nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2020‒06‒08
eleven papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Innovation catalysts - How multinationals reshape the global geography of innovation By Riccardo Crescenzi; Arnaud Dyèvre; Frank Neffke
  2. Related variety, recombinant knowledge and regional innovation. Evidence for Sweden, 1991-2010 By Mikhail Martynovich; Josef Taalbi
  3. The impact of financial constraints on tradable and non-tradable R&D investments in Portugal By Magalhaes, Manuela
  4. Learning With Friends: A Theoretical Note On The Role of Network Externalities In Human Capital Models For The New Industry By Pena, Paul John; Lim, Dickson
  5. Measuring organisation capital at the firm level: A production function approach By Rammer, Christian; Roth, Felix; Trunschke, Markus
  6. The Kuznets Curve for the Sustainable Environment and Economic Growth By Mishra, Mukesh Kumar
  7. A multi-channel interactive learning model of social innovation By Attila Havas; György Molnár
  8. Information technologies and entrepreneurship By Julien Hanoteau; Jean‐jacques Rosa
  9. An Italian case-study of Eco-innovations: drivers and barriers for SMEs in Calabria By Solferino, Nazaria
  10. Knowledge Transfers from Federally Supported R&D By Link, Albert
  11. Can Innovation Save Us? Understanding the Role of Innovation in Mitigating the Covid-19 Pandemic in ASEAN-5 Economies By Layos, Jerk Joshua Meire; Pena, Paul John

  1. By: Riccardo Crescenzi; Arnaud Dyèvre; Frank Neffke
    Abstract: We study whether and when Research and Development (R&D) activities by foreign multinationals help in the formation and development of new innovation clusters. Combining information on nearly four decades worth of patents with socio-economic data for regions that cover virtually the entire globe, we use matched difference-in-differences estimation to show that R&D activities by foreign multinationals have a positive causal effect on local innovation rates. This effect is sizeable: foreign research activities help a region climb 14 percentiles in the global innovation ranks within five years. This effect materializes through a combination of knowledge spillovers to domestic firms and the attraction of new foreign firms to the region. However, not all multinationals generate equal benefits. In spite of their advanced technological capabilities, technology leaders generate fewer spillovers than technologically less advanced multinationals. A closer inspection reveals that technology leaders also engage in fewer technological alliances and exchange fewer workers in local labor markets abroad than less advanced firms. Moreover, technology leaders tend to set up their foreign R&D activities in regions with relatively low absorptive capacity. We attribute these differences to that fact that the trade-off between costs and benefits of local spillovers a multinational faces depends on the multinational’s technological sophistication. This illustrates the importance of understanding corporate strategy when analyzing innovation clusters.
    Keywords: innovation, regions, foreign direct investment, patenting, cluster emergence
    JEL: O32 O33 R11 R12
    Date: 2020–03
  2. By: Mikhail Martynovich; Josef Taalbi
    Abstract: This study investigates how related variety in the regional employment mix affects the innovation output of a region. Departing from the idea of recombinant innovation, previous research has argued that related variety enhances regional innovation as inter-industry knowledge spillovers occur more easily between different but cognitively similar industries. This study combines a novel dataset and related variety measures based on network theory, which allows a more nuanced perspective on the relationship between related variety and regional innovation. The principal novelty of the paper lies in employing new data on product innovations commercialised by Swedish manufacturing firms between 1970 and 2013. In this respect, it allows a direct measure of regional innovation output as compared to patent measures, usually employed in similar studies. The second contribution of this paper is that we employ network-topology based measures of related variety that allow us to measure relatedness as the recombination rather than direct flow of knowledge. We argue that this measure comes closer to the notion of innovation as spurred by recombination and show that this measure is a superior predictor of innovation activity.
    Keywords: related variety, relatedness, innovation, network analysis
    JEL: L16 O31 R11 R12
    Date: 2020–03
  3. By: Magalhaes, Manuela
    Abstract: We develop a directed technical change model with two sectors, tradable and non-tradable, and dynamic firms’ decisions to invest in R&D in the presence of financial constraints. The model establishes a linkage between R&D decisions, product and process innovations, future productivity, profits, and credit constraints. The model is estimated using Portuguese firms’ data of the tradable and non-tradable sectors. We find that the previous R&D investments raises the innovating probabilities, the innovating probabilities are higher in the tradable sector, and the startup costs of innovation tend to be higher than the maintenance costs. The results also show complementary between the R&D benefits and the firm’s financial strength, diminishing marginal returns to capital on innovation benefits, and high heterogeneity of the innovation costs across industries. Finally, when the firms’ financial strength and the trade-off between tradable and non-tradable goods are considered, the R&D benefits in the non-tradable sector do not compensate its cost given the higher productivity and innovation probabilities of the tradable sector. As a result, the R&D investments in the tradable sector illustrates a misallocation of financial resources.
    Keywords: : Credit constraints, firm-level data, productivity, R&D, tradable and non-tradable goods.
    JEL: O31 O32
    Date: 2020–04–04
  4. By: Pena, Paul John; Lim, Dickson
    Abstract: Contemporary literature on how individuals learn in the 21st-century reveal critical differences from learning patterns in the mid-20th century–a period in which celebrated, pioneering works of Mincer, Becker and Ben-Porath on human capital were developed. Education and learning theories have evolved, but the prevailing human capital theories have not. Given continued technological progress, and the rise in available knowledge through the Internet, learning in networks is a distinct feature of the 21st-century industry. The connectivist theory of learning in the digital age is explored and substantiated. Using optimal control theory and dynamic optimisation, we define optimal conditions for knowledge generation and growth of learning networks. We find that knowledge per learner grows exponentially when the obsolescence rate of knowledge is less than the departure rate of learners from the learning network. We also find that a learning network will continue to grow as long as learners are sufficiently impatient and that technology sufficiently becoming obsolete faster. Furthermore, we show a positive relationship between the size of the network and wealth on knowledge. That is, as long as the remaining wealth on knowledge is increasing, the learning network will continue to grow over time. We present insights for policy consideration that address the necessary and sufficient conditions for sustained knowledge generation and the growth of the learning network.
    Keywords: human capital, learning, industry 4.0, networks
    JEL: J24 M53 O15
    Date: 2019–06
  5. By: Rammer, Christian; Roth, Felix; Trunschke, Markus
    Abstract: Organisation capital is one of the key intangible assets of firms, driving innovation and firm performance. Measuring this asset has been notoriously difficult, however. Differently to other intangible assets, firms do not build up organisation capital primarily by monetary investment but rather through establishing new organisational routines and building up trust, which often do not coincide with any financial expenditure. Quantifying such efforts at the firm level has largely failed so far. This paper takes up a traditional production function approach which includes, in addition to labour and tangible assets, investment in all measurable intangible assets (technological and non-technological knowledge, software and databases, firm-specific human capital, brand equity), but excluding organisation capital. The residuum of the estimation is considered as a measure of a firm' organisation capital. Using panel data from the German innovation survey, we find higher organisation capital in young and small firms. Our measure tends to show a u-shaped link to qualitative indicators such as organisational innovation.
    Keywords: Organisation Capital,Production Function,CIS
    JEL: D24 E22 L25
    Date: 2020
  6. By: Mishra, Mukesh Kumar
    Abstract: This paper examines different strategies for the protection of the global climate, the environment and Green Growth mechanism for natural resources and scrutinizes the extent to which they meet the transformative requirements of the Paris Climate Agreement and the 2030 Agenda. It analyses the interactions between relevant institutions of global and multi-level environmental governance. It focuses on the legitimacy of respective green mechanisms and their effects on ecosystems and human welfare. It requires that keeping in mind The Kuznets Curves Model Mechanism and reform further to develop the global economic governance system and restructure incentive systems at national level. Crises like COVID-19 show the urgency to promote necessary transformations for our society to survive in the 21st century. It can be a good reminder that in any breakdown, there is always a chance for breakthrough. Pollution and greenhouse gas emissions have fallen across continents as countries try to contain the spread of the new coronavirus. The green economy aims to achieve economic growth and development without an adverse effect on the environment. The environmental Kuznets curve (EKC) hypothesis explains the relationship between economic activity and environmental degradation. Therefore, environmental conservation policies, technological advancement and modern industrial policies are required to make the economic growth of the countries effective in reducing CO2 emissions. There is need for international collaboration among developing and developed countries for fostering green economy and sustainability. We need green growth because risks to development are rising as growth continues to erode natural capital, through the tools of Sustainable Development.
    Keywords: Sustainable Development,Green Economy,Green Growth,The Environmental Kuznets Curve
    JEL: Q56 Q57
    Date: 2020
  7. By: Attila Havas (Institute of Economics, CERS, 1097 Budapest, Tóth Kálmán u. 4., Hungary); György Molnár (Institute of Economics, CERS, 1097 Budapest, Tóth Kálmán u. 4., Hungary)
    Abstract: We develop a new model of social innovation (SI) inspired by the multi-channel interactive learning model of business innovation. As opposed to the linear models of innovation, this model does not identify ‘stages’ of business innovation. Rather, it stresses that innovation is an interactive process, in which collaboration among various partners are crucial, as they possess different types of knowledge, all indispensable for successful innovation activities. Having considered numerous definitions of SI, first we propose a new one, then adapt the multi-channel interactive learning model to SI. To do so, we identify the major actors in an SI process, their activities, interactions, modes of (co-)producing, disseminating and utilising knowledge. We also consider the micro and macro environment of a given SI. We illustrate the analytical relevance of the proposed model by considering three real-life cases. The model can assist SI policy-makers, policy analysts, as well as practitioners when devising, implementing or assessing SI.
    Keywords: Definitions and models of social innovation, Business innovation studies, Multi-channel interactive learning, Microcredit industry, Roma minority, Social housing
    JEL: O35 O30 J71 G21 L31 O18
    Date: 2020–05
  8. By: Julien Hanoteau (KEDGE Business School [Marseille], AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université); Jean‐jacques Rosa (Institut d'Études Politiques [IEP] - Paris)
    Abstract: This article shows how the increase of information availability due to new technologies positively affects aggregate entrepreneurship in national economies. We rely on an "occupational choice" model of managerial production, extended to include the managerial use of information, to explain variations in the number of entrepreneurs, and thus of firms, as measured by the aggregate new business creation data. We present evidence that supports such a theory of industrial organization dynamics for a sample of 78 economies over the period 2004–2012 using panel data instrumental variable regressions.
    Keywords: Entrepreneurship,Information and communication technologies,Managerial information,Industrial organization
    Date: 2019–01–07
  9. By: Solferino, Nazaria
    Abstract: We aim to investigate the drivers and barriers of eco-innovations in Calabria and the role of intermediaries to enhance in the organizations the concept of sustainable development. We analyse three case studies of environmentally sustainable companies. Our analysis shows that several critical issues need to be addressed by national and regional policies to remove relevant barriers to these investments. The interwied companies identified these difficulties mainly in the problems to access credits and get funds alongside to the excess of complicate beaurocracy. On the other side, the attention for the environmental issues and the opportunity to promote products and services with a lower environmental impact on the market, in order to obtain a competitive advantage and possibly increase the turnover and customer portfolio, represents the most pushing factor for the adoption of radical eco-innovations. Nevertheless, intermediaries play an important role as these companies have in common that they had the possibility to benefit from the expertises and competences of a provider of services.
    Keywords: Eco-innovations, Environmental sustainability, Case study method.
    JEL: O3 O31 O33
    Date: 2020–04–08
  10. By: Link, Albert (University of North Carolina at Greensboro, Department of Economics)
    Abstract: The purpose of this paper is to identify covariates with publication activity, a form of knowledge transfer, from SBIR publicly funded research. The paper offers an argument about the policy relevance of studying knowledge transfers from publicly funded research that occurs in private sector firms. Relevant explanatory variables are the length of the funded research project, university involvement in the project, the firm's history of SBIR funding, and the academic background of firms' founders.
    Keywords: Technology transfer; Public sector R&D; Entrepreneurship; Program evaluation; SBIR program;
    JEL: H54 L26 O31 O32 O38
    Date: 2020–05–21
  11. By: Layos, Jerk Joshua Meire; Pena, Paul John
    Abstract: The novel coronavirus (Covid-19) pandemic raises the question of whether innovation can save humanity. Indeed, as it always has, innovation is the path towards finding solutions such as vaccines, treatments and policies that mitigate the further spread of the virus. Since the announcement of a global pandemic on March 12, 2020, countries with relatively high levels of innovation remain high on the world rankings on new cases and deaths while countries considered relatively lower in innovation are not. We test the relationship between innovation systems and the ability of its pre-epidemic state to address the pandemic. We use a two-step System Generalized Method of Moments (GMM) to test this relationship using cases from the ASEAN-5 economies and their respective levels of innovation as reported in the Global Innovation Index. We find that the relationship between the level of innovation and a country’s ability to respond to the crisis to be significant and positive. We also find that search interest, an indicator of market response within an innovation context, to have a significant negative relationship with crisis management. We provide some preliminary analyses and insights on these two key findings as well as policy recommendations concerning innovation systems.
    Keywords: coronavirus, covid-19, innovation systems, Triple Helix, ASEAN
    JEL: F15 I10 O30
    Date: 2020–05–02

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