nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2017‒07‒16
seventeen papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Time to Stop Playing Games with Industrial Policy? What Government & Business Might Learn from Team GB By Sue Konzelmann; Marc Fovargue-Davies
  2. Young Innovative Firms, Investment-Cash Flow Sensitivities and Technological Misallocation By Oscar Mauricio Valencia-Arana; Jose Eduardo Gomez-Gonzalez; Andrés Garcia-Suaza
  3. Coherent diversification in corporate technological portfolios By Emanuele Pugliese; Lorenzo Napolitano; Andrea Zaccaria; Luciano Pietronero
  4. The Knowledge Spillover Theory of Intrapreneurship, Labour Mobility and Innovation by Firm Size By Braunerhjelm, Pontus; Ding, Ding; Thulin, Per
  5. Assessing primary care performance in Indonesia: An application of frontier analysis techniques By Firdaus Hafidz; Tim Ensor; Sandy Tubeuf
  6. Spécificités des déterminants des innovations environnementales : une approche appliquée aux PME By Pinget, Amandine
  7. Evolution of the Global Knowledge Network: Network Analysis of Information and Communication Technologies’ Patents By Kibae Kim
  8. Technology Network Innovation and Distribution By Jingong Huang
  9. Mobile Phone Innovation and Environmental Sustainability in Sub-Saharan Africa By Simplice Asongu; Jacinta C. Nwachukwu
  10. A Note on Schumpeterian Competition in the Creative Class and Innovation Policy By Batabyal, Amitrajeet; Yoo, Seung Jick
  11. Secular trends in innovation and technological change By Frietsch, Rainer; Schubert, Torben; Neuhäusler, Peter
  12. Co-operation in Production, the Organization of Industry & Productive Systems: A Critical Survey of the 'District' Form of Industrial Organisation & Development By Sue Konzelmann; Frank Wilkinson
  13. How much does job autonomy vary across countries and other extra-organizational contexts? By van Hoorn, Andre
  14. Mid-Sized Italian manufacturing firms: a panel data analysis on profitability By Migliardo, Carlo; Schilirò, Daniele
  15. Knowledge Transfer and Intra-Firm Trade By Sotiris Blanas; Adnan Seric
  16. Ideas Production and International Knowledge Spillovers: Digging Deeper into Emerging Countries By Luintel, Kul B; Khan, Mosahid
  17. Firm dynamics in developing countries: a single policy for all regions? By Calá, Carla Daniela

  1. By: Sue Konzelmann; Marc Fovargue-Davies
    Abstract: This paper investigates the degree to which the British elite sport policy model might inform a strategy for building international competiveness in UK industry. The methodology is qualitative, based on in-depth interviews with key figures in the British elite sport system, including UK Sport's CEO, Performance Directors of National Sport Governing Bodies whose athletes competed in London 2012 and Rio 2016 and Olympic athletes. The analysis also draws upon detailed case studies of sectors that are currently competing successfully in international markets – despite decades of ill-informed industrial policy, if not neglect. Areas standing out as key to the UK elite sport policy model's success include: an institutional structure to provide strategic leadership, identify talent and support the development of internationally competitive athletes and teams, whilst at the same time insulating them from interference by short-term political (and sporting) interests; an enabling competitive environment with access to a reliable source of finance; and an institutional system that encourages learning, innovation and responsiveness to opportunities and constraints. Taken together, these – if available to British businesses, clusters and sectors – would likely facilitate improvement in the UK's industrial performance. The significance of the elite sport case is that not only was it developed and successfully implemented in the British cultural, institutional and political context, in many respects elite sport can be considered a high performance industrial sector. It therefore offers a starting point for evolving strategy for building international competitiveness in comparable sectors of British industry.
    Keywords: UK sport, sport policy, elite sport development, industrial strategy, competitiveness
    JEL: L00 L50 L83
    Date: 2017–03
  2. By: Oscar Mauricio Valencia-Arana; Jose Eduardo Gomez-Gonzalez; Andrés Garcia-Suaza
    Abstract: Can technological misallocation generate financial frictions? We build a theoretical model with testable implications, in which the misallocation between R&D and production activities generates borrowing constraints. The investor offers the innovator a rent that is contingent to the success of its project in order to make them exert an incentive-compatible effort level. However, this rent distorts the allocation of effort between activities. Specifically, it leads to a suboptimal level of effort impulsing a reallocation of resources from production to R&D. Consequently, the investor cannot appropriate the surplus resulting from innovation. This distortion increases the cost of external financing for firms that have large amount of intangible assets. Using Compustat data for manufacturing firms in the United States between 1982 and 2007, we show that cash-flow sensitivities are positive and increasing in firms with high R&D intensities
    Keywords: Moral Hazard, Endogenous Borrowing Constraints, and TechnologicalMisallocation
    JEL: G11 D86
    Date: 2017–06–06
  3. By: Emanuele Pugliese; Lorenzo Napolitano; Andrea Zaccaria; Luciano Pietronero
    Abstract: We study the relationship between firms' performance and their technological portfolios using tools borrowed from the complexity science. In particular, we ask whether the accumulation of knowledge and capabilities related to a coherent set of technologies leads firms to experience advantages in terms of productive efficiency. To this end, we analyzed both the balance sheets and the patenting activity of about 70 thousand firms that have filed at least one patent over the period 2004-2013. From this database it is possible to define a measure of the firms' coherent diversification, based on the network of technological fields, and relate it to the firms' perfomance in terms of labor productivity. Such a measure favors companies with a diversification structure comprising blocks of closely related fields over firms with the same breadth of scope, but a more scattered diversification structure. We find that the coherent diversification of firms is quantitatively related to their economic performance and captures relevant information about their productive structure. In particular, we prove on a statistical basis that a naive definition of technological diversification can explain labor productivity only as a proxy of size and coherent diversification. This approach can be used to investigate possible synergies within firms and to recommend viable partners for merging and acquisitions.
    Date: 2017–07
  4. By: Braunerhjelm, Pontus (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Ding, Ding (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Thulin, Per (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: Presenting The Knowledge Spillover Theory of Intrapreneurship, we examine how labour mobility impacts innovation distributed on firm size. A matched employer-employee dataset, pooled with firm-level patent application data, is implemented in the analysis. We provide new evidence that knowledge workers’ mobility has a positive and strongly significant impact on all firms’ innovation output, measured as patent applications. The patterns and effects differ between large and small firms. More precisely, for small firms, intraregional mobility of knowledge workers that have previously worked in a patenting firm (the learning-by-hiring effect) are shown to be statistically and economically highly significant, whereas only limited impact could be detected for firms losing knowledge workers (the-learning-by-diaspora effect).
    Keywords: Labour mobility; knowledge diffusion; innovation; social networks
    JEL: J24 O31 R23
    Date: 2017–07–13
  5. By: Firdaus Hafidz (Academic Unit of Health Economics, Leeds Institute of Health Sciences, University of Leeds); Tim Ensor (Leeds Institute of Health Sciences, University of Leeds); Sandy Tubeuf (Academic Unit of Health Economics, Leeds Institute of Health Sciences, University of Leeds)
    Abstract: Despite increased national health expenditure in health facilities in Indonesia, health outcomes remain low. The aim of our study is to examine the factors determining the relative efficiency of public primary care facilities. Using linked national data sources from facility-, households, and village-based surveys, we measure the efficiency of 185 primary care facilities across fifteen provinces in Indonesia with output oriented data envelopment analysis (DEA) and stochastic frontier analysis (SFA). Inputs include the number of doctors, midwife and nurses, and other staff while outputs are the number of outpatients and maternal child health patients. We run truncated regression in second stage DEA and one stage SFA analysis to assess contextual characteristics influencing health facilities performance. Our results indicate a wide variation in efficiency between health facilities. High-performing primary care facilities are in affluent areas. Primary care facilities located in urban areas, in Java and Bali Island, with high coverage of insurance scheme for the poor perform better than other geographical location.We find an inconclusive impact of quality of care, patient mix, and availability of inpatient services on efficiency. This paper concludes by highlighting the characteristics of primary care facilities that have the potential to increase efficiency.
    Keywords: Efficiency, Primary care facilities, frontier analysis, data envelopment analysis, stochastic frontier analysis, Indonesia
    JEL: C50 I10
    Date: 2017
  6. By: Pinget, Amandine
    Abstract: Understanding how companies innovate for positive environment impact and sustainable development is a crucial issue for business and society today. Yet, little is currently known about this particular kind of innovation. The objective of this thesis is to shed light on the specificities of environmental innovation for small and medium-sized enterprises (SMEs) in terms of determinants and perceived barriers. The theoretical framework is based on the Porter’s Hypothesis in order to examine the effect of regulation. It is enriched by the RBV and KBV approaches to better take into account SMEs’ capabilities and resources in the adoption of environmental innovation. This research is based on three empirical articles and on a quantitative approach which mobilizes several econometric methods. This thesis contributes to three key findings: (1) Environmentally innovative SMEs perceive more barriers, in more intense and numerous ways, compared to others innovative or non-innovative SMEs; (2) Environmentally innovative SMEs utilize more external knowledge sources than other SMEs; (3) SMEs, like large firms, can adopt environmental innovations proactively because they possess certain capacities. These results lead to public policy and managerial recommendations for more widespread and more effective environmental innovation in SMEs.
    Keywords: Environmental innovation, Technological innovation, Determinants, Barriers, Strategic profile, SMEs
    JEL: Q5 Q55
    Date: 2016–12–01
  7. By: Kibae Kim (Technology Management, Economics, and Policy Program; College of Engineering; Seoul National University)
    Abstract: In recent studies, Information and Communication Technologies have been key drivers of innovation and economic growth throughout the world. Because the Information and Communication Technology products and services require intensive knowledge, leading countries invested in their innovation systems to operate more effectively and efficiently. Studies on innovation have investigated the knowledge base of countries and their respective relationships with their national institutions, and subsequent economic growth to identify factors which have led to success. However, the approaches of previous studies omit the constituents of the knowledge base while focusing on quantitative aspects such as size. In this article, I propose a novel approach to exploring the knowledge base at a global level by undertaking a network analysis of patents. In this framework, the global knowledge network is defined as a set of countries and respective technological similarities between countries as vertices and edges. Applying this framework, the research questions are addressed qualitatively by identifying the structure of the network and how it has evolved. The analysis results indicate that the global knowledge network consists of a cluster of developed countries, and the cluster is linked with developing countries through Japan, U.S.A. and China. They also show that the Information and Communication Technology leaders changed from Great Britain and France to U.S.A. in 1920s, from U.S.A. to Japan in 1970s. The framework is expected to be applied to economic studies of innovation and knowledge bases at a global level.
    Keywords: Global Knowledge Network, Information and Communication Technology, Technology Leadership, Network Analysis, Patents.
    JEL: A12 O33 O34 O53
    Date: 2015–09
  8. By: Jingong Huang (University of Melbourne)
    Abstract: Motivated by empirical evidence from the U.S. patent citation data on the dynamics of firms' patent portfolio development, I build a model of innovation incorporating a technology network structure. The model features firms operating in multiple technology sectors and internalising the spillovers of their own knowledge accumulation to produce patents. Two new insights emerge: The technology network is an important determinant of the patent distribution in different sectors. The growth of patents in each sector is proportional to the Eigenvector Centrality of the technology network. The model is estimated using Simulated Method of Moments and it is capable of reproducing the patent distribution observed in the data.
    Date: 2017
  9. By: Simplice Asongu (Yaoundé/Cameroun); Jacinta C. Nwachukwu (Coventry University, UK)
    Abstract: This study investigates how the mobile phone can complement knowledge diffusion in order to influence CO2 emissions in 44 Sub-Saharan African countries for the period 2000-2012. The empirical evidence is based on Generalised Method of Moments. Three knowledge diffusion variables representing three of the four pillars of the World Bank’s Knowledge Economy Index are employed: educational quality, information and communication technology (ICT) and scientific output. Six CO2 emission variables are used, namely: CO2 per capita, CO2 from electricity and heat, CO2 from liquid fuel, CO2 from manufacturing and construction, CO2 from transport and CO2 intensity. In the assessments, a decreasing tendency in these variables translates into positive conditions for environmental sustainability. Based on net effect from complementarities, the following findings are established. First, the mobile phone complements education to have a net negative effect on CO2 emissions per capita and CO2 emissions from the consumption of liquid fuel. Second, where some positive net effects of knowledge diffusion are apparent, corresponding marginal effects are negative. Corresponding mobile phone penetration thresholds at which the positive net effects on CO2 emissions can be dampened and reversed are largely within policy range. Practical and theoretical implications are discussed.
    Keywords: CO2 emissions; ICT; Economic development; Africa
    JEL: C52 O38 O40 O55 P37
    Date: 2017–05
  10. By: Batabyal, Amitrajeet; Yoo, Seung Jick
    Abstract: We study innovation policy in a region in which the members of the creative class engage in Schumpeterian competition and thereby extend aspects of the recent analysis in Batabyal and Yoo (2017). Using the language of these researchers, the creative class is broadly composed of existing and candidate entrepreneurs. In contrast to these researchers, we suppose that R&D by candidate entrepreneurs does not generate any negative externalities. In this setting, we analyze the impact that taxes and subsidies on R&D by existing and candidate entrepreneurs have on R&D expenditures and regional economic growth.
    Keywords: Creative Class, Creative Destruction, Economic Growth, Innovation Policy, R&D
    JEL: O31 O38 R11
    Date: 2017–06–30
  11. By: Frietsch, Rainer; Schubert, Torben; Neuhäusler, Peter
    Abstract: This paper deals with the question of changing relations between business R&D (BERD), patents and output measures like value added and productivity (macro level) as well as EBIT and market capitalization (micro level) to analyze long-term/secular effects of technological change at different levels. The results of the panel data reveal an increase of the patent numbers resulting from R&D expenditures. However, we also find a difference in the elasticities of BERD and patents between patent-intensive and non-patent-intensive sectors. In addition, the association between patents and labor productivity falls when all sectors are taken into account, implying decreasing contributions of technological progress to the productivity. Yet, the drivers are non-patent-intensive sectors, as we observe an increasing association of patents and labor productivity for patent-intensive sectors. The results of the enterprise panel data reveal similar results. The correlations between R&D and patents increased over the last 20 years, although it seems there is a concentration of R&D and patenting activities to a smaller amount of firms, which can partially be explained by the fact that research and development that is necessary for a single patent has become more and more expensive in the past years.
    Date: 2017
  12. By: Sue Konzelmann; Frank Wilkinson
    Abstract: Liberal economics has traditionally put strong emphasis on individualisation and specialisation – and has struggled with the notion of co-operation. Thus, Alfred Marshall's pioneering work on the English industrial districts of his day posed a significant challenge to the conventional wisdom, which embraced laissez-faire markets and Adam Smith's claim that improvements in efficiency depend upon the increased division of labour within firms competing in them. Marshall found that an important determinant of the competitive success of industrial districts was effective co-operation within and between firms, supported by a dense network of institutions, and markets regulated by agreed rules, norms and standards. He theorised that these generate external economies of scale and scope that enable the district and its constituent small firms to successfully compete with large, vertically integrated firms. From the mid-1920s, however, with the emergence and growth of very large, highly successful firms, the conventional wisdom shifted to suppose that the historical tendency in capitalist development was towards large firm dominance; and the small firm sector was progressively reduced to a residuum. However, the rediscovery of the industrial district by Italian scholars during the 1960s revived interest in Marshall's notion of localised productive systems and attracted considerable attention to this form of industrial organisation. This paper traces themes within this literature, from the earliest theorising by the Classical Political Economists to the present, focusing on the role of co-operation in production, the relationship between the organisation of production and markets, and the nature and functioning of productive systems.
    Keywords: Industrial Districts, Productive Systems, Co-operation and Competition, Industrial Organisation
    JEL: B00 L00
    Date: 2016–09
  13. By: van Hoorn, Andre
    Abstract: This paper integrates the study of contextual influences on job autonomy as a key workplace practice with the growing literature on intra-country variation (ICV) versus between-country variation (BCV) in international HRM. While contexts such as industry or country are widely recognized to affect workplace practices such as job autonomy, the influences of different extra-organizational contexts are seldom examined simultaneously or their relative influence systematically compared. Similarly, while much research considers the importance of BCV vis-à-vis ICV in international HRM, little attention is paid to variation that occurs between sub-national or supranational contexts. To move forward on both these counts, we use multilevel analysis and empirically assess the comparative importance of industry as a sub-national context and politico-institutional clusters as a supranational context in addition to country context as sources of differences in job autonomy. Results indicate that inter-cluster variation can be substantially larger than inter-country variation, but that inter-industry dissimilarities tend to exceed both inter-cluster and inter-country dissimilarities. Hence, the main finding of our analysis is that dissimilarities in job autonomy associated with crossing country borders are not exceptionally large as employers and employees face larger dissimilarities in job autonomy when they move across industries. Implications of this finding both for international HRM and for international business and cross-cultural management more broadly are discussed.
    Keywords: Multilevel modeling; intra-country variation; workplace organization; job autonomy; institutional clusters; cultural distance
    JEL: J81 L22 M59
    Date: 2016
  14. By: Migliardo, Carlo; Schilirò, Daniele
    Abstract: This paper aims to provide an empirical analysis concerning the different aspects of profitability of the Italian manufacturing firms of intermediate size, namely medium and medium-large size companies, for the period 2004-2010. It analyzes various aspects of firm profitability relating corporate structures, that is, capital structure, risk component, asset composition, and growth opportunities. The study investigates firm profitability by using econometric panel-data techniques, such as the system dynamic GMM estimator that assures the robustness of our empirical analysis. One of the main results of our investigation is that we find a significant and negative impact of capital structure (i.e. leverage and tangibility) and risk component on firm profitability.
    Keywords: Mid-sized Italian firms; profitability: panel data; GMM
    JEL: C23 G32 L2 L25 L6 L60
    Date: 2016–10
  15. By: Sotiris Blanas; Adnan Seric
    Abstract: Using a unique sample of foreign affliates in Sub-Saharan Africa, we study the relationship of the extensive and intensive margins of their intra-firm trade with knowledge transfer to them from their parent companies. We find that the engagement of foreign affliates in intra-firm trade and their share of intra-firm trade are positively associated with the probability of these receiving crucial parental assistance in the use of patents, trademarks, and brand names, technology and know-how, access to foreign supplier network, and access to global markets. Foreign afiliates which engage in intra-firm trade and those with a higher share of this type of trade also receive more important overall parental assistance. The positive associations between intra-firm trade and knowledge transfer in the form of patents, trademarks and brand names are weaker in countries with relatively strong legal rights than in countries with relatively weak legal rights. Our findings point to the interplay between property rights and intangible assets theories of the multinational firm by suggesting that the joint role of knowledge ows in production and of multinational firm boundaries as facilitators of transfers of tangibles and intangibles is crucial.
    Keywords: knowledge transfer, intra-firm trade, foreign affliates, Sub-Saharan Africa
    JEL: F14 F21 F23 L21 L23 L24
    Date: 2017
  16. By: Luintel, Kul B (Cardiff Business School); Khan, Mosahid
    Abstract: Research and Development (R&D) activities of emerging countries (EMEs) have increased considerably in recent years. Recent micro studies and anecdotal evidence points to industrialized countries as the sources of knowledge in EMEs. In this context, we examine ideas production and international knowledge spillovers in a panel of 31 EMEs by accounting for six diffusion channels and two types (national versus USPTO) of patent filings. Knowledge spillovers to EMEs accruing from (i) the industrialized world, (ii) the emerging world, (iii) different country and regional groups, and (iv) selected bilateral cases are modeled. Spillovers from the industrialized world appear robust via geographical proximity and disembodied channels only. Other conduits, including trade flows, are either insignificant or not robust. Spillovers from emerging world are virtually non-existent. Analyses of regional clusters of EMEs do not support any role of language, culture or geographical characteristics in knowledge diffusion. Overall, the breadth and depth of knowledge spillovers appear extremely moderate across EMEs; however, we find pockets (specific countries and certain groups) generating positive spillovers. A carefully choreographed policy focusing on such pockets might be fruitful. We hope that this study (i) complements the micro literature, (ii) furthers the existing macro literature and (iii) provides some new policy insights. Our results are robust to a range of robustness checks, including the estimators – a cointegration approach versus a simple fixed effects OLS estimator.
    Keywords: Ideas Production; Diffusion; Fixed Effects; Panel Integration and Cointegration
    JEL: G0 O4 O16
    Date: 2017–07
  17. By: Calá, Carla Daniela
    Abstract: We analyse the determinants of firm dynamics in developing countries using Argentina as an illustrative case. We explain firm entry and exit at the regional level, distinguishing three groups of manufacturing activities: low, medium and high tech. We find that both region- and sector- specific determinants explain firm dynamics, but the impact is not homogeneous across the sectors considered. In particular, for low tech industries, there is a need for explanatory variables that proxy for the specificities of developing economies (e.g., poverty, informal economy and idle capacity). We also find evidence of a core-periphery pattern according to which agglomeration economies and previous entries and exits have different effects in core and peripheral regions. These results are relevant for policy makers in developing countries, who should take into account not only the specificities of such economies, but also the regional heterogeneity both in terms of the level of development and industrial composition within the country .
    Keywords: Dinámica Empresarial; Creación de Empresas; Cese de Actividad; Relación Centro-Periferia; Economía Regional; Argentina;
    Date: 2015–12

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