nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2019‒11‒11
fourteen papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Applying a New Methodology to Measure Investment in R&D and Science and Technology Activities: The Case of Colombia By Alexander Cotte Poveda; Clara Inés Pardo; Jorge Andrade Parra
  2. SMES’ STRATEGIES TO FACE THE ONSET OF THE GREAT RECESSION By Juan A. Máñez Castillejo; María E. Rochina-Barrachina; Juan A. Sanchis Llopis
  3. Do Multinationals Transplant Their Business Model? By Dalia Marin; Linda Rousova; Thierry Verdier
  4. Information and Communication Technology (ICT) and Technological Capacity: A Regression Analysis on Some European and Emerging Countries By Maliki, Samir; Sour, Ouieme
  5. New empirics about innovation and inequality in Europe By Antonio Biurrun-Santamaria
  6. Human Capital, Parent Size and the Destination Industry of Spinouts By Mariko Sakakibara; Natarajan Balasubramanian
  7. University Postgraduate Research Programmes: Digitization(ICT),Innovations and Applications By NWAOBI, GODWIN
  8. New Technology, Entrepreneurship and the Revival of Manufacturing in Africa: Opportunities for Youth and Women? By Wim Naudé
  9. Innovation ecosystems in small countries – The case of Luxembourg By Binsfeld, Nico; Whalley, Jason
  10. Disruptive Innovation by Heterogeneous Incumbents and Economic Growth: When do incumbents switch to new technology? By Ohki, Kazuyoshi
  11. Analysis of Science, Technology, and Innovation in Emerging Economies By Alexander Cotte Poveda; Clara Inés Pardo; Patricia Fletscher Moreno
  12. Do digital skills foster green diversification? A study of European regions By Artur Santoalha; Davide Consoli; Fulvio Castellacci
  13. International human capital mobility and FDI: Evidence from G20 countries By Takaoka, Sumiko; Etzo, Ivan
  14. How Wide Is the Firm Border? By Atalay, Enghin; Hortacsu, Ali; Li, Mary Jialin; Syverson, Chad

  1. By: Alexander Cotte Poveda; Clara Inés Pardo; Jorge Andrade Parra
    Abstract: Research and development (R&D), especially in industry and technology, is a crucial component of innovation, productivity and effectiveness, as well as the generation of new competitive advantages that are reflected in the whole economy of a country. In this context and with the aim of improving the measurement of R&D, the Organization for Economic Cooperation and Development updated the Frascati Manual in 2015 to provide the main, globally applicable guidelines for national statistical offices and policy-makers to analyze trends and allow for international comparisons of science, technology and innovation. In developing countries, it is particularly important to determine different strategies to guarantee adequate R&D to inform the creation of policies and instruments to effectively promote knowledge and generate technological solutions to local problems. This chapter describes the development and application of the Frascati Manual (2015) in Colombia to measure investments in R&D and other scientific, technological and innovation activities in Colombia from the perspective of the requirements of the manual for government, higher education, business enterprises, the health sector and private non-profit institutions with an update for the entire 2000–2017 period. The results indicate that the new guidelines for quantifying investments in R&D guarantee greater reliability through the use of mixed methods involving administrative registers or surveys and control mechanisms with budget analysis. Moreover, it is important to analyze differences among sectors to adequately determine the specific factors related to scientific, technological and innovation activities with the aim of establishing the investments and expenditures in science, technology and innovation. During the period of study, Colombia maintained constant investment with a slight increase in the last year that was mainly due to found royalties. The resulting indicators of expenditure in R&D and other scientific, technological and innovation activities can be used to monitor and evaluate relevant policies that have been implemented, as well as to make international comparisons.
    JEL: O3 O31 O34 O38
    Date: 2019–06–20
  2. By: Juan A. Máñez Castillejo (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).); María E. Rochina-Barrachina (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).); Juan A. Sanchis Llopis (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).)
    Abstract: This work analyses how SMEs (as compared to large firms) endured the onset of the recent Great Recession through the engagement in internationalization and innovation strategies. We focus on the SMEs strategies of exporting and undertaking R&D and the impact of these activities on firms’ markups (i.e., a measure of performance). This study will allow determining whether performing these strategic activities allowed SMEs to get advantages to sustain markups, not only in an expansive period but also during the hit of the hardest period of the recent financial and economic crisis. The data we use is the Spanish survey on firms’ strategies (ESEE), 1993-2009. We obtain two main results: first, for SMEs the strategies of only exporting or performing both activities explain higher markups; and, second, there is confirmation that R&D played an increasing role in protecting firms against a decrease in markups in the onset of the crisis.
    Keywords: SMEs, Exports, R&D, markups, the Great Recession
    JEL: D24 F14 O32 E32
    Date: 2019–10
  3. By: Dalia Marin; Linda Rousova; Thierry Verdier
    Abstract: What determines whether or not multinational firms transplant the mode of organisation to other countries? We embed the theory of knowledge hierarchies in an industry equilibrium model of monopolistic competition to examine how the economic environment may affect the decision of multinational firms about transplanting the mode of organization to other countries. We test the theory with original and matched parent and affiliate data on the level of decentralization of 660 Austrian and German multinational firms and 2200 of their affiliate firms in Eastern Europe. We find that three factors stand out in promoting the multinational firm’s decision to transplant the organisational form to the affiliate firm in the host country: a competitive host market, the human resource policy of the multinational firm, and when an innovative technology is transferred to the host country. These factors increase the respective probabilities of organizational transfer by 7, 21, and 24 percentage points.
    Keywords: organizational economics of multinational firms, trade and organisation, the theory of the firm, organizational transfer between countries
    JEL: D23 F12 F23 F61
    Date: 2019
  4. By: Maliki, Samir; Sour, Ouieme
    Abstract: The aim of this article is to analyses technological capacity and the role of the Information and Communication Technology (ICT) in the case of ten European and Emerging countries. We introduce some variables to test the innovation as a dependent variable to capture the appropriate regression model for the period 2008-2016. The fixed effect model confirms the positive relationship between the technological capacity and ICT as proxy variables. Also, the results show that the Exports of High Technology products as a share of total exports in countries of the sample is not significant for that period.
    Keywords: Information and Communication Technology,Technological capacity,Emerging countries-European Countries
    Date: 2019
  5. By: Antonio Biurrun-Santamaria (Instituto Complutense de Estudios Internacionales (ICEI), Universidad Complutense de Madrid.)
    Abstract: The increase of internal inequality is one of the consequences of the recent turbulence of the World economy and the crisis’ effects in advanced countries. At the same time, to face the new information age and the phenomena of digitalization and robotization, investment in research and development (R&D) is an indisputable action for economic and social progress. The combination of these two dynamics opens new debates about the still unresolved relationship between innovation and inequality. This paper contrasts the postulates of the existing body of theory and the existing empirical evidence to argue that the positive co-evolution of inequality reduction and technological progress in Europe is not a lineal process, but it requires to analyze its complexity and what sort of combination of factors would best explain it. The findings are based on regressions with panel data from a sample of 20 countries in the period 1995-2017, and they show the relevance of structural and institutional aspects within the European region. In particular, two clusters of countries seem to define a dissimilar behavior in the relationship between inequality and innovation and a virtuous circle defined by the contribution of social protection and innovation policies contributes to a favorable solution of the puzzle between innovation and inequality.
    Keywords: Innovation; Inequality; Institutions; Catching-up.
    Date: 2019
  6. By: Mariko Sakakibara; Natarajan Balasubramanian
    Abstract: We study how spinout founders’ human capital and parent size relate to founders’ propensity to stay in the same industry as their parents or to go outside the industry. Individuals with high human capital face a higher performance penalty if they form spinouts outside the parent industry, but they also face greater deterrence from large parents if they stay in that industry. Using matched employer employee data on spinout founders and their coworkers, we find that individuals with higher human capital are less likely to form spinouts in distant industries than in the parent’s industry. Further, we find that as parent size increases, such individuals are less likely to form spinouts in the parent’s industry and more likely to form spinouts in distant industries.
    Keywords: Entrepreneurship, spinout, human capital, competition, industry-specific knowledge
    Date: 2019–10
    Abstract: Without advanced educational research, development will not occur and only technologically educated people can command the skills necessary for sustainable growth and development. However, the current generations of university postgraduate students are ushering in a new paradigm for research. Here, collaboration is made much easier, sharing of research knowledge is instant and the resultant synergies yield huge advances in research productivity and innovation. Therefore, this paper argues that ICT integration and digitization process will help university postgraduate (research) programmes to remain the same while at the same time is influencing it, determining and changing it. And giving that technological change is continuous and frequently disruptive, educational (research) policy planning should be dynamic and integrated within the framework of ecosystem innovation hub.
    Keywords: Digitization, ICTs, University, Research, Postgraduate- programmes, Innovation, TechHub, Nigeria, Africa, Incubation, Internet, Education, Knowledge, Information Networks, Technology, Infrastructures
    JEL: A20 A23 C80 C88 D8 I2 I23 O3 O31 O32 O33
    Date: 2019–10–28
  8. By: Wim Naudé (Maastricht University; Professor)
    Abstract: The digitization of the economy and advances in smart materials are transforming the nature of manufacturing. This is often described as features of the “Fourth Industrial Revolution” or Industry 4.0. For African economies, not yet having industrialized, this is of great importance, especially given the challenge of youth job creation and the need for gender equality. A combination of Industry 4.0 technologies and a resurgence in tech-entrepreneurship will have four broad impacts on manufacturing in Africa (i) the sector will continue to grow significantly in terms of value added; (ii) net job creation will be positive; (iii) it will stimulate technological and complex skills development, as well as (iv) investment in supportive infrastructure. The opportunities that these impacts will have for youth and women are outlined in the following report. Youth and women stand to benefit because of the ability of manufacturing to provide quality, high-productivity jobs in urban areas, to stimulate the development of human capital, including gender equality, and to provide, through new technologies that “democratizes” production for small businesses, new opportunities for both male and female entrepreneurs. The author also identifies policy support measures, to help realize these outcomes.
    Keywords: Economic Complexity, Fourth Industrial Revolution, Technology, Employment, Women, Youth
    Date: 2019–05
  9. By: Binsfeld, Nico; Whalley, Jason
    Abstract: Since it emerged at the start of the decade, the ecosystem model of Martin Fransman (Fransman, 2010) has been widely applied to understand innovative processes within the information and communication technology (ICT) sector - see, for example, Binsfeld, Whalley, & Pugalis (2017b). The framework has recently been updated (Fransman, 2018) so that an innovation ecosystem is defined as "of a group of interdependent players and processes who together through their interactions, make innovation happen". He has also proposed a deeper examination of the dynamics of how innovation happens within innovation systems, and who is in charge of making innovation happen. This paper seeks to apply this evolved understanding of innovative processes to Luxembourg. More specifically, the paper will describe and comment about the evolution of the ICT ecosystem in recent years. The paper will also present and reflect on a series of recent government initiatives that have been launched with the intention of stimulating the development of the ecosystem. Through such an approach, we will demonstrate the pivotal role played by the government as the main driver behind innovation in the ecosystem. The paper also outlines Luxembourg's national skills strategy and explores the degree to which these various initiatives may be integrated together.
    Date: 2019
  10. By: Ohki, Kazuyoshi
    Abstract: In this paper, we construct a tractable endogenous growth model to examine heterogeneous incumbents' current technology-switching behavior. Then, we examine the effects of policies such as a subsidy for innovation by incumbents, a subsidy for innovation by entrants, and the extension of patent length. Our setting suggests interesting and counterintuitive results. High quality incumbents tend to be less likely to conduct innovation, which is inconsistent with Schumpeter's hypothesis. A subsidy for innovation by entrants decreases the average quality of differentiated goods. Moreover, it may decrease the growth rate of the economy if the positive spillover of innovation from average quality production is adequately large. Aggregate innovation can be small even when the population size is large if the barriers to entry are extremely high.
    Keywords: Economic Growth, R&D, Firm-Heterogeneity, Innovation by Incumbents, IPR Policy
    JEL: O31 O32 O33 O34 O41
    Date: 2019–10–31
  11. By: Alexander Cotte Poveda; Clara Inés Pardo; Patricia Fletscher Moreno
    Abstract: This research outlines a number of different perspectives on the relationship between science, technology, and innovation in emerging economies. In it, the authors explore the aforementioned relationship as a pillar of economic development, driving growth in emerging economies. Employing a collaborative and interdisciplinary approach, the authors work to determine the main related factors and outcomes of the relationship between science, technology, and innovation, ultimately seeking to guide public policies to enhance the welfare of the population of an emerging economy.
    JEL: O3 O31 O34 O38
    Date: 2019–06–18
  12. By: Artur Santoalha (TIK Centre, University of Oslo, Norway); Davide Consoli (INGENIO (CSIC-Universitat Politècnica de València), Spain); Fulvio Castellacci (TIK Centre, University of Oslo, Norway)
    Abstract: Within the debate on smart specialisation, there is growing attention towards the features that favour or thwart regions’ ability to pursue sustainable development through eco-innovation. Against this backdrop, the present paper proposes an empirical analysis of the role of local capabilities, of related diversification and of their interaction in a panel of 225 European regions (NUTS 2) between 2002 and 2013. The main novelty is the explicit consideration of digital skills, workforce capabilities associated with the use and development of digital technologies. We find that the e-skills endowment is positively correlated with the probability that regions specialise in new green technological domains. Moreover, digital competences positively moderate the effect of technological relatedness on green diversification. Our results highlight the potential of complementarities between two emerging general-purpose technologies, ICTs and eco-innovations, in the transition towards a greener economy.
    Date: 2019–10
  13. By: Takaoka, Sumiko; Etzo, Ivan
    Abstract: Human talent will be (or is already) scarce. We view international students as the source of high-skilled labour force, which satisfies the skill and task requirement of firms, particularly those anticipating overseas expansion, and argue whether the international student stock in a country is an indication of positive future prospect for the acquiror country in cross-border mergers. Using the international students’ stocks between pairs of acquiror countries of origin and target firms’ countries for bilateral mergers and acquisitions (M&A) activities, we exploit the within variation of both bilateral M&A activities and bilateral international student stocks between G20 countries. The formation of human capital signals that potential acquirors can access skilled workers and boosts the bilateral M&A activities. Results further indicate that the marginal effect of international students from target country in acquiror country has larger impact than that from acquiror country in target country.
    Keywords: FDI, G20, International students mobility
    JEL: F21 F22 G34
    Date: 2019–10–29
  14. By: Atalay, Enghin (Federal Reserve Bank of Philadelphia); Hortacsu, Ali (University of Chicago); Li, Mary Jialin (Compass Lexecon); Syverson, Chad (University of Chicago)
    Abstract: We examine the within- and across-firm shipment decisions of tens of thousands of goods-producing and goods-distributing establishments. This allows us to quantify the normally unobservable forces that determine firm boundaries; that is, which transactions are mediated by ownership control, as opposed to contracts or markets. We find firm boundaries to be an economically significant barrier to trade: Having an additional vertically integrated establishment in a given destination ZIP code has the same effect on shipment volumes as a 40 percent reduction in distance. These effects are larger for high value-to-weight products, for faraway destinations, for differentiated products, and for IT-intensive industries.
    Date: 2019–10–01

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