nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2020‒02‒10
twelve papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Building Knowledge Economies in Africa: An Introduction By Simplice A. Asongu; John Kuada
  2. Does Import Competition Reduce Domestic Innovation? Evidence from the 'China Stock' and Firm-Level Data on Canadian Manufacturing By Myeongwan Kim
  3. Strategic Decision Making based on Information Systems for Improving the Competitiveness of Small and Medium Enterprises in the Trade Sector of tourism and Commerce City By Alimudin, Arasy; Falani, Achmad Zakki
  4. China: Challenges and Prospects from an Industrial and Innovation Powerhouse By ALVES DIAS Patricia; AMOROSO Sara; ANNONI Alessandro; ASENSIO BERMEJO Jose Miguel; BELLIA Mario; BLAGOEVA Darina; DE PRATO Giuditta; DOSSO Mafini; FAKO Peter; FIORINI Alessandro; GEORGAKAKI Aliki; GKOTSIS Petros; GOENAGA BELDARRAIN Xabier; GREGORI Wildmer; HRISTOV Hristo; JAEGER-WALDAU Arnulf; JONKERS Koen; LEWIS Adam; MARMIER Alain; MARSCHINSKI Robert; MARTINEZ TUREGANO David; MUNOZ-PINEIRO Maria Amalia; NARDO Michela; NDACYAYISENGA Nathalie; PASIMENI Francesco; PREZIOSI Nadir; RANCAN Michela; RUEDA CANTUCHE Jose; RONDINELLA Vincenzo; TANARRO COLODRON Jorge; TELSNIG Thomas; TESTA Giuseppina; THIEL Christian; TRAVAGNIN Martino; TUEBKE Alexander
  5. European Institute of Innovation and Technology (EIT) Knowledge and Innovation Communities (KICs): Collaboration in a RIS3 Context By Nida Kamil Ozbolat; Karel Herman Haegeman; Katerina Sereti
  6. Economic and environmental sustainability performance of environmental policies in agriculture By Gwendolen DeBoe
  7. Public Service Innovation Networks (PSINs): Collaborating for Innovation and Value Creation By Benoît Desmarchelier; Faridah Djellal; Faïz Gallouj
  8. L’union fait la force? Evidence for wage discrimination in firms with high diversity By Elena Grinza; Stephan Kampelmann; François Rycx
  9. Industry 4.0 investments in manufacturing firms and internationalization By Marco Bettiol; Mauro Capestro; Valentina De Marchi; Eleonora Di Maria
  10. Strategy for managing the competitive potential of small and medium-sized enterprises By Generalova, Svetlana (Генералова, Светлана)
  11. Effects of the institutional change based on democratization on origin and diffusion of technological innovation By Mario Coccia
  12. R&D Spillovers in Canadian Industry: Results from a New Micro Database By Myeongwan Kim, John Lester

  1. By: Simplice A. Asongu (Yaoundé/Cameroon); John Kuada (Aalborg University, Denmark)
    Abstract: Knowledge has emerged as a fundamental driver of economic growth and development by inter alia improving the effectiveness and efficiency of economic projects and boosting the process of finding new avenues of addressing developmental policy syndromes. Recent evidence suggests that Africa is on the threshold of significant and sustainable economic growth if its human and material resources can be effectively mobilised to support the process (Kuada & Mensah, 2017; Asongu & Tchamyou, 2019). Consequently, the World Bank’s Knowledge Economy Framework aims to explore and support the extent to which current policies in African countries affect the knowledge development process (and thereby competitiveness) on the continent. A knowledge economy is an economy in which economic prosperity largely depends on the accessibility, quality and quantity of information available, instead of the means of production (Asongu, 2017a, 2017b). This themed issue of Contemporary Social Science-‘Building Knowledge Economies in Africa’ - consists of papers that focus on, but are not limited to, the four dimensions of the World Bank’s Knowledge Economy Index. These are: information and communication technology, education, economic incentives and institutional regime, and innovation (Tchamyou, 2017). The themed issue engages with high quality contributions which, taken together, address the drivers towards knowledge-based economies. This introduction provides a context for understanding the importance of building knowledge economies in Africa and summarises the main contributions to the themed issue. The paper ends by advising scholars and policy makers regarding the risks associated with a colonial view of knowledge- notably the importance of proposing knowledge-based policies while avoiding hegemonic paradigms and hierarchical constructs. In summary, the issue consists of a set of theoretically informed, empirically robust, policy-relevant and accessible articles for both specialists and non-specialists.
    Keywords: Knowledge economy; Development; Africa
    JEL: O10 O30 O38 O55 O57
    Date: 2020–01
  2. By: Myeongwan Kim
    Abstract: A key economic issue in Canada is the declining Business Enterprise Research and Development in manufacturing since the early 2000s. Accompanying this, the total factor productivity (TFP) growth in manufacturing slowed after 2000. However, there has not been a definitive explanation for these trends. To deepen our understanding of this phenomenon, we focus on the increasing Chinese import share in the total domestic absorption in Canadian manufacturing since the early 2000s, which appears to be driven by positive supply shocks within Chinese manufacturing. Based on a firm-level database covering all incorporated firms in Canadian manufacturing, we find that rising Chinese import competition led to declines in R&D expenditure and TFP growth within firms but reallocated employment towards more productive firms and induced less productive firms to exit. The negative within-effects were pronounced for firms that were initially smaller, less profitable, and less productive. These firms also experienced declines in their profit margins due to rising Chinese import competition while larger and better-performing firms did not. Our estimates imply that rising Chinese import competition can explain about 7 per cent of the total decline of $1.36 billion (2007 CAD) in R&D expenditure in Canadian manufacturing between 2005 and 2010. Although it led to declines in TFP within firms, the positive reallocation effects more than offset the negative within-effect. Had there been no increase in Chinese import competition between 2005 and 2010, TFP in Canadian manufacturing would have declined by 1.26 per cent per year instead of the actual 1.09 per cent per year over this period.
    Keywords: China Shock, Canada, Imports, Productivity, Innovation
    JEL: F62 O32 O51 O53 L60
    Date: 2019–08
  3. By: Alimudin, Arasy; Falani, Achmad Zakki
    Abstract: Precise decision making for developing business in information and technology era nowadays is highly demanded. Delay in making decision stimulates loss of business opportunity coupled with hamper the growth of business to become stagnant or even failed. Steady growth of commerce industry for East Java province in 2015 was exceeding the national growth which was around 17, 29%. For instance Surabaya, Batu and Malang. The results showed grocery store in Surabaya should be able to keep its customers trought the use of IT to manage and keep customers trust.Strategic location of grocery stores in Malang should be able to keep its customers not to move to competitors therefore grocery stores need to manage stock and variation of products according to the customer demands.Grocery stores in Batu are still relatively moderate since it is located nearby the area of tourism therefore those stores should maintain stability of price competitiveness by reducing production cost by not selling products that are not popular. The distance of grocery stores that are bit far from the tourism center and the presence of mini market as competitor urge grocery stores to be more creative in creating excellence service and price. Utilization of information and technology greatly assist the grocery stores in reducing marketing costs and increasing competitiveness price.
    Date: 2017–11–22
    Abstract: China is rapidly becoming a major industrial competitor in high tech and growth sectors. Its economic success and related industrial policies have received a high degree of attention, especially in light of its capacity to challenge the leading position of advanced economies in several fields. China aims, through the 'Made in China 2025' strategy, to become a world leader in key industrial sectors. In these sectors, it strives to strengthen its domestic innovation capacity, to reduce its reliance on foreign technologies while moving up in global value chains. This report analyses China's approach to attain a dominant position in international markets through a combination of industrial, R&I, trade and foreign direct investment policies. It offers an assessment of China's current position compared to the EU and US innovation systems across a range of dimensions. It concludes that China has become a major industrial competitor in several rapidly expanding high tech sectors, which may well result in attaining China's goal of becoming an innovation leader in specific areas. As a response, the EU will need to boost its industrial and R&I performance and develop a trade policy that can ensure a level playing field for EU companies in China and for Chinese companies in the EU.
    Keywords: China, Global Value Chains, M&As, FDI, Venture Capital, R&I, Genomics, Artificial Intelligence, Robotics, Quantum, Nuclear, New Vehicles, Wind Energy, Solar Photovoltaics, Industrial Leadership
    Date: 2019–05
  5. By: Nida Kamil Ozbolat (European Commission - JRC); Karel Herman Haegeman (European Commission - JRC); Katerina Sereti (European Institute of Innovation and Technology (EIT))
    Abstract: Innovation in the European Union is called upon to increase competitiveness, to improve territorial cohesion, and also to address societal challenges. This challenge-driven innovation is also high on the global agenda, and calls for building sufficient critical mass by taking full advantage of synergies and complementarities between innovation initiatives, in particular between cohesion-based innovation and excellence-based innovation. This report investigates in particular the motivations, practices and opportunities for strengthening collaborations between EIT Knowledge and Innovation Communities (EIT KICs) (focusing on excellence-based innovation) and the Managing Authorities of national and regional ESI Funds (focusing on cohesion-based innovation), within the context of Research and Innovation Strategies for Smart Specialisation (RIS3). Closer collaboration between RIS3 actors and the EIT KICs’ actors across Europe seems natural, as both communities aim at building Europe-wide value chains, encompass similar sets of stakeholders, and tackle similar societal challenges through innovation. However collaboration does not seem to come naturally, given the limited practices to date. Detailed analysis of both conceptual and practical similarities and differences between both approaches and the related communities identifies arguments, opportunities and bottlenecks for increased collaboration. Different modes of collaboration are considered, as well as proposals to scale up current collaboration practices and unlock existing collaboration potential. The report aims to make an important practical contribution to optimising the efficiency of research and innovation spending, to combining the objectives of increased competitiveness and cohesion, and to better addressing the big challenges our society is facing on the eve of the launch of the new Multi-Financial Framework.
    Keywords: Smart Specialisation, RIS3, EIT, KICs, Cohesion Policy, Territorial Development, Collaboration, Innovation, Research Excellence, Synergies, ESIF, Horizon 2020, Horizon Europe, Stairway to Excellence, S2E
    Date: 2019–12
  6. By: Gwendolen DeBoe (OECD)
    Abstract: This report reviews the literature on the effects of agri-environmental policies on environmental sustainability and economic performance in agriculture. Examining these twin impacts is essential for understanding the scope for “win-win” policies which improve both types of performance, and where trade-offs between economic and environmental objectives may arise. The review considers findings on several underlying questions: i) whether agri-environmental policy instruments successfully deliver on their objectives to improve the environmental performance of agriculture, and ii) whether agri-environmental policy instruments slow down productivity growth or if they contribute to stimulating productivity growth and improved environmental outcomes. As part of this latter question, this review considers the impacts of agri-environmental policies on innovation, economic performance and structural change in agriculture. It brings together literature from across a range of disciplines, including evidence from over 160 papers. As a whole, the reviewed literature identifies significant “room for improvement” in both the effectiveness of agri-environmental policies for improving agricultural sustainability and their economic efficiency, particularly in relation to hybrid instruments (e.g. cross-compliance) and voluntary agri-environmental schemes (AES).
    Keywords: AES, agri-environmental policy, economic performance, environmental sustainability, innovation, Porter Hypothesis
    JEL: Q15 Q18
    Date: 2020–02–04
  7. By: Benoît Desmarchelier (CLERSE - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille - ULCO - Université du Littoral Côte d'Opale - CNRS - Centre National de la Recherche Scientifique); Faridah Djellal (CLERSE - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille - ULCO - Université du Littoral Côte d'Opale - CNRS - Centre National de la Recherche Scientifique); Faïz Gallouj (CLERSE - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille - ULCO - Université du Littoral Côte d'Opale - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This deliverable is given over to "Public Service Innovation Networks" (PSINs). It seeks to define and characterize PSINs, from a structural point of view (sectors, actors, interaction, innovation) and a dynamic point of view (emergence, functioning, life cycle, performance) and to understand what distinguishes them from other types of innovation networks.
    Date: 2019–10–14
  8. By: Elena Grinza; Stephan Kampelmann; François Rycx
    Abstract: Measuring the economic impact of coworkers from different countries of origin sparked intense scrutiny in labor economics, albeit with an uncomfortable methodological limitation. Most attempts have involved metrics that eliminate most of the socially and economically relevant heterogeneity among different countries of origin, salient dimension of diversity and critical determinant of labor market outcomes of migrants. The typical examples of such metrics are diversity indicators that divide the firm’s workforce into binary categories such as blacks and whites, foreigners and natives, and non-Europeans and Europeans. We propose an entirely novel approach that constructs a firm-level aggregate measure of diversity that explicitly takes into account differences in socio-economic conditions of migrants’ countries of origin. To do so, we use the United Nations Development Programme’s Human Development Index (HDI), a standard harmonized measure of cross-country variations in levels of socio-economic development that is available for virtually all the countries in the world. By resorting to rich matched employer-employee panel data for Belgium, we use this new aggregate measure of firm-level diversity to estimate firm-level wage equations, which control for a wide range of observable and time-invariant unobservable factors, including variations in labor productivity between firms and within firms over time. The results seem to suggest that the majority of firms do not discriminate against foreigners. However, our findings show that firms with high diversity might broadly discriminate against them. The wage discrimination in high-diversity firms could be alleviated through a stronger presence of collective bargaining and efforts to de-cluster foreigners from low-HDI countries in these firms.
    Date: 2020–01–07
  9. By: Marco Bettiol (DSEA, University of Padova); Mauro Capestro (DSEA, University of Padova); Valentina De Marchi (DSEA, University of Padova); Eleonora Di Maria (DSEA, University of Padova)
    Abstract: There is a growing attention on the relationship between investments in industry 4.0 technologies – specifically 3D printing – and internationalization processes. Such technologies can modify the scale and the organization of manufacturing processes, potentially pushing firms in the redefinition of their activities worldwide. At the same time, firms with manufacturing activities located in high-cost countries can benefit from industry 4.0 investments for increasing productivity. Although these relevant implications, limited attention is given to explore how manufacturing firms adopt industry 4.0 technologies in relation to their degree of internationalization. Based on an original dataset of about 1,400 Italian manufacturing firms, the paper analyzes the technological investments strategies of 200 Industry 4.0 adopters in terms of intensity of technological adoption, differences in the technological solutions used and related motivations, taking into account the location of their manufacturing activities as well as export. Results suggest that the adoption of 4.0 technologies per se is independent from the level of internationalization, while internationalized and domestic firms invest in different technologies. Among the four groups of firms identified (global/domestic sourcing – export/domestic market) differences in motivations arise as well as in the steps of value chains where technologies have been implemented.
    Keywords: industry 4.0, internationalization, manufacturing, global sourcing, high-cost countries, 3D printing, automation
    Date: 2020–01
  10. By: Generalova, Svetlana (Генералова, Светлана) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The article discusses the concept of the competitive potential of small and medium enterprises. From the point of view of the system approach the structure of potential is described. The essence of the strategy of managing the competitive potential of small and medium-sized businesses is revealed. The role of state support in the formation of the potential of competitiveness of small and medium-sized businesses is shown. The application of the method of “smart” benchmarking in the system of strategic management of the competitive potential of enterprises has been proposed.
    Keywords: strategy, competitive potential, small and medium enterprises, state support of entrepreneurship, benchmarking
    Date: 2019–10
  11. By: Mario Coccia
    Abstract: Political systems shape institutions and govern institutional change supporting economic performance, production and diffusion of technological innovation. This study shows, using global data of countries, that institutional change, based on a progressive democratization of countries, is a driving force of inventions, adoption and diffusion of innovations in society. The relation between technological innovation and level of democracy can be explained with following factors: higher economic freedom in society, effective regulation, higher economic and political stability, higher investments in R&D and higher education, good economic governance and higher level of education system for training high-skilled human resources. Overall, then, the positive associations between institutional change, based on a process of democratization, and paths of technological innovation can sustain best practices of political economy for the development of economies in the presence of globalization and geographical expansion of markets.
    Date: 2020–01
  12. By: Myeongwan Kim, John Lester
    Abstract: Business investment in research and development (R&D) makes a key contribution to rising living standards. Firms undertaking the R&D can reduce production costs and introduce new products that provide benefits to consumers that are not fully captured in selling prices. Further, it is very difficult for R&D-performing firms to prevent some of the knowledge created from leaking out or spilling over to other firms. Since firms do not take these positive spillover benefits into consideration when making investment decisions, most governments subsidize business investment in R&D with the expectation that economic performance will improve as a result. Our study confirms the existence of substantial spillover benefits from R&D performed in Canada, so government support for R&D is justified. However, we do not find any empirical evidence to support the current policy of subsidizing R&D at a higher rate when it is performed by small firms than when it is performed by large firms. We also find much lower private rate of return on R&D performed by small firms than by large firms. Subsidies appear to be playing a key role in this result
    JEL: O32 D22 D24
    Date: 2019–08

This nep-cse issue is ©2020 by João José de Matos Ferreira. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.