we show that patent box regimes without nexus requirements for tax-efficient reallocation of patent profits induce positive spillovers within multinational groups. The implementation of a patent box in a country one of the foreign affiliates of a firm resides, increases domestic research activity by about 74 percent or 2 percent per implied tax rate differential. Furthermore, our findings suggest that patent boxes generate negative spillovers on average patent quality. This has important implications for international tax policy and the evaluation of patent box regimes.
    Keywords: patent box,spillover,corporate taxation,innovation
    JEL: F23 H25 O31
    Date: 2016
  9. By: Iris Wanzenböck
    Abstract: This paper proposes a new measure for assessing the network proximity between aggregated units, based on disaggregated information on the network distance of actors. Specific focus is on R&D network structures between regions. We introduce a weighted version of the proximity measure, related to the idea that direct and indirect linkages carry different types of knowledge. Here, first-order proximity arising from direct cross-regional linkages is to be distinguished from higher-order network proximity resulting from indirect linkages in the R&D network. We use an macroeconomic application where we analyse the productivity effects of R&D network spillovers across regions to illustrate the usefulness of a proximity measure specifically developed for aggregated units.
    Keywords: network proximity, aggregated networks, first-order proximity, higher-order proximity, R&D networks, knowledge spillovers
    Date: 2016–11
  10. By: Pietro-Moncada- Paternò-Castello (European Commission – JRC)
    Abstract: In order to achieve the 3% target in R&D intensity and boost its competitiveness and job creation, the EU needs to adapt its industrial structure and increase the weight of high R&D intensive sectors. A focus on creating the conditions for firm creation and growth in "new-emerging innovative sectors" (NEIS) is recommended.
    Keywords: EU private R&D intensity gap, industrial dynamics, firms demographics, comparative analysis, EU R&D policy
    Date: 2016–11
  11. By: De Fraja, Gianni; Facchini, Giovanni; Gathergood, John
    Abstract: We study the relationship between academic salaries and research performance. To this end, we use individual level data on the salary of all UK university professors, matched to results on the performance of academic departments from the 2014 government evaluation of research. The UK higher education sector is particularly interesting because professorial salaries are unregulated and the outcome of the official research evaluation of universities is one of their key financial and academic concerns. We first present a simple model of university pay determination, which shows that pay level and pay inequality in a department are positively related to performance. Our empirical results confirm these theoretical predictions; we also find that the pay-performance relationship is weaker for the more established and better paying universities. Our findings are also consistent with the idea that higher salaries have been used by departments to recruit academics more likely to improve their performance.
    Keywords: Higher education competition; Research Excellence Framework; Research funding; Salary inequality; University sector
    JEL: D47 H42 I28 L30
    Date: 2016–11
  12. By: Szilard Benk; Tamas Csabafi; Jing Dang; Max Gillman; Michal Kejak
    Abstract: For US postwar data, the paper explains central consumption, labor, investment and output correlations and volatilities along with output growth persistence by including a human capital investment sector and a variable physical capital utilization rate. Strong internal "amplication" results from an economy-wide productivity shock across goods and human capital investment sectors that has variances 10,000 fold smaller than in the standard RBC TFP shock. Simulated moments are compared to data moments for the business cycle, the low frequency and the Medium Cycle frequency, as well as the high frequency. A metric is provided to gauge that the results have an average of 46% deviation of simulated moments from data moments, for a broad array of targets across all windows. Within this array, key correlations have only a 15% deviation in the business cycle window, and growth persistence only an 8% deviation in the low frequency, which indicates good "propagation". Countercyclic human capital investment time and procyclic physical capital capacity utilization rates are also found as in data.
    Date: 2016–11–10
  13. By: Linh Xuan Diep Nguyen; Simona Mateut; Thanaset Chevapatrakul
    Abstract: This paper examines the volatility spillovers between US industries and their dependence on the inter-industry business linkages. Our first-stage multivariate model reveals significant volatility transmission between trading industries. Our second-stage results demonstrate that inter-industry spillovers are influenced by the strength of the trading relationship. When industries are more important to their partners, as measured by the shares of inputs or revenue, they tend to have stronger volatility spillovers toward their partners and are less affected by the volatility of their partners. Qualitatively similar results are obtained regardless of the business-linkages measures used and from samples restricted to closely-linked or to nonfinancial industries. Importantly, business linkages are highly relevant for shock spillovers in bad market conditions. The link between volatility spillovers and the strength of the business relationship is confirmed at portfolio level as well.
    Date: 2016
  14. By: Tanya Bondarouk (School of Management and Governance, Universiteit Twente, Netherlands); Chris Brewster (Henley Business School, University of Reading, UK); ;
    Abstract: This paper examines the role of information technology (IT) directly on one central aspect of work in the twenty-first century, its impact on human resource management (HRM) itself. We use the long-established ‘Harvard’ model of HRM, offering a more contextualised view of HRM, a more expansive view of stakeholders, and a wider and more long-term approach to outcomes. Applying those principles to the literature on IT and HRM helps us clarify both the advantages and disadvantages to different stakeholders of the intersection between HRM and technology. We show that rapid technological developments offer a new, smart, digital context for HRM practices with the better quality HRM data and enabling a strong HRM ownership by all stakeholders. At the same time, we see a tension in HRM responsibilities between HRM professionals and organizational members who are not directly assigned HRM tasks but are the subject of them. On the basis of that analysis we offer suggestions for future research.
    Keywords: information technology, human resource management, contextual HRM, multi-stakeholder perspective, e-HRM, HRM outcomes, Harvard approach
    Date: 2016–11
  15. By: Daniel Gonçalves (Gabinete Estratégia e Estudos Ministério Economia / Office for Strategy and Studies - Ministério da Economia / Ministry of Economy); Ana Martins (Gabinete Estratégia e Estudos Ministério Economia / Office for Strategy and Studies - Ministério da Economia / Ministry of Economy)
    Abstract: Given the linkage between Total Factor Productivity growth and economic growth, it becomes relevant to understand, at the firm level, which are the main determinants of such growth path. We use an extensive panel data covering Portuguese manufacturing firms, between 2010 and 2014, in order to assess which are the main determinants of the Total Factor Productivity. Through a second stage estimation we present a fixed-effects model that captures different dimensions of firm level characteristics that impact TFP growth, suggesting policy recommendations amid the model’s results. Our results show that age and debt influence negatively TFP growth, whereas size, exports and training expenses prompt TFP growth.
    Keywords: Total Factor Productivity, LEVPET, Industry
    JEL: D22 D24
    Date: 2016–11
  16. By: Rammer, Christian; Gottschalk, Sandra; Peneder, Michael; Wörter, Martin; Stucki, Tobias; Arvanitis, Spyros
    Abstract: This paper investigates the impact of energy policies on the export performance of firms. There has been a long policy debate on potentially negative impacts of cost-increasing energy policies on international competitiveness. We use firm-level data from three countries with similar industry structure but different energy policies: Germany, Switzerland, and Austria. We rely on firm manager assessments on the relevance of energy policy (in terms of taxes, regulations, standards, subsidies and demand stimulation) for their firm operation and link data on the adoption and development of new energy technologies. Regression analyses and matching approaches both show very few impacts of energy policy on export performance, suggesting that either policy impacts on firms' cost are negligible in the period of study (2012 to 2014) or likely negative impacts are balanced by the adoption of new technology.
    Keywords: energy policy,technology adoption,competitiveness,export,matching approach
    JEL: O33 Q48 Q55 F14 F18
    Date: 2016
  17. By: Axel Demenet (DIAL, UMR 225, IRD, Paris, France, PSL Research University, Université Paris-Dauphine, LEDa, Paris, France)
    Abstract: The lack of managerial capital was recently put forward as a constraint for developing countries firms (Bruhn et al., 2010). While established for large and medium firms, its importance for micro enterprises has yet to be proven: evidence found in Development Economics and Entrepreneurial Studies is, at best, mixed. This paper uses a panel of Vietnamese micro, small and medium enterprises to investigate this question in a comparative manner. The data let building a multidimensional measure of Managerial Capital, and allows consistent estimates of firm-level productivity. Even though bias might still affect the estimation of the average influence of managerial capital on productivity, I am able to show that this influence is as important for micro firms as it is for medium ones.
    Keywords: informal sector, microenterprises, household business, managerial capital, entrepreneurship
    JEL: O17 M1
    Date: 2016–10
  18. By: Müller, Bettina; Murmann, Martin
    Abstract: We investigate the extent to which complementarities between technical and business skills of founders and employees matter for the generation of market novelties by new ventures. Using data about German start-ups, we find that there are no complementarities between technical and business skills within the group of founders, but that there are significant complementarities between technically trained founders and employees who have business skills. This suggests that the innovation potential of start-ups by technically trained founders is best explored by hiring employees who are trained in business. However, a reverse relationship does not exist: There are no complementarities between founders with business skills and employees with technical skills.
    Keywords: Entrepreneurship,Innovation,Human Capital,Skills,Complementarity
    JEL: J24 L23 L26 M13 M51 Q31
    Date: 2016
  19. By: Oleg Sidorkin
    Abstract: I study the impact of management quality on innovation input and output of manufacturing firms in ten emerging countries using data from the Management, Organization and Innovation (MOI) Survey. I find effects of management quality on the decisions of firms to invest in R&D hold for both EU and non-EU emerging countries. An improvement in management quality from the 25th percentile to the median is associated with a 4.5 percentage point increase in the propensity to invest in R&D and a 5.7 percent increase in R&D spending per employee. Furthermore, there are positive but weak effects of management quality on product innovation. The empirical results for individual management practices show that the quality of monitoring management is intimately connected with innovation input and output. The quality of incentive management is related to higher input into innovation, but not to innovation output. The overall effects of operations and targeting management quality do not prove to be significant. All results hold after controlling for differences in management quality by industries. Additional analysis of management quality asymmetry shows that the results are driven mainly by firms with low quality management.
    Keywords: management quality; R&D; innovation; emerging countries;
    JEL: L2 M2 O3 P2
    Date: 2015–12
  20. By: Werner Bönte (University of Wuppertal, Schumpeter School of Business and Economics; University of Wuppertal, Jackstädt Center of Entrepreneurship and Innovation Research; Indiana University, School of Public & Environmental Affairs, Institute for Development Strategies); Sandro Lombardo (University of Wuppertal, Schumpeter School of Business and Economics); Diemo Urbig (University of Wuppertal, Schumpeter School of Business and Economics; University of Wuppertal, Jackstädt Center of Entrepreneurship and Innovation Research; Indiana University, School of Public & Environmental Affairs, Institute for Development Strategies)
    Abstract: Economists and psychologists follow different approaches to measure individual competitiveness. While psychologists typically use self-reported psychometric scales, economists tend to use incentivized behavioral experiments, where subjects confronted with a specific task self-select into a competitive versus a piece-rate payment scheme. So far, both measurement approaches have remained largely isolated from one another. We discuss how these approaches are linked and based on a classroom experiment with 186 students we empirically examine the relationship between a behavioral competitiveness measure and a self-reported competitiveness scale. We find a stable positive relationship between these measures suggesting that both measures are indicators of the same underlying latent variable, which might be interpreted as a general preference to enter competitive situations. Moreover, our results suggest that the self-reported scale partly rests on motives related to personal development, whereas the behavioral measure does not reflect competitiveness motivated by personal development. Our study demonstrates how comparative studies such as ours can open up new avenues for the further development of both behavioral experiments and psychometric scales that aim at measuring individual competitiveness.
    Keywords: Competition, Experiment, Tournament scheme, Personal Development Motive
    JEL: C91 D03 M52
    Date: 2016–11
  21. By: Dachs, Bernhard; Hud, Martin; Koehler, Christian; Peters, Bettina
    Abstract: A growing literature investigates how firms' innovation input reacts to changes in the business cycle. However, so far there is no evidence whether there is cyclicality in the effects of innovation on firm performance as well. In this paper, we investigate the employment effects of innovations over the business cycle. Our analysis employs a large data set of manufacturing firms from 26 European countries over the period from 1998 to 2010. Using the structural model of Harrison et al. (2014), our empirical analysis reveals four important findings: First, the net effect of product innovation on employment growth is pro-cyclical. It turns out to be positive in all business cycle phases except for the recession. Second, product innovators are more resilient to recessions than non-product innovators. Even during recessions they are able to substitute demand losses from old products by demand gains of new products to a substantial degree. As a result their net employment losses are significantly lower in recessions than those of non-product innovators. Third, we only find resilience for SMEs but not for large firms. Fourth, process and organizational innovations displace labor primarily during upturn and downturn periods.
    Keywords: innovation,employment,business cycle,resilience,Europe
    JEL: O33 J23 C26 D2
    Date: 2016

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