nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2020‒02‒17
seven papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Does FDI benefit incumbent SMEs?: FDI spillovers and competition effects at the local level By Alexander C. Lembcke; Lenka Wildnerova
  2. R&D and Knowledge Expertise of French Regions By Tan Tran
  3. Global Challenges and Survival Strategies of the SMEs in the Era of Economic Globalization: A Systematic Review By Naradda Gamage, Sisira Kumara; Ekanayake, EMS; Abeyrathne, GAKNJ; Prasanna, RPIR; Jayasundara, JMSB; Rajapakshe, PSK
  4. The Dynamics of High-Growth Firms : Evidence from Tunisia By Marcio,Cruz; Baghdadi,Leila; Arouri,Hassen
  5. Children of Crisis: The Effects of Economic Shocks on Newborns By Akbulut-Yuksel, Mevlude; Cilasun, Seyit Mumin; Turan, Belgi
  6. Declining Business Dynamism in Belgium By Gert Bijnens; Jozef Konings

  1. By: Alexander C. Lembcke; Lenka Wildnerova
    Abstract: That global networks provide positive externalities to participating firms is a well‑documented fact. Less is known about how the performance of non-participating firms, especially those that are small or medium-sized, changes with exposure to an increase in the presence of globally integrated firms in their vicinity. With global trade being dominated by large firms, the benefits for SMEs are often indirect, e.g. through input relationships with larger companies or through knowledge spillovers that facilitate the adoption of best practices in firms with access to globally integrated peers. This paper combines industry and regional exposure to global links in form of foreign ownership. It uses firm-level microdata for 13 OECD countries, allowing for local spillovers (or crowding out) within the same industry and across industries. Foreign investment in the firm in the same region is associated with increasing productivity of local firms, especially in form of cross-sector externalities. Horizontal (same sector) externalities are negative, especially if they are coming from foreign firms locating in distanced regions. FDI tends to be associated with employment decline in manufacturing firms, but some growth in small firms.
    Keywords: Employment, FDI, Firms, Productivity, SME
    JEL: D22 F14 F23 F21 R12
    Date: 2020–02–12
  2. By: Tan Tran
    Abstract: Within the literature of regional innovation systems, a growing stream of research emphasizes the role of differentiated knowledge bases. The employees’ occupations mainly measure the existing work on knowledge bases. Even though the conceptual theory highlights the importance of interactions across types of knowledge bases underlying innovation activities, they are separately measured and treated in most empirical studies. While few studies use the interaction term between knowledge bases, it does not reflects their actual relationships. In this study, an attempt is made to analysis and observe the regional knowledge for long periods of time. The study suggests suggesting to measure different types of expertise in science and technology of the region, as the fine-grained layers of regional knowledge bases, by using patent and publication datasets in France. Finally, we imply the new measurements to understand the relationships between regional R&D expenditure and their knowledge expertise. The results show that R&D expenditure has a positive relationship with the numbers of the scientific and technological expertise of the region; however, not to the level of expertise. The results also show that the level of technological expertise will increase if it is complementary to a specific science.
    Keywords: regions, science, technology, interdependence, R&D
    JEL: R11 O32 O34
    Date: 2020–02
  3. By: Naradda Gamage, Sisira Kumara; Ekanayake, EMS; Abeyrathne, GAKNJ; Prasanna, RPIR; Jayasundara, JMSB; Rajapakshe, PSK
    Abstract: Globalization has presented new challenges for SMEs due to the increased competition, and as a result, the mortality rate of SMEs after a shorter period of commencement is relatively high. Accordingly, SMEs necessity to adopt survival strategies and strategic decisions to succeed in the business environment facing global challenges. This study attempted to critically review the existing literature on the global challenge for SMEs to identify the survival and succeeding strategies of SMEs in the current competitive business environment. Published reports in the field by the recognized multilateral organizations and seventy-five excellent research papers published by four recognized journal publishing companies: Emerald, Elsevier, Tayler & Francis, and MDPI were selected for inclusion in this review. Based on this review, it has been found that leading global challenges for SMEs in economic globalization include: global market competition, global financial and economic crisis, information communication technology, rise of Multinational Corporations, Transnational Corporations, changing profile of consumers and their preferences, trade dumping, international terrorism and religious conflicts, and trade wars. Further research could take on survival Strategies of SMEs in the industrial level to identify the sustainability-oriented specific policies. As well as a need for a stronger theoretical examination on survival strategies of SMEs in the global challenges.
    Keywords: Globalization, Global Challenges, Survival Strategies, Competitiveness, Small and Medium Enterprises
    JEL: M21
    Date: 2019–12–20
  4. By: Marcio,Cruz; Baghdadi,Leila; Arouri,Hassen
    Abstract: This paper examines the dynamics and characteristics of high-growth firms in Tunisia. Further knowledge about the dynamics of these firms can inform the design of business support policies, especially toward small and medium-size firms. The analysis suggests that between 1999 and 2015, about 9 to 10.5 percent of the firms in Tunisia achieved high-growth status per year, on average, depending on the definition used, and these shares have been remarkably stable over time. Although a small share of firms achieves high growth annually, almost one in every three firms that survive for more than a decade has achieved high-growth status at least once. High-growth status is more prevalent among small and young firms, as well as firms that export, import, or receive foreign direct investments.
    Date: 2020–02–10
  5. By: Akbulut-Yuksel, Mevlude (Dalhousie University); Cilasun, Seyit Mumin; Turan, Belgi (University of Houston)
    Abstract: In this paper, we explore the deep economic crisis experienced by the Turkish economy in 2001 and 2008 as quasi-experiments to causally identify the association between economically challenging conditions in-utero and child's birth weight. First, we utilize the temporal and spatial variations of the economic crisis. Second, we estimate mother fixed effects models by exploring the variation in the birth weight of siblings by their in-utero exposure to economic downturn. Using the Turkish Demographic Health Surveys (DHS), we find that a higher regional GDP contributes significantly to better birth outcomes among crisis-time children; adverse health effects are mainly observed in children born to mothers with low socio-economic status, suggesting that the main driver of the estimated effects of economic crises in Turkey is credit constraints. Our mother fixed effects models reveal that selective fertility, abortion, and unobserved heterogeneity across mothers are important omitted variables in the interpretation of regional regressions. The estimated effects of economic downturns cease to be statistically and economically significant once we control more accurately and directly for a family's firsthand experience with economic recessions. Thus, our results demonstrate that regional-level regressions estimating potential infant health costs of economic recessions potentially overestimate the true effects, and more direct measures of unobserved heterogeneity should also be considered in these analyses.
    Keywords: infant health, childhood environment, economic crisis
    JEL: J13
    Date: 2020–01
  6. By: Gert Bijnens; Jozef Konings
    Abstract: Using 30 years of data from all for-profit firms incorporated in Belgium, we show that business dynamism and entrepreneurship have been declining over recent decades. This decline set in around the year 2000 following a decade of declining start-up rates. We also observe a decreasing share of young firms that become high-growth firms and more importantly a declining propensity for small (not necessarily young) firms to experience fast growth. Interestingly, a similar decline in business dynamism occurred in the U.S., where firms face a far less rigid institutional environment than in Belgium. These remarkable similarities suggest that global trends rather than country specific changes are at the basis of this evolution. We show evidence that points to the role of ICT intensity and in explaining the secular decline in business dynamism.
    Keywords: business dynamism, firm dynamics, firm growth, entry, reallocation, high-growth firms, high-impact firms
    JEL: D21 E24 J6 L25
    Date: 2018–10
    Abstract: Abstract- The purpose of this paper is to present the literature review of the theory of the Foreign Direct Investments and the basic context related to this study. It is a fact that markets’globalization and internationalization of economic relations which have existed during the recent years, have led to a rapid increase in trade flows, money and capital flows. In such field, the multinational enterprises play the most important role in the development of Foreign Direct Investments. Initially, there is a conceptual approach to the forms of international activities as well as the basic definitions concerning Foreign Direct Investments. Therefore, it follows a description of the reasons for the implementation of Foreign Direct Investments and their forms. The three main types of Foreign Direct Investments, the factors that lead an enterprise to their realization and the incentives to attract them are listed at this paper. The literature review for this study concludes with the major empirical studies conducted on Outward Foreign Direct Investments.
    Keywords: Intex Terms- Foreign Direct Investments (FDI), Outward FDI.
    JEL: F21
    Date: 2020

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