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on Economics of Strategic Management |
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Issue of 2019‒04‒22
eleven papers chosen by João José de Matos Ferreira Universidade da Beira Interior |
| By: | OA Carboni; G. Medda |
| Abstract: | The outsourcing of R&D activities is considered an important way to acquire external technological information that can be integrated into a firm's own knowledge endowment. Given the complex relationship between R&D partnerships and innovation performance, it becomes of paramount importance for scholars, managers and policy-makers to understand whether and how outsourcing benefits the firm. This paper tries to assess the impact that external sources of R&D may have on product innovation, differentiating between R&D supplied by universities and other companies. The empirical analysis is based on a large and representative sample of European manufacturing companies. The analysis considers R&D an endogenous decision in investigating its effect on product innovation. An instrumental variable two-step estimation method is employed to deal with this issue. The results suggest that R&D intensity, or the share of R&D acquired from external sources, has a positive and significant effect on product innovation. Furthermore, we find evidence of an inverse U-shaped relationship between R&D outsourcing and innovation, meaning that on average, costs start to outweigh benefits as the R&D collaboration projects increase. We also estimate high returns from R&D acquired from universities on the probability to achieve product innovations, while having firms in the same group as research partners has the largest effect on innovative product sales. The results have straightforward implications for the practice of R&D managers. In order to gain advantages from partnership in research, innovation managers need to jointly exploit these different types of collaboration activities and their potential synergies. Given that the innovative firms in the sample desire additional credit which actually they do not obtain, R&D managers should also be concerned with the financing sources firms have access to. Finally, the analysis suggests that managers ought to identify the appropriate level of external acquisition in order to fully benefit on innovation. |
| Keywords: | External R&D;research partners;innovation performance;IV model |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:201906&r=all |
| By: | Crowley, Frank; Jordan, Declan |
| Abstract: | A key concept in the economics of innovation is the 'public good' nature of knowledge. This generates a tension between incentivizing knowledge production by allowing knowledge creators appropriate the economic benefits and encouraging its diffusion to enhance the social return to knowledge creation. Where firms operate in localities that are characterized by greater entrepreneurship, there may be lower incentives to engage in research and development. This would result from a higher risk of knowledge spillovers to local start-ups and/or that employees may exploit new knowledge in spin-out firms. It has also been suggested in the literature that greater local entrepreneurial activity may lower profits for incumbent firms, through greater competition and/or the leakage of commercially valuable new knowledge. This paper presents a novel conceptual perspective on this tension and empirically tests it. Using Swedish firmlevel data and county-level data on new start-ups, this paper estimates the effect on R&D activity of local rates of business start-ups. It finds that greater numbers of new start-ups in a metropolitan area reduces firm-level R&D expenditure. However, this relationship is not linear, so that at higher levels of new firm formation in a region, firm-level R&D expenditure falls at a diminishing rate. This suggests that the effect of local entrepreneurship on a business' R&D decisions is conditioned by the extent of that entrepreneurship. |
| Keywords: | Innovation,entrepreneurship,absorptive capacity,knowledge spillovers |
| JEL: | R11 O33 O31 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:srercw:srercwp20182&r=all |
| By: | Akcigit, Ufuk; Ates, Sina T. |
| Abstract: | In the past several decades, the U.S. economy has witnessed a number of striking trends that indicate a rising market concentration and a slowdown in business dynamism. In this paper, we make an attempt to understand potential common forces behind these empirical regularities through the lens of a micro-founded general equilibrium model of endogenous firm dynamics. Importantly, the theoretical model captures the strategic behavior between competing firms, its effect on their innovation decisions, and the resulting ``best versus the rest'' dynamics. We focus on multiple potential mechanisms that can potentially drive the observed changes and use the calibrated model to assess the relative importance of these channels with particular attention to the implied transitional dynamics. Our results highlight the dominant role of a decline in the intensity of knowledge diffusion from the frontier firms to the laggard ones in explaining the observed shifts. We conclude by presenting new evidence that corroborates a declining knowledge diffusion in the economy. We document a higher concentration of patenting in the hands of firms with the largest stock and a changing nature of patents, especially in the post-2000 period, which suggests a heavy use of intellectual property protection by market leaders to limit the diffusion of knowledge. These findings present a potential avenue for future research on the drivers of declining knowledge diffusion. |
| Keywords: | business dynamism; Competition; knowledge diffusion; Market concentration |
| JEL: | E22 E25 L12 O31 O33 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13669&r=all |
| By: | Bircan, Cagatay; de Haas, Ralph |
| Abstract: | We exploit historically-determined variation in local credit markets to identify the impact of bank lending on firm innovation across Russia. We find that deeper credit markets increase firms' use of bank credit, their adoption of new products and technologies, and productivity growth. This relationship is more pronounced in industries further from the technological frontier; more exposed to import competition; and that export more. These impacts are also stronger for firms near historical R&D centers or railways, and in regions with supportive institutions. Consistent with these results, credit markets contribute to economic growth in such regions. |
| Keywords: | credit constraints; Firm innovation; institutions; Russia; Technological change |
| JEL: | D22 G21 O12 O31 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13663&r=all |
| By: | Ufuk Akcigit; Sina T. Ates |
| Abstract: | In the past several decades, the U.S. economy has witnessed a number of striking trends that indicate a rising market concentration and a slowdown in business dynamism. In this paper, we make an attempt to understand potential common forces behind these empirical regularities through the lens of a micro-founded general equilibrium model of endogenous firm dynamics. Importantly, the theoretical model captures the strategic behavior between competing firms, its effect on their innovation decisions, and the resulting “best versus the rest” dynamics. We focus on multiple potential mechanisms that can potentially drive the observed changes and use the calibrated model to assess the relative importance of these channels with particular attention to the implied transitional dynamics. Our results highlight the dominant role of a decline in the intensity of knowledge diffusion from the frontier firms to the laggard ones in explaining the observed shifts. We conclude by presenting new evidence that corroborates a declining knowledge diffusion in the economy. We document a higher concentration of patenting in the hands of firms with the largest stock and a changing nature of patents, especially in the post-2000 period, which suggests a heavy use of intellectual property protection by market leaders to limit the diffusion of knowledge. These findings present a potential avenue for future research on the drivers of declining knowledge diffusion. |
| JEL: | E22 L12 O31 O33 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25756&r=all |
| By: | Paul J.J. Welfens (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW)); Tian Xiong (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW)) |
| Abstract: | Foreign direct investment (FDI) has been widely considered as an essential channel contributing to a host countries’ innovation development through knowledge and skill spillover effects. In recent years, China has become the second biggest FDI recipient in the world and continues to promote its domestic innovation ability. Here, the question of how FDI affect the growth of regional innovation in China is posed. By applying an alternative knowledge production function (KPF), we investigate the effects of FDI on the development of self-innovation capacities in 31 Chinese provinces using a fixed-effects specification panel data analysis covering the period from 2000 to 2015. Our findings on the contribution of FDI to the growth of different kinds of patent applications in different regions are mixed. Significant results were mainly found for invention patents in the eastern region. Concluding, we suggest potential policy implementations. |
| Keywords: | Regional Innovation Capacity, Patent, Foreign Direct Investment, China |
| JEL: | O33 O34 F21 R11 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:bwu:eiiwdp:disbei247&r=all |
| By: | Daldere, Dace |
| Abstract: | This thesis is devoted to a phenomenon that is currently reshaping the global business architecture: Open innovation (OI) networks. Managers are interested to know how to construct and manage their networks such that they are beneficial for their OI efforts. The goal of the thesis is to determine how network characteristics influence the effectiveness of different types of OI activities and how firms can achieve a beneficial network position by engaging in OI efforts. This thesis is based on three empirical studies that draw on social network theory as an overreaching theoretical framework. Furthermore, this thesis aligns social network theory with the relational view and the literature on distant knowledge. To provide a comprehensive understanding of OI networks, the studies in this thesis also employ different methodological approaches: Crosssectional and longitudinal analysis based on multisource and multiindustry datasets. The key results show that in order to profit from OI firms need well-elaborated risk and network management practices that are applied to the main decisions that managers have to make regarding firms’ entire OI efforts. In specific, network characteristics can help firms to increase the potentials of the upsides of OI and at the same time they can reduce the risks of the downsides of OI. Moreover, certain types of OI activities are more or less suitable for achieving a beneficial position in an OI network and fostering firm performance. Altogether, this thesis provides important implications for managerial practice and closes relevant gaps in the scientific research regarding OI networks. |
| Date: | 2019–03–10 |
| URL: | http://d.repec.org/n?u=RePEc:dar:wpaper:112353&r=all |
| By: | Nathan, Max (University of Birmingham); Rosso, Anna (University of Milan) |
| Abstract: | We take a fresh look at firms' innovation-productivity linkages, using novel data capturing new aspects of innovative activity. We combine UK administrative microdata, media and website content to develop experimental metrics – new product/service launches – for a large panel of SMEs. Extensive validation and descriptive exercises show that launches complement patents, trademarks and innovation surveys. We also establish connections between launches and previous innovative activity. We then link IP, launches and productivity, controlling for media exposure and firm heterogeneity. Launch activity is associated with higher SME productivity, especially in the service sector. High-quality launches and medium-size firms help drive this result. |
| Keywords: | innovation, productivity, ICT, data science |
| JEL: | L86 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12213&r=all |
| By: | Nesma Ali (Heinrich-Heine University Düsseldorf); Boris Najman |
| Abstract: | This paper investigates the role of informal firms’ competition in determining the micro-level effect of cronyism on formal-firms’ productivity in the aftermath of the 2011 Egyptian revolution. Based on the World Bank panel Enterprise Surveys, we follow a constructive approach to indicate politically connected firms based on the findings of the previous literature. Using a propensity score reweighting – difference-in-difference estimator, we find that being a crony firm after the revolution could generate unsustainable gains in terms of productivity. This is mostly due to cronyism externalities that engenders a stronger intensity of informal competition, which jeopardizes any increase in productivity and creates a large disequilibrium at the firm level. We also provide evidence that crony firms’ excess in labor is the main channel through which this effect occurs. Hence, crony firm survival in Egypt depends on their ability to balance between the sustain provision of privileges and the threats imposed by the growth of the informal sector. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1292&r=all |
| By: | Julia Olmos Peñuela; Paul Benneworth; Elena Castro-Martínez |
| Abstract: | The recognition of academic research as a potential source of economic growth and social welfare has attracted the attention of both policy-makers and academics over the past decades. But emphasising the impact of research brings a new set of tensions to scientific governance processes, and raises the risk that academics who engage more with users be hindered in pursuing their research activities. In this paper, we seek to understand whether researchers that meaningfully engage with societal users in their research micro-practices face additional obstacles in their research, whether in terms of the acceptance of that research by academic communities and the absorption of that knowledge by users. To do this, we draw on a recent approach to knowledge production highlighting the importance of ‘openness’ of research practices in influencing the subsequent societal usability of that knowledge. Openness occurs by involving users in research practices, and we therefore ask the question of whether researchers who use open research practices do indeed suffer additional obstacles to their research. Drawing on a questionnaire of 1583 scientists working for the largest Spanish Public Research Organisation, we identify that the greatest obstacles that all researchers face are in administrative structures, which make it harder to engage with users. Less-open users tend to experience fundamental obstacles in their engagement, such as a lack of interest from users or a lack of acceptance by other academics, whilst more open researchers experience problems relating to the practices of managing technology transfer projects. We conclude by arguing that a differentiated support structure is need to assist academics with user engagement reflecting their past experience as well as the need for a rethink of how research organisations situate user engagement in their administrative structure. |
| Keywords: | societal engagement, obstacles, openness, academic norms, research management |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:chs:wpachs:201805&r=all |
| By: | Diego Aboal; Gustavo Rojas; Belén Servín; Paz Queraltó |
| Abstract: | In this paper we evaluate the impact of two programs to support innovation in micro, small and medium enterprises in Paraguay. This article has two contributions to literature. First, the evidence on the impact of this type of programs in developing countries is still scarce. Second, we evaluate the impacts on some variables that have been largely overlooked in the literature, such as innovation activities other than R&D. The evaluation finds positive and significant effects on the probability of carrying out various innovation activities, on the probability of achieving different types of innovation and on the incorporation of technical personnel to the firms. A negative effect on R&D was found, which might be showing a displacement effect of this innovation activity by others. The most robust results are those related to the impact of the program on process and product innovation. The impacts on innovation activities and employment are less robust to alternative specifications and samples. |
| Keywords: | Innovation support programs, innovation, impact evaluation, Paraguay |
| JEL: | O31 O32 O38 C21 |
| Date: | 2019–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:col:000518:017233&r=all |