nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2018‒04‒02
eleven papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  2. International Technology Sourcing and Knowledge Spillovers: Evidence from OECD Countries By Sophia Chen; Estelle Dauchy
  3. R&D investments and spillovers under endogenous absorptive capacity: Competitive R&D cannot take full-advantage of complementarity in absorptive capacity while cooperative R&D can By Mário Alexandre Patrício Martins da Silva
  4. Foreign Direct Investment according to different countries’ stages of Human Development By João Oliveira; Francisco Martins; Elísio Brandão
  5. The Impact of the French Policy Mix on Business R&D: How Geography Matters By Benjamin Montmartin; Marcos Herrera; Nadine Massard
  6. Confidence in Knowledge or Confidence in the Ability to Learn: An Experiment on the Causal Effects of Beliefs on Motivation By Fischer, Mira; Sliwka, Dirk
  7. Foreign ownership and market power: the special case of European banks By Panayotis D. Alexakis; Ioannis G. Samantas
  8. Growth and the geography of knowledge By Marta Aloi; Joanna Poyago-Theotoky; Frederic Tournemaine
  9. Informality in Indian Manufacturing By Rubina Verma; Rahul Giri
  10. The Effect of R&D Growth on Employment and Self-Employment in Local Labour Markets By Tommaso Ciarli; Alberto Marzucchi; Edgar Salgado; Maria Savona
  11. INSTITUTIONS, CAPABILITIES AND ECONOMIC DEVELOPMENT By Antonio Cubel; María Teresa Sanchis; Juan A. Sanchis-Llopis

  1. By: Mário Alexandre Patrício Martins da Silva (Faculdade de Economia da Universidade do Porto)
    Abstract: In this paper, we explain the analytics of a particular type of mechanism of Open Innovation (OI), namely the management of non-pecuniary exchange of information, and address the relationship between Intellectual Property Rights (IPRs), particularly patent rights, and OI using a static game-theoretic setting of Research and Development competition. We show that, surprisingly perhaps, a rise in the strength of patent protection induces the free sharing and dissemination of technological information and other contributions to the OI development of innovations. Conversely, a fall in the strength of the patent system induces the exercise of traditional IPRs by innovative firms to protect their intellectual assets.
    Keywords: Open innovation; IPRs; knowledge spillovers; R&D
    JEL: O33
    Date: 2017–11
  2. By: Sophia Chen; Estelle Dauchy
    Abstract: How much do firms benefit from foreign R&D and through what channel? We construct a global network of corporate innovation using more than 1.5 million patents granted to firms in OECD countries. We test the “international technology sourcing” hypothesis that foreign innovation activities tap into foreign R&D and improve home productivity through knowledge spillovers. We find that firms with stronger inventor presence in technology frontier countries benefit disproportionately more from their R&D. The strength of knowledge spillovers depends on the direction of technology sourcing. Knowledge externality is larger for firms in technology frontier countries than for firms in non-frontier countries.
    Date: 2018–03–12
  3. By: Mário Alexandre Patrício Martins da Silva (Faculdade de Economia do Porto)
    Abstract: We show that the setting up of general conditions on complementarity in absorptive capacity gives rise to different, if not opposite Nash equilibrium outcomes to those found when absorptive capacity is assumed to be determined only by the similarity of R&D orientations. Firms that cooperate in R&D can take full advantage of complementarity in R&D by adopting firm-specific R&D paths, which appears to contradict Kamien and Zang’s (2000) findings, and so would contradict Weithaus’ (2005) predictions. Oddly, firms competing in R&D cannot gain the most from the potential of complementarity in knowledge by not choosing firm-specific R&D approaches in equilibrium under even milder conditions, which is contrary to another prediction of the Kamien and Zang’s and Weithaus’ models.
    Keywords: Absorptive capacity, complementarities, R&D, knowledge spillovers
    JEL: O33
    Date: 2017–11
  4. By: João Oliveira (FEP-UP, School of Economics and Management, University of Porto); Francisco Martins (FEP-UP, School of Economics and Management, University of Porto); Elísio Brandão (FEP-UP, School of Economics and Management, University of Porto)
    Abstract: This investigation studies Foreign Direct Investment determinants with a framework different from the major research present in the literature related to FDI. Its aim is to study and give insights into the reported differences in FDI determinants in the literature. This framework uses thirteen pillars as FDI determinants, which are synthesized recurring to a wide spectre of variables representing nations’ characteristics selected from literature namely from The World Competitiveness Reports of The World Economic Forum. The results of the econometric models estimated by GLS, with data from 186 countries, indicate significant differences on FDI determinants according to the different human development stage; therefore policies regarding FDI attraction must be shaped according to the stage of human development of each country and the specific determinants. The effect of the recent financial crisis in investors decisions regarding FDI was also studied using a structural change test. The results indicate that there was a significant shift in FDI flows.
    Keywords: Foreign Direct Investment, Determinants, Human Development Index Levels, Principal Component Analysis, Taxes.
    JEL: C38 F21 O15 O57
    Date: 2017–09
  5. By: Benjamin Montmartin (SKEMA Business School; Université Côte d’Azur; OFCE Sciences.Po; GREDEG CNRS); Marcos Herrera (CONICET - IELDE; National University of Salta, Argentina); Nadine Massard (GAEL UMR 1215; Université Grenoble Alpes, France)
    Abstract: Based on a spatial extension of an R&D investment model, this paper measures the macroeconomic impact of the French R&D policy mix on business R&D using regional data. Our measure takes into account not only the direct effect of policies but also indirect effects generated by the existence of spatial interaction between regions. Using a unique database containing information on the levels of various R&D policy instruments received by firms in French NUTS3 regions over the period 2001-2011, our estimates of a spatial Durbin model with structural breaks and fixed effects reveal the existence of a negative spatial dependence among R&D investments in regions. In this context, while a-spatial estimates would conclude that all instruments have a crowding-in effect, we show that national subsidies are the only instrument that is able to generate significant crowding-in effects. On the contrary, it seems that the design, size and spatial allocation of funds from the other instruments (tax credits, local subsidies, European subsidies) lead them to act (in the French context) as beggar-thy-neighbor policies.
    Keywords: Policy mix evaluation, R&D investment, Spatial panel, French NUTS3 regions
    JEL: H25 O31 O38
    Date: 2018–03
  6. By: Fischer, Mira (University of Cologne); Sliwka, Dirk (University of Cologne)
    Abstract: Previous research has shown that feedback about past performance has ambiguous effects on subsequent performance. We argue that feedback affects beliefs in different dimensions – namely beliefs about the level of human capital and beliefs about the ability to learn – and this may explain some of the ambiguous effects. We experimentally study the causal effects of an exogenously administered change in beliefs in both of these dimensions on the motivation to learn. We find that confidence in the ability to learn raises incentives, while confidence in the level of human capital lowers incentives for individuals with high levels of human capital.
    Keywords: economic experiments, confidence, human capital investment, motivation
    JEL: C91 D83 I21 J24
    Date: 2018–02
  7. By: Panayotis D. Alexakis (National and Kapodistrian University of Athens); Ioannis G. Samantas (National and Kapodistrian University of Athens)
    Abstract: The paper examines the nexus of foreign ownership and market power in 26 European banking sectors, for the period 1997-2013. The sample comprises 11,761 bank-year estimates of marginal cost and market power, which are then matched with data on the foreign ownership status and presence across all host countries. The analysis reports strong evidence over the significant effect of well-capitalised foreign-owned banks on their monopolistic conduct. There is also a weaker indication that foreign presence leads to higher margins in large-sized foreign banks in fast-growing economies and markets of stricter regulation on capital, in which foreign penetration lies above 14% of the host banking industry.
    Keywords: Market power; European banks; foreign banking; semiparametric modeling
    JEL: C14 D40 G2 L40
    Date: 2018–02
  8. By: Marta Aloi; Joanna Poyago-Theotoky; Frederic Tournemaine
    Abstract: We analyse how spatial disparities in innovation activities, coupled with migration costs, affect economic geography, growth and regional inequality. We provide conditions for existence and uniqueness of a spatial equilibrium, and for the endogenous emergence of industry clusters. Spatial variations in knowledge spillovers lead to spatial concentration of more innovative firms. Migration costs, however, limit the concentration of economic activities in the most productive region. Narrowing the gap in knowledge spillovers across regions raises growth, and reduces regional inequality by making firms more sensitive to wage differentials. The associated change in the spatial concentration of industries has positive welfare effects.
    Keywords: Growth; Economic geography; Geographic labour mobility; Innovation; Knowledge spillovers; Regional economics
    Date: 2018
  9. By: Rubina Verma (Instituto Tecnologico Autonomo de Mexico (ITAM)); Rahul Giri (International Monetary Fund)
    Abstract: This paper characterizes informality in output and employment in the Indian economy for the period 1978-2005, with a special emphasis on the manufacturing sector. We first present statistics on growth and employment for India as well as for three sectors - agriculture, industry and services- for the time period 1950-2005. We also present data on employment in informal and formal enterprises using National Sample Survey data and highlight how informality in both formal and informal enterprises has grown over the years. This is further confirmed by comparing India with 40 other developing countries, where we find that the share of informal employment in non-agricultural employment is the highest among all the countries, and Indian manufacturing is a sector where the degree of informality is strikingly high. We document informality in Indian manufacturing carefully by examining detailed data on value added, employment, capital-labor ratios and trade at the 3 digit level for the manufacturing industries during the 1978-2010 period and highlight those industries in which informality has been increasing and dominant. Importantly, the level of informality in Indian employment has remained persistently high despite the rapid growth in GDP and GDP per capita seen since 1991, which is when India initiated the process of liberalizing the domestic industrial policy as well as its trade policy.
    Date: 2017
  10. By: Tommaso Ciarli (SPRU, University of Sussex); Alberto Marzucchi (SPRU, University of Sussex); Edgar Salgado (SPRU, University of Sussex); Maria Savona (SPRU, University of Sussex)
    Abstract: The paper investigates the effects of firms’ investment in Research and Development (R&D) on employment dynamics in the British local labour markets (Travel to Work Areas). We distinguish between local areas characterised by the initial level of routinised employment of the workforce. We implement a instrumenting strategy to address endogeneity issues in the relation between innovation and employment. Our results suggest that increases in R&D investments mainly affect routinised areas, where the employment created is low skilled, concentrated in non-tradable sectors (like transport, construction) and services. A significant share of the jobs created is self-employment, concentrated in the 25-34 age cohort. We qualify the effect of R&D on self-employment by looking at local firms’ dynamics, which suggest that the increase in self-employment is reflected in a higher number of micro-firms. Rather, in non-routinized areas, R&D results in the expected increase in the demand of high-skilled workers and a reduced demand of low-skill employment.
    Keywords: Innovation; R&D investments; Employment; Self-employment; Local Labour Markets; Routinisation; Skills
    JEL: O33 J24 D3
    Date: 2018–03
  11. By: Antonio Cubel (Universidad de Valencia (Spain)); María Teresa Sanchis (Universidad de Valencia and Instituto Figuerola (Spain)); Juan A. Sanchis-Llopis (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia, Spain)
    Abstract: This paper studies the relevance of institutional disparities and social capabilities in economic performance for a set of 21 OECD countries during the second half of the XXth century (1953-2007). For this purpose, we have constructed a set of institutional variables to capture the post WWII institutional framework, characterized by the development of the Welfare State and by an increasing exposure of countries to international competence. Our results confirm that capital liberalization and trade openness together with social expenditure enhanced the economic development for the countries analysed. Conversely, other “social capabilities” such as the existence of job security institutions and the presence of social conflicts had a negative influence on economic development.
    Keywords: economic development, institutional framework, capabilities
    Date: 2016–07

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