nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2018‒09‒24
seventeen papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Supporting an Innovation Agenda for the Western Balkans - Tools and Methodologies By Andonova Elena; Boden Mark; Cetl Vlado; Diukanova Olga; Dosso Mafini; Dusart Jean; Gkotsis Petros; Gnamus Ales; Kleibrink Alexander; Kotsev Alexander; Lavalle Carlo; Mandras Giovanni; Matusiak Monika; Radovanovic Nikola; Rainoldi Alessandro; Slavcheva Milena; Veskovic Miroslav; Hollanders Hugo; Ndubuisi Gideon; Owusu Solomon; Radosevic Slavo
  2. Ten-year evolution of EU industrial R&D in the global context By Pietro Moncada-Paterno-Castello; Hector Hernandez
  3. Obstacles For Academic Entrepreneurship in Turkey By Mehmet Basar
  4. Success factor analysis of the regional innovation-supporting facilities in Korea By Young-Hyun Jin; Chang-Dae Park
  5. A heterogeneous coefficient approach to the knowledge production function By Corinne Autant-Bernard; James P. LeSage
  7. Living Labs from Open Innovation Approach: a Systematic Literature Review By Julián Andrés Galindo Yepes; Edna Bravo Ibarra
  8. Compétences externes et innovation: le cas des firmes de l'industrie manufacturière algérienne By Messaoud Zouikri; Mounir Amdaoud
  9. Soft power of frugal innovation and its potential role in India's emergence as a global lead market for affordable excellence By Tiwari, Rajnish; Prabhu, Jaideep
  10. Banking performance of China and Pakistan By Jia Xin Xu; Naiwen Li; Muhammad Ishfaq Ahmad
  11. The European Index of Digital Entrepreneurship Systems By Erkko Autio; Laszlo Szerb; Eva Komlosi; Monika Tiszberger
  12. Innovators and Innovations in High Quality Wines of Argentina By Julio Elías; Gustavo Ferro
  13. Creative Differences? Measuring Creative Economy Employment in the US and UK Using Microdata By Kemeny, Tom; Nathan, Max; O'Brien, Dave
  14. Managing digital marketing strategies in emerging markets: The case of China By Francesca Checchinato; Lala Hu
  15. Community Networks and the Growth of Private Enterprise in China By Dai, R.; Mookherjee, D.; Munshi, K.; Zhang, X.
  16. Prices under Innovation: Evidence from Manufacturing Firms By Jaumandreu, Jordi; Lin, Shuheng
  17. Influences of Entrepreneurial Competencies on Product Development Decision: Longan Processing Enterprises in Thailand By CHANITA PANMANEE; KASEM KUNASRI

  1. By: Andonova Elena; Boden Mark; Cetl Vlado; Diukanova Olga; Dosso Mafini; Dusart Jean; Gkotsis Petros; Gnamus Ales; Kleibrink Alexander; Kotsev Alexander; Lavalle Carlo; Mandras Giovanni; Matusiak Monika (European Commission - JRC); Radovanovic Nikola; Rainoldi Alessandro; Slavcheva Milena; Veskovic Miroslav; Hollanders Hugo; Ndubuisi Gideon; Owusu Solomon; Radosevic Slavo
    Abstract: The Western Balkan region has significantly improved in terms of innovation performance in the last ten years. However, in catching up with other European regions, the focus of innovation efforts should be enhanced. Exports are still far more focused on medium- and low-technology products. Innovative efforts mostly accommodate traditionally strong sectors, which do not necessarily reflect the ideal competitiveness paths for economies in the region. Although some Western Balkan economies record increases in patent activity, patent intensity in the region is still low, while, on the other hand, scientific publication production displays a stable growth trend. While Western Balkan economies are at different stages in the formation of research and innovation (R&I) policy governance systems, national research and innovation policy frameworks are continuously being improved. The enhancement of governance in the area of R&I came as the result of increased capacity building activities in the region, as well as of the real needs emerging as a result of social and economic transformation. On the other hand, R&I systems in the Western Balkan economies need to continue shifting their focus towards businesses to provide better balance between public and private sector orientation. The Joint Research Centre of the European Commission is committed to supporting the shift in innovation policies and improvement of R&I efforts and governance in the Western Balkan economies through a number of tools and activities, allowing policy instruments to be matched with the specific needs of the economy. This approach seeks efficient governance mechanisms for R&I policy by reaching out to the business sector and other important actors of the innovation ecosystem. It determines sustainable development directions for economies and ensures the continuity of policy monitoring and evaluation cycles. This ambitious challenge is translated into four specific lines of activity: (i) the application of the smart specialisation methodology to design and implement innovation strategies; (ii) capacity-building activities for technology transfer, in particular through specialised workshops, tools and instruments specifically designed to assist the academic institutions in the regional economies; (iii) support to transnational collaboration and linkages in the context of EU macro-regional strategies; and (iv) data quality enhancement. The analysis of the development potential of the Western Balkan region in terms of economic, innovative and scientific capabilities in this report is supported with the good practices addressing specific challenges in the region.
    Keywords: Western Balkans, innovation policy, smart specialisation, enlargement
    Date: 2018–04
  2. By: Pietro Moncada-Paterno-Castello (European Commission - JRC); Hector Hernandez (European Commission - JRC)
    Abstract: More than a quarter of the industrial investment in global R&D is made by EU companies. In the last decade EU companies have increased their specialisation in medium-tech sectors, with a significant R&D share increase in the Automobile sector and a decrease in the Aerospace & Defence sector. EU shows an insufficient number of companies and a small number of global players in key (high-tech) sectors such as Biotechnology, Software and IT hardware. Conversely, competing economies are much stronger in these newer high-tech sectors and have maintained and even reinforced such strength. The high-tech innovation-led competitiveness of some countries has benefitted from proactive industrial policies which have supported targeted sectors and markets. Clear examples are those of the USA, South Korea and China. Promising undertakings are proposed by the European Commission to foster industrial competitiveness, innovation and technological leadership, also addressing the EU private investment gap in R&I. Industrial dynamics at company level provide insights into policy strategies to strengthen EU corporate R&D and to improve the competitiveness of innovation-driven industries.
    Keywords: Industrial R&D, EU innovation policy
    Date: 2018–07
  3. By: Mehmet Basar (Anadolu University)
    Abstract: Today, as a result of the knowledge economy, universities are focusing more on creating commercial knowledge along with their primary tasks ? education and research. Increasing demand for university-industry collaboration, universities? new roles in the economic development through technology transfer, and commercialization of knowledge are among the major factors that lead to concepts such as ?entrepreneurial university? and ?academic entrepreneur?. Academic entrepreneurship is actually a wider concept that covers all the efforts and activities toward the commercialization of the scientific research outputs of the universities and their industrial partners.In Turkey, Supreme Council for Science and Technology supports academic entrepreneurship activities and encourages potential academic entrepreneurs through various support mechanisms. However, there are many problems that academic entrepreneurs encounter and this study aims to discuss possible solutions for these problems and obstacles.
    Keywords: Entrepreneurial University, Academic Entrepreneur
    JEL: L26 L31 I00
    Date: 2018–06
  4. By: Young-Hyun Jin (Korea Institute of S&T Evaluation and Planning (KISTEP)); Chang-Dae Park (Korea Institute of S&T Evaluation and Planning (KISTEP))
    Abstract: Korean government has established innovation-supporting facilities in the outside of national capital region. The so-called ?Regional R&D Centers? are equipped with R&D equipment and aim to support R&D activities of the small and medium sized enterprises in the nearby regional industry cluster. Since 2006, more than 582 facilities have been established using more than 10 billion USD. However, there are many debates on the efficacy of the regional R&D centers. In this study, we analyzed the success factors of the selected regional R&D centers using DEA and tobit regression. To measure the efficiency of the regional R&D centers using DEA, we selected budget invested, man-power and operation duration as the input variables and the number companies who utilized the facilities, number of utilization and awareness among the cluster as the output variables. The results showed that the efficiency of the regional R&D centers depends on the types of the host institute of the regional R&D center. We tested the relationship between the efficiency measured by DEA and factors in the planning and operation stages of the centers and environmental factors like GRDP. The tobit analysis showed that the number of partner institutes has strong positive influence to the efficiency in all the efficiency models. The location and support of operational expenses also showed positive influence in some models. The policy implication as well as detailed analysis procedure and results will be discussed in the presentation.
    Keywords: regional innovation-supporting facility, DEA, tobit regression, success factor analysis
    Date: 2018–06
  5. By: Corinne Autant-Bernard (Univ Lyon, UJM Saint-Etienne, GATE UMR 5824, F-42023 Saint-Etienne, France); James P. LeSage (Fields Endowed Chair in Urban and Regional Economics, McCoy College of Business Administration, Texas State University, San Marcos, Texas 78666)
    Abstract: Past literature has used conventional spatial autoregressive panel data models to relate patent production output to knowledge production inputs. However, research conducted on regional innovation systems points to regional disparities in both regions ability to turn their knowledge inputs into innovation and to access external knowledge. Applying a heterogeneous coefficients spatial autoregressive panel model, we estimate region-specific knowledge production functions for 94 NUTS3 regions in France using a panel covering 21 years from 1988 to 2008 and 4 high-technology industries. A great deal of regional heterogeneity in the knowledge production function relationship exists across regions, providing new insights regarding spatial spillin and spillout effects between regions.
    Keywords: knowledge production, spatial econometrics, region-specific parameters
    JEL: C21 O31 O52 R12
    Date: 2018
  6. By: Radostina Popova (University of Forestry)
    Abstract: The paper attempts to characterize the performance and problems in Forest Industry in Republic of Bulgaria. It contains general characteristic like technological and economic characteristics of the Forest Industry in Bulgaria, technological operations and wood processes, trends of the furniture in EU as a main final product in the Forest Industry. It presents the largest enterprises and the biggest foreign suppliers also and countries for export and import. The paper also presents the performance of the Forest industry enterprises in Bulgaria in strategical management areas like quality, ICT, financing, marketing, internet, internationalization and innovations.The methods applied include statistical analyses of production, value added and employee, expert assessments as well as generalization survey's results from a focus group of managers of Forest industry SMEs, provided in 2016. Some recommendations are drawn in areas of strategic management (technologies and information, innovation cooperation) and in areas of production and operations management.
    Keywords: Forest Industry; Wood processes; Woodworking; Furniture manufacturing; Strategic management; Production management; Innovation cooperation.
    JEL: L68 L73 M11
    Date: 2018–06
  7. By: Julián Andrés Galindo Yepes (Universidad Industrial de Santander - UIS); Edna Bravo Ibarra (Universidad Industrial de Santander - UIS)
    Abstract: This research presents the body of a systematic literature review on Living Labs. Based on a review of the Scopus database and the analysis of the 53 most cited articles, we can be conclude that the research and development of the Living Labs concept has been taken off since 2006 and to date, in terms of quality and academic impact, remains insignificant The review of Living Labs requires to be identified in the scientific literature: 17 definitions, 20 concepts, 4 predecessors, 5 elements, 7 characteristics, 4 types, 4 archetypes, 20 benefits, 3 streams, 3 levels and 17 roles of innovation intermediaries. This study identified three methodologies that allow us to understand the methodological processes for the creation of Living Labs from the quasi-experimental perspective, the innovation phases and the development of the projects-based in ICT. The information contained in this literature review allows us to understand the evolution of the theoretical concept of Living Labs over time, as well as the variables that intervene in the characterization of these innovation ecosystems from the open innovation approach.
    Keywords: Living Labs ? Open Innovation ? Literature Review - Innovation
    JEL: O31 O32
    Date: 2018–06
  8. By: Messaoud Zouikri; Mounir Amdaoud
    Abstract: This paper addresses an hypothesis on the contribution of the external capabilities to the birth of the innovation activity within the firm. The econometric analysis conducted on a sample of Algerian manufacturing entreprises, allowed to highlight four robust results which remain significant and stable after adjustment by various indicators. The main result is that the development of different firm capabilities was not exclusively originated from an edogenous effort, but also induced by an exogenous shock resulting from participating to the upgraded firms' program financially supported by the Algerian government and the European Union. Furthermore, the improvement of human resources competencies, the use of ICT and the compliance to performance criteria explain significantly firm engagement differences in the product innovation activity. The R&D and firm size as traditional factors seem not to be significant predictors of innovation capacity in the present case.
    Keywords: external capabilities, innovation capacity, human capital, Algerian manufacturing industry, recursive equation system
    JEL: O32 D22 C34
    Date: 2018
  9. By: Tiwari, Rajnish; Prabhu, Jaideep
    Abstract: The phenomenon of frugal innovation, as characterized by "affordable excellence", is experiencing increasing acceptance by business leaders, policy makers and scholars around the world. Frugal products, services and technologies strive to radically increase affordability while significantly reducing their environmental footprint through careful and prudent use of resources. It is expected that frugal solutions will be increasingly necessary in both the developed and developing world to ensure social inclusion, environmental sustainability and continued economic growth. Traditionally, frugality has been regarded as a social virtue in India and the socio-cultural context of the country provides a fertile environment for the development of frugal products and services. Not surprisingly, considerable research shows that discussions of frugal innovations have been closely associated with India. This concept has now begun to spread to other developing and industrialized nations. A primary objective of this conceptual paper is to showcase how frugal innovations emanating from India have found acceptance in other corners of the world and why they contribute to India's soft power on a global stage. We argue that frugal innovations can potentially provide a useful medium for a benevolent power that aims to promote peaceful coexistence, inclusive growth and prosperity around the world. Indian firms and policymakers should not become complacent about their existing businesses and fail to comprehend the importance of frugal innovation. They would be well advised to retain their focus on creating customer value and avoid falling prey to the dominant logic of potentially wasteful, unsustainable and exclusive innovation approaches. Instead of focusing on delivering "more for more for few" they should rather continue to focus on delivering "more for less for many". The demand for affordable and sustainable excellence is sure to grow globally and India can establish itself as a global soft power in the process.
    Keywords: Frugal Innovation,Lead Markets,Resource-constrained Innovation,Reverse Innovation,Soft Power,Frugality,Culture
    Date: 2018
  10. By: Jia Xin Xu (Liaoning Technical University [Huludao]); Naiwen Li (Liaoning Technical University [Huludao]); Muhammad Ishfaq Ahmad (University of Lahore)
    Abstract: This study aims to investigate the comparative performance of the banks of the china and Pakistan, as both countries have very strong business relationships apart from the strategic relationships. The recent investment contracts between two countries " One Belt One road " worth $54 billion motive me to do examine the comparative performance of Chinese and Pakistani banks as banks do have vital role in this regard. To give first sight understanding of the objectives of the study, I choose the title which explains the objectives of the study clearly as starting with the comparative study of the banking performance of both countries. As the banks play a magnificent role in an economy for the smooth as well as efficient functioning of the different activities of the society. The importance of the banking could be realized by taking the example of the blood in human body as banks provides blood to the economy of any country. Due to their important role, it is strong need to keep banking sector healthy and stable which is not possible without the continuous focus on it. Recent economic crunch has highlighted that a well-established financial system is the basic ingredient for the economic growth. So it is very important to know what factors derive the performance of the banks. This study main focus is to identifying the factors determining the profitability of the Chinese and Pakistani banking sector. China becomes the economic hub for rest of the world and Chinese banking is also growing significantly. The importance of the Chinese banks could be realized that four Chinese banks are ranked among the top big firms of the world. The study used the Chinese and Pakistani banking sector sample which includes all kinds of banks over the time span of 2010 to 2017. The Chinese banking sample consists of forty four banks while Pakistani banks sample consists of twenty one banks. We observed that Chinese banking profitability which is measured through the Return on Assets (ROA) and Return on Equity (ROE), is positively influenced by the net interest income, deposits, Capital adequacy ratio and GDP growth while non-performing loans are significantly contribute to the performance of the Chinese banking. This relationship exist the same in the Pakistani banking industry. Moreover we found that Chinese banks are performing better than the Pakistani banks because of their big size, higher growth in GDP and due to the government ownership. Furthermore I also conclude this is the golden time for the Chinese banks to go across the border to gain the lucrative opportunity in the Pakistan as the Gawader Seaport is managed by the Chinese government to channel their trade to the Europe. By doing so they cannot only increase their Chinese market share but international market share. Moreover we found that Chinese listed banks perform much better than the unlisted banks of china. Although some unlisted banks perform nicely but overall listed banks produced sound results. Through getting listed and managing the financial resources, they can do cross border business either by mergers, joint ventures or acquisition to overcome the cultural issues. In the case of Pakistan, we observed that foreign banks beat both the domestic private banks and state owned banks. We ranked domestic private banks at number two and state banks performed poorly in case of Pakistan. In the Comparison of Chinese and Pakistani bank, Chinese banks are better than Pakistani banks the factors for the performance react in the same way.
    Keywords: GDP,Listed banks,Banks' performance,Return on Equity (ROE),Non-performing loans
    Date: 2018–06–29
  11. By: Erkko Autio (Imperial College London); Laszlo Szerb (University of Pecs); Eva Komlosi (University of Pecs); Monika Tiszberger (University of Pecs)
    Abstract: During the last decade digitisation has transformed the character of entrepreneurial activities as for both the entrepreneurial opportunities and the practices to pursue them. In this context, to ensure that the new productivity potential is fully deployed to the benefits of economic growth and societal welfare, policymakers need adequate metrics to monitor digital entrepreneurship. The measurement challenge of the digital entrepreneurship lays in the pervasive nature of the phenomenon itself that cannot be captured by count-based measures of individual-level entrepreneurial action. Therefore it becomes important to monitor the conditions which set the business context of entrepreneurs in the different EU countries. The European Index of Digital Entrepreneurship Systems (EIDES) addresses the measurement challenge by appraising the framework and systemic conditions for 1. stand-up, 2. start-up, and 3. scale-up activities in the EU28 countries. Furthermore, the EIDES also attempts to disentangle the digital component of the just-mentioned entrepreneurial conditions and stages of development.
    Keywords: entrepreneurial ecosystem, digital entrepreneurship, startups, innovation, high-growth companies, policy support to innovation
    Date: 2018–09
  12. By: Julio Elías; Gustavo Ferro
    Abstract: How does the process of applying knowledge to the economy work? How do people innovate? What is inside the innovation black box? Can the process be stylized? We apply an economic approach to creativity which provides a general analytical framework to innovation to answer these questions by distinguishing two types of innovations: conceptual and experimental. The development of quality wines which in Argentina began in the 1990s was a process that involves both types of innovations. We analyze two cases of successful winemakers and we characterize their process of innovations to derive lessons with potential managerial and public policy implications. Resumen: ¿Cómo funciona el proceso de aplicar conocimiento a la economía? ¿Cómo innova la gente? ¿Qué hay dentro de la caja negra de la innovación? ¿Cómo puede estilizarse el proceso? Aplicamos un enfoque económico de la creatividad que provee un marco analítico generalpara responder estas preguntas, distinguiendo dos tipos de innovaciones: conceptuales y experimentales. El desarrollo de los vinos de alta calidad en Argentina comenzó en los 1990s y fue un proceso que tuvo ambos tipos de innovaciones. Analizamos dos casos de bodegueros exitosos y caracterizamos sus procesos de innovación para derivar lecciones con potenciales implicaciones gerenciales y de política pública.
    Keywords: Innovation, Wine industry, Argentina
    JEL: O31 Q13
    Date: 2018–08
  13. By: Kemeny, Tom (Queen Mary, University of London); Nathan, Max (University of Birmingham); O'Brien, Dave (University of Edinburgh)
    Abstract: Using high-quality administrative microdata spanning 2011-2013, this paper develops new routines to compare creative economies using the creative trident framework, and applies them to the UK and US national and regional contexts. We find the UK creative economy is larger in workforce shares, and grows faster over the study period; the US' is absolutely larger, and is distributed more evenly across industries. Regional results are shaped by deeper differences in national urban systems. The paper highlights possibilities for widely varying national configurations of creative economies, considers potential mechanisms driving differentiation, and reflects on the usefulness of the creative trident approach.
    Keywords: creative industries, creative trident, cities, labour markets, occupations, cross-country analysis
    JEL: P50 R12 R58 L80
    Date: 2018–08
  14. By: Francesca Checchinato (Dept. of Management, Università Ca' Foscari Venice); Lala Hu (Dept. of Management, Università Ca' Foscari Venice)
    Abstract: Since Internet has been seen as global, few studies have examined the influence of the context in the digital marketing strategies. This paper wants to contribute on the debate about standardization-adaptation, focusing on the digital strategies, defining how companies adapt them to the Chinese market identifying the drivers that call for this adaptation. China is selected because it is a contradictory market: more advanced than the Western one but also with many restrictions. We carry out a qualitative research based on interviews with nine key informants operating in the digital Chinese market with different roles. Our findings suggest that there are drivers that force companies to create an online presence and drivers that impact the digital localization. The main adaptations concern international distribution strategy and communication related to contents and media as well as organization.
    Keywords: China, digital marketing, e-commerce, internationalization, Internet.
    JEL: M31
    Date: 2018–09
  15. By: Dai, R.; Mookherjee, D.; Munshi, K.; Zhang, X.
    Abstract: This paper identifies and quantifies the role played by birth-county-based community networks in the growth of private enterprise in China. We develop a network-based model that generates predictions for the dynamics of firm entry, concentration, and firm size across birth counties with varying social connectedness (measured by population density). These predictions are verified over the 1990-2009 period with administrative data covering the universe of registered firms. Competing non-network-based explanations can explain some, but not all, of the results. Moreover, supplementary evidence indicates that network spillovers occur within the birth county and, going down even further, within clans within the county. Having validated the model, we estimate its structural parameters and conduct counter-factual simulations, which estimate that entry over the 1995-2004 period would have been 40% lower (with a comparable decline in the stock of capital) in the absence of community networks. Additional counter-factual simulations shed light on misallocation and industrial policy in economies where networks are active.
    Keywords: Community Networks, Entrepreneurship, Misallocation, Institutions, Growth and Development.
    JEL: J12 J16 D31 I3
    Date: 2018–09–11
  16. By: Jaumandreu, Jordi; Lin, Shuheng
    Abstract: We study how firms' innovations impact prices with endogenous productivity and markup, under imperfect competition and dynamic pricing. Absent innovation, productivity plus markup changes curb price growth to half of variable inputs cost growth. Innovation's additional impact on costs is negatively correlated with markup changes. We detect two prevalent strategies. When marginal cost goes down, firms cash-in innovation by increasing the markups to enlarge profits. When marginal cost goes u firms practice countervailing pricing by decreasing markups. With no innovation aggregate manufacturing price growth had multiplied by 1.4, but innovation without cash-in strategies had multiplied it by 0.8.
    Keywords: Innovation; marginal cost; markup; price indices
    JEL: D43 L11 L16 O31
    Date: 2018–08
  17. By: CHANITA PANMANEE (Faculty of Economics, Maejo University); KASEM KUNASRI (Faculty of Management science, Chiang Mai Rajabhat University)
    Abstract: This research aims to evaluate the entrepreneurial competencies of longan processing entrepreneurs and analyze the impacts of entrepreneurial competencies on new product development decision. The 165 samples of longan processing entrepreneurs are selected by a purposive sampling method. The results of entrepreneurial competencies show that risk taking orientation and competitiveness orientation are the two lowest score competencies in which the longan processing entrepreneurs should be interested in. Moreover, the age of the entrepreneur and pro-activeness orientation of the entrepreneur have some negative impacts on the decision making probability of the new product development. The entrepreneurial competencies on risk taking, innovativeness and competitiveness have positive influences on new product development decision. The findings lead to a discussion about whether the longan processing entrepreneurs are ready to develop the new product, or not.
    Keywords: longan processing, entrepreneurial competencies, product development, composite index, logit model
    JEL: C25 M21 Q13
    Date: 2018–06

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