nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2019‒05‒06
eight papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Competition and Firm Productivity: Evidence from Portugal By Pedro Carvalho
  2. Identification of Key Companies for International Profit Shifting in the Global Ownership Network By Tembo Nakamoto; Abhijit Chakraborty; Yuichi Ikeda
  3. The digital innovation policy landscape in 2019 By Caroline Paunov; Sandra Planes-Satorra
  4. Outsourcing and Excellence of Core HR Practices: Comparing institutional mechanisms among market economies By Klaas Szierbowski-Seibel; Marius Claus Wehner; Rüdiger Kabst
  5. (When) Is Hiring Strategic? Human Capital Management as a Design Decision in Organizations By Elfenbein, Daniel W.; Sterling, Adina
  6. Providing new OECD evidence on tourism trade in value added By OECD
  7. SMMES in South Africa: Understanding the Constraints on Growth and Performance By Haroon Bhorat; Zaakhir Asmal; Kezia Lilenstein; Kirsten van der Zee
  8. Cloud computing and firm growth By Timothy DeStefano; Richard Kneller; Jonathan Timmis

  1. By: Pedro Carvalho
    Abstract: This paper presents empirical evidence on the impact of competition on firm productivity for the Portuguese economy. To that effect, firm-level panel data comprising information between 2010 and 2015 gathered from the Integrated Business Accounts System (Portuguese acronym: SCIE) is used. The database enables the construction of economic and financial indicators, which allow for isolating the impact of competition on firm-level productivity. We find a positive relationship between competition and both total factor productivity and labor productivity. This relationship is found to be robust to different specifications and in accordance with the results in the literature obtained for other countries.
    Keywords: Competition, Productivity, Portugal
    JEL: D40 D24 O47
    Date: 2018–07
  2. By: Tembo Nakamoto; Abhijit Chakraborty; Yuichi Ikeda
    Abstract: In the global economy, the intermediate companies owned by multinational corporations are becoming an important policy issue as they are likely to cause international profit shifting and diversion of foreign direct investments. The purpose of this analysis is to call the intermediate companies with high risk of international profit shifting as key firms and to identifying and clarify them. For this aim, we propose a model that focuses on each affiliate's position on the ownership structure of each multinational corporation. Based on the information contained in the Orbis database, we constructed the Global Ownership Network, reflecting the relationship that can give significant influence to a firm, and analyzed for large multinational corporations listed in Fortune Global 500. In this analysis, first, we confirmed the validity of this model by identifying affiliates playing an important role in international tax avoidance at a certain degree. Secondly, intermediate companies are mainly found in the Netherlands and the United Kingdom, etc., and tended to be located in jurisdictions favorable to treaty shopping. And it was found that such key firms are concentrated on the IN component of the bow-tie structure that the giant weakly connected component of the Global Ownership Network consist of. Therefore, it clarifies that the key firms are geographically located in specific jurisdictions, and concentrates on specific components in the Global Ownership Network. The location of key firms are related with the ease of treaty shopping, and there is a difference in the jurisdiction where key firms are located depending on the location of the multinational corporations.
    Date: 2019–04
  3. By: Caroline Paunov; Sandra Planes-Satorra
    Abstract: How are OECD countries supporting digital innovation and ensuring that benefits spread across the economy? This paper explores the current landscape of strategies and initiatives implemented in OECD countries to support innovation in the digital age. It identifies common trends and differences in national digital, smart industry and artificial intelligence (AI) strategies. The paper also discusses policy instruments used across OECD to support digital innovation targeting four objectives: First, policies aimed at enhancing digital technology adoption and diffusion, including demonstration facilities for SMEs. Second, initiatives that promote collaborative innovation, including via the creation of digital innovation clusters and knowledge intermediaries. Third, support for research and innovation in key digital technologies, particularly AI (e.g. by establishing testbeds and regulatory sandboxes). Fourth, policies to encourage digital entrepreneurship (e.g. through early-stage business acceleration support).
    Keywords: digital innovation, digital technologies and artificial intelligence (AI), innovation and research policy, innovation strategies
    JEL: O30 O31 O33 O38 O25 I28
    Date: 2019–05–06
  4. By: Klaas Szierbowski-Seibel (Paderborn University); Marius Claus Wehner (Heinrich-Heine-Universität Düsseldorf); Rüdiger Kabst (Paderborn University)
    Abstract: This study focuses on the boundary decision between outsourcing and excellence of two core HR practices among large organizations in liberal market economies (LMEs) and coordinated market economies (CMEs): recruitment & selection (R&S) and training & development (T&D). By adding institutional arguments and comparing two market economies in this context, we investigate when and why organizations outsource certain core HR practices to external vendors and professionalize and improve other core HR practices at the same time. We use a sample of 1,948 organizations in eight countries of a large-scale survey. The results show that organizations in LMEs tend to professionalize and improve their R&S excellence by simultaneously diminishing R&S outsourcing and T&D excellence. Conversely, organizations in CMEs professionalize and improve their T&D excellence by simultaneously increasing R&S outsourcing and decreasing R&S excellence. However, the results for T&D outsourcing are not significant. Implications for theory within the context of core HR practices are discussed.
    Keywords: Outsourcing, HR excellence, recruitment and selection, training and development, institutional theory, market economies (keywords)
    Date: 2019–04
  5. By: Elfenbein, Daniel W. (Washington University in St. Louis); Sterling, Adina (Stanford University)
    Abstract: This paper examines when and under what conditions whom to hire is a strategic decision. We identify four mechanisms involved in hiring that add to the “strategicness†of human capital decisions. We posit that, to the degree that human capital outcomes are influenced by these mechanisms, hiring cannot be effectively delegated or treated independently from a firm’s other strategic decisions, nor will a “best athlete†approach to hiring lead to optimal results. We outline the shifts in scholarly attention required for scholars to conceptualize hiring as a strategic process, and we argue that this conceptualization is critical given the increasing use of data science tools by industry to support and automate hiring decisions. By delving into the mechanisms and conditions that make hiring strategic, we contribute to a broader understanding of how and why firms acquire human capital and highlight gaps and opportunities for future research.
    Date: 2018–08
  6. By: OECD
    Abstract: The ability to measure the economic impacts of tourism provides policy makers with the evidence necessary to ensure that future policies are targeted to meet strategic objectives. However, despite significant work on tourism economics, notably with the Tourism Satellite Account, a deeper understanding is needed of how tourism trade directly and indirectly contributes to the economic growth and competitiveness of countries. This report scopes out the benefits and challenges of analysing tourism from a trade in value added perspective. It identifies the priority actions to strength the underlying ‘value chain’ of national statistics needed to build analyses tourism from a trade in value added perspective, and sets out a roadmap to make progress. It builds on wider OECD work on Trade in Value Added (TiVA), and represents a first attempt to better link tourism data with the underlying Inter-Country Input-Output (ICIO) infrastructure. Pilot country analysis for Canada, Portugal and the United Kingdom is presented.
    Keywords: global value chains, globalisation, ICIO, Tourism economy, tourism expenditure, Tourism Satellite Account (TSA), tourism statistics, trade, Trade in Value Added (TiVA)
    Date: 2019–05–03
  7. By: Haroon Bhorat; Zaakhir Asmal; Kezia Lilenstein; Kirsten van der Zee (University of Cape Town; Director)
    Abstract: Small, Medium and Micro Enterprises (SMMEs) have been identified as a key component to advancing inclusive growth and development in South Africa. This paper serves to present a snapshot of the current profile of SMMEs in South Africa as well as the key inhibitors of growth for SMMEs. We provide a comparative perspective of the role of SMMEs and entrepreneurship in South Africa, then profile the current landscape of SMMEs in South Africa, evaluating the characteristics of SMMEs across three dimensions: firm, owner and employee characteristics. Following this, we distinguish between formal and informal SMMEs in order to highlight the unique nature of informality in South Africa. This paper also evaluates the endogenous and exogenous impediments to growth faced by South African SMMEs. Endogenous challenges are internal to the firm while exogenous challenges are external to the firm. In summarising these findings, we present the major challenges inhibiting the growth of SMMEs in South Africa, taking into account firm heterogeneity in terms of both firm size and informality status.
    Keywords: SMMEs; South Africa; inclusive growth; development; entrepreneurship; informality
    JEL: E2 E26 J26 J4 O1 O4 O17
    Date: 2018–07
  8. By: Timothy DeStefano; Richard Kneller; Jonathan Timmis
    Abstract: The arrival of the cloud has enabled a shift in the nature of ICT use, from investment in sunk capital to a pay-on-demand service that allows firms to rapidly scale up. This paper uses new firm-level data to examine the impact of cloud on firm growth in the UK, using zipcode-level instruments of the timing of high-speed fibre availability and expected speeds. We find cloud leads to the growth of young firms in terms of employment and productivity, but they become more concentrated in fewer plants. For older firms we find no scale or productivity growth, but instead disperse activity by closing plants and moving employment further from the headquarters. In addition, the plants that close tend to be those without access to fibre broadband.
    Keywords: firm growth; the cloud; ICT use; employment; productivity
    Date: 2019

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