nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2018‒12‒24
eight papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Measuring Financial Capability of the Street Vendors By Muduli, Silu; Ramana, D. V.
  2. Does persistence in internationalization and innovation influence firms’ performance? By Iandolo, Stefano; Ferragina, Anna Maria
  3. Firm R&D investment and export market exposure By Peters, Bettina; Roberts, Mark J.; Vuong, Van Anh
  4. Anti-Migration as a Threat to Internationalization? A Review of the Migration-Internationalization Literature By Hatzigeorgiou, Andreas; Lodefalk, Magnus
  5. Strategic Fertility Behaviour, Early Childhood Human Capital Investments and Gender Roles in Albania By Grogan, Louise
  6. Do information and communication technologies (ICT) improve educational outcomes? Evidence for Spain in PISA 2015 By Nerea Gómez-Fernández; Mauro Mediavilla
  7. When Hours Decline: Tides of Change in Low-wage Labor Markets By Wendy Rayack
  8. Emerging market multinational companies and internationalization: the role of home country urbanization By Estrin, Saul; Nielsen, Bo B.; Nielsen, Sabina

  1. By: Muduli, Silu; Ramana, D. V.
    Abstract: Financial capability of an individual is ability to use and manage financial products for current and future financial needs with adequate financial knowledge. United Kingdom Financial Services Authority, 2006 defines financial capability as composition of four dimensions: financial management to meet current needs, financial planning for ahead, management of financial products, and financial knowledge. Taking all the above four dimensions into account, paper studies financial capability from a sample of street vendors in Bhubaneswar, India. The financial capability index for each individual has been calculated with recently developed index measure that satisfies MANUSH (Monotonicity, Anonymity, Normalisation, Uniformity, Shortfall sensitivity, Hiatus sensitivity to level) axioms. Paper finds that individual characteristics and business characteristics such as education, age, business experience, daily turnover, affects the financial capability of the individuals. Moreover, paper finds, street vendors in regions with higher bank branches have higher financial capability.
    Keywords: Financial capability,Financial literacy,Financial inclusion
    JEL: O18 R58 O20
    Date: 2018
  2. By: Iandolo, Stefano; Ferragina, Anna Maria
    Abstract: In this paper, we analyze the joint effect of persistency in innovation and export on firms’ total factor productivity (measured in accordance with Levinsohn and Petrin, 2003). For this purpose, we use data on Italian manufacturing firms covering an eight-year time span (1998-2006) which allow us to measure the effect of different time activities, both in innovation and in export and the existence of different pathways linking them. We distinguish between persistent and temporary exporting firms as well as frequent and temporary innovators, to test (through OLS and a two-step system GMM) the existence of any combined learning-by-exporting and learning-by-doing effects. We find that persistent innovation efforts seem to be associated with a permanent presence in foreign markets since persistently innovative and exporting firms have better productivity results than persistently exporting (innovating) firms with no persistent innovation (export). Combining both strategies can be an opportunity to internalize knowledge flows coming from long-lasting exposure to foreign markets.
    Keywords: Export,Innovation,Firms,Productivity,GMM
    JEL: F14 F10 F23 O30 D24
    Date: 2018
  3. By: Peters, Bettina; Roberts, Mark J.; Vuong, Van Anh
    Abstract: In this article we study differences in the returns to R&D investment between firms that sell in international markets and firms that only sell in the domestic market. We use German firm-level data from the high-tech manufacturing sector to estimate a dynamic structural model of a firm's decision to invest in R&D and use it to measure the difference in expected long-run benefit from R&D investment for exporting and domestic firms. The results show that R&D investment leads to a higher rate of product and process innovation among exporting firms and these innovations have a larger impact on productivity improvement in export market sales. As a result, exporting firms have a higher payoff from R&D investment, invest in R&D more frequently than firms that only sell in the domestic market, and, subsequently, have higher rates of productivity growth. The endogenous investment in R&D is an important mechanism that leads to a divergence in the long-run performance of firms that differ in their export market exposure. Simulating the introduction of trade tariffs we find a substantial reduction in firms' productivity growth and incentive to invest in R&D.
    Keywords: R&D choice,Export,Innovation,Productivity,Dynamic structural model
    JEL: F14 L25 O31 O32
    Date: 2018
  4. By: Hatzigeorgiou, Andreas; Lodefalk, Magnus
    Abstract: Does anti-migration sentiment threaten internationalization? One major pro-Brexit argument was that it would enable more control over immigration. The most recent US presidential election also focused on immigration. Anti-migration sentiment could be a threat to internationalization, given that migrants can help lower the costs of internationalization. Since trade contributes to economic growth, this could, in turn, impede economic development. Despite extensive literature on the migration-trade nexus, there are few examples of policymakers highlighting the role of migration for internationalization. One possible explanation is the absence of an accessible survey of the available theory and evidence on this relationship, and this article intends to bridge the gap. We review and discuss over 100 papers published on the subject, from pioneering country-level studies to nascent firm-level studies that utilize employer-employee data. To our knowledge, this is the first paper offering a wide-ranging review of the different strands of theory on the relationship between migration and internationalization, as well as new empirical findings. Although the evidence suggests that migration can facilitate internationalization we also note substantial gaps and inconsistencies in the extant literature. The aim of this article is to encourage future research and assist policymakers in their efforts to promote internationalization.
    Keywords: Migration,networks,information,trade,foreign direct investment
    JEL: D20 D80 F14 F16 F22 F23 J61
    Date: 2018
  5. By: Grogan, Louise (University of Guelph)
    Abstract: Preferences for male children in Albania are shown to have persisted through nearly half a century of communist rule, and twenty five years of economic transition. Substantial contemporary birth masculinisation is concentrated amongst higher order births. Fertility falls strongly when a firstborn child is male. Still, there is only mixed evidence that parents invest more in young boys than girls, or that women's status increases with the birth of a son. Earlier male births reduce women's midlife employment but do not appear to affect say in household resource allocation. Women in their forties who bore sons at younger ages are considerably more accepting of spousal violence.
    Keywords: sex information technology, patrilocality, son preference, 1918 Albanian census, demographic and health surveys (DHS), old-age security, resource allocation, communism, household violence
    JEL: O12 I31 J7
    Date: 2018–11
  6. By: Nerea Gómez-Fernández (Universitat Politècnica de València); Mauro Mediavilla (Universitat de València & Institut d’Economia de Barcelona (IEB))
    Abstract: With the world becoming increasingly digitalized, determining the relationship between the use of ICT in the learning process and educational outcomes takes on special relevance for guiding educational policy decisions in a reasoned way. The objective of this study is to evaluate the effect on academic performance of the use and availability of Information and Communication Technologies (ICT) at school and at home. For this purpose, we apply a hierarchical lineal regression model approach with data from the Programme for International Student assessment survey (PISA) 2015. PISA 2015 contains a brief but specific questionnaire for ICT that is completed voluntarily in some of the countries participating in the survey, as is the case in Spain. The results show differences in the sign of the impact according to the ICT variable used. The positive impact of ICT use is associated with its use for entertainment at home and with the students’ interest in ICT. However, the use of ICT for schoolwork at home and the general use of ICT by students in schools have negative effects on the learning process. Another significant result is the magnitude of the coefficient for the relation between the starting age for using ICT on the scores in the three competences. The higher the age, the lower the score achieved. The results of the regressions by tertiles of performance show that ICT can also play an important role in improving the academic performance of the students with the worst results. Finally, some control variables related to students, home and location are also relevant in our models.
    Keywords: Education, PISA 2015, ICT, Spain, Academic Performance
    JEL: I20 I21 O33
    Date: 2018
  7. By: Wendy Rayack (Economics Department, Wesleyan University)
    Abstract: Using data from the Panel Study of Income Dynamics for 1997 through 2013, we explore adjustment strategies used in low-wage labor markets when hours decline, and we document the features that characterize flows of workers through these markets over time. We find that half of the population moves through these markets at some point in their lives. Yet only one percent of workers are permanently in low-wage jobs. The 17 percent who are permanently in “low-or-zero-wage” status show high rates of cycling in and out of unemployment, temporary layoff, education, disability status, temporary retirement and keeping house, thus demonstrating a labor force that is in constant motion. Yet, for over 45 percent of men and over 30 percent of women, some of that mobility is upward into higher-wage positions, suggesting that much of the movement reflects low rewards and poor work conditions. We identify 35 possible paths during the Great Recession from employment to loss of employment and back to employment by 2013, and we explore several less successful sequences ending with no job by 2013. The investigation shows that certain sequences are much more common for recent holders of low-wage jobs than for others. Workers recently in higher-wage jobs show more success in returning to employment whether coming from temporary layoff, unemployment or a stint out of the labor force, regardless of the type of non-wage activity. Men starting from low-wage jobs are more likely than others to report being unemployed in two consecutive survey years and to end up still unemployed by 2013. However, we show that recession-induced declines in hours stem largely from decreased weeks worked or lower average weekly hours rather than from a drop in the probability of working in a given year. We also find evidence of some offsetting, recession-induced increases in overtime hours for low-wage single women who head households. These findings suggest that recessionary losses are distributed in multiple ways, very few of which culminate in a worker losing all annual hours of work, even for those in low-wage jobs. However, for those starting from higher-wage positions, average job tenure rises during recessions. In contrast, the lack of security in low-wage markets shows up not only as fewer years of tenure, but also as tenure that declines by about a quarter of a year for each percentage point rise in state unemployment rates. Many of the traits that we document can be masked by cross-section snapshots. With longitudinal analysis, the picture takes new shape, showing a constant churning of the labor force and multiple strategies for adjusting to shocks. In such a world, higher-wages might help transform secondary work into jobs that promote attachment, bring lower turnover, and yield gains in productivity. This potential for improving the performance of low-wage markets suggests new ways to think about the possible consequences of minimum-wage hikes.
    Date: 2017–01
  8. By: Estrin, Saul; Nielsen, Bo B.; Nielsen, Sabina
    Abstract: We develop a multilevel theoretical framework for investigating the role of home country urbanization for emerging market multinational companies' (EMNCs) international expansion. We propose that more urbanized home environments directly increase EMNC's proclivity to internationalize and moderate the effects of firm intangible and tangible resources. The empirical counterpart studies 592 EMNCs from 18 different countries in 2010 and an unbalanced panel of a subsample of these firms over the period 2006–2010. Our hypotheses are confirmed in both datasets. We find that while urbanization complements firm financial resources when expanding abroad, it appears to substitute to some extent for internal R&D capabilities. Our findings further our understanding of the drivers of internationalization of EMNCs.
    Keywords: Emerging market multinationals; Internationalization; Home country effects; Urbanization; Financial strength; Cross-classified; Multilevel modeling
    JEL: N0 J50
    Date: 2017–09–01

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