nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2017‒05‒14
thirteen papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Disruptive technologies and competitive advantage of firms in dynamic markets By Mario Coccia
  2. Are Trends in Patenting Reflective of Innovative Activity in Canada? By Jacob Greenspon & Erika Rodigues
  3. A technological model of the R&D process and its implications with scientific research and socio-economic activities By Angelo Bonomi
  4. Spatial-economic impacts of tourism on regional development: challenges for Europe By João Romão; Peter Nijkamp
  5. Defining high-growth firms in South Africa By Mulalo Mamburu
  6. The gender lifetime earnings gap: Exploring gendered pay from the life course perspective By Boll, Christina; Jahn, Malte; Lagemann, Andreas
  7. HRM and Small-Firm Employee Motivation: Before and after the Recession By Bryson, Alex; White, Michael
  8. An Overview of the Canadian Banking System: 1996 to 2015 By Robert McKeown
  9. The Creative Response and the Endogenous Dynamics of Pecuniary Knowledge Externalities: An Agent Based Simulation Model. By Antonelli, Cristiano; Ferraris, Gianluigi
  10. What Drives Differences in Management? By Bloom, Nicholas; Brynjolfsson, Erik; Foster, Lucia; Jarmin, Ron; Patnaik, Megha; Saporta-Eksten, Itay; Van Reenen, John
  11. Innovation, Credit Constraints and National Banking Systems: A Comparison of Developing Nations By Edward Lorenz; Sophie Pommet
  12. Cross-border co-authorships in scientific articles and knowledge flows: implications for investigating an emerging international system of innovation By Leonardo Costa Ribeiro; Márcia Siqueira Rapini; Leandro Alves Silva; Eduardo da Motta e Albuquerque
  13. How Important are Spillovers from Major Emerging Markets? By Raju Huidrom; M. Ayhan Kose; Franziska L. Ohnsorge

  1. By: Mario Coccia (CNR-IRCRES, National Research Council, Research Institute on Sustainable Economic Growth, Turin, Italy ARIZONA STATE UNIVERSITY, Center for Social Dynamics & Complexity, Arizona)
    Abstract: A fundamental problem in the field of management of technology is how firms develop and sustain disruptive technologies for competitive advantage in markets. The vast literature has analyzed several characteristics of disruptive innovations. However, the determinants are hardly known. The study here seems to show, in a market with high intensity of R&D investments (anticancer drugs), that the emergence of disruptive technologies can be driven by the coevolution of consequential problems and their solution in R&D labs of firms. In general, incumbent and entrant firms have a strong incentive to find innovative solutions to unsolved, consequential and new problems in order to achieve and sustain the prospect of a (temporary) profit monopoly and competitive advantage in markets with technological dynamisms. Overall, then this study shows one of the general sources of disruptive technologies that seems to support industrial and corporate change in a Schumpeterian world of innovation-based competition.
    Keywords: Disruptive Technologies; Problem Solving; R&D Management, Industrial Change, Target Therapy, Anticancer Drugs.
    JEL: O11 P16 P51
    Date: 2017–04
  2. By: Jacob Greenspon & Erika Rodigues
    Abstract: This report sheds light on trends in Canadian innovation as indicated through patenting. Central to these recent trends is an apparent paradox: the number of patents granted to Canadians, an output indicator of innovative activity, has increased substantially between 2000 and 2014 despite decreased business sector expenditures on research and development, a crucial input to innovation, in the same period. This report examines this issue an provides several potential explanations as to why this is the case, the strongest being that the divergence between trends in patenting and R&D expenditures is caused by greater efficiency of research processes and an increase in strategic filings of patents. Furthermore, this report documents recent trends in patenting activity in Canada from several sources and compares trends across different technologies. Patenting trends are also used to give a regional perspective on innovation by tracking the level of innovative activity occurring in provinces and census metropolitan areas.
    Keywords: Productivity, Patenting, Research and Development, Innovation, Trends, Technology, Measurement, Canada,
    JEL: O31 O32 Q55 D70
    Date: 2017–04
  3. By: Angelo Bonomi (CNR-IRCRES, National Research Council, Research Institute on Sustainable Economic Growth, Moncalieri, Italy)
    Abstract: This work describes a model of the R&D process derived by technology management and experience in carrying out this type of activity. The model gives a comprehensive description of the numerous processes of technological nature involving innovations from science to business. The model sees R&D as an organizing activity of fluxes of knowledge and capitals with a dynamics that is determined by R&D projects and their implementing rather than by R&D investments. The model recognizes the existence of a general knowledge generated by R&D activities, formed either by successful or abandoned projects, not necessarily linked to the objectives of the projects, and diffusing among the various actors making R&D in the distributed innovation system existing in conditions of open innovation. Such general knowledge has a role of driving force in developing innovative ideas and saving R&D costs. The model separates neatly the R&D process from scientific research considering existence of an intertwining process between research and R&D. About relation with socio-economic factors determining the effects of new technologies, the model presents different views about relation of R&D investments and economic growth. In fact it considers the inexistence of limits to generation of new technologies, when unlimited financing of R&D is available, and highlights the importance of the specific innovative system of a country in determining the contribution of R&D investments to its economic growth. Concluding the model considers that economic growth does not depend actually on R&D investments, that should be considered rather a means, but on the intensity of generation of innovative ideas, that depends on the efficiency of the territorial innovative system, and on adopted strategies and availability of capitals financing their development joined with an effective industrial organization.
    Keywords: research & development, R&D model, R&D management, technology innovation, knowledge spillover, socio-economic growth
    JEL: O30 O31 O47
    Date: 2017–02
  4. By: João Romão (University of Algarve and CEFAGE, Portugal); Peter Nijkamp (Tinbergen Institute, the Netherlands)
    Abstract: Despite the increasing socio-economic importance of tourism, in particular in the European context, a set of recent studies involving a large number of European regions has led to the identification of important problems related to the sustainable use of natural resources, innovation dynamics and specialization patterns, impacts of tourism on regional economic growth, and the relations between tourism performance and regional sustainable development in Europe. Taking these questions as a starting point, the purpose of this review article is to propose a conceptual framework for their analysis, including concepts like authenticity, place, smart tourism, co-creation of destinations and experiences, information segmentation, differentiation of supply, life cycle of tourism destinations, path dependence, customer variety, specialization or integrative diversification of tourism products. Finally, this analytical framework is used in order to identify and discuss a set of challenges for the future of tourism in European regions, with a view to policy and managerial implications, oriented to the integration of tourism policies within a broader context of socio-economic development, with implications on the definition and implementation of innovation and regional development policies, including smart specialization strategies. These challenges relate to the touristic experience (memorable, personalized and authentic), innovation (in the context of a diverse economy) and participatory governance (communities sharing spaces and places).
    Keywords: Territorial capital; Innovation; Related variety; Sustainability; Regional development.
    JEL: Q56 R11 Z32
    Date: 2017
  5. By: Mulalo Mamburu
    Abstract: Traditionally, much of the research on economic growth drivers has been focused on small and medium enterprises. In recent years the academic focus on small businesses has shifted to a particular group of firms that are interesting from an economic growth and policy development perspective, namely high-growth firms. While the standard definition that is recommended by the Organisation for Economic Co-operation and Development is widely accepted, various scholars have used different definitions concentrating on different variables such as turnover or employment growth. Using new South African firm-level data, the study hypothesizes that the identification of high-growth firms is highly sensitive to the measure of firm growth, such that different firm growth measures will return samples of firms with significantly different demographic characteristics. These differences will then have an impact on the findings of analyses based on these growth measures. They will also have implications for public policy recommendations that seek to encourage the emergence of high-growth firms.
    Date: 2017
  6. By: Boll, Christina; Jahn, Malte; Lagemann, Andreas
    Abstract: Research on the gender earnings divide so far mostly focuses on the gender gap in hourly wages which, due to its snapshot nature, is inappropriate to capture the biographical dimension of gendered pay. With the 'gender lifetime earnings gap' (GLEG), we introduce a new measure that meets this requirement. Based on a group of 93,511 German individuals born 1950-64 from the 'Sample of Integrated Labour Market Biographies' (SIAB 7510), we find that at the end of the employment career, women accumulated 49.8 % less earnings than men. Thus, the GLEG is more than twice as high as the current German gender pay gap. The GLEG is the largest (smallest) at the bottom (top) of the earnings distribution. It most prominently widens during the period of family formation (age 25-35). Relatedly, gender differences in endowments, mainly in terms of experience and hours, answer for three quarters of the GLEG. For younger cohorts, family breaks tend to lose importance whereas the role of work hours remains unchanged. Furthermore, the GLEG notably differs between occupational segments.
    Keywords: lifetime earnings,Blinder & Oaxaca decomposition,occupational segments,cohort analysis,gender,life course,wage distribution,wage gap
    JEL: D31 J31 J16
    Date: 2017
  7. By: Bryson, Alex (University College London); White, Michael (Policy Studies Institute)
    Abstract: A long-running debate in the small firms' literature questions the value of formal 'human resource management' (HRM) practices which have been linked to high performance in larger firms. We contribute to this literature by exploiting linked employer-employee surveys for 2004 and 2011. Using employees' intrinsic job satisfaction and organizational commitment as measures of motivation we find the returns to small firm investments in HRM are u-shaped. Small firms benefit from intrinsically motivating work situations in the absence of HRM practices, find this advantage disturbed when formal HRM practices are initially introduced, but can restore positive motivation when they invest intensively in HRM practices in a way that characterizes 'high performance work systems' (HWPS) and 'strategic human resource management' (SHRM). Although the HPWS effect on employee motivation is modified somewhat by the recessionary transition, it remains rather robust and continues to have positive promise for small firms.
    Keywords: small firms, human resource management, high performance work system, workplace motivation, intrinsic job satisfaction, organizational commitment
    JEL: L23 M50 M54
    Date: 2017–04
  8. By: Robert McKeown (Queen's University)
    Abstract: From 1996 to 2015, total assets at Canadian and foreign banks operating in Canada grew four-times in size. This growth occurred with neither a significant regulatory change, such as the repeal of Glass-Steagall, nor the introduction of new business lines, such as wealth management or investment banking. Using data from CANSIM and a little used dataset from OSFI, I describe how the Canadian banks earn revenue, fund business activities, and pay expenses. The success of the Canadian banking system can be attributed to: i) a focus on retail and branch-level banking, ii) a preference for deposit-financing, and iii) minimizing costs, particularly noninterest expenses. Furthermore, I provide a broad overview of the data, accounting rules, and trends in Canadian banking. Estimating a reduced form model similar to DeBoskey and Jiang (2012), I find no evidence that the Canadian banks manipulated the provision for credit losses to ‘smooth’ earnings.
    Keywords: Bank, Bank Lending, Borrowing, Commercial Banks, Financial Intermediaries, Retail Bank, Canada, Canadian
    JEL: G21
    Date: 2017–04
  9. By: Antonelli, Cristiano; Ferraris, Gianluigi (University of Turin)
    Abstract: The paper elaborates an agent based simulation model (ABM) to explore the endogenous long-term dynamics of knowledge externalities. ABMs, as a form of artificial cliometrics, allow the analysis of the effects of the reactivity of firms caught in out-of-equilibrium conditions conditional on the levels of endogenous knowledge externalities stemming from the levels of knowledge connectivity of the system. The simulation results confirm the powerful effects of endogenous knowledge externalities. At the micro-level, the reactions of firms caught in out-ofequilibrium conditions yield successful effects in the form of productivity enhancing innovations, only in the presence of high levels of knowledge connectivity and strong pecuniary knowledge externalities. At the meso-level, the introduction of innovations changes the structural characteristics of the system in terms of knowledge connectivity that affect the availability of knowledge externalities. Endogenous centrifugal and centripetal forces continually reshape the structure of the system and its knowledge connectivity. At the macro system level, an out-of-equilibrium process leads to a step-wise increase in productivity combined with non-linear patterns of output growth characterized by significant oscillations typical of the long waves in Schumpeterian business cycles.
    Date: 2017–03
  10. By: Bloom, Nicholas (Stanford University); Brynjolfsson, Erik (MIT Sloan School of Management); Foster, Lucia (U.S. Census Bureau); Jarmin, Ron (U.S. Census Bureau); Patnaik, Megha (Stanford University); Saporta-Eksten, Itay (Tel Aviv University); Van Reenen, John (MIT Sloan School of Management)
    Abstract: Partnering with the Census we implement a new survey of "structured" management practices in 32,000 US manufacturing plants. We find an enormous dispersion of management practices across plants, with 40% of this variation across plants within the same firm. This management variation accounts for about a fifth of the spread of productivity, a similar fraction as that accounted for by R&D, and twice as much as explained by IT. We find evidence for four "drivers" of management: competition, business environment, learning spillovers and human capital. Collectively, these drivers account for about a third of the dispersion of structured management practices.
    Keywords: learning, competition, productivity, management
    JEL: L2 M2 O32 O33
    Date: 2017–04
  11. By: Edward Lorenz (Université Côte d'Azur, France; GREDEG CNRS); Sophie Pommet (Université Côte d'Azur, France; GREDEG CNRS)
    Abstract: In that paper, we seek to extend exiting micro-level studies on the financing decisions of enterprises in developing countries by explicitly connecting these decisions to firms’ innovation outcomes and to the wider institutional framework formed by the national banking system. Indeed, the national banking system is recognized as being central to the ability of developing-country firms to acquire the resources and develop the capabilities needed for innovation. We investigate the links between innovation and financial system characteristics for a sample of 36 developing nations spread across 5 regions of the world: Sub-Saharan Africa, the Middle East and North Africa, East Asia and Pacific, South Asia and Central Asia. Our results show that credit constraints have a significant negative impact on innovation and that the characteristics of the national banking system indirectly affect innovation through their impact on the likelihood that firms face these financing constraints.
    Keywords: Financing Constraints, Innovation, Banking System, Developing Nations
    JEL: O3 O16 G2
    Date: 2017–05
  12. By: Leonardo Costa Ribeiro (Inmetro-RJ); Márcia Siqueira Rapini (Cedeplar-UFMG); Leandro Alves Silva (Cedeplar-UFMG); Eduardo da Motta e Albuquerque (Cedeplar-UFMG)
    Abstract: Size matters: the total of internationally co-authored scientific articles in 2015 corresponds to the global scientific production in 1993. The steady and systematic growth in international collaboration in science provides a strong basis for an emerging GIS. Therefore, it is important to map international flows that connect different national systems of innovation. This paper tracks knowledge flows through cross-border co-authorships in scientific publications, through a database with 10 million papers published in 2000, 2003, 2006 2009, 2012 and 2015. The data show an increase in international co-authorships from 10.7% in 2000 to 21.3% in 2015. However, this growth has network properties, since the number of international flows has grown from 545,372 in 2000 to 7,083,075 in 2015. Those international co-authorships signal networks of universities and research institutes, providing international connections to firms that eventually interact only locally with those universities and research institutes. The growth in the size, dimension and quality of those scientific flows strengthens a broad and variegated mosaic of interconnections can be grasped by the size of the network of cross-border co-authorships, a network that might be supporting an emerging and rudimentary global system of innovation.
    Keywords: Knowledge flows, International co-authorships, Science, Innovation systems
    JEL: O30
    Date: 2017–05
  13. By: Raju Huidrom (WorldBank, Development Prospects Group); M. Ayhan Kose (WorldBank, Development Prospects Group; Brookings Institution; CEPR, and CAMA); Franziska L. Ohnsorge (WorldBank, Development Prospects Group; CAMA)
    Abstract: The seven largest emerging market economies China, India, Brazil, Russia, Mexico, Indonesia, and Turkey constituted more than one-quarter of global output and more than half of global output growth during 2010-15.These emerging markets, which we call EM7,are also closely integrated with other countries, especially with other emerging and frontier markets. Given their size and integration, growth in EM7 could have significant cross-border spillovers. We provide empirical estimates of these spillovers using a Bayesian vector auto regression model. We report three main results. First, spillovers from EM7 are sizeable: a 1 percentage point increase in EM7 growth is associated with a 0.9 percentage point increase in growth in other emerging and frontier markets and a 0.6 percentage point increase in world growth at the end of three years. Second, sizeable as they are, spillovers from EM7 are still smaller than those from G7 countries (Group of Seven of advanced economies). Specifically, growth in other emerging and frontier markets, and the global economy would increase by one-half to three times more due to a similarly sized increase in G7 growth. Third, among the EM7, spillovers from China are the largest and permeate globally.
    Keywords: Business cycles; spillovers; external shocks; China; EM7; G7.
    JEL: E32 F20 F42
    Date: 2017–05

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