nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2019‒04‒29
eleven papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. International R&D networks of firms: A country-level analysis of the EU framework programmes By Ukrainski, Kadri; Kanep, Hanna; Kirs, Margit; Karo, Erkki
  2. Micro-Evidence on Corporate Relationships in Global Value Chains: The Role of Trade, FDI and Strategic Partnerships By Andrea Andrenelli; Iza Lejárraga; Sébastien Miroudot; Letizia Montinari
  3. Innovation, Productivity, and Spillovers Effects: Evidence from Chile By Crespi, Gustavo; Figal Garone, Lucas; Maffioli, Alessandro; Stein, Ernesto H.
  4. Sectoral productivity Growth and Innovation Policies By Ivanova, Olga; Chatzouz, Moustafa
  5. Smart Specialisation Evaluation: Setting the Scene By Carlo Gianelle; Fabrizio Guzzo; Elisabetta Marinelli
  6. Patent protection, innovation, and technology transfer in a Schumpeterian economy By Huang, Chien-Yu; Yang, Yibai; Zheng, Zhijie
  7. What a firm produces matters: diversification, coherence and performance of Indian manufacturing firms By Giovanni Dosi; Nanditha Mathew; Emanuele Pugliese
  8. FDI Patterns and Global Value Chains in the Digital Economy By Antonello Zanfei; Andrea Coveri; Mario Pianta
  9. Who and how do participate strategic planning? By Täks, Viire; Vadi, Maaja
  10. Firm heterogeneity, productivity, and the extensive margins of trade - differences between manufacturing firms in East and West Germany By Krenz, Astrid
  11. Understanding the capabilities for digital innovations from a digital technology perspective By Wiesböck, Florian; Hess, Thomas

  1. By: Ukrainski, Kadri; Kanep, Hanna; Kirs, Margit; Karo, Erkki
    Abstract: Empirical studies have shown that the internationalization processes of firms in re-search and development (R&D) are slower compared to those of trade or investments. The pioneers of R&D internationalization have been high-tech companies in small mar-kets with little research resources in their home countries. The motives for internation-alization in R&D besides widening the R&D resource base concern the search for the novelty value of collaboration for innovation, but the costs are associated with collab-orative capacity and lack of experience. EU has aimed at boosting Europe's industrial leadership and competitiveness via different policy instruments, mainly R&D subsidies to SMEs and larger firms for collaborative partnerships with various institutional and geographical scopes. By comparing FP7 and Horizon2020, two recent Framework Pro-grammes (FPs), the innovation focus has strengthened besides basic research within subsidized R&D activities. Additionally, the projects involve more partnerships between higher education and research institutions, private firms and public sector bodies. The picture of the network formed by supported projects shows a concentration around larger and older EU member states while the smaller countries, but also EU13 (the new member states) locating on the periphery. Individual countries are engaged in international R&D networks with different patterns, but for EU13 countries the network-ing barriers seem to be higher, even in the most successful cases the single partner (mostly SME) projects dominate. In gaining stronger hub roles in the private firm R&D networks, the economies in all countries need to improve connectivity within and out-side their communities.
    Keywords: R&D,innovation,EU13 countries
    Date: 2019
  2. By: Andrea Andrenelli; Iza Lejárraga; Sébastien Miroudot; Letizia Montinari
    Abstract: Global value chains (GVCs) have sharpened the interdependencies between trade and foreign direct investment (FDI). Using a novel micro-level dataset covering about 27 000 corporate relationships of 147 multinational enterprises (MNEs) in 13 sectors, new evidence is provided on how firms organise their production globally by combining trade with investment, and on a range of non-equity, contract-based partnerships. The analysis leads to five stylised facts. First, MNE activities are a combination of trade, FDI and strategic partnerships. All firms rely on a mix of these different types of corporate relationships. Second, the configuration of trade, investment and strategic partnerships varies across sectors, firms and markets. The results highlight considerable firm-level heterogeneity within the same industry and across the different modes of entry. Third, investment performs various functions in GVCs. In addition to traditional forms of FDI such as “market-seeking” or “input-seeking”, investment “in capabilities” or “conglomerate” FDI also account for a relevant share of equity-based relationships. Fourth, support business functions emerge as key building blocks in GVCs, which suggests that policy reforms in transversal services sectors that support all GVCs should merit special attention. Fifth, GVCs display a clear geographical organisation. While domestic corporate relationships may lead to higher volumes of activities, in terms of the number of relationships MNEs have more partners abroad. Moreover, the large majority of GVC interactions take place within OECD countries. Overall, the complex and heterogeneous interlinkages observed in modern firm strategies highlight the importance of ensuring a level playing field for both trade and investment.
    Keywords: investment, multinational enterprises, Trade
    JEL: L23 L24 F23
    Date: 2019–04–25
  3. By: Crespi, Gustavo; Figal Garone, Lucas; Maffioli, Alessandro; Stein, Ernesto H.
    Abstract: This paper estimates the direct and spillover effects of two matching grants schemes designed to promote firm-level research and development (R&D) investment in Chile on firm productivity. Because the two programs target different kinds of projects—the National Productivity and Technological Development Fund (FONTEC) subsidizes intramural R&D, while the Science and Technology Development Fund (FONDEF) finances extramural R&D carried out in collaboration with research institutes—analyzing their effects can shed light on the process of knowledge creation and diffusion. The paper applies fixed-effects techniques to a novel dataset that merges several waves of Chile’s National Manufacturing Surveys collected by the National Institute of Statistics with register data on the beneficiaries of both programs. The results suggest that while both programs have had a positive impact on participants’ productivity, only FONDEF-funded projects have generated positive spillovers on firms’ productivity. The analysis reveals that the spillover effects on productivity display an inverted-U relationship with the intensity of public support. Spillover effects were found to occur only if firms were both geographically and technologically close.
    Keywords: Chile, impact evaluation, innovation, matching grants programs productivity, spillover effects
    Date: 2019–02
  4. By: Ivanova, Olga; Chatzouz, Moustafa
    Abstract: This papers studies the sectoral differences in the impacts of various innovation policies, human capital and R&D intensity on the productivity growth using econometric panel data techniques. We analyze the development of the sectoral productivity as depending on both knowledge creation and knowledge adoption, where both channels of productivity growth can be influenced by various types of R&D related public policy. We use the combination of the most recent EU-KLEMS database and OECD data for econometric analysis on six aggregated sectors of the economy. In contrast with other existing studies our econometric analysis covers the whole of the economy and includes various traditional, industrial and services sectors. The main contribution of the paper is in highlighting the differences between economic sectors and identifying potential for sector-specific innovation policies.
    Keywords: Endogenous growth, R&D, panel data, R&D policy, industrial sectors
    JEL: O47
    Date: 2019–04–23
  5. By: Carlo Gianelle (European Commission - JRC); Fabrizio Guzzo (European Commission - JRC); Elisabetta Marinelli (European Commission - JRC)
    Abstract: This report presents a set of preliminary conceptual and practical considerations on the evaluation of the Smart Specialisation policy. It opens a discussion that aims to set the scene for more articulated and detailed reflections. It is important that evaluation exercises are focused on selected elements of the policy scheme; this facilitates identifying suitable evaluation questions and methodologies. Evaluation is meaningful only in the presence of well-specified evaluation questions, stemming from the specific information needs of the actors involved in Smart Specialisation Strategies. A well-defined intervention logic, linking clear ends with means, is essential for evaluation. Monitoring systems act as early-warning mechanisms signalling critical aspects in the implementation, which call for deeper assessment and understanding through evaluation exercises. To plan useful evaluations and increase the chances of their results being used require an ongoing commitment to develop a learning culture and build evaluation capabilities across institutions and stakeholders.
    Keywords: Regional innovation policy; Smart Specialisation; public policy evaluation; policy monitoring
    JEL: O25 O38 R12 R58
    Date: 2019–04
  6. By: Huang, Chien-Yu; Yang, Yibai; Zheng, Zhijie
    Abstract: This paper analyzes the effects of intellectual property rights (IPR) protection on innovation and technology transfer in a North-South quality-ladder model with innovative Northern R&D and adaptive Southern R&D. The degree of IPR protection in two countries differs in terms of patent breadth, which determines the markups of Northern firms and their Southern affiliates, respectively. In this model, stronger IPR protection in the South leads to a permanent decrease in the North-South wage gap, a temporary increase in the Northern innovation rate, and a permanent increase in technology transfer. By contrast, stronger IPR protection in the North leads to a permanent increase in the North-South wage gap, ambiguous effects on the Northern innovation rate, and a permanent decrease in technology transfer. Finally, we perform a quantitative analysis by calibrating the model to the US-China data, and the numerical results support these policy implications.
    Keywords: Intellectual property rights protection, Schumpeterian innovation, multinational firms, technology transfer
    JEL: F12 F23 F43 O31 O34
    Date: 2019–03
  7. By: Giovanni Dosi; Nanditha Mathew; Emanuele Pugliese
    Abstract: Economic growth and development of a country involves accumulation of knowledge and dynamic capabilities (Cimoli et al., 2009). Past research has begun to investigate the capability accumulation and macro-economic development of countries and sectors (Dosi et al., 1990), also by means of introduction of new products (Hausmann and Rodrik, 2003). In this work, recognizing that firms are the actual domain in which production takes place, we focus on the firm-level process of capability accumulation and diversification in a developing country. We investigate the relationship between diversification (and coherent diversification) and firm performance by employing an extensive database of Indian manufacturing firms with detailed information on product mix of firms. We claim that such an understanding of firmsù incentives to diversify is relevant not only for the corporate management, but also for the diversification of countries and thereby its development. First, we explore the reasons behind firmsù strategy to diversify, i.e, which firms choose a broad product scope and whether the change in the scope of the firm results in improved performance in terms of firm profitability and sales growth. Second, we look at the idiosyncratic characteristics of different products, by emphasizing the synergies of a product line with respect to the overall product basket of the firm. In this line, we develop a measure that captures the synergies and economies of scope between different products, and observe that the firmsù future performance crucially depend on the interactions between the products that comprise its basket. Overall, our results are consistent with an intangible-capabilities model of firm diversification: diversification results in improved firm performance if the firm has underused capabilities and the new production line is able to exploit them.
    Keywords: Diversification; Coherence; Endogenous Switching.
    Date: 2019–04–18
  8. By: Antonello Zanfei (Department of Economics, Society & Politics, Universit? di Urbino Carlo Bo); Andrea Coveri (Department of Economics, Society & Politics, Universit? di Urbino Carlo Bo); Mario Pianta (Scuola Normale Superiore, Florence)
    Abstract: The modern process of digitalization of the world economy entails global flows of investment in technology-based industries and knowledge activities located upstream of value chains. This work exploits the wealth of information offered by the fDi Markets database to provide an overview about the geographical patterns of FDIs and of specialization in digital industries and in technological activities.We showremarkable differences across both advanced and emerging economies in this respect. Europe is both a big attractor and a big investor in digital related business, but relies on emerging economies more to offshore production than to set up R&D labs in these countries. By contrast, North American economies are more prone to engage in knowledge intensive FDIs towards the most dynamic emerging countries than is the case of Europe.Emerging economies also play a large variety of rolesinglobal flows of investment in digital industries.However, with the relevant exceptions of China, India and the Four Asian Tigers, inward and outward FDIsof Emerging economies are predominantlyproduction-oriented, with a lower involvement in R&D, Design and ICT activities. Hence, the observed patterns of FDIs appear to consolidate existing hierarchies in digital related global production networks, creating limited upgrading opportunities in the case of most emerging economies.
    Keywords: Foreign direct investment, globalization, digitalization, global value chains.
    JEL: F12 F21 F23 L23 M21 O30
    Date: 2019
  9. By: Täks, Viire; Vadi, Maaja
    Abstract: The paper offers new insights into how concurrent combinations of different strategic planning participants is related to the usage of various management tools in the company. It shares the light to two areas with little empirical studies - concurrent involvement of strategic planning participants and the relation between strategic planning participants and use of management tools. Through this, it helps to explain strategic planning participants influence strategy implementation processes. The study is based on a dataset of 204 Estonian companies. To analyse relationships Bayesian networks is chosen and the dynamic networks illustrate the findings. Using this analysing method allows evaluating probabilistic relations between various combinations of strategic planning participants and use of management tools. The study shows that leading actors of strategic planning are owners, top and middle managers. Middle managers have a central role in involving lower positions in the company to strategic planning. When owners are involved in strategic planning, companies tend to use externally oriented management tools like customer relationship management. Involvement of top managers is related to internally oriented management tools, most probably with business process re-engineering. In case of concurrent involvement of top managers and owners, owner-related management tools are preferable in use. Middle managers are most often involved in strategic planning when benchmarking and first-level managers when business process re-engineering is in use. Bayesian network models were also composed of the involvement of specialists and blue-collar workers, while these networks did not show any relationships between strategic planning participants and management tools.
    Keywords: strategic planning,strategic planning participants,management tools,Strategy implementation,Estonia,Bayesian networks
    Date: 2019
  10. By: Krenz, Astrid
    Abstract: I investigate the relationship between the extensive margins of imports and exports (the number of countries traded with and the number of goods traded) and firm productivity using a newly constructed and rich panel data set of German manufacturing firms for the years 2009-2014. I do for the first time construct a data set based on German trade data and firm data that accounts for the substantial change in the German register of firms statistics after 2012. The extensive margins are significantly and positively associated with firm-level productivity both for West and East German firms in cross-sectional estimations, which is in line with the previous literature. Productivity is higher in firms that import and export more goods and trade with more countries. However, results based on panel analyses reveal that especially for East German firms the relationship becomes insignificant when unobserved firm heterogeneity is controlled for. The results point to a high degree of firm heterogeneity, of factors that are relevant and differ within the firm only, for firms in East Germany.
    Keywords: Extensive margins of trade,Firm Productivity,Germany,Firm Heterogeneity
    JEL: F14 L25 L60
    Date: 2019
  11. By: Wiesböck, Florian; Hess, Thomas
    Abstract: With this study, we want to take a first step in this direction and try to develop a basic understanding of the capabilities for digital innovations (henceforth: digital innovation capabilities (DIC)) from a digital technology perspective. Such a perspective argues that digital innovations are based on digitalization and digital transformation capabilities (Wiesböck 2018). Hence, the aim of this paper is to develop a digital technology-centered theoretical conceptualization of an organization's DIC. This way, we want to answer the following research question: How do an organization's digitalization capabilities and digital transformation capabilities define an organization's digital innovation capabilities?
    Date: 2018

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