nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2020‒11‒09
ten papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Technology network structure conditions the economic resilience of regions By Gergo Toth; Zoltan Elekes; Adam Whittle; Changjun Lee; Dieter F. Kogler
  2. ICT, Collaboration, and Science-Based Innovation: Evidence from BITNET By Kathrin Wernsdorf; Markus Nagler; Martin Watzinger
  3. Managing (Open) Innovation Projects By Wicaksono, Hendro
  4. Technological Complexity and Economic Growth of Regions By Lars Mewes; Tom Broekel; ; ;
  5. Essays on Energy Efficiency, Environmental Regulation and Labor Demand in Swedish Industry By Amjadi, Golnaz
  6. Strategy for Cluster-Based Industrial Development in Developing Countries By Keijiro Otsuka
  7. Technological Complexity and Economic Growth of Regions By Michael Fritsch; Michael Wyrwich; ; ;
  8. Attracting Profit Shifting or Fostering Innovation? On Patent Boxes and R&D Subsidies By Andreas Haufler; Dirk Schindler
  9. Economic complexity for competitiveness and innovation: A novel bottom-up strategy linking global and regional capacities By PUGLIESE Emanuele; TACCHELLA Andrea
  10. Does the Timing of integrating new Skills affect Start-up Growth? By Grillitsch, Markus; Schubert, Torben

  1. By: Gergo Toth; Zoltan Elekes; Adam Whittle; Changjun Lee; Dieter F. Kogler
    Abstract: This paper assesses the network robustness of the technological capability base of 269 European metropolitan areas against the potential elimination of some of their capabilities. By doing so it provides systematic evidence on how network robustness conditioned the economic resilience of these regions in the context of the 2008 economic crisis. The analysis concerns calls in the relevant literature for more in-depth analysis on the link between regional economic network structures and the resilience of regions to economic shocks. By adopting a network science approach that is novel to economic geographic inquiry, the objective is to stress-test the technological resilience of regions by utilizing information on the co-classification of CPC classes listed on European Patent Office patent documents. Findings from a regression analysis indicate that metropolitan regions with a more robust technological knowledge network structure exhibit higher levels of resilience with respect to changes in employment rates. This finding is robust to various random and targeted elimination strategies concerning the most frequently combined technological capabilities. Regions with high levels of employment in industry but with vulnerable technological capability base are particularly challenged by this aspect of regional economic resilience.
    Keywords: regional economic resilience, network robustness, metropolitan regions, technology space
    Date: 2020–09
  2. By: Kathrin Wernsdorf; Markus Nagler; Martin Watzinger
    Abstract: Does access to information and communication technologies (ICT) increase innovation? We examine this question by exploiting the staggered adoption of BITNET across U.S. universities in the 1980s. BITNET, an early version of the Internet, enabled e-mail-based knowledge exchange and collaboration among academics. After the adoption of BITNET, university-connected inventors increase patenting substantially. The effects are driven by collaborative patents by new inventor teams. The patents induced by ICT are exclusively science-related and stem from fields where knowledge can be codified easily. In contrast, we neither find an effect on patents not building on science nor on inventors unconnected to universities.
    Keywords: ICT, communication, knowledge diffusion, science-based innovation, university-patenting
    JEL: H54 L23 L86 O30 O32 O33
    Date: 2020
  3. By: Wicaksono, Hendro
    Abstract: This presentation introduces the concept of innovation and innovation management. It also explains the different open innovation models based on the triple helix and the implementation of triple helix model 3 in Germany. Finally, it gives examples of best practices to manage an open innovation project.
    Date: 2020–10–14
  4. By: Lars Mewes; Tom Broekel; ; ;
    Abstract: One the one hand, complex technologies o↵er substantial economic benefits, and on the other, they are difficult to invent and to imitate, and they refuse a fast dissemination. This two-sidedness motivates the idea that regions’ competitive advantages and, in consequence, their economic growth, originate in their ability to produce and utilize complex technologies. However, the relationship between technological complexity and regional economic growth has rarely been empirically investigated. Here, we address this pressing issue by assessing the complexity of technological activities in 159 European NUTS 2 regions and relating it to their economic growth from 2000 to 2014. Our empirical results suggest that technological complexity is an important predictor of regional economic growth. A 10% increase in complexity is associated with a 0.45% GDP per capita growth. By showing that technological complexity is important for regional economic growth, our results fuel current policy debates about optimal regional policies such as the Smart Specialization strategy.
    Keywords: Knowledge Complexity, Technological Complexity, Regional Economic Growth, Patent Data
    JEL: O10 O33 R11
    Date: 2020–09
  5. By: Amjadi, Golnaz (Department of Economics, Umeå University)
    Abstract: Paper [I] Energy efficiency improvement (EEI) benefits the climate and matters for energy security. The potential emission and energy savings due to EEI may however not fully materialize due to the rebound effect. In this study, we measure the size of the rebound effect for fuel and electricity within the four most energy intensive sectors in Sweden: Pulp and paper, Basic iron and steel, Chemical, and Mining. We use a detailed firm-level panel data set for 2000–2008 and apply a stochastic frontier analysis (SFA) for measuring the rebound effect. We find that neither fuel nor electricity rebound effects fully offset the potential energy and emission savings. Among the determinants, we find the CO2 intensity and the fuel/electricity shares to be useful indicators for identifying firms with higher or lower rebound effects within each sector. Paper [II] Energy efficiency improvement (EEI) is generally known to be a cost-effective measure for meeting energy, climate and sustainable growth targets. Unfortunately, behavioral responses to such improvements (called energy rebound effects) may reduce the expected savings in emissions and energy from EEI. Hence, the size of this effect should be considered to help set realistic energy and climate targets. Currently there are significant differences in approaches for measuring rebound effect. Here, we used a two-step procedure to measure both short- and long-term energy rebound effects in the Swedish manufacturing industry. In the first step, we used data envelopment analysis (DEA) to obtain energy efficiency scores. In the second step, we estimated energy rebound effects using a dynamic panel regression model. This approach was applied to a firm-level panel dataset covering all 14 sectors in the Swedish manufacturing industry over the period 1997–2008. We showed that, in the short run, partial rebound effects exist within most of manufacturing sectors, meaning that the rebound effect decreased, but did not totally offset, the energy and emission savings expected from EEI. The long-term rebound effect was smaller than the short-term effect, implying that within each sector, energy and emission savings due to EEI are larger in the long run compared to the short run. Paper [III] Energy inefficiency in production implies that the same level of goods and services could be produced using less energy. The potential energy inefficiency of a firm may be linked to long-term structural rigidities in the production process and/or systematic shortcomings in management (persistent inefficiency), or associated with temporary issues like misallocation of resources (transient inefficiency). Eliminating or mitigating different inefficiencies may require different policy measures. Studies measuring industrial energy inefficiency have mostly focused on overall inefficiencies and have paid little attention to distinctions between the types. The aim of this study was to assess whether energy inefficiency is transient and/or persistent in the Swedish manufacturing industry. I used a firm-level panel dataset covering fourteen industrial sectors from 1997–2008 and estimated a stochastic energy demand frontier model. The model included a four-component error term separating persistent and transient inefficiency from unobserved heterogeneity and random noise. I found that both transient and persistent energy inefficiencies exist in most sectors of the Swedish manufacturing industry. Overall, persistent energy inefficiency was larger than transient, but varied considerably in different manufacturing sectors. The results suggest that, generally, energy inefficiencies in the Swedish manufacturing industry were related to structural rigidities connected to technology and/or management practices. Paper [IV] The aim of this paper was to investigate whether the environment and employment compete with each other in Swedish manufacturing industry. The effect of a marginal increase in environmental expenditure and environmental investment costs on sector-level demand for labor (employment) was studied using a detailed firm-level panel dataset for the period 2001–2008. The results showed that the sign and magnitude of the net employment effects ultimately depend on the aggregate sector-level output demand elasticity. If the output demand is inelastic, these costs induce small net improvements in employment, while a more elastic output demand suggests negative, but in most sectors relatively small, net effects on demand for labor. Hence, the results did not generally indicate a substantial trade-off between jobs and the environment. The general policy recommendation that can be drawn from this study is that, in the absence of empirically estimated output demand elasticities, a careful attitude regarding national environmental initiatives for sectors exposed to world market competition should be adopted.
    Keywords: Energy efficiency improvement; rebound effect; stochastic frontier analysis; data envelopment analysis; stochastic energy demand frontier model; persistent and transient energy inefficiency; energy inefficiency; environmental expenditure and environmental investment costs; output demand elasticity
    JEL: C02 C33 C50 D22 J23 K32 L60 Q40 Q50
    Date: 2020–10–30
  6. By: Keijiro Otsuka (Graduate School of Economics, Kobe University)
    Abstract: Discussions on industrial policy are back on the scene primarily because of the failure of the Washington Consensus as a development strategy. Having emerged is a new consensus that the industrial policy should address market failures while pursuing comparative advantage. However, it is unclear where markets fail, how market failures can be corrected, and whether governments can identify them. In the literature, credit provision, management training, and information externalities arising from industrial clusters and foreign direct investment are discussed separately as means to promote industrial development. This study proposes a strategy for cluster-based industrial development based on a comprehensive review of the relevant literature.
    Date: 2020–10
  7. By: Michael Fritsch; Michael Wyrwich; ; ;
    Abstract: We investigate how initial conditions that existed in East Germany at the end of the socialist regime impact regional development during the turbulent shock transition to a market economic system. Our investigation spans a period of almost 30 years. Both the self-employment rate (an indication of the existence of a pre-socialist entrepreneurial tradition) and the share of the workforce with a tertiary degree have a strong positive effect on regional development. We conclude that knowledge and a tradition of entrepreneurship have long-run positive effects on development in regions that face disruptive shocks. Entrepreneurship and knowledge play a less important role for development across West German regions, where no significant shocks occurred.
    Keywords: Entrepreneurship, knowledge, economic development, history, transformation, East Germany
    JEL: L26 R11 N93 N94
    Date: 2020–10
  8. By: Andreas Haufler; Dirk Schindler
    Abstract: Many countries have introduced patent box regimes in recent years, offering a reduced tax rate to businesses for their IP-related income. Patent boxes are supposed to increase innovative activity, but they are also suspected to aim at attracting inward profit shifting from multinational firms. In this paper, we analyze the effects of patent box regimes when countries can simultaneously use patent boxes and R&D subsidies to promote innovation. We show that when countries set their tax policies unilaterally, innovation is fostered, at the margin, only by the R&D subsidy. The patent box tax rate is instead targeted at attracting international profit shifting, and it is optimally set below the corporate tax rate. With cooperative tax setting, the optimal royalty tax rate is instead equal to, or even above, the statutory corporation tax. Hence, patent box regimes emerge in the decentralized policy equilibrium, but never under policy coordination. Enforcing a nexus principle, as proposed by the OECD, is helpful to mitigate harmful competition for paper profits, but it comes at the price of increased strategic competition in direct R&D subsidies to attract physical R&D units instead of intangible patents.
    Keywords: R&D investment, patent boxes, investment tax credits, profit shifting, tax competition
    JEL: H25 H87 F23
    Date: 2020
  9. By: PUGLIESE Emanuele (European Commission - JRC); TACCHELLA Andrea (European Commission - JRC)
    Abstract: Economic Complexity is a data driven empirical approach developed to inform the study of territorial development with quantitative metrics. Techniques inspired by complex systems analysis and network theory allow measuring the intangible capabilities necessary for a country or region to be competitive, both in overall terms and in specific markets. We exemplarily analyse the case of Slovakia's industrial and innovation competitiveness by looking at the overall potential of the country and focusing on its Electronics sector.
    Keywords: Economic Complexity Economic Forecasting Structural Change Regional Innovation System
    Date: 2020–10
  10. By: Grillitsch, Markus (CIRCLE, Lund University); Schubert, Torben (CIRCLE, Lund University)
    Abstract: Growth often requires start-ups to recruit new skills not present in the founding team. We analyze if the relationship between integrating new skills and growth depends on timing. Should new skills be recruited as early as possible, or can start-ups add them as needed along the way? Using a unique panel dataset covering Sweden’s population of start-ups from 1997-2012, our analysis shows that i) start-ups grow faster if they integrate novel skills early in their life, while adding novel skills later reduces growth, and ii) corporate spin-offs profit less from recruiting novel skills than de novo start-ups. We mirror our results against existing theories and develop theoretical perspectives for future research.
    Keywords: start-ups; growth; spin-offs; time/temporal aspects; venture teams
    JEL: M13 M51
    Date: 2020–10–28

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