nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2018‒10‒22
thirteen papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. IKT-Sektor in China und Wirtschaftsbeziehungen zu Deutschland By Paul J.J. Welfens; Evgeniya Yushkova
  2. Related variety, unrelated variety and the novelty content of firm innovation in urban and non-urban locations By Marte C.W. Solheim; Ron Boschma; Sverre Herstad
  3. Strukturwandel in der Wissensökonomie: Eine Analyse von Branchen-, Lage- und Regionseffekten in Deutschland By Margarian, Anne
  4. Internationalization of emerging market firms: the role of Domestic agglomerations in reducing liability of origin. By Sandeep S; Rajesh Srinivas Upadhyayula
  5. The pecking order of innovation finance By Andrea Mina; Henry Lahr
  6. The willingness to pay and the attributes preferences on hotel choice decisions. By Ratthapoom Wongpradu; Supeecha Panichpathom
  7. Researching the competitiveness of the fishing industry in the region of the Baltic countries By Kubala, Sebastian; Firley, Chrystian
  8. Creativity Under Fire: The Effects of Competition on Creative Production By Daniel P. Gross
  9. ICT, R&D and Organizational Innovation: Exploring Complementarities in Investment and Production By Pierre Mohnen; Michael Polder; George van Leeuwen
  10. The effect of local industry competition on firm productivity. Evidence from the Mexican manufacturing industry By Barriga-Cabanillas, Oscar
  11. Determinants of Foreign Direct Investment in Fast-Growing Economies: Evidence from the BRICS and MINT Countries By Simplice Asongu; Uduak S. Akpan; Salisu R. Isihak
  12. The long-term effect of digital innovation on bank performance: an empirical study of SWIFT adoption in financial services By Scott, Susan V.; Van Reenen, John; Zachariadis, Markos
  13. Modern industrial organization theory of media markets and competition policy implications By Budzinski, Oliver; Kuchinke, Björn

  1. By: Paul J.J. Welfens (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW)); Evgeniya Yushkova (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW))
    Abstract: Der Vorstoß chinesischer Unternehmen im Bereich der Informations- und Kommunikationstechnologie (IKT) in Deutschland und der EU ist geprägt von einer starken Stellung chinesischer IKT-Unternehmen in Teilbereichen des Sektors, insbesondere der IKT-Produktion und einem Teilbereich innovativer digitaler Dienstleistungen. Chinas Rolle im IKT-Export bei IKT-Gütern und bei IKTDienstleistungen nimmt längerfristig zu. Der große chinesische Heimatmarkt, eine starke IKT-Forschung, zunehmende staatliche Forschungsförderung und auch die Präsenz leistungsstarker westlicher Firmen (z.B. IBM, Microsoft und SAP) und japanischer sowie koreanischer Tochterunternehmen in China tragen zu digitalen bzw. internetbasierten Innovations- und Wissensdynamik bei; zudem auch das langfristig hohe Wirtschaftswachstum in China. Schließlich bedeutet das strategische Interesse Chinas an der Entwicklung von Industrie 4.0, dass chinesische IKT-Firmen in fortgeschrittenen digitalen Märkten der EU zunehmend aktiv sind und auch über chinesische Tochterfirmen Zugang zur Markt- und Technologiedynamik in Deutschland und anderen EU-Ländern suchen. Es gibt ein strategisches Interesse Chinas, auch stark in IKT-intensiv produzierenden Sektoren – also auf der Anwenderseite – zu investieren, wobei Deutschland hier als Standort bzw. Zielland von besonderem Interesse ist. Summary: The advantage of Chinese firms in the area of Information and Communication Technologies (ICT) in Germany and the EU is characterized by the strong position of Chinese firms in certain ICT sub-sectors, particularly in the fields of ICT-production and of innovative digital services. China’s role in terms of the export of ICT goods and ICT services is increasing over time. The large Chinese domestic market, strong ICT-related research and development, increasing state support measures for research, and the presence of more efficient western firms (e.g. IBM, Microsoft and SAP) as well as Japanese and Korean subsidiaries in China contribute to the digital and Internet-based innovation and growth dynamics; and the long-term high economic growth rates China has experienced. Ultimately, the strategic interest of China will be to develop its own Industry 4.0, to ensure that Chinese ICT firms are increasingly active in digitally advanced markets, and to seek further access to benefit from the market and technology dynamics in Germany and other EU countries. There is also a strategic interest on the part of China to invest strongly in those productive sectors which are ICT-intensive in terms of usage, whereby here Germany could be an attractive location and destination country for investment.
    Keywords: Informations- und Kommunikationstechnologie, Makroökonomik, China
    JEL: L86 E6 O53
    Date: 2018–04
  2. By: Marte C.W. Solheim; Ron Boschma; Sverre Herstad
    Abstract: In this paper, we investigate whether the composition of experience-based knowledge accumulated by firms in urban and rural locations is reflected in the novelty content of their innovations. Looking at the manufacturing industry, and using Norwegian Linked Employer- Employee register data (LEED) merged with Community Innovation Survey (CIS) data, we find that unrelated experience variety within firms increases the probability of radical innovation, independently of firms' location, whereas related variety increases the probability of incremental innovation in large-city regions. These results demonstrate that innovation capacity cannot be understood from the single perspective of R&D efforts and strategy as it also depends on experiences accumulated in 'entire organizations' and the locations in which accumulation occurs. Moreover, they suggest that for manufacturing firms, urban locations are not hot spot for radical change. Instead, they support incremental innovative activities by facilitating effective sharing of knowledge between related sectors.
    Keywords: immigration, Diversity, Innovation, Related Variety, Unrelated Variety, Urban, Rural
    JEL: O31 P25 O15 O14 J24
    Date: 2018–10
  3. By: Margarian, Anne
    Abstract: This Thuenen-Report discusses the results of an analysis of the structural change between industries in German districts. At the heart of the report is the question: “In how far is economic development structurally determined?” The theoretical outset is the new growth theory which implies that in the modern economy knowledge is the central differentiating production factor. A differentiation of variably mobile forms of knowledge makes it possible to develop theoretical expectations over industries’ distribution and development in urban and rural regions in the east and west of Germany. The empirical analysis leans mainly on a correspondingly differentiated shift-share regression within which the development of the number of firms and employees on district level can be broken down in industry- and region-effects. In a second step, the identified effects are further statistically examined in order to identify, among others, various non-linear industry effects. The analysis confirms the most important theoretically derived expectations: The economy of prospering rural areas is carried above all by the production sector, despite its own sinking employment share. The intangible knowledge that is crucial for its small and medium size firms is characterized by restricted mobility. Urban regions develop above all positively if they are attractive to knowledge-intensive businesses and highly qualified employees. Due to the differences in the mobility of relevant knowledge sources, an equalization between Germany’s west and east is more likely to take place in urban than in rural districts. Within the analysis, a change from a holistic perspective towards a focus on regional and economic details has helped to answer the initial question: Regional economic development is not totally structurally determined, but is made by firms, who, based on experience and innovation, generate competitive advantages. On the other hand, economic lags cannot simply be compensated through individual efforts because competitiveness pre-supposes experience and tacit knowledge concerning the particular technological regime. Development opportunities for structurally disadvantaged rural regions are in the exploitation of opportunities that stem from new markets and activities. The spatial implications of the digitalization and digital transformation of the economy remain ambiguous so far. If the necessary infrastructural and knowledge resources are successfully created all over the country and applied in innovative extension of existing capacities, new impulses could be generated by this technological “regime-change” for peripheral regions as well.
    Keywords: Agribusiness, Community/Rural/Urban Development, Industrial Organization
    Date: 2018–10–15
  4. By: Sandeep S (Indian Institute of Management Kozhikode); Rajesh Srinivas Upadhyayula (Indian Institute of Management Kozhikode; Indian Institute of Management Kozhikode)
    Abstract: The extant literature in institutional theory has found liabilities of origin (LOR) costs such as (i) capability based and (ii) legitimacy based costs as the major cost disadvantages faced by emerging market multinationals (EMNEs) while undertaking internationalization. Studies have pointed out that the treatment of institutions in International business (IB) have considered institutions at a national level, ignoring the role of sub-national institutions. This is particularly important for EMNEs as the institutional development in their home countries are highly uneven. Further, the recent studies in economic geography have also criticized the treatment of location in extant IB literature. They have also argued that location in extant IB literature is treated synonymously with a country or a nation state, expunging the nuanced examination or differentiation of locational features. Hence we observe that the role of sub-national institutions such as domestic agglomerations in the internationalization of EMNEs is under-reported in the extant literature. In this paper we explain the role of sub-national institutions such as domestic agglomerations in reducing LOR cost disadvantages (capability and legitimacy based cost disadvantages) and facilitating the outward internationalization of EMNEs.
    Keywords: institutional theory, liabilities of origin, emerging market multinationals
    Date: 2018–03
  5. By: Andrea Mina; Henry Lahr
    Abstract: This paper examines the relationship between firms' innovation activities and the hierarchy of financing behaviours. We analyse the role of innovation inputs (R&D), intermediate outputs (patents) and outcomes (product and process innovations) as sources of information asymmetry in financing decisions. Our focus on mainly unlisted companies allows us to study the effects of information asymmetries in the context where they are most severe, that is, among small and medium-sized firms. We identify the effect of innovation, alongside the size of the firm, its age and its human capital, on the order of directly observed external capital allocations. Our results show that innovation is strongly associated with a pecking order characterised by increasing agency costs, and that the more uncertain the innovation signal, the stronger its effect on the pecking order. In further robustness tests, this relationship and associated hierarchy of external financing emerge from the data without imposing an a-priori pecking order.
    Keywords: R&D, innovation, information asymmetries, capital structure, pecking order
    Date: 2018–10–17
  6. By: Ratthapoom Wongpradu; Supeecha Panichpathom
    Abstract: A fast-growing number of small and medium size hotels in Thailand leads to a fierce competition within hotel industry. Old strategies such as price cutting may be obsolete. Needs of niche customers must be identified in order to target the right market and to employ the limited resource with correspond strategies. Thus, this paper aims to examine the preferred attributes on hotel choice decisions for Thai baby boomer travelers. Conjoint analysis technique was applied to explore how qualified respondents perceive the relative importance of cleanliness, monetary value, sleep quality, location, facilities, and amenities quality in the selection of small and medium hotels under the operation of Small and Medium Enterprise (SME) entrepreneurs. Despite the complication in collecting the samples of the technique, an innovative board game is created correspondingly to simplify the process and to visually mimic the trade-off situation in a process of consumer's evaluation. The findings suggest that application of the most preference profile card: Clean bed, Free Breakfast, Adjustable temperature, Green Environment, Fast-heated water heater should be put in priority in regard to the willingness to pay. SME hotel entrepreneurs targeting baby boom traveler could adjust the attributes to the outcomes accordingly in order to be competitive.
    Keywords: Baby boomers; Board Game; Conjoint Analysis; Hotel; Willingness to pay
    JEL: R3
    Date: 2018–01–01
  7. By: Kubala, Sebastian; Firley, Chrystian
    Abstract: The main objective of this article is to examine the level of competitiveness of the fishing industry in the countries of the Baltic region. The current socio-economic conditions have caused that there is a diverse degree of demand for fish products, different level of development of foreign trade and diverse possibilities of obtaining fish organisms through the development of aquaculture in individual Baltic states. The calculations performed in the study used such methods as DEA index and Trade Coverage index. Calculating the indicators made it possible to demonstrate that there is a significant variation in the degree of competitiveness of the fishing industry in the Baltic countries, while there is also a diversity in terms of the development of aquaculture, importance of foreign trade in fish products and relevance of the entire fish market.
    Keywords: Agricultural and Food Policy
    Date: 2018
  8. By: Daniel P. Gross
    Abstract: Though fundamental to innovation and essential to many industries and occupations, individual creativity has received limited attention as an economic behavior and has historically proven difficult to study. This paper studies the incentive effects of competition on individuals' creative production. Using a sample of commercial logo design competitions, and a novel, content-based measure of originality, I find that intensifying competition induces agents to produce original, untested ideas over tweaking their earlier work, but heavy competition drives them to stop investing altogether. The results yield lessons for the management of creative workers and for the implementation of competitive procurement mechanisms for innovation.
    JEL: D81 M52 M55 O31 O32
    Date: 2018–09
  9. By: Pierre Mohnen; Michael Polder; George van Leeuwen
    Abstract: This paper examines whether there are complementarities between investments in ICT, R&D and organizational innovation, and the effects of different investment profiles on total factor productivity growth on Dutch firm-level data. We estimate an integrated model of investment profile adoption and total factor productivity growth. We find that the three investment decisions are complementary, in the sense that investing in one increases the probability of investing in another one because joint investments lead to higher TFP growth than individual investments. ICT earns on average an expected rate of return of 9.7%, followed by 6% to 7% on organizational innovation and a modest 1.4% to 1.8% on R&D in services and manufacturing respectively.
    JEL: L25 O30 O33
    Date: 2018–09
  10. By: Barriga-Cabanillas, Oscar
    Keywords: Productivity Analysis and Emerging Technologies, Industrial Org./Supply Chain Management, Demand and Price Analysis
    Date: 2018–06–20
  11. By: Simplice Asongu (Yaoundé/Cameroun); Uduak S. Akpan (SPIDER Solutions, Uyo, Nigeria); Salisu R. Isihak (Rural Electrification Agency, Nigeria)
    Abstract: This study employs panel analysis to examine the determinants of foreign direct investment (FDI) to Brazil, Russia, India, China, and South Africa (BRICS) and Mexico, Indonesia, Nigeria, and Turkey (MINT) using data for eleven years i.e. 2001 – 2011. First, it uses pooled time-series cross sectional analysis to estimate the model on determinants of FDI for three samples: BRICS only, MINT only, and BRICS and MINT combined; then, fixed effects model is also employed to estimate the model for BRICS and MINT combined. The results show that market size, infrastructure availability, and trade openness play the most significant roles in attracting FDI to BRICS and MINT while the roles of availability of natural resources and institutional quality are insignificant. Given that FDI inflow to a country has the potential of being mutually beneficial to the investing entity and host government, the challenge is on how BRICS and MINT can sustain the level of FDI inflow and ensure it results in economic growth and socio-economic transformation. To sustain the level of FDI inflow, governments of BRICS and MINT need to ensure that their countries remain attractive for investment. BRICS and MINT also need to ensure that their economies absorb substantial skills and technology spillovers from FDI inflow to promote sustainable long-term economic growth by investing more in their human capital. The study is significant because it contributes to literature on determinants of FDI by extending the scope of previous studies which often focus only on BRICS.
    Keywords: FDI, determinants, fast-growing economies, BRICS, MINT
    JEL: C52 F21 F23 O40 P37
    Date: 2018–01
  12. By: Scott, Susan V.; Van Reenen, John; Zachariadis, Markos
    Abstract: We examine the impact on bank performance of the adoption of SWIFT, a network-based technological infrastructure for worldwide interbank telecommunication. We construct a new longitudinal dataset of 6,848 banks in 29 countries in Europe and the Americas with the full history of adoption since SWIFT’s initial operations in 1977. Our results suggest that the adoption of SWIFT (i) has large effects on profitability in the long-term; (ii) is greater for small than for large banks; and (iii) exhibits significant network effects on performance. We use an in-depth field study to better understand the mechanisms underlying the effects on profitability.
    Keywords: technology adoption; bank performance; financial services; network innovation; SWIFT
    JEL: N20 O33
    Date: 2017–06–01
  13. By: Budzinski, Oliver; Kuchinke, Björn
    Abstract: This paper outlines the modern industrial organization theory of media markets including competition policy implications. After recapturing fundamentals of industrial organization theory in a non-technical way, the state of the art of (i) modern platform economics, (ii) the economics of the so-called sharing economy, and (iii) the economics of data-based business models and data-driven markets is summarized in a detailed way and illustrated by modern media examples.
    Keywords: industrial organization,media economics,industrial economics,platform economics,sharing economy,digital economy,digitization,big data,economics of privacy,competition policy,antitrust economics
    JEL: L0 L82 L10 A2 K21
    Date: 2018

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