nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2018‒01‒15
nine papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Innovation Activity of Firms in the Philippines By Quimba, Francis Mark A.; Albert, Jose Ramon G.; Llanto, Gilberto M.
  2. Impact of Foreign Linkages on Innovation Activity of Manufacturing Firms in CALABARZON By Quimba, Francis Mark A.; Calizo, Sylwyn Jr. C.
  3. ICT Capital Spending, ICT Sector, and Firm Productivity: Evidence from Indonesian Firm-Level Data By Chaikal Nuryakin; Faisal Rachman; Ashintya Damayati; Nia Kurnia; Moslem Afrizal
  4. The organizational design of high-tech startups and product innovation By Grimpe, Christoph; Murmann, Martin; Sofka, Wolfgang
  5. Intangible-intensive strategies of Russian companies By Sofia N. Paklina; Mariia A. Molodchik; Carlos Jardon
  6. Macroeconomic Overview of the Philippines and the New Industrial Policy By Rosellon, Maureen Ane D.; Medalla, Erlinda M.
  7. Business Dynamic Statistics of Innovative Firms By Nathan Goldschlagy; Elisabeth Perlmanz
  8. Banking Crises and Investments in Innovation By Oana Peia
  9. Modern Public Enterprises: Organisational Innovation and Productivity By Caroline Stiel

  1. By: Quimba, Francis Mark A.; Albert, Jose Ramon G.; Llanto, Gilberto M.
    Abstract: Set against a rapidly changing global environment, Philippine industries now, more than ever, are facing new demands that will require more innovation for firms to remain competitive across the global market. The PIDS Survey on Innovation Activities (PSIA) conducted among firms in food manufacturing, other manufacturing, ICT, and BPO suggests that in 2015, about 43% of Philippines establishments were innovation-active. Strikingly, the BPO sector spends the most for innovation activities despite it being the least innovation-active among the various sectors at a rate of just 30%. Intellectual property applications have been very low across all industries following firms’ tendency to view their product innovations as trade secrets in order to maintain their competitive edge against rivals. The study also finds that the conduct of knowledge management activities is positively correlated with firm size. Moreover, larger firms tend to rely on internal sources for their information and innovation which is the case with the food processing and automotive sectors. Results of the panel data model explaining innovative behavior among 2015 PSIA firms, that were also part of a pilot survey in 2009, showed that knowledge management activities and firm size are adequate determinants of innovation behavior. Taking all these survey results into perspective, a national policy that is grounded on consultations with all stakeholders in the innovation ecosystem should be pursued. Enabling the business environment through stronger intellectual property rights can also encourage more firms to innovate especially among wary multinational companies.
    Keywords: innovation, Philippines, process innovation, product innovation, micro, small and medium enterprises, industry-academe collaboration
    Date: 2017
  2. By: Quimba, Francis Mark A.; Calizo, Sylwyn Jr. C.
    Abstract: Despite several studies exploring innovation activities in the Philippines, no clear answer has been provided to the question of whether having foreign linkages can induce knowledge transfer and innovation. This study probes deeper into the role of foreign linkages to innovation activities of manufacturing firms in the CALABARZON region. Utilizing a probit estimation and an IV regression to control for endogeneity brought forth by omitted variable bias, the results show that foreign linkages can indeed positively affect a firm’s likelihood to undertake product innovation that involves the development of a new product using a technology new to the firm. On the other hand, process innovation has consistently shown to be positively influenced by foreign linkages. Given these results, it can be inferred that having foreign linkages and participating in the global value chain impacts both process and product innovations positively. Thus, it is important to highlight the need to promote stronger regional and global linkages to sustain the manufacturing growth in CALABARZON. Moreover, supporting series of training that teach the 5S system through government channels like the Technical Education and Skills Development Authority and the various state universities and colleges are as important. Highlighting the role of industrial parks and recognizing the value of establishment-level data are also key points in this study.
    Keywords: Philippines, innovation, manufacturing, process innovation, product innovation, CALABARZON, foreign linkages
    Date: 2017
  3. By: Chaikal Nuryakin (Researcher, Institute for Economic and Social Research, Faculty of Economics, University of Indonesia, Jakarta); Faisal Rachman (Institute for Economic and Social Research, Faculty of Economics, University of Indonesia); Ashintya Damayati (Institute for Economic and Social Research, Faculty of Economics, University of Indonesia); Nia Kurnia (Researcher, Institute for Economic and Social Research, Faculty of Economics, University of Indonesia, Jakarta); Moslem Afrizal (Researcher, Institute for Economic and Social Research, Faculty of Economics, University of Indonesia, Jakarta)
    Abstract: This study examined the impact of ICT on firm productivity in Indonesia. Using unbalanced panel data of medium and large manufacturing firms, we performed two kinds of estimation. The first estimation is Cobb-Douglas production function with output as the dependent variable. Capital was grouped into non-ICT capital and ICT capital in order to determine the impact of ICT on firm’s output creation. The second estimation used total factor productivity as the dependent variable, where TFP was estimated using Levinsohn-Petrin productivity estimator. As other internal and external factors were added to the regression as control variable, the study provides early evidence that while the impact of R&D and innovation still needs to be further elaborated, ICT capital may have a positive, but not always significant, impact on firm’s production and productivity in Indonesia.
    Keywords: ICT — Productivity — TFP — R&D — Innovation
    JEL: E22 D24 O3
    Date: 2017–10
  4. By: Grimpe, Christoph; Murmann, Martin (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Sofka, Wolfgang
    Abstract: "We investigate whether appointing a middle management level affects startups' innovation performance. Additional hierarchical levels are often suspected to restrict innovative activities. However, founders' capacities for information processing and resource allocation are usually strongly limited while, at the same time, R&D decisions are among the most consequential choices of startups. We argue that middle management is positively related to introducing product innovations because it improves the success rates from recombining existing knowledge as well as managing R&D personnel. In addition, we suggest that the effectiveness of these mechanisms depends on the riskiness of a startup's business opportunity. Based on a sample of German high-tech startups, we find support for our conjectures." (Author's abstract, IAB-Doku) ((en))
    JEL: L26 M13 M12 M51 L22 L23 J21
  5. By: Sofia N. Paklina (National Research University Higher School of Economics); Mariia A. Molodchik (National Research University Higher School of Economics); Carlos Jardon (National Research University Higher School of Economics)
    Abstract: This paper explores strategic behavior of Russian companies with regard to intangible resources and its link to different types of performance. Additionally, the study addresses the question, whether companies in intangible-intensive profiles have specific characteristics in terms of industry, size, company age and type of ownership. Following intellectual capital view, the study provides a cluster analysis considering four attributes: human resources, innovative capabilities, information and communications technology (ICT) capabilities and relational capital. Analysis of more than 1,000 Russian public companies over the period 2004-2014 reveals three profiles of strategic behavior considering the employment of intellectual resources. The majority of Russian public companies (60%) follow the non-intensive intangible strategy. Only 13% of companies constitute the intangible-intensive profile having endowment of all intellectual resources higher than the sample average. The rest 27% of companies also persuade the intangible-intensive strategy with the focus on innovative capabilities
    Keywords: intangibles, intellectual capital, strategy, strategic group, cluster analysis, Russian companies, performance
    JEL: L10 O30 G30
    Date: 2017
  6. By: Rosellon, Maureen Ane D.; Medalla, Erlinda M.
    Abstract: The Philippines demonstrated significant economic growth—and is still gaining momentum—in recent years. This was after being tagged as the ‘sick man of Asia’ for showing slow growth while its Asian neighbors flourished. To sustain the current growth momentum and make it inclusive, transforming the economy becomes crucial. The government developed a new industrial strategy. It started with the Manufacturing Resurgence Program which developed industrial roadmaps with the help of the private sector. This was meant to evolve into a Comprehensive National Industrial Policy (CNIP) that integrates industry/manufacturing with agriculture and services. The overall strategy identifies competition, innovation, and productivity as the underlying framework. The New Industrial Policy has further evolved into an Inclusive, Innovative Industrial Strategy (I3s) recognizing the crucial role of innovation especially as we are on the road towards Industry 4.0. The overall objective of the Philippine industrial strategy is to build globally-competitive industries as well as strong domestic and global linkages. Currently, there are 12 priority industries identified. To boost growth and make these industries competitive and productive, several strategic actions/measures have also been identified, such as addressing supply chain gaps, providing HRD and skills training, developing small and medium enterprises, considering innovation and upgrading, intensifying investment promotion, and addressing horizontal issues e.g. infrastructure, logistics, and regulatory processes, among others. With the strong economy that the Philippines has been experiencing and a new industrial policy being implemented, attaining growth that is sustainable and inclusive is promising. Manufacturing growth surpassing services sector growth in the last three years is a testament to the impact of the new industrial policy on the economy, especially in the manufacturing sector. With the continued implementation of the strategic actions and programs and support from stakeholders, goals that strengthen SMEs, industry and innovation hubs establishment, more and quality labor generation and labor productivity enhancement, among other aspirations for the industry, can be achieved.
    Keywords: Philippines, new industrial policy, Philippine industrial strategy, macroeconomic performance, Manufacturing Resurgence, Program
    Date: 2017
  7. By: Nathan Goldschlagy; Elisabeth Perlmanz
    Abstract: A key driver of economic growth is the reallocation of resources from low to high productivity activities. Innovation plays an important role in this regard by introducing new products, services, and business methods that ultimately lead to increased productivity and rising living standards. Traditional measures of innovation, particularly those based on aggregate inputs, are increasingly unable to capture the breadth and depth of innovation in modern economies. In this paper, we describe an effort at the US Census Bureau, the Business Dynamics Statistics of Innovative Firms (BDS-IF) project, which aims to address these challenges by extending the Business Dynamics Statistics data to include new measures of innovative activity. The BDS-IF project will produce measures of firm, establishment, and employment flows by firm age, firm size, and industry for the subset of firms engaged in activities related to innovation. These activities include patenting and trademarking, the employment of STEM workers, and R&D expenditures. The exibility of the underlying data infrastructure allows this measurement agenda to be extended to include copyright activity, management practices, and high growth firms.
    Keywords: Firm dynamics, innovation, Longitudinal Business Database, Business Dynamics Statistics
    Date: 2017–01
  8. By: Oana Peia
    Abstract: This paper proposes a new channel to explain the medium- to long-term effects of banking crises on the real economy. It embeds a banking sector prone to runs in a stylized growth model to show that episodes of bank distress affect not only the volume, but also the composition of firm investment, by disproportionally decreasing investments in innovation. Thishypothesis is confirmed empirically employing industry-level data on R&D spending around 13 recent banking crises episodes. Using difference-in-difference identification strategies, I show that industries that depend more on external finance, in more bank-based economies, invest disproportionally less in R&D following systemic banking crises. These industries also have a lower share of R&D spending in total investment, suggesting a shift in the composition of investment that is specific to recessions following banking crises and not other business cycle recessions.
    Keywords: Banking crises; R&D investment; Financial dependence; Global games
    JEL: G01 G21 E22
    Date: 2017–12
  9. By: Caroline Stiel
    Abstract: In advanced economies, state-owned enterprises play an important role in sectors of general interest such as energy and water supply. The conditions under which they operate have changed fundamentally since 1998, with new strategies required for firms to preserve market shares in the face of liberalisation and technological innovation. This paper investigates the productivity effect of three strategies in new public management: corporatisation, outsourcing, and partial privatisation. Firm-level productivity is estimated from production data using a control function approach. As most of the firms are typically multiproduct firms, we suggest a method for modelling differences in the product mix and to account for heterogeneous production environments. Using a newly constructed and unique dataset from the German Federal Statistical Office, we find that outsourcing and corporatisation positively impact productivity, while partial privatisation does not increase productivity.
    Keywords: State Ownership, Productivity, Firm Organisation, Structural Production Function
    JEL: L32 D24 L24 L97
    Date: 2017

This nep-cse issue is ©2018 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.