nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2017‒01‒01
eighteen papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Public subsidies for SME research and development: Empirical evaluation of collaborative versus individual place-based programs By Andrea Bellucci; Luca Pennacchio; Alberto Zazzaro
  2. What drives export performance of firms in Eastern and Western Poland? By Pawel Gajewski; Grzegorz Tchorek
  3. Innovation, Creative Destruction and Structural Change: Firm-level Evidence from European Countries By Bernhard Dachs; Martin Hud; Christian Köhler; Bettina Peters
  4. Universities and collaborative innovation in EC-funded research projects: An analysis based on Innovation Radar data By Annarosa Pesole; Daniel Nepelski
  5. Recruiting for Small Business Growth: Micro-level Evidence By Gidehag, Anton; Lodefalk, Magnus
  6. What drives firm profitability? A comparison of the US and EU food processing industry By Adelina Gschwandtner; Stefan Hirsch
  7. Environmental regulation and international expansion of MNEs : The moderating role of pollution reduction resources and firm multinationality on location choice By MALEN, Joel; YAMANOI, Junichi
  8. Import, Export and Multinationality. Evidence from Swedish Firms By Davide Castellani; Claudio Fassio; ;
  9. Does bank competition reduce cost of credit ? Cross-country evidence from Europe By Zuzana FUNGACOVA; Anastasiya SHAMSHUR; Laurent WEILL
  10. Product mix and firm productivity responses to trade competition By Mayer, Thierry; Melitz, Marc J.; Ottaviano, Gianmarco I. P.
  11. Technology Diffusion, Pareto Distribution, and Patent Policy By Keiichi Kishi
  12. Evidence on the Within-Industry Agglomeration of R&D, Production, and Administrative Occupations By Goldman, Benjamin; Klier, Thomas H.; Walstrum, Thomas
  13. Implementing Smart Specialisation Strategies: A Handbook By Inmaculada PERIANEZ FORTE; MARINELLI Elisabetta; Dominique FORAY; John Huw EDWARDS; Martina PERTOLDI; Kevin Morgan; Krzysztof MIESZKOWSKI; Javier GOMEZ PRIETO; Claire Nauwelaers; Ruslan RAKHMATULLIN; Lina STANIONYTE; Åge MARIUSSEN; Carlo GIANELLE; Alexander KLEIBRINK; Mathieu DOUSSINEAU
  14. Knowledge Creates Markets: The Influence of Entrepreneurial Support and Patent Rights on Academic Entrepreneurship By Dirk Czarnitzk; Thorsten Doherr; Paula Schliessler; Katrin Hussinger; Andrew Toole
  15. Synergies for Innovation: Lessons Learnt from the S2E National Events By Andrea Conte; Nida Kamil Ozbolat
  16. Individual and structural influences on the entrepreneurial activities of academics By Bijedić, Teita; Maaß, Frank; Schröder, Christian; Werner, Arndt
  17. Developments in new entrepreneurial activity in Finland By Kotiranta, Annu; Pajarinen, Mika; Rouvinen, Petri
  18. Firm structure and the location decision of German manufacturing firms: Evidence from official firm-level data By Krenz, Astrid

  1. By: Andrea Bellucci (Institute for Applied Economic Research (IAW), Germany, MoFiR, Italy); Luca Pennacchio (Dipartimento di Scienze Economiche e Statistiche - Universita' degli Studi di Napoli - "Federico II"); Alberto Zazzaro (Universita' Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali, MoFiR - Ancona, Italy, CSEF, Naples, Italy)
    Abstract: This paper provides novel empirical evidence on the effectiveness of regional research and innovation policies for small and medium-sized firms (SMEs). Two subsidy programs implemented at the regional level in central Italy are investigated. One program targeted firms' individual research, while the other addressed collaborative research between firms and universities. Using a matched difference-in-differences approach our empirical analysis shows a differentiated impact of the two programs. The first was successful in stimulating additional private R&D investment and, at least partially, in improving firms. performance. The second program had weaker effects, mostly restricted to R&D expenditure and employment. Otherwise, subsidized firms show a reduction in their tangible and intangible investments, thus casting doubts on the benefits of subsidies forcing R&D collaborations.
    Keywords: Research and innovation; place-based regional subsidies; impact evaluation, small- and mediumsized firms, collaborative research programs.
    JEL: G32 H81 L52 O38 R58
    Date: 2016–12
  2. By: Pawel Gajewski (Institute of Economic Sciences, Polish Academy of Sciences); Grzegorz Tchorek (Faculty of Management, University of Warsaw)
    Abstract: We use a unique firm-level survey dataset that draws from the EFIGE (European Firms In Global Economy) questionnaire, to unveil differences in factors driving export performance in structurally most diverse areas of Poland. While conventional results about the role of size, foreign ownership and innovation activity are confirmed at the aggregate level, the picture breaks down when Western and Eastern macroregions are extracted. Our results suggest that the common perception of a more developed West (Poland “A”) and a backward East (Poland “B”) might be outdated. Rather, firms in both regions seem to follow distinct strategies and have dissimilar success factors for competing internationally. Interestingly, export performance in the East is found to benefit from family ties in business, but also product innovation and non-price competitiveness. In the West, it is in turn associated mostly with size and foreign ownership. Overall, our results on the one hand add support to the ‘New’ new trade theory and ‘New’ new economic geography’s premises related to the importance of microeconomic factors and, on the other, shed a new light on the pattern of regional development in Poland. We also discuss some implications for policy makers and managers and suggest directions of further research.
    Keywords: trade, region, firm, competitiveness
    JEL: F14 R12
    Date: 2017–01
  3. By: Bernhard Dachs (Austrian Institute of Technology, Vienna); Martin Hud (ZEW Centre for European Economic Research, Mannheim); Christian Köhler (ZEW Centre for European Economic Research, Mannheim); Bettina Peters (ZEW, Mannheim, and CREA, University of Luxembourg)
    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
  4. By: Annarosa Pesole (European Commission - JRC); Daniel Nepelski (European Commission - JRC)
    Abstract: The European Commission's Framework Programme (FP) contributes an important share of R&D expenditure in Europe. For example, the Horizon 2020 is the biggest EU Research and Innovation programme ever launched which makes nearly €80 billion available over 7 years (2014 to 2020). In addition to financing science and technology development, one of the main objectives of the FP is to foster international collaboration among research organizations and private firms, both large and small. Collaboration is a key conduit for innovation-related knowledge flows for both firms that use R&D and those that are not R&D-active. The main idea behind the Framework Programme is that innovation often results from the interaction and cooperative efforts of different organisation devoted to the achievement of a common goal. This study builds on the first IR report: it extends the number of reviewed projects, and it looks at the relationship between the type of innovators and the potential of their innovations. A particular emphasis is put on collaboration between universities and private organizations. Furthermore, the report analyses whether universities and private organizations have different needs and face different bottlenecks to bring their innovations to the market.
    Keywords: Innovation Radar, Collaboration, Industry, University, SMEs, EC-funded
    Date: 2016–12
  5. By: Gidehag, Anton (Örebro University and HUI Research); Lodefalk, Magnus (The Ratio Institute)
    Abstract: We examine the link between new employees in leading positions and subsequent productivity in small- and medium-sized (SME) enterprises. Managers and professionals are likely to possess important tacit knowledge. They are also in a position to influence the employing firm. Exploiting rich and comprehensive panel data for Sweden in the 2001-2010 period and employing semi-parametric and quasi-experimental estimation techniques, we find that newly recruited leading personnel have a positive and statistically significant impact on the productivity of the hiring SME. Interestingly, our results suggest that professionals with experience from international firms and enterprise groups contribute the most to total factor productivity. Overall, the findings suggest the importance of mobility of leading personnel for productivity-enhancing knowledge spillovers to SMEs.
    Keywords: recruitment; knowledge spillovers; firm growth; productivity; SME
    JEL: D22 D24 D83 J24 J62
    Date: 2016–12–15
  6. By: Adelina Gschwandtner; Stefan Hirsch
    Abstract: This article analyzes persistence and the drivers of profitability in US and EU food processing using GMM estimations. Due to different firm size structures first comparable samples of US and EU food processors are derived using Propensity Score Matching. The GMM results indicate that profit persistence in food processing is lower than in other manufacturing sectors. Firm-specific drivers of profitability are size, growth and financial risk. Regarding industry characteristics the growth rate significantly influences profitability. The findings provide insights for the management of food processing firms as well as for policy decisions aiming to counter power imbalances in the food sector.
    Keywords: Firm profit; persistence; food industry; GMM panel estimation; propensity score matching
    JEL: L12 L66 M21
    Date: 2016–12
  7. By: MALEN, Joel; YAMANOI, Junichi
    Abstract: We examine how stronger environmental regulations influence MNE international expansion decisions by attending to two sources of firm heterogeneity that moderate this effect: possession of pollution reduction capabilities and firm multinationality. Empirical tests on 523 cases of international manufacturing expansion into 49 potential host countries by 124 Japanese chemical industry firms between 2001 and 2010 reveal that the market entry deterring effect of stronger environmental regulations is weaker for firms possessing unique capabilities for pollution reduction and for more multinational firms. Moreover, because more multinational firms have greater incentives and skills for modifying capabilities to create value in host-country environments, the positive moderating effect of PR-capabilities are strengthened yet further for high multinationality firms.
  8. By: Davide Castellani (Henley Business School, University of Reading); Claudio Fassio (CIRCLE, Lund University, Sweden and BRICK, Collegio Carlo Alberto, Torino, Italy); ;
    Abstract: This paper studies the role of imported inputs in explaining firms’ export behaviour. Unlike most of the existing literature we are also able to control for the participation of domestic firms to multinational networks. This allows us to test to what extent the recurrent evidence that importing foster exporting activity is instead a figment of the fact that importers are also part of multinational groups. Our evidence, based on Swedish manufacturing firms, suggests that imported inputs, rather than multinationality, are a key determinant of firms’ export propensity and product scope. This result is particularly strong for SMEs, and it is driven by imported intermediates and (to a lesser extent) capital goods.
    Keywords: importing, exporting, multinational enterprises, Sweden
    JEL: F14 F23 O52
    Date: 2016–11
  9. By: Zuzana FUNGACOVA (Bank of Finland); Anastasiya SHAMSHUR (University of East Anglia); Laurent WEILL (LaRGE Research Center, Université de Strasbourg)
    Abstract: Despite the extensive debate on the effects of bank competition, only a handful of single-country studies deal with the impact of bank competition on the cost of credit. We contribute to the literature by investigating the impact of bank competition on the cost of credit in a cross-country setting. Using a panel of firms from 20 European countries covering the period 2001–2011, we consider a broad set of measures of bank competition, including two structural measures (Herfindahl-Hirschman index and CR5), and two non-structural indicators (Lerner index and H-statistic). We find that bank competition increases the cost of credit and observe that the positive influence of bank competition is stronger for smaller companies. Our findings accord with the information hypothesis, whereby a lack of competition incentivizes banks to invest in soft information and conversely increased competition raises the cost of credit. This positive impact of bank competition is however influenced by the institutional and economic framework, as well as by the crisis.
    JEL: G21 L11
    Date: 2016
  10. By: Mayer, Thierry; Melitz, Marc J.; Ottaviano, Gianmarco I. P.
    Abstract: We document how demand shocks in export markets lead French multi-product exporters to re-allocate the mix of products sold in those destinations. In response to positive demand shocks, those French firms skew their export sales towards their best performing products; and also extend the range of products sold to that market. We develop a theoretical model of multiproduct firms and derive the specific demand and cost conditions needed to generate these product-mix reallocations. Our theoretical model highlights how the increased competition from demand shocks in export markets - and the induced product mix reallocations - induce productivity changes within the firm. We then empirically test for this connection between the demand shocks and the productivity of multi-product firms exporting to those destinations. We find that the effect of those demand shocks on productivity are substantial - and explain an important share of aggregate productivity fluctuations for French manufacturing.
    Date: 2016
  11. By: Keiichi Kishi (Graduate School of Economics, Osaka University)
    Abstract: We develop a Schumpeterian growth model based on technology diffu- sion. Each rm has a different productivity level. New entrants enter into the targeted industries by learning the existing technologies owned by the other rms. Some of the new entrants succeed to adopt the frontier tech- nology. The other new entrants may adopt the non-frontier technologies. We show that if it is extremely difficult to adopt the frontier technology, the technology diffusion generates the Pareto distributions of rm size, productivity, and innovation size. Further, we introduce the minimum innovation size required for a patent into the model. That is, the patent office grants the patents only for superior inventions. We show that an increase in minimum innovation size may reduce the average patentable innovation size because of an endogenous response of the distribution of innovation size. This implies that if the patent office requires the superior innovations for the patents, it may cause innovators to produce a larger amount of inferior patentable innovations.
    Keywords: Technology diffusion, Innovation, Pareto distribution
    JEL: O30 O33 O34
    Date: 2016–12
  12. By: Goldman, Benjamin (Standford Institute for Economic Policy Research); Klier, Thomas H. (Federal Reserve Bank of Chicago); Walstrum, Thomas (Federal Reserve Bank of Chicago)
    Abstract: To date, most empirical studies of industrial agglomeration rely on data where observations are assigned an industry code based on classification systems such as NAICS in North America and NACE in Europe. This study combines industry data with occupation data to show that there are important differences in the spatial patterns of occupation groups within the widely used industry definitions. We focus on workers in manufacturing industries, whose occupations almost always fit into three groups: production, administrative, or R&D. We then employ two approaches to document the spatial distributions of each group within an industry. First, we calculate the distribution of employment shares across local labor markets and second, we calculate a version of the Duranton and Overman (2005) agglomeration index. Both approaches reveal appreciable differences in the spatial distribution of occupation groups within most manufacturing industries. These differences have important implications for our understanding of the sources of industrial agglomeration, the spatial agglomeration of innovation, the effectiveness of local economic development initiatives, and the spatial properties of particular industries.
    Keywords: Agglomeration; automobiles; manufacturing industries; labor markets; occupations
    JEL: J24 L6 L62 O10 R12
    Date: 2016–11–14
  13. By: Inmaculada PERIANEZ FORTE (European Commission - JRC); MARINELLI Elisabetta (European Commission - JRC); Dominique FORAY (École polytechnique fédérale de Lausanne); John Huw EDWARDS (European Commission - JRC); Martina PERTOLDI (European Commission - JRC); Kevin Morgan (Cardiff University); Krzysztof MIESZKOWSKI (European Commission - JRC); Javier GOMEZ PRIETO (European Commission - JRC); Claire Nauwelaers (Independent STI policy expert); Ruslan RAKHMATULLIN (European Commission - JRC); Lina STANIONYTE (European Commission - JRC); Åge MARIUSSEN (Nordlands Research Institute,Norway); Carlo GIANELLE (European Commission - JRC); Alexander KLEIBRINK (European Commission - JRC); Mathieu DOUSSINEAU (European Commission - JRC)
    Abstract: Smart Specialisation represents the most comprehensive industrial policy experiment being implemented in Europe. Conceived within the reformed Cohesion policy of the European Commission, Smart Specialisation is a place-based policy promoting economic transformation and investment in innovative activities in selected areas of the socio-economic system in order to achieve a smart, inclusive and sustainable growth. Drawing on empirical evidence, the Smart Specialisation Implementation Handbook is targeted at policy-makers and regional development professionals who are crafting their innovation policy according to a common set of principles and methodologies. The handbook aims at taking stock of the Smart Specialisation experience and presenting its current state of the art, both in terms of conceptual developments and practical implementation. It addresses five key milestones of the implementation process: 1) The Entrepreneurial Discovery Process (EDP) cycle: from priority selection to strategy implementation 2) Good governance: principles and challenges 3) From priorities to projects: selection criteria and selection process 4) Transnational cooperation and value chains 5) Monitoring
    Keywords: Smart Specialisation - Innovation policy - Regional Development - Policy Implementation - Dimensions of collaboration
    Date: 2016–12
  14. By: Dirk Czarnitzk (KU Leuven, Belgium); Thorsten Doherr (Centre for European Economic Research (ZEW), Mannheim); Paula Schliessler (Centre for European Economic Research (ZEW), Mannheim); Katrin Hussinger (CREA, Université du Luxembourg); Andrew Toole (US Patent and Trademark Office, Alexandria, USA)
    Abstract: We use an exogenous change in German Federal law to examine how entrepreneurial support and the ownership of patent rights influence academic entrepreneurship. In 2002, the German Federal Government enacted a major reform called Knowledge Creates Markets that set up new infrastructure to facilitate university-industry technology transfer and shifted the ownership of patent rights from university researchers to their universities. Based on a novel researcher-level panel database that includes a control group not affected by the policy change, we find no evidence that the new infrastructure resulted in an increase in start-up companies by university researchers. The shift in patent rights may have strengthened the relationship between patents on university-discovered inventions and university start-ups; however, it substantially decreased the volume of patents with the largest decrease taking place in faculty-firm patenting relationships.
    Keywords: Intellectual property, patents, technology transfer, policy evaluation
    JEL: O34 O38
    Date: 2016
  15. By: Andrea Conte (European Commission – JRC); Nida Kamil Ozbolat (European Commission – JRC)
    Abstract: In this issue - Smart Specialisation Strategies (S3) play a key role in fostering an efficient and inclusive Research and Innovation (R&I) ecosystem by creating the right framework for focused investments based on selected high value added priorities and a shared vision of territorial development. - Building synergies can contribute to two complementary objectives: helping to close the innovation divide across European territories and increasing the efficiency and effectiveness of public policy intervention. - Synergies between ESIF and other funding programmes (e.g. COSME, Horizon 2020) could maximise the specific value added of S3 investments such as the capacity to support effectively research capacity building and the exploitation of research results for raising the overall social/economic impact of European R&I. - Quality of R&I "governance" (e.g. long-term planning, monitoring and evaluation, stakeholders' involvement) appears as the key factor for achieving a successful implementation of R&I investments under the current S3.
    Keywords: Stairway to Excellence, Smart Specialisation, ESIF, Horizon 2020, European Funds, Synergies, Policy Events, R&I, Governance, Innovation
    Date: 2016–12
  16. By: Bijedić, Teita; Maaß, Frank; Schröder, Christian; Werner, Arndt
    Abstract: In this paper we study how and to what extend (i) individual working conditions (e.g. peers, working atmosphere, work contract incentives, wage satisfaction), (ii) institutions (e.g. technology transfer offices, patent exploitation agencies, chair in entrepreneurship or awards for academic entrepreneurship) and (iii) network relationships simultaneously affect the likelihood of engaging in entrepreneurial activities (nascent entrepreneurship) in academia. Using unique data collected from 5.992 academic scientists in 73 German Universities Germany, we find that entrepreneurial peers and performance based monetary incentives have a strong positive effect on the entrepreneurial intentions. We show that, although there is a comprehensive support infrastructure for start-ups in German academic institutions, these services are little known amongst their staff. Finally we find that market related networks show a high correspondence with high entrepreneurial intentions, whereas networks within the own university do not have any impact. Several mentioned aspects were analyzed before, but mostly on a limited sample (e.g. only stem field), isolated personal variables (e.g. gender) or isolated environmental aspects (e.g. peer groups). Our study provides a holistic view on the impact of several university-specific structural factors on entrepreneurial intentions among academic scientists in Germany by simultaneously focusing on personal and occupational characteristics for different faculties. @Wissenschaftliches Hochschulpersonal generiert im Rahmen seiner Forschungstätigkeit Innovationen und verfügt über aktuelles Wissen, das als Basis für eine innovative Unternehmensgründung betrachtet werden kann. Bisher fehlte jedoch eine umfassende empirische Analyse, inwieweit die bestehenden institutionellen Rahmenbedingungen die Gründungsneigung von Wissenschaftlern beeinflussen. Hier setzt die vorliegende Studie an, indem sie die Wirkung personenbezogener und institutioneller Einflussfaktoren (wie Arbeitsbedingungen, Netzwerkbeziehungen und gründungsfördernde Hochschulangebote) untersucht und potenzielle institutionelle Handlungsfelder identifiziert. Die Befragung von 5.992 Wissenschaftlern an 73 deutschen Hochschulen hat gezeigt, dass insbesondere monetäre Anreize im Forschungskontext aber auch Rollenvorbilder im kollegialen Umfeld, Netzwerke - hier insbesondere außerhalb der eigenen Institution - und spezifische Infrastrukturangebote gründungsfördernd wirken.
    Keywords: Academic Entrepreneurship,Nascent Entrepreneurship,German Universities,Institutions,Working Conditions,Knowledge Transfer
    JEL: O32 M13 J24
    Date: 2016
  17. By: Kotiranta, Annu; Pajarinen, Mika; Rouvinen, Petri
    Abstract: About half of all new business activity in Finland can be categorized as being entrepreneurial. The number of this kind of new businesses has not increased dramatically during the last ten years. However, the characteristics of these businesses have changed. Nowadays, new entrepreneurs have higher education background, they have more likely work experience from a relevant field, they are more innovation-oriented, and they have higher initial growth aspirations. Their businesses are more likely to seek sales growth by utilizing international markets and by focusing more on consumer markets and less on business-to-business markets. On the other hand, maybe due to prolonged recession in the Finnish economy, the higher share of new entrepreneurial businesses is being started because there are no better opportunities to get a job. Heavy regulation and tight legislation are being seen as the most significant disincentives at the start-up phase. Growth-oriented new entrepreneurial firms see financial issues and labor market rigidities as significant restrictions for growth.
    Keywords: Entrepreneurship, growth firm, start-ups, growth-orientation, enterprise policy
    JEL: D92 L26 L53 M13
    Date: 2016–12–22
  18. By: Krenz, Astrid
    Abstract: This paper uses a comprehensive, official firm-level dataset for German manufacturing firms to investigate the location decision of new firm activity in the German regional economy, differentiated by firm structure. The rich regional dimension of this dataset is investigated for the first time in regard to the location choices of firms. Results reveal that agglomeration economies play a significant role for small firms, but not for medium-sized and large firms. Whereas the market potential exerts a significant positive impact for all firms, labor costs do not exert a significant impact on large firms' location decisions.
    Keywords: Firm location,Regional economy,Agglomeration economies
    JEL: R11 R12
    Date: 2016

This nep-cse issue is ©2017 by João José de Matos Ferreira. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.