nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2020‒05‒11
nine papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Going Revolutionary: The Impact of 4IR Technology Development on Firm Performance By Mario Benassi; Elena Grinza; Francesco Rentocchini; Laura Rondi
  2. The Impact of Emerging Market Competition on Innovation and Business Strategy By Lorenz Kueng; Nicholas Li; Mu-Jeung Yang
  3. Smart Specialization Strategies at National, Regional, or Local Levels? Synergy and Policy-making in German Systems of Innovation By Henriette Ruhrmann; Michael Fritsch; Loet Leydesdorff
  4. Women on Top Management Teams and Firm Performance in German Medium-Sized Enterprises: The Moderating Role of Recruiting Source By Kristina Reineke; Holger Steinmetz; Rodrigo Isidor; Rüdiger Kabst
  5. ICT Adoption, Competition and Innovation of Informal Firms in West Africa: Comparative Study of Ghana and Nigeria By Alhassan A. Karakara; Evans S. Osabuohien
  6. Efficiency of microenterprises in the Nigerian economy By Igbekele A. Ajibefun; Adebiye G. Daramola
  7. Growing through Spinoffs. Corporate Governance, Entry, and Innovation By Maurizio Iacopetta; Raoul Minetti; Pierluigi Murro
  8. Opportunities for development through integration in global value chains? A cross-sectoral and cross-national comparison By Dünhaupt, Petra; Herr, Hansjörg; Mehl, Fabian; Teipen, Christina
  9. R&D Spillovers and Welfare Effect of Privatization with an R&D Subsidy By Lee, Sang-Ho; Muminov, Timur

  1. By: Mario Benassi (Department of Economics, Management, and Quantitative Methods, University of Milan); Elena Grinza (Department of Management and Production Engineering, Politecnico di Torino); Francesco Rentocchini (Department of Economics, Management, and Quantitative Methods, University of Milan); Laura Rondi (Department of Management and Production Engineering, Politecnico di Torino)
    Abstract: Drawing on the knowledge-based view of the firm, we investigate whether firm performance is related to the accumulated stock of technological knowledge associated with the Fourth Industrial Revolution (4IR), and what contextual factors affect this relationship. We test our research questions on a longitudinal matched patent-firm data set on medium and large firms filing 4IR patents at the European Patent Office (EPO). Our results show a significant and economically relevant positive association between the development of 4IR technologies and firm productivity, but no relationship with its profitability, thereby suggesting that the returns from costly technological investments are slow to cash in. We also find that late entrants benefit more from the development of 4IR technological capabilities than early entrants and experience a substantial “boost effect”. We provide empirical support to an explanation of these findings in terms of the ability of late entrants to (i) manage the inherent complexity of the bundle of technologies comprising the 4IR and (ii) exploit profitable downstream applications of the 4IR.
    Keywords: Fourth Industrial Revolution (4IR); patenting; technology development; firm performance; longitudinal matched patent-firm data
    JEL: O33 D24 J24
    Date: 2020–07
  2. By: Lorenz Kueng (University of Lugano - Faculty of Economics; Swiss Finance Institute; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); Northwestern University - Kellogg School of Management); Nicholas Li (University of Toronto - Department of Economics); Mu-Jeung Yang (University of Washington - Department of Economics)
    Abstract: How do firms in high-income countries adjust to emerging market competition? We estimate how a representative panel of Canadian firms adjusts innovation activities, business strategies, and exit in response to large increases in Chinese imports. Whether firms invest in process or product innovation matters: on average, the number of process innovations declines more strongly than the number of product innovations. In addition, firms that initially pursue process innovation strategies and survive have higher profits ex-post, but are ex-ante more likely to exit. In contrast, firms that initially pursue product innovation strategies have higher profits if they survive, without significant impact on exit. Both empirical patterns are consistent with our theory, which suggests that innovation strategies do not ensure insulation against competitive shocks, but instead increase risk.
    Keywords: International Competition, Innovation, Management Practices, Firm Performance
    JEL: F14 L2 O3
    Date: 2020–04
  3. By: Henriette Ruhrmann (Technical University of Berlin); Michael Fritsch (Friedrich Schiller University Jena, Faculty of Economics); Loet Leydesdorff (Amsterdam School of Communication Research (ASCoR), University of Amsterdam)
    Abstract: Employing a quantitative, data-driven tool - the Triple Helix Indicator - to microdata of firms in Germany, we develop an evidence base for innovation-policy strategies. We aim to answer the question which level of government (local, regional, national) might be most effective for strategic innovation policy-making based on smart specialization in Germany. The empirical results show that the country is decentralized to the extent that it cannot be considered a "national" innovation system. More than two-thirds of innovation-system synergy is generated at the lower levels of districts (NUTS3) and Governmental Regions (NUTS2). In high-tech and medium-tech manufacturing, former East and West Germany, as well as North and South Germany, can be considered separate sub-national innovation systems. These findings strengthen the case for region- and context-specific innovation policies. The results illustrate the value of the Triple Helix Indicator for systematic regional mapping and serve as evidence for policy-makers to expand RIS3 policy strategies to the regional and local level in Germany.
    Keywords: Innovation systems, Triple Helix, Germany, Redundancy, Synergy
    JEL: O30 R11 O38 O52
    Date: 2020–04–22
  4. By: Kristina Reineke (University of Paderborn); Holger Steinmetz (Leibniz Institute for Psychology Information); Rodrigo Isidor (University of Bayreuth); Rüdiger Kabst (University of Paderborn)
    Abstract: Despite substantial research, evidence regarding the relationship between the proportion of women on top management teams (TMTs) and firm performance is still inconclusive. Building on upper echelons theory, this paper expands the discussion of potential moderating effects in this regard by applying a complementary perspective to the commonly studied organization-oriented factors. Applying a person-oriented perspective to the composition of TMTs, this study argues that the recruiting source of TMT members – whether members were recruited from the owner’s family, from the internal job market or the external job market – leads to differences in the job-relevant characteristics of TMT members. Consequently, the recruiting source should moderate the relationship between TMT gender composition and performance. Our analysis of 1025 German medium-sized enterprises (MEs) shows that there is no main effect of the proportion of women on firm performance. However, recruiting from the owner’s family and the internal labor market have a significant negative moderating influence on the relationship between the proportion of women on TMTs and firm performance. Conversely, hiring externally exerts a significant positive effect.(abstract of the paper)
    Keywords: top management team; gender; proportion of women; performance; person-oriented moderators; recruiting
    JEL: J16 L25 M12 M14
    Date: 2020–04
  5. By: Alhassan A. Karakara (University of Cape Coast, Ghana); Evans S. Osabuohien (CEPDeR, Covenant University, Ota, Nigeria)
    Abstract: Purpose – This study investigates how ICT adoption enhances the innovativeness of informal firms in West Africa, using the cases of Ghana and Nigeria. Design/methods/approach – The study used the World Bank Enterprise Survey data 2014 for Ghana and Nigeria with binary logistic regression analysis to achieve this. Four different innovations are modelled. They include: first, whether a firm has innovated based on producing a new product or significantly improved product; second, whether a firm has innovated in its methods of production or services; third, whether a firm has innovated in terms of its organisational structure; and fourth, whether a firm has introduced a new and improved marketing method. Findings – The results show that the use of email, cellphone and website has a positive impact on the four types of innovations modelled. However, these effects varied markedly between Ghana and Nigeria. Firms’ spending on R&D, firm giving its employees the chance to develop their ideas and when firm competes with others; all positively impact on the four types of innovations. Thus, the study recommends that policies should be geared towards making firm have more access to ICTs to enable them to be more innovative to serve clients and the economy. Originality/value – This study differs by concentrating on how the adoption of ICTs could help firms to introduce innovations into their companies in two West African countries, namely: Ghana and Nigeria. Thus, it complements literature on informal firms’ innovation efforts in West Africa.
    Keywords: Firms, ICT adoption, Innovation, West Africa, World Bank Enterprise Survey data, Ghana, Nigeria
    JEL: D21 L60 L80 O14 O30
    Date: 2020–01
  6. By: Igbekele A. Ajibefun; Adebiye G. Daramola (Department of Agricultural Economics and Extension Federal University of Technology Akure, Nigeria)
    Abstract: This study investigates the efficiency of microenterprises in the Nigerian economy, using cross sectional data collected on 180 microenterprises selected from block-making, metalfabricating and saw milling occupational groups. Quantitative estimates obtained from the stochastic frontier production function indicate a wide variation in technical and allocative efficiencies within and across occupational groups and across operational scales. The wide variation in the level of efficiency is an indication that there is ample opportunity for these enterprises to raise their level of efficiency. The level of education of enterprise owners was found to be highly significant in affecting the level of efficiency of the microenterprises. This implies that education is an important policy variable, and could be used by policy makers to improve both technical and allocative efficiency in the sampled enterprises. Hence, education policy that would encourage operators of microenterprises in the country to undergo literacy and training programmes would lead to substantial increase in efficiency of production and hence in the volume of output at the current level of technology. Finally, rising age of enterprise owners was found to lead to decline in the mean efficiency. Therefore, government policy should focus on ways to attract and encourage young entrepreneurs who are agile and able to put in more efforts at raising the level of efficiency.
  7. By: Maurizio Iacopetta (SKEMA Business School and OFCE Sciences Po); Raoul Minetti (Michigan State University); Pierluigi Murro (LUISS University)
    Abstract: New firms are often based on ideas that the founders developed while working for incumbent firms. We study the macroeconomic effects of spinoffs through a growth model of product variety expansion, driven by firm entry, and product innovation. Spinoffs stem from conflicts of interest between incumbent firms' shareholders and employees. The analysis suggests that incumbents invest more in product innovation when knowledge protection is stronger. An inverted-U shape relationship emerges, however, between the intensity of spinoff activities and the strength of the rule of law. A calibration experiment indicates that, with a good rule of law, loosening knowledge protection by 5\% reduces product innovation by one fifth in the short run and one seventh in the long run, but boosts the spinoff rate by one tenth and one sixth in the short and long run, respectively. Nevertheless, per capita income growth drops and welfare deteriorates. The trade-offs are broadly consistent with evidence from Italian firm.
    Keywords: Corporate governance, Endogenous growth, Spinoffs
    JEL: E44 O40 G30
    Date: 2020–04
  8. By: Dünhaupt, Petra; Herr, Hansjörg; Mehl, Fabian; Teipen, Christina
    Abstract: In traditional trade theory, it is generally assumed that the development of export-oriented industries in the Global South can create the conditions for technological spillover effects, productivity increases and social welfare gains. However, based on the results of comparative case studies in four sectors (apparel, automotive, electronics and IT services) and six emerging and developing countries (Bangladesh, Brazil, China, India, South Africa, Vietnam), successful economic integration into global value chains is not necessarily associated with better working conditions, nor with positive employment and welfare effects. It also becomes clear that the country-specific context of a particular industry plays a greater role in determining these effects than is often assumed. Here the decisive factors are in particular the national system of industrial relations and the power of trade unions. At the same time, it can be asserted from this study that without coherent industrial policy strategies it is not possible to realize the opportunities for development that arise as a product of deeper integration into the global economy.
    Keywords: Trade Theory,Economic Development,Global Value Chains,EconomicUpgrading,Social Upgrading
    JEL: F10 F63 O57
    Date: 2020
  9. By: Lee, Sang-Ho; Muminov, Timur
    Abstract: We reexamine the results in Gil Molto et al. (2011) and compare the welfare effect of privatization policy in an R&D competition between a mixed duopoly and a private duopoly with an R&D subsidy. We show that an R&D subsidy with privatization policy is beneficial for society unless the spillovers rate is sufficiently low. Otherwise, public R&D leadership in a mixed market is socially superior.
    Keywords: Privatization; R&D subsidy; R&D spillovers; R&D leadership;
    JEL: H21 L13 L32
    Date: 2020–03

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