nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2019‒04‒08
eleven papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. FDI, multinationals and structural change in developing countries By Pineli, Andre; Narula, Rajneesh; Belderbos, Rene
  2. The differential impact of open innovation on the efficiency of firms By Isabel Álvarez; Cipriano Quirós; Francisco J. Santos
  3. The problem of collective increment of knowledge and joint innovation in the structure of interfirm agreements between rival firms By Lyasko, Alexander (Ляско, Александр)
  4. Atividade econômica e inovação na indústria brasileira: uma análise com dados em painel (2010-2016) By Gilberto Libânio; Marco Flávio Resende; Débora Freire; Rosa Lívia Gonçalves Montenegro
  5. Firm Heterogeneity and the Activity of Japanese Manufacturing Multinationals in India By Hiroyuki Nishiyama; Azusa Fujimori; Takahiro Sato
  6. Cluster externalities, firm capabilities, and the recessionary shock: How the macro-to-micro-transition shapes firm performance during stable times and times of crisis By Hundt, Christian; Holtermann, Linus; Steeger, Jonas; Bersch, Johannes
  7. Adapting business framework conditions to deal with disruptive technologies in Denmark By Mikkel Hermansen; Valentine Millot
  8. Collusive Agreements in Vertically Differentiated Markets By Marco A. Marini
  9. User innovation barriers and their impact on user-developed products By Pieper, Thorsten; Herstatt, Cornelius
  10. Bits and bolts: The digital transformation and manufacturing By Matej Bajgar; Sara Calligaris; Flavio Calvino; Chiara Criscuolo; Jonathan Timmis
  11. Machine imports, technology adoption and local spillovers By Békés, Gábor; Harasztosi, Péter

  1. By: Pineli, Andre (Henley Business School, University of Reading); Narula, Rajneesh (Henley Business School, University of Reading); Belderbos, Rene (UNU-MERIT, Maastricht University and KU Leuven)
    Abstract: Economic development can be defined as a process in which output growth is accompanied by qualitative changes in the structures of production and employment. Can FDI affect this process? This paper looks for answers in two ways. First, it reviews the extant knowledge about the relationship between MNE activity and economic development in developing countries. Core theoretical and conceptual issues are presented and the key findings of both microeconomic (FDI linkages and spillovers) and macroeconomic (FDI-growth nexus) empirical studies are discussed. The main message of both streams of literature is that FDI has the potential to catalyse development, but actual outcomes are contingent on several factors, such as the absorptive capacity of domestic firms and the level of development of local financial markets. Second, the paper addresses the relationship between FDI and structural change more directly, in a cross-country context, using a two-step estimation approach that is consistent with both theoretical arguments and previous empirical findings which suggest that the FDI-development nexus is highly country-specific. The results confirm such heterogeneity and suggest that the interaction between the sectoral concentration of FDI and the development stage of the country plays a role in determining the development impact of FDI.
    Keywords: foreign direct investment, multinational enterprises, developing countries, economic development, structural change
    JEL: D62 F23 L16 O11 O14 O19 O24
    Date: 2019–02–14
  2. By: Isabel Álvarez (Instituto Complutense de Estudios Internacionales (ICEI), Universidad Complutense de Madrid.); Cipriano Quirós (Instituto Complutense de Estudios Internacionales (ICEI), Universidad Complutense de Madrid.); Francisco J. Santos (Instituto Complutense de Estudios Internacionales (ICEI), Universidad Complutense de Madrid.)
    Abstract: The effects of open innovation strategies on the economic efficiency of firms is a topic often avoided, and about which little is known. This paper contributes to the exploration of that connection, revealing persistent collaboration and the embeddedness of firms within their environments to be two crucial aspects. Impacts on efficiency are conditioned by the type of external links employed, by the agents with whom a firm collaborates, and by the inherent differences between foreign and domestic firms. Findings obtained from fresh empirical evidence provided in this paper reveal that: 1) collaboration with competitors on innovation generates a direct effect on a firm’s efficiency, whether foreign or domestic; 2) only persistent and vertical linkages have a positive impact; and 3) access to complementary sources of knowledge becomes increasingly relevant to a rise in efficiency as a firm increases its embeddedness within a location, making institutional collaboration especially significant for domestic firms.
    Keywords: Open innovation; Collaboration; Efficiency of firms; Foreign firms; Embeddedness.
    Date: 2018
  3. By: Lyasko, Alexander (Ляско, Александр) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: In interfirm strategic alliances, which are forged between direct competitors, two kinds of knowledge-related processes take place at the same time. On one hand, parties to interfirm agreements engage in knowledge and information exchange, with an aim to produce incremental innovations, while not relinquishing control over important parts of knowledge underlying their competitive advantage. On the other hand, partners should recombine their intellectual assets and transform the knowledge they receive in order to create radically novel products, processes and technologies, which boost competitive advantage not for single players, but for all parties involved in strategic collaboration.
    Date: 2019–03
  4. By: Gilberto Libânio (Cedeplar-UFMG); Marco Flávio Resende (Cedeplar-UFMG); Débora Freire (Cedeplar-UFMG); Rosa Lívia Gonçalves Montenegro (UFSJ)
    Abstract: The aim of the present work is to analyze the relationship between the level of economic activity and technological innovation in Brazilian industry from 2010 to 2016. The central hypothesis of the paper is that the greater the economic activity, the higher the positive impact on the innovation rate, through channels such as the increase in investments in fixed capital and the improvement in the financing conditions for innovation activities. The analysis is based on a database of the first six years of the survey called Innovation Survey in which it was possible to obtain a panel segmented by four blocks of industrial sectors. These data were analyzed by means of panel data regression model that reveals the temporal evolution of the relation between the level of industrial activity and the rate of innovation of firms. The main result suggests that the overcoming of the current crisis and the consequent recovery of economic activity are important elements for the increase of innovation rates in the Brazilian industry.
    Keywords: Innovation; Financing; Economic activity; Panel data
    JEL: C23 O11 O31
    Date: 2019–03
  5. By: Hiroyuki Nishiyama (School of Economics, University of Hyogo, Japan); Azusa Fujimori (Faculty of Management, Osaka Seikei University, Japan); Takahiro Sato (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)
    Abstract: This paper anatomizes the linkage between country/region characteristics and Japanese MNE activity in India from both theoretical and empirical sides. We construct a North-South firm-heterogeneity model with FDI and exchange rate. We use this model to make three contributions: First, we theoretically reveal how country characteristics affect the average sales of the firm in the host country. Secondly, we make clear the state-level characteristics on three main industrialized areas in India using the data from some valuable databases. Thirdly, we estimate determinant factors of average sales of each Japanese affiliate firms in India focusing on regional characteristics derived in the theoretical part using firm-level data. We also construct several proxy variables of determinant factors of average sales in state-level and put into estimated regression equation. This empirical analysis targets at the 1990s and 2000s. Over this period, India enjoyed steady economic growth and it can be linked with increase of FDI inflow and technological spillover from MNEs. We find out that some regional characteristics such as level of human-capital or transportation cost in each state and also exchange rate have a significant effect on average sales of each Japanese affiliate firms in India.
    Keywords: Firm heterogeneity, foreign direct investment, India, Japanese multinational enterprises
    JEL: F10 F12 F23 L25 O53 R30
    Date: 2019–03
  6. By: Hundt, Christian; Holtermann, Linus; Steeger, Jonas; Bersch, Johannes
    Abstract: In this paper, we examine the macro-to-micro-transition of cluster externalities to firms and how it is affected by the macroeconomic instability caused by the recessionary shock of 2008/2009. Using data from 16,166 manufacturing and business services firms nested in 390 German regions, we employ within-firm regression techniques to estimate the impact of crosslevel interactions between firm- and cluster-level determinants on phase-related differences in firm performance between a pre-crisis (2004-2007) and a crisis period (2009-2011). The empirical results validate the existence of a macro-to-micro-transition that evolves best in the case of broad firm-level capabilities and variety-driven externalities. Furthermore, the results indicate that the transition strongly depends on the macroeconomic cycle. While the transition particularly benefits from a stable macroeconomic environment (2004-2007), its mechanisms are interrupted when being exposed to economic turmoil (2009-2011). Yet, the crisisinduced interruption of the transition is mainly restricted to the national recession in 2009. As soon as the macroeconomic pressure diminishes (2010-2011), we observe a reversion of the transmission mechanisms to the pre-crisis level. Our study contributes to the existing literature by corroborating previous findings that the economic performance of firms depends on a working macro-to-micro transition of external resources, which presupposes sufficient cluster externalities and adequate firm-level combinative capabilities. In contrast to previous studies on this topic, the transition mechanism is not modeled as time-invariant. Instead, it is coupled to the prevailing macroeconomic regime.
    Keywords: macro-to-micro-transition,combinative capabilities,agglomeration economies,cluster-level externalities,unrelated variety,related variety,macroeconomic regimes,Great Recession,economic resilience
    JEL: C33 R11 R58
    Date: 2019
  7. By: Mikkel Hermansen; Valentine Millot
    Abstract: Danish firms are close to the technological frontier compared to other OECD countries,making the introduction of new – potentially disruptive – technologies key to boostproductivity growth. Despite a high level of digitalisation and good framework conditions,aggregate productivity growth in Denmark has been only average compared to otheradvanced OECD countries and lags behind in less knowledge-intensive service industries.Policy needs to embrace innovative technologies by leaning against attempts to discourageor exclude them and by tackling unintended or outmoded obstacles in legislation andregulation. Analysis based on Danish firm-level data suggests that digital adoption throughinvestment in ICT capital increases firm productivity and contributes to business dynamicsand firm growth. Improving economic incentives for such investment as well as facilitatingadoption of new business models require a shift of taxation away from capital and labourincome. Ensuring supply of the right skills and maintaining effective upskilling will helpworkers cope with disruptive changes and ensure that economic growth benefits all.
    Keywords: competition, digitalisation, disruption, innovation, productivity, skills, taxation
    JEL: E24 H25 L40 L50 O16 O33 O38
    Date: 2019–04–02
  8. By: Marco A. Marini
    Abstract: This paper introduces a number of game-theoretic tools to model collusive agreements among firms in vertically differentiated markets. I firstly review some classical literature on collusion between two firms producing goods of exogenous different qualities. I then extend the analysis to a n-firm vertically differentiated market to study the incentive to form either a whole market alliance or partial alliances made of subsets of consecutive firms in order to collude in prices. Within this framework I explore the price behaviour of groups of colluding firms and their incentive to either pruning or proliferating their products. It is shown that a selective pruning within the cartel always occurs. Moreover, by associating a partition function game to the n-firm vertically differentiated market, it can be shown that a sufficient condition for the cooperative (or coalitional) stability of the whole industry cartel is the equidistance of firms’ products along the quality spectrum. Without this property, and in presence of large quality differences, collusive agreements easily lose their stability. In addition, introducing a standard infinitely repeated-game approach, I show that an increase in the number of firms in the market may have contradictory effects on the incentive of firms to collude: it can make collusion easier for bottom and intermediate firms and harder for the top quality firm. Finally, by means of a three-firm example, I consider the case in which alliances can set endogenously qualities, prices and number of variants on sale. I show that, in every formed coalition, (i) market pruning dominates product proliferation and (ii) partial cartelisation always arises in equilibrium, with the bottom quality firm always belonging to the alliance.
    Keywords: Research Methods/ Statistical Methods
    Date: 2017–06–23
  9. By: Pieper, Thorsten; Herstatt, Cornelius
    Abstract: User innovation is a broadly discussed phenomenon in the context of open innovation which describes, for instance, the customer integration into the early phases of new product development). Despite there existing a large body of research in the field of lead users and user innovation, scientific literature provides only a few insights into how barriers are influencing user innovators and their development processes (Braun and Herstatt, 2007). In addition, there is still little research into the effects of user innovation barriers on user-generated products, and how user innovators' personal characteristics remedy or foster the effect of barriers on user-generated products along the user innovation process. Accordingly, this study contributes to lead user and user innovation theory by analyzing quantitative data from 299 respondents in the field of Fab Labs and makerspaces. An empirical model comprising user innovation barriers (technological, social, legal and ownership), user innovators' personal traits (lead userness and openness) and user innovations' product properties (perceived complexity) is analyzed by applying multivariate regression methods. Findings from the study reveal a hierarchical allocation of the barriers' impacts on the dependent variable perceived complexity, along the development stages. Barriers in user innovation processes serve as factors hindering, but also promoting, user innovation activities. It has been found, for instance, that technological barriers in the conceptualization and social barriers in the prototyping phase increase user innovations' perceived complexity. Instead, legal barriers in prototyping even decrease perceived complexity. Furthermore, an influence of openness as a direct and moderating personal trait to overcome user innovation barriers has been confirmed by this study.
    Keywords: Open and User Innovation,User Innovation Process,User Innovator Characteristics,Lead User Research,Collaborative Workspaces
    Date: 2018
  10. By: Matej Bajgar (OECD); Sara Calligaris (OECD); Flavio Calvino (OECD); Chiara Criscuolo (OECD); Jonathan Timmis (OECD)
    Abstract: The digital transformation forces a re-think of government policy as manufacturing business models increasingly transition from “bolts” to “bits”. The road to Industry 4.0 implies important and pervasive changes in business dynamics, firm growth and the nature of competition. This report presents a framework for measuring the digital transformation of manufacturing industries, and maps the impact of digital technologies across these several dimensions: firm productivity growth, business dynamism, industry concentration, firm mark-ups and mergers and acquisition activity. It suggests policies that governments can use to facilitate digital adoption and reap the benefits of the digital revolution in manufacturing.
    Date: 2019–04–05
  11. By: Békés, Gábor; Harasztosi, Péter
    Abstract: In less developed economies import can be the primary source of adopting new technologies in the form of modern production equipment. This paper explores the spread of manufacturing machinery across locations and investigates the effects of previous importers on the firms' decision to import certain types of foreign machines. Using a uniquely compiled Hungarian firm-level dataset for the 1992-2003 period, we find that the probability of importing a particular piece of sector specific machinery is positively affected by the presence of local firms previously importing the same machine. A similar pattern is found with regards to the choice of source country. While these results offer evidence of positive externalities, we find that these benefits are concentrated in large and foreign owned companies.
    Keywords: agglomeration; impact of technology adoption; machine imports; trade-related spillovers
    JEL: D22 F14 R12
    Date: 2019–03

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