nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2017‒11‒26
ten papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Innovation in Russia: the territorial dimension By Crescenzi, Riccardo; Jaax, Alexander
  2. Positioned for an ideas boom? Productivity and innovation in Australia By Steven Bond-Smith; Rebecca Cassells; Alan S Duncan; Daniel Kiely; Yashar Tarverdi
  3. Manufacturing Employment Elasticity and Its Drivers in Developing and Emerging Countries : Focus on Sub-Saharan Africa By Abdelaaziz Aït Ali; Yassine Msadfa
  4. The Diffusion of Knowledge via Managers’ Mobility By Giordano Mion; Luca David Opromolla; Alessandro Sforza
  5. The Role of Strategic Entrepreneurship in Performance of Russian SMEs during the Economic Crisis By Shirokova, Galina V.; Ivvonen, Liudmila; Gafforova, Elena
  6. The Talent Management ? a real challenge for SKF Bearings business in Bulgaria By Maria Tumbeva; Elmira Bantcheva
  7. The Aggregate Implications of Innovative Investment in the Garcia-Macia, Hsieh, and Klenow Model By Ariel Burstein
  8. The Network Structure between Organizations and the Operational Efficiency of Drug Development By Fumihiko Isada; Yuriko Isada
  9. Liability of Foreignness as a Boundary Condition for an Entry Mode Choice: a Case of Russian Companies on German Market By Panibratov, Andrei Yu.; Ribberink, Natalia; Veselova, Anna S.; Nefedov, Konstantin S.
  10. Effects of corporate sector restructuring on productivity growth and the role of foreign owned enterprises in China By Chan-Guk Huh

  1. By: Crescenzi, Riccardo; Jaax, Alexander
    Abstract: The debate on Russia’s innovation performance has paid little attention to the role of geography. This paper addresses this gap by integrating an evolutionary dimension in an ‘augmented’ regional knowledge production function framework to examine the territorial dynamics of knowledge creation in Russia. The empirical analysis identifies a strong link between regional R&D expenditure and patenting performance. However, R&D appears inadequately connected to regional human capital. Conversely, Multinational Enterprises (MNEs) play a fundamental role as ‘global knowledge pipelines’. The incorporation of historical variables reveals that the Russian case is a striking example of long-term pathdependency in regional patterns of knowledge generation. Endowment with Soviet-founded science cities remains a strong predictor of current patenting. However, current innovation drivers and policies also concur to enhance (or hinder) innovation performance in all regions. The alignment of regional innovation efforts, exposure to localised knowledge flows and injections of ‘foreign’ knowledge channelled by MNEs make path-renewal and pathcreation possible, opening new windows of locational opportunity.
    Keywords: innovation; R&D; evolutionary economic geography; regions; BRICS; Russia
    JEL: O32 O33 R11 R12
    Date: 2017–08–03
  2. By: Steven Bond-Smith (Bankwest Curtin Economics Centre (BCEC), Curtin University); Rebecca Cassells (Bankwest Curtin Economics Centre (BCEC), Curtin University); Alan S Duncan (Bankwest Curtin Economic Centre, Curtin University); Daniel Kiely (Bankwest Curtin Economics Centre, Curtin Business School); Yashar Tarverdi (Bankwest Curtin Economic Centre, Curtin University)
    Abstract: Positioned for an Ideas Boom is the fourth report in the Bankwest Curtin Economics Centre Focus on the States series. The report examines an issue of central importance to maintaining economic growth, improving competitiveness and creating jobs – productivity and innovation. The much anticipated National Innovation and Science Agenda launched by Prime Minister Malcolm Turnbull in December 2015 has committed funding of $1.1 billion over four years to twenty eight action areas, which include de-risking start-ups; investing in STEM; attracting and keeping overseas entrepreneurs; and improving university-industry connectedness, amongst others. These measures are welcome not just because of the commitment of financial support to innovation programmes, but also because of the important signal that promoting a culture of innovation is essential to Australia’s economic growth and future prosperity. So is Australia positioned to capitalise on an ideas boom? It is more important now than ever for Australia to both learn from, and drive, prosperity through international collaborations. Australia has the people, the resources, the environment, the knowledge and the creativity to thrive in the future, and to contribute to national and global economic growth. But significant barriers remain, specifically in relation to access to research and development funding and venture capital investment, especially to smaller enterprises and at early stages of business expansion. The National Innovation and Science Agenda provides a credible and coherent prospectus of policies, and significant government funding support, to drive productivity and innovation growth in Australia. The opportunity, and the responsibility, falls on us all government, families, businesses, universities and research institutions – to bring the ideas boom to reality.
    Keywords: Western Australia, productivity and innovation, economic growth, costs of business, employment, research and development
    Date: 2016–03
  3. By: Abdelaaziz Aït Ali; Yassine Msadfa
    Abstract: The aim of this work is to contribute to the empirical literature on employment-GDP elasticities in four main ways. First, it provides a set of employment-GDP elasticities for a sample of emerging and developing economies, including 11 sub-Saharan countries, based on the GGDC 10-sectors database. Second, it assesses the extent to which manufacturing activities are inclusive compared to the rest of the economy, in terms of employment creation. Third, it explores the determinants of cross-country variations in employment elasticities, both on overall and manufacturing levels, focusing in particular on the role played by structural, institutional and macroeconomic variables. Fourth, the present paper attempts to measure how different the manufacturing elasticity responsiveness is to the same set of explanatory variables, compared to the overall employment elasticity. The key results of the paper can be summarized as follows: (i) Overall point estimates of elasticities typically fall in the 0–1 range, with the majority of them ranging between 0.4 and 0.7. (ii) Elasticities vary considerably across countries and sectors, with manufacturing elasticity outperforming the rest of the economy in low-income countries in sub-Saharan Africa, while it’s below average in Latin American and Asian economies. (iii) Structural policies aimed at increasing labor market flexibility and accelerating the process of structural transformation have the same significant and positive impact on both overall and manufacturing employment elasticities. (iv) Macroeconomic policies aimed at reducing macroeconomic volatility have a significant and positive impact on manufacturing elasticity rather than the rest of the economy. We attribute that to the tradability characteristic of manufacturing products that exert pressure over the competitiveness of the domestic fabric and thus the scale of growth translation into employment. (v) Manufacturing activities tend to be more labor-intensive than the rest of the economy when agriculture employment is higher, suggesting that the “stock of unskilled labor in agriculture” feed growth in manufacturing more than the rest of the economy; (vi) The rule of law is a crucial determinant of how much growth is translated into employment. However, the sign of the coefficient is not consistent with the prevailing intuition. Countries with a better governance framework witness a lower elasticity and vice-versa. We argued that rule of law could be capturing the effect of the informal sector, which may allow more flexibility within labor markets. This channel seems to be effective in the manufacturing activities. (vii) Finally, it seems that elasticity at lower growth rates is bigger than elasticity at higher rates, even for the rest of the economy. However, the scale effect in the overall economy is lower than manufacturing. This could be explained by the possible scale economies in the manufacturing sector that outperform the rest of the economy. The automatization process and the substitution effect is more likely to occur in manufacturing than in services, especially considering that the above analysis has been conducted mainly over developing economies where services do not witness high productivity levels and low levels of cost-cuts.
    Date: 2017–09
  4. By: Giordano Mion; Luca David Opromolla; Alessandro Sforza
    Abstract: Better managers and managerial practices lead to better firm performance. Yet, little is known about what happens when managers move across firms. Does a firm hiring a good manager improve its performance? If yes is there some valuable knowledge the manager has acquired and successfully diffused to the new firm? In order to answer these questions we use information related to specific activities the manager was involved in when working for previous firms. More specifically, we use information on whether the manager has worked in the past for firms exporting to a specific destination country or a specific product. Our data is rich enough to allow controlling for both manager and firm unobservables and wash out any time-invariant ability of the manager as well as overall firm performance. We find that the export experience gained by managers in previous firms leads their current firm towards higher export performance, and commands a sizable wage premium for the manager. We use several strategies to deal with endogeneity including an exogenous event study: the sudden end of the Angolan civil war in 2002. We further refine our analysis by looking at different types of managers (general, production, financial and sales) and show how specific export experience interacts with the degree of product differentiation and/or the financial vulnerability of a firm’s products as well as with rising import competition from China.
    Keywords: Managers, knowledge diffusion, firm performance, job mobility, export experience
    JEL: M2 L2 F16 J31
    Date: 2017–06
  5. By: Shirokova, Galina V.; Ivvonen, Liudmila; Gafforova, Elena
    Abstract: This study examines how components of strategic entrepreneurship relate to Russian small and medium-sized firms performance during the economic crisis and to what extent combinations of firm resources determine these relationships. In order to address these issues we surveyed 651 Russian private SMEs. Our results show that during the economic crisis exploitation is positively associated with firm performance. However, we found positive association of exploration with firm performance during the economic crisis instead of negative association. Our results also indicate that relationship between exploration as well as exploitation and firm performance is dependent on different combinations of firm resources.
    Keywords: strategic entrepreneurship, exploration, exploitation, SMEs, firm performance, economic crisis, human capital, financial capital, social capital, Russia,
    Date: 2016
  6. By: Maria Tumbeva (New Bulgarian University); Elmira Bantcheva (New Bulgarian University)
    Abstract: The Talent Management topic is extremely extensive. At a time of global economic recession (2016) and a subsequent boom in the first quarter of 2017, unclear markets, great pace of change, and an extreme need for flexibility, each organization relies on its talents to overcome them. Good practices show that they best deal with the "crisis" of companies in which there are built-up, robust talent management processes and continuity planning.This topic is a real challenge for SKF Bearings company in Bulgaria witch consists of three independent plants located in the town of Sopot, the town of Kalofer and the village of Karnare. In view of the demographic development of the area in which the Company is located, the problem of building up its own staff and continuity for all levels of government is at the forefront. Another challenge is the stagnation in the labor market and the lack of expertise. Bulgaria is an increasingly preferred destination for exporting labor - intensive production facilities from central Europe to automotive and not only industry. For companies, this mean that they will have to where with the available staff, which posses the challenge of retaining, re-qualifying and increasing knowledge, skills, performance and motivation.In view of the increasing turnover in trends of the company, the task of continuity of the business processes from the point of view of the human resource is at the forefront and the implementation of a Talent Management system is with high priority for the organization. Talent Management aims to ensure that SKF has the right people in the right place in order to stimulate the business and to succeed in the market - today and tomorrow. It is about creating the right conditions for employees to maximize their potential and focus on their own development and careers.
    Keywords: talent, talent management, company strategy, business analysis, development
    Date: 2017–10
  7. By: Ariel Burstein (UCLA)
    Abstract: We extend the model firm dynamics of Garcia-Macia, Hsieh, and Klenow (2016) to include a description of the costs of innovative investments as in the model of Klette and Kortum (2004). In this model, aggregate productivity (TFP) grows as a result of innovative investment by incumbent and entering firms in improving continuing products and acquiring new products to the firm. This model serves as a useful benchmark because it nests both Quality-Ladders based Neo-Shumpeterian models and Expanding Varieties models commonly used in the literature and, at the same time, it provides a rich model of firm dynamics as described in GHK. We show how data on firm dynamics and firm value can be used to infer the elasticities of aggregate productivity growth with respect to changes in incumbent firms' investments in improving their incumbent products, incumbent firms' investments in acquiring products new to the firm, and entering firms' investments in acquiring new products. As discussed in Atkeson and Burstein (2015), these elasticities are a crucial input in evaluating the extent to which it is possible to alter the medium term growth path of the macroeconomy through policies aimed at stimulating innovative investments by firms. We use these methods to provide quantitative estimates of these elasticities of aggregate TFP growth with respect to changes in each of the three categories of innovative investment in the model as well as of the rate of social depreciation of innovation expenditures.
    Date: 2017
  8. By: Fumihiko Isada (The Faculty of Informatics, Kansai University); Yuriko Isada (School of Policy Studies, Kwansei Gakuin University)
    Abstract: The sharp rise in health-care costs is compressing the public finance in various countries today, and an increase in the efficiency of the research and development of pharmaceutical products is required. In order to increase the efficiency of drug development, open innovation through external cooperation between drug manufacturing companies is attracting attention. However, the research findings on previous researches are not necessarily the same regarding the size of the effect of external cooperation between drug manufacturing companies. It is assumed that differences in the kinds of pharmaceutical products and in the mode of inter-organisational relations are two of the causes of the variation in the research findings. For example, with regard to the mode of inter-organisational relation, the operational efficiency of a horizontal international specialization style is high in the IT industry, and the operational efficiency of a vertical integration style is high in the motor industry. Thus, in this research, the pharmaceutical products were classified appropriately and the inter-organisational relation fit for each was clarified empirically. As a method of research, from the intellectual-property database, the joint-application patents for the past ten years were extracted, and the inter-organisational relation was analysed by using the method of social network analysis. As a result, when the pharmaceutical products were classified with the conventional polymer formulation, the bio-drug development and the dosage-form development, the effect of external cooperation changed with differences in product characteristics. In addition, it became clear that the modes of external cooperation fit for each differ. (This work was supported by JSPS KAKENHI Grant Number 16K03916.)
    Keywords: inter-organisational relation, social network analysis, joint-application patent, pharmaceutical product
    JEL: O32
    Date: 2017–10
  9. By: Panibratov, Andrei Yu.; Ribberink, Natalia; Veselova, Anna S.; Nefedov, Konstantin S.
    Abstract: In the paper we apply liability of foreignness (LOF) concept as a boundary condition for a choice of entry mode used by Russian companies while penetrating German market. In terms of an entry mode we differentiate between export and FDI and test how different aspects of LOF affect the choice between these two alternatives. The paper presents the results of a pilot study of 40 subsidiaries of Russian MNEs operating in different regions of Germany. Our results show that both exporter and companies who are involved in FDI experience significant negative effects from the lack of proper institutional and business knowledge about host market, though in various degrees. Legal consulting and personal market analysis are identified among effective instruments to mitigate these effects for both types of entry modes, however, cooperation with institutional agents, such as the Chamber of Commerce, is also of high value, especially, for companies involved in FDI.
    Keywords: liability of foreignness, entry mode, Russian companies, FDI, foreign direct investments, legal consulting, market analysis,
    Date: 2016
  10. By: Chan-Guk Huh (Chungnam National University, International Trade Department)
    Abstract: This study analyzes productivity enhancing effects of privatizations as well as corporate sector restructuring involving foreign owned enterprises (FOE) in China using firm level data from 1998 to 2007 period. First, we examine key characteristics of firm level total factor productivities (TFPs) using a non-parametric multi-factor productivity approach and, then we decompose TFP growth by ownership categories using the dynamic Olley-Pakes method, paying special attention to the role of FOEs in this area. Second, this study measures spillover effects of FOEs on TFP of overall industries and finds that the FOE sector not to have had the backward spillover effects, which operate through sourcing of intermediate parts from local firms. However, this result is reversed when we re-examine the relationship using a truncated FOE group, which consists of firms that have been converted into FOEs from being local Chinese firms through foreign direct investments. This suggests that the lack of knowledge of local supply chain networks by original FOEs might have contributed to the earlier finding of an absence of the backward spillover effect of FOEs on local firms. In addition, this study finds shuffling of firms between the two categories of FOEs of HMT and FDI to have had measurable TFP enhancing effects.
    Keywords: Total Factor Productivity, FDI, China, privatization
    JEL: F21 F23
    Date: 2017–10

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