nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2019‒08‒12
twelve papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Determinants of Productivity Gap in the European Union: A Multilevel Perspective By Randolph Luca Bruno; Elodie Douarin; Julia Korosteleva; Slavo Radosevic
  2. Exploring the Knowledge Management Phenomenon in Russia: A Stakeholders’ Perspective By Grinberg, E.; Pleshkova, A.; Selivanovskikh, L.
  3. Innovation Union: Costs and Benefits of Innovation Policy Coordination By Teodora Borota; Fabrice Defever; Giammario Impullitti
  4. Human Resource Management and Knowledge Management Strategies: Looking for a Fit By Sokolov, D.; Zavyalova, E.
  5. “Entrepreneurial Spirits in Women and Men. The Role of Financial Literacy and Digital Skills" By Noemi Oggero; Mariacristina Rossi; Elisa Ughetto
  6. Technological regimes and the geography of innovation: a long-run perspective on US inventions By Dario Diodato; Ahmad Andrea Morrison
  7. Does FDI Promote Entrepreneurial Activities? A Meta-Analysis By Sanghyun Hong; W. Robert Reed; Bifei Tian; Tingting Wu; Gen Chen
  8. Lack of Successors, Firm Default, and the Performance of Small Businesses By TSURUTA Daisuke
  9. The Effect of Product, Service, and Customer Satisfaction on Word-of-Mouth Behavior By Setyani Dwi Lestari
  10. Ownership Structure, Board of Directors and Firm Performance: Evidence from Taiwan By Aziz Jaafar; Lynn Hodgkinson; Mao-Feng Kao
  11. The Relationship between Leadership Style and Employee Outcomes: The Mediating Role of Organizational Commitment By Ilzar Daud
  12. Eco-Innovation and Firm Growth in the Circular Economy: Evidence from European SMEs By Pelin Demirel; Gamze Ozturk Danisman

  1. By: Randolph Luca Bruno; Elodie Douarin; Julia Korosteleva; Slavo Radosevic
    Abstract: The paper explores the determinants of productivity gap within the European Union in four industrial manufacturing sectors (computers, chemicals, basic metals and food) of strong macroeconomic significance and varied 'Research and Development' (R&D) intensity. Our analysis reveals that some of the most important factors determining productivity gap across the EU are related to technology gap variables - R&D intensity and R&D embedded in purchased equipment and machinery - and how they interact. While the signs for both R&D and embedded R&D are as expected and our results emphasise the relevance of technology for closing the productivity gap, this is not the case with the interaction between these two variables. The estimates for the interaction terms are indeed very significant and consistently negative in three out of four sectors. This negative relationship suggests that there is no complementarity between these two modes of technology acquisition - R&D and embedded R&D investments - which are however each separately crucial for catching up. In policy terms, this situation suggests that there is a lack of coordination between R&D policy and technology transfer (FDI, trade and industrial policy). Given that, our results also show a widening productivity gap between the countries of the EU periphery (South and East) and the rest of the sample.
    Keywords: productivity; technology gap; multilevel analysis; European Union.
    Date: 2019–08–09
  2. By: Grinberg, E.; Pleshkova, A.; Selivanovskikh, L.
    Abstract: The question of whether knowledge management (KM) models are contextually universal has been extensively addressed by research and practice. For over a quarter of a decade management scholars and practitioners have tested the universal validity and applicability of KM practices and technological tools in different settings, primarily focusing on the idiosyncrasies of the national and/or organizational culture profiles. Recognizing the cultural biasness of knowledge-related processes, they have explored the role of the country context in the efficiency of management interventions and investigated the potential effect of the national culture on an organization’s ability to manage high potentials and build innovation capabilities via the adaptation and integration of relevant KM practices. Though the contemporary discourse on the feasibility of the culture-of-the-model approach in these fields is at the point of animation, the context-specific enablers of the emergence and legitimization of KM in countries that do not follow the Western or Eastern management tradition are not explicitly studied, which significantly limits one’s understanding of the nature and role of KM in firms from particular clusters of countries. In particular, KM in Russia is at the stage of formation – it remains underdeveloped in this context, despite different stakeholders, inter alia, management consultants, executives from local governmental and non-governmental organizations, representatives of the teaching / scientific communities, and managerial talents from KM-adjacent fields, acknowledging the role knowledge and knowledge-related systems play in the creation and maintenance of sustainable competitive advantage. We therefore aim at analyzing the KM phenomenon in Russia through the lens of stakeholders’ theory and investigating the country-specific peculiarities of KM emergence, development and acceptance.
    Keywords: knowledge workers, knowledge managers, knowledge management systems, stakeholder theory,
    Date: 2019
  3. By: Teodora Borota; Fabrice Defever; Giammario Impullitti
    Abstract: In this paper, we document large heterogeneity in innovation policy and performance between old and new EU member states, and present firm-level evidence on the close link between foreign direct investment (FDI) spillovers and eastern European _firms' innovation. Guided by these facts and motivated by the pressing debate on further EU integration, we build a two-region endogenous growth model to analyse the gains from innovation policy cooperation in an economic union. The two regions, the West (the old members) and the East (the new post-2004 members), feature firms competing in innovation for market leadership, are integrated via free trade and costly technology transfer via FDI and have different innovation performance and policy. Calibrating the model to reproduce key features of the EU economy, we compare the outcomes of an East-West R&D subsidy war with a cooperation scenario with unified subsidy across regions, and obtain three main results. First, we find that the dynamic gains spurring from the impact of cooperation on the economy's growth rate are sizable and substantially larger than the static gains obtained internalising the strategic motive for subsidies. Second, our model suggests that the presence of FDI and multinational production alleviates the strategic motive and increases the gains from cooperation. Third, separating FDI and innovation policy generates larger gains from cooperation, a policy complementarity driven by the knowledge spillovers carried by FDI.
    Keywords: Optimal innovation policy, growth theory, international policy coordination, EU integration, FDI spillovers
    JEL: O41 O31 O38 F12 F42 F43
    Date: 2019–08
  4. By: Sokolov, D.; Zavyalova, E.
    Abstract: The aim of the paper is to explore the theoretical underpinnings of a fit between knowledge management (KM), human resource management (HRM) and competitive strategies of knowledge-intensive organizations. The paper is based on a review of strategic KM and strategic HRM literature. Based on resource-based view, behavioral, contingent and configurational (complementarity) perspectives, the article proposes a number of testable propositions regarding the alignment between the strategies at different levels (KM, HRM, competitive). The review demonstrates effects of the strategic fit between personalization knowledge management strategy, commitment-oriented HRM strategy and differentiation-based competitive strategy, as well as between codification knowledge management strategy, control-oriented HRM strategy and cost leadership-based competitive strategy. Other combinations of strategies are considered to be less complimentary. Combined three strategies constitute particular strategic configurations that may have both positive and negative synergies influencing employee behavior and organizational outcomes. This study adds value to the literature by discussing mechanisms underlying the strategic interaction of the functional strategies in knowledge-intensive organizations. It also contributes to the discussion of contingent and configurational perspectives on “KM/HRM management – performance” relationship. Additionally, the paper facilitates to the integration and mutual enrichment of KM and HRM research fields.
    Keywords: knowledge management strategy, human resource management strategy, competitive strategy, strategic configurations, strategic fit, horizontal fit,
    Date: 2019
  5. By: Noemi Oggero (Collegio Carlo Alberto); Mariacristina Rossi (University of Turin and CeRP-Collegio Carlo Alberto); Elisa Ughetto (Politecnico, Turin)
    Abstract: We investigate the attitudes to entrepreneurship of Italian households, focusing on the importance of digital skills and financial literacy as potentially relevant factors shaping entrepreneurial entry. We put the gender focus to our analysis to detect whether, and to what extent, women and men differ in their propensity to run a business. We carry out our research by using a sample of the Bank of Italy SHIW dataset for the year 2008 and 2010. Our findings suggest a strong heterogeneity, between men and women, of the importance of digital skills and financial literacy as entrepreneurial drivers. Results show that the impact of financial literacy on the probability of being an entrepreneur is significant, but only for men. Digital skills increase the probability of being entrepreneur with a bigger effect for men than for women.
    Date: 2019–03
  6. By: Dario Diodato; Ahmad Andrea Morrison
    Abstract: The geographical distribution of innovative activities is an emerging subject, but still poorly understood. While previous efforts highlighted that different technologies exhibit different spatial patterns, in this paper we analyse the geography of innovation in the very long run. Using a US patent dataset geocoded for the years 1836-2010, we observe that ? while it is true that differences in technologies are strong determinant of spatial patterns ? changes within a technology over time is at least as important. In particular, we find that regional entry follows the technology life cycle. Subsequently, innovation becomes less geographical concentrated in the first half of the life cycle, to then re-concentrate in the second half.
    Keywords: technological regime, spatial patterns of innovation, life cycle, patents, US Economic Geography
    JEL: R11 O11
    Date: 2019–07
  7. By: Sanghyun Hong; W. Robert Reed (University of Canterbury); Bifei Tian; Tingting Wu; Gen Chen
    Abstract: This study uses meta-analysis to analyze 557 estimates from 35 studies that estimate the effect of inward FDI on entrepreneurial activity. We address two questions: (i) Does FDI lead to greater entrepreneurial activity in host countries? (ii) What factors are responsible for the different estimates across studies? In addressing these questions, we make two methodological contributions. We extend the new Andrews-Kasy meta-analysis estimators (Andrews & Kasy, 2019) to allow for explanatory variables, and we develop a nested framework of multiple meta-analysis models that allows for testing between models and model selection. We estimate that, across all studies, the average estimated effect of FDI on entrepreneurship is positive but small in size, and statistically insignificant. In contrast, the average effect from studies that control for endogeneity is negative and statistically significant.
    Keywords: Meta-analysis, FDI, Entrepreneurship
    JEL: L26 F21 C10
    Date: 2019–08–01
  8. By: TSURUTA Daisuke
    Abstract: We investigate the effects of the lack of successors on small businesses with an elderly manager. Using firm-level data from Japan, which is a country with an ageing population, we find the following results. First, smaller, younger, highly leveraged, and non-growing firms are likely to have no successor. Second, firms with an elderly manager are more likely to exit and default if they have no successors, and this was particularly the case during the period of the global financial crisis around 2009. This result suggests that these firms have less incentive to repay debts because they are not going concerns. As a result of the high probability of default and exit, the annual rate of change in bank borrowing is low if firms with an elderly manager have no successor. Third, using the propensity score matching method, we find that sales growth for firms with no successor is lower than that for other firms.
    Date: 2019–07
  9. By: Setyani Dwi Lestari (Budi Luhur University, Jl. Ciledug Raya, Petukangan Utara, 12260, Jakarta Selatan, Indonesia Author-2-Name: Mariah Author-2-Workplace-Name: Budi Luhur University, Jl. Ciledug Raya, Petukangan Utara, 12260, Jakarta Selatan, Indonesia Author-3-Name: Heni Iswanti Author-3-Workplace-Name: Budi Luhur University, Jl. Ciledug Raya, Petukangan Utara, 12260, Jakarta Selatan, Indonesia Author-4-Name: Umbar Riyanto Author-4-Workplace-Name: Budi Luhur University, Jl. Ciledug Raya, Petukangan Utara, 12260, Jakarta Selatan, Indonesia Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)
    Abstract: Objective - Banks are financial intermediaries which are vital to support the economy of a country. Banks can be interpreted as the financial institutions whose activities are collecting funds from the community, distributing the funds back to the community, and providing other banking services. The development and improvement of service quality from the banks should be the center of public attention. This is because of the tight competition in terms of quality of the services, products, and marketing strategies undertaken by the banks. In an environment of tight competition, the top priorities of service companies such as banks are customer satisfaction and excellent service quality in order to improve customer loyalty and word-of-mouth behavior. This research aims to study, analyze, and explore the effect of product, service, and customer satisfaction on word-of-mouth (WOM) behavior at PT Bank Jakarta. Methodology/Technique - The models used in this research is a descriptive and associative model using SPSS 19. This study uses a simple random sampling technique with a total sample of 80 people. The research instrument used as a measuring tool in this study is a questionnaire consisting of 40 statements. Findings & Novelty - The result of this research show that product (X1), service (X2), and customer satisfaction (X3) simultaneously affect word-of-mouth behavior (Y). The results conclude that PT Bank Windu Kentjana International Tbk Jakarta should improve the quality of its products and services delivered to its customers and prospective customers in order to build their loyalty and improve their word-of-mouth.
    Keywords: Product; Service; Customer Satisfaction; Word of Mouth Behavior.
    JEL: M30 M31 M39
    Date: 2019–06–17
  10. By: Aziz Jaafar (Bangor University); Lynn Hodgkinson (Bangor University); Mao-Feng Kao (National Dong Hwa University)
    Abstract: Purpose Using a dataset of listed firms domiciled in Taiwan, the main aim of this paper is empirically assess the effects of ownership structure, board of directors on firm value. Design/methodology/approach Using a sample of Taiwanese listed firms from 1997 to 2015, the study uses a panel estimation to exploit both the cross-section and time-series nature of the data. Furthermore, a 2SLS regression model is used as robustness test to mitigate the endogeneity issue. Findings Our main results show that the higher the proportion of independent directors, the smaller the board size, and together with a two-tier board system and no CEO duality, the stronger the firm’s performance. With respect to ownership structure, block-holders’ ownership, institutional ownership, foreign ownership and family ownership, are all positively related to firm value. Practical implications Although the Taiwanese corporate governance reform concerning the independent director system which is mandatory only for newly-listed companies is a successful, the regulatory authority should require all listed companies to appoint independent directors to further enhance the Taiwanese corporate governance. Originality/value First, unlike much of the previous literature on western developed countries, this study examines the effects of corporate governance mechanisms on firm performance in a newly-industrialised country, Taiwan. Second, while a number of studies use a single indicator of firm performance this study examines both accounting-based and market-based firm performance. Third, this study addresses the endogeneity issue between corporate governance factors and firm performance by using two stage least squares (2SLS) estimation, and details the econometric tests for justifying the appropriateness of using 2SLS estimation
    Keywords: corporate governance, independent directors, board characteristics, ownership structure
    JEL: M40 G34
    Date: 2019–03
  11. By: Ilzar Daud (Faculty of Economics and Business, Universitas Tanjungpura, Pontianak Indonesia Author-2-Name: Nur Afifah Author-2-Workplace-Name: Faculty of Economics and Business, Universitas Tanjungpura, Pontianak Indonesia Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)
    Abstract: Objective - The objective of this study is to examine the relationship between transformational leadership styles and job performance and the mediating role of organizational commitment in the relationship between transformational leadership style and job performance in State-Owned Banks in West Kalimantan, Indonesia. Methodology/Technique - The data used to evaluate the model was gathered from the State-Owned Banks in West Kalimantan, Indonesia. 200 permanent employees of those State-Owned Banks participated in the survey. The Structural Equation Modelling (SEM), using LISREL software was employed to examine the relationship among the constructs in this study, which are transformational leadership style, organizational commitment, and job performance. Finding - The findings of this study conclude that transformational leadership style significantly affects job performance and organizational commitment, whereas organizational commitment significantly influences job performance. Briefly, organizational commitment mediates the relationship between transformational leadership styles and job performance in State-Owned Banks in West Kalimantan, Indonesia. Novelty - Most of the previous studies were carried out in western countries, raising doubts about generalizations in research results in developing countries such as Indonesia. Therefore, the novelty of this research is carried out in the context of developing countries, especially in State-Owned Banks in West Kalimantan, Indonesia.
    Keywords: Transformational Leadership Style; Organizational Commitment; Job Performance.
    JEL: L22 M12 M19
    Date: 2019–06–19
  12. By: Pelin Demirel (Dyson School of Design Engineering, Imperial College London, UK.); Gamze Ozturk Danisman (Faculty of Economics Administrative and Social Sciences, Bahcesehir University, Istanbul,Turkey)
    Abstract: As the circular economy (CE) concept gains growing popularity among consumers and producers, small and medium-sized enterprises (SME) increasingly look for ways to reorganize their offering and operations to integrate into the CE. This study examines the impact of (1) circular eco-innovations and (2) external funding available for CE activities on the growth of European SMEs using a dataset of 5100 SMEs across 28 European countries in 2016. Findings reveal that a significant threshold investment (i.e. higher than 10% of revenues) into circular eco-innovations is required for SMEs to benefit from investing into the CE. Moreover, the majority of circular eco-innovations fail to boost the growth rates of SMEs, with the exception of investments into eco-design innovations. While traditional forms of debt and grant finance targeted to CE activities are found to have no or negative impact on the growth of SMEs, equity finance (i.e. angel and venture capital investments) contributes positively to their growth. The study offers insights into the lower levels of SME engagement in the CE as well as policy implications for improving engagement.
    Keywords: Circular Economy, Eco-Innovation, Eco-design, Entrepreneurship, Finance, Growth, SMEs.
    Date: 2019–06

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