nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2021‒09‒06
nine papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Home country institutional harshness and emerging market SMEs internationalization: a strategy tripod perspective By Yadav, Sandeep
  2. Social Capital, Performance of SMEs, and COVID-19 Pandemic By Rajapakshe, PSK; Gamage, SKN; Prasanna, RPIR; Jayasundara, JMSB; Ekanayake, EMS; Upulwehera, JMHM; Wijerathna, WAID; Abeyrathne, GAKNJ
  3. Know-how and Know-who: Effects of a Randomized Training on Network Changes Among Small Urban Entrepreneurs By Mattea Stein
  4. Practise What You Preach: Innovation Implementation on Campuses of Dutch Research Universities By Magorzata Rymarzak; Alexandra den Heijer; Monique Arkesteijn
  5. Emerging 21st Century technologies: Is Europe still falling behind? By Hugo Confraria; Vitor Hugo Ferreira; Manuel Mira Godinho
  6. The impact of digitalisation on productivity: Firm-level evidence from the Netherlands By Martin Borowiecki; Jon Pareliussen; Daniela Glocker; Eun Jung Kim; Michael Polder; Iryna Rud
  7. Synergistic Competitive Advantage - The Modern Appeal of RBV and IO Theory in the Mergers and Acquisitions By Arup Barua; Alexandra Ioanid
  8. Foreign entry timing, time since first entry, and internationalization speed of SMEs: when does manager domestic experience matter? By Yadav, Sandeep
  9. International Trade and Technological Competition in Markets with Dynamic Increasing Returns By Luca Fontanelli; Mattia Guerini; Mauro Napoletano

  1. By: Yadav, Sandeep
    Abstract: Purpose - What is the role of the home country institutional environment in emerging market small and medium firms (SMEs) internationalization? Drawing from strategy tripod perspective, this study tests the proposed theoretical model on the impact of institutional harshness on SMEs internationalization. This study also demonstrates the moderating role of firm resources and industry informal competition on the relationship between home country institutional harshness and SMEs internationalization. Design/methodology/approach – This study tests the proposed theoretical model on a survey sample of 5129 Indian and Chinese SMEs from World Bank Enterprise Surveys (WBES). This study uses the Tobit regression model and Logit regression model as estimation techniques. Findings - Based on the institution-based view, the author finds that institutional harshness in the home country increases SMEs internationalization as escape to home country institutional challenges. The findings show that SMEs international quality certificate possession and informal industry competition strengthen the institutional harshness and internationalization relationship. The findings also support the negative moderating effect of SMEs global linkages on institutional harshness and internationalization relationship. Originality/value – This study contributes to institutional theory and international business literature by showing emerging market SMEs international expansion as a response to owner/manager perception of high institutional harshness. The study extends the boundaries of the home country institution escape-based internationalization argument by examining the heterogeneous impact of institutional harshness on SMEs internationalization based on firm resources and industry context.
    Keywords: Emerging market, Internationalization, Institutional harshness, SMEs, Exporting, Institutional theory, Industry context, Firm resources
    JEL: F2 L1
    Date: 2021–03
  2. By: Rajapakshe, PSK; Gamage, SKN; Prasanna, RPIR; Jayasundara, JMSB; Ekanayake, EMS; Upulwehera, JMHM; Wijerathna, WAID; Abeyrathne, GAKNJ
    Abstract: The aim of this working paper is to explore the relationship between social capital and the performance of SMEs and articulate the ways of using the social capital as an instrument to address the performance of the SMEs in context of Covid-19 pandemic. Further, this review identifies the unexplored areas related to concepts ‒ social capital, SME performance, and Covid‒19 pandemic which will pave the way for further research in area focused. . The review and discussion on existing state of knowledge disclosed the key areas which create link between social capital and SME performance. First, the investigation of the impact of externalities on SMEs performance, especially the impact of COVID-19 pandemic, and how the social capital could assists to minimize the effect were divulged. Then, the way of allocating social capital to intensify the success of SMEs in the internationalization process was revealed. Accordingly, with the growing significance of the banking institutions during the pandemic period, investigating the banking relationship as an external social capital with the SMEs performance was recognized as one of the critical areas in the pandemic situation. Lastly, during the era of treating customers like the kings of the market, interaction among innovation, marketing capabilities, and social capital to facilitate the competitive performance of SMEs have been substantially addressed. Findings suggested that investigating the dynamic environmental changes of SMEs and social capital influence are vital to stimulate the sustainable competitive advantage of SME sector in the intensified economic competition.
    Keywords: Internationalization, Innovations, SMEs, Social capital, Sustainable competitive advantage
    JEL: L00
    Date: 2020–08–30
  3. By: Mattea Stein (Università di Napoli Federico II and CSEF)
    Abstract: Micro-enterprise owners in developing country industrial clusters interact through networks of horizontal business collaboration, information-sharing, and friendship links, despite the potential for close competition inherent in this setting. This paper explores how such business links change, and specifically whether they can be endogenous to a public policy intervention that provides training to some network members but not others. Using a randomized training for micro-entrepreneurs in Kampala, Uganda, together with novel panel network data, I find a positive effect on linking likelihoods, driven by untreated entrepreneurs to whom links with treated entrepreneurs become more desirable. As predicted by a bilateral network formation framework, it is the relatively lower-status treated who attract new connections with relatively higher-status untreated. Furthermore, links within clusters of treated enterprises are strengthened, which is not due to a strategic replacement of untreated with treated partners out of a competition motive but seems to be an effect of jointly attending the training. Together, my findings show that public policy interventions can cause networks to re-wire, with important implications both for research and policy.
    Keywords: network formation, network change, social networks, firms, micro-enterprises
    Date: 2021–09–02
  4. By: Magorzata Rymarzak; Alexandra den Heijer; Monique Arkesteijn
    Abstract: In all advanced economies, there is a general tendency toward reforms of higher education institutions (HEIs) and education systems. In addition to their traditional educational role, and their second mission of conducting scientific research, they are expected to participate in various types of innovation initiatives as part of their third mission. With the transformation of the universities, the campus usage for innovation processes is also changing. From being the grounds where university buildings are providing settings for basic and applied research, it has become both the birthplace and test ground of innovations. Many universities want to practise what they preach on their own campuses: what is invented here is also applied here. On top of that, they want to set a good example of being innovative institutions, not only academically, but also in campus management and services. However, the scope and dynamics of the implementation of their own innovative ideas vary significantly. It is clear that universities need to develop their campus according to their own conditions/needs and features. But while some universities take the opportunity for wider adoption of on-campus innovations to support university performance, others are not as successful in the innovation implementation for many reasons. In this article both the drivers and the barriers that may hinder the implementation of campus innovations at Dutch research universities are studied.
    Keywords: Campus Management; Innovation; universities
    JEL: R3
    Date: 2021–01–01
  5. By: Hugo Confraria; Vitor Hugo Ferreira; Manuel Mira Godinho
    Abstract: Firms and countries that specialise in emerging technologies tend to have a higher chance of becoming or remaining competitive in the future. This paper aims to analyse the most dynamic areas of technological competition between 2010 and 2019 and to identify which actors are leading in those areas. We analyse patenting dynamics in four major patent offices (USPTO, EPO, JPO, KIPO), to have a global landscape of technological dynamism, and we use the IPC patent classification system to proxy the technological areas. After examining patenting growth patterns in all 4-digit IPC classes, we built a score to classify the emergent technological areas across the four offices. Our results indicate twelve “emerging” IPC classes, which are related to software engineering, digital communication, IT methods for management, medical technology, pharmaceuticals, energy conservation, games, biotechnology and semiconductor devices. We find that European firms do not hold a leading share in any of these IPC classes. This is particularly true in emerging areas such as software engineering, energy conservation and semiconductor devices, which are likely to be critical to succeed in the new techno-paradigms related to digitalization and clean energy.
    Keywords: Emerging technologies; Technology policy; Technological competition; European Paradox; Matched patent-firm data
    Date: 2021–08
  6. By: Martin Borowiecki; Jon Pareliussen; Daniela Glocker; Eun Jung Kim; Michael Polder; Iryna Rud
    Abstract: This paper analyses the role of intangibles and digital adoption for firm-level productivity in the Netherlands drawing on a newly constructed panel data set of Dutch enterprises. It provides robust evidence on productivity effects of intangibles and digital adoption using firms’ exposure to sector-wide advances in intangible intensity and digital adoption as an instrument. Results show that intangibles as measured by levels of digital skill intensity have a positive and statistically significant impact on firm-level productivity growth in the service sector and for younger firms. Productivity benefits from software investment are strong for low productivity firms. Together, these findings highlight the potential of intangibles to support the productivity catch-up of laggard enterprises. The evidence also suggests that productivity benefits from ICT hardware investment and the uptake of high-speed broadband are positive and sizeable.
    Keywords: digitalisation, intangibles, productivity, skills
    JEL: D24 E22 J24 O33
    Date: 2021–09–08
  7. By: Arup Barua (South-Eastern Finland University of Applied Sciences, Finland); Alexandra Ioanid (University Politehnica of Bucharest, Romania)
    Abstract: The Resource-based View (RBV) and Industrial Organization (IO) theory have successfully clarified the competitive advantage for a single firm based on resources and market aspects but less so for knowing the competitive advantage for dual entities or companies. Therefore, this article attempts to investigate how a competitive advantage emerges in post-M&A. It illustrates that both theories together should contemplate the "synergistic competitive advantage" as a measurement of M&A performance, which explains the competitive advantage by the acquisition synergies, e.g., joint sales, expertise, revenue, and cost. The modern thought will widen the joint appeal of RBV and IO theory considering the SCP model because the synergy (i.e., a combined effect of two entities) should be a competitive, and competitive advantage should be synergistic for acquisition success. Future researchers are entreated to test the synergistic competitive advantage in post-M&A, evading the traditional competitive advantage. Decisively the implications and directions of future research would be illuminated.
    Keywords: RBV (Resource-based View), IO (Industrial Organization), SCP (Structure, Conduct, Performance), SCA (Synergistic Competitive Advantage), M&As (Mergers and Acquisitions)
    JEL: G34 M16 O19
    Date: 2021–07
  8. By: Yadav, Sandeep
    Abstract: This study explores the interrelatedness between the various temporal concept of internationalization. Using organizational learning perspective, this study explores the impact of foreign entry timing, time since first foreign entry on the speed of internationalization. The author tests the proposed hypotheses on a sample of 11291 Small and medium-sized enterprises (SMEs) from 118 countries based on World Bank Enterprise Survey (WBES) data. The results show that foreign entry timing reduces the speed of internationalization while time since first foreign entry increases the speed of internationalization. Further, the author finds that manager prior domestic industry experience reduce disadvantages associated with the late start of internationalization and increase speed of internationalization. In contrast, the author finds support for the negative moderating effect of manager domestic industry experience on the time since first foreign entry and internationalization speed relationship.
    Keywords: foreign entry timing; time since first foreign entry; time in internationalization; speed of internationalization; SMEs; organizational learning; manager experience; temporality; absorptive capacity
    JEL: F23 M12
    Date: 2021–07
  9. By: Luca Fontanelli; Mattia Guerini; Mauro Napoletano
    Abstract: We build a simple dynamic model to study the effects of technological learning, market selection and international competition in the determination of export flows and market shares. The model features two countries populated by firms with heterogeneous productivity levels and sales. Market selection in each country is driven by a finite pairwise Polya urn process. We show that market selection leads either to a national or to an international monopoly in presence of a static distribution of firm productivity levels. We then incorporate firm learning and entry-exit in the model and we show that the market structure does not converge to a monopoly. In addition, we show that the extended model is able to jointly reproduce a wide ensemble of stylized facts concerning intra-industry trade, industry and firm dynamics.
    Keywords: International trade; industrial dynamics; firm dynamics; market selection; Polya urn.
    Date: 2021–08–27

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