nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2021‒12‒06
six papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. How Does Basic Research Improve Innovation Performance in the World’s Major Pharmaceutical Firms? By Bart Leten; Stijn Kelchtermans; Rene Belderbos
  2. Colocation of Entrepreneurs and New Firm Survival: Role of New Firm Founder’s Experiential Relatedness to Local Entrepreneurs By Tavassoli, Sam; Jienwatcharamongkhol, Viroj; Arenius, Pia
  3. R&D innovation with socially responsible firms By Domenico Buccella; Luciano Fanti; Luca Gori
  4. Economic impacts of mobile broadband innovation: Evidence from the transition to 4G By Jeffrey Eisenach; Robert Kulick
  5. Development of a tool for optimizing the management processes in the field of innovation in the Bulgarian furniture enterprises By Georgieva, Daniela; Popova-Terziyska, Radostina; Neykov, Nikolay
  6. The human side of productivity: Uncovering the role of skills and diversity for firm productivity By Chiara Criscuolo; Peter Gal; Timo Leidecker; Giuseppe Nicoletti

  1. By: Bart Leten; Stijn Kelchtermans; Rene Belderbos
    Abstract: Employing a panel (1995-2015) of large R&D spending pharmaceutical firms, we investigate how internal basic research increases a firm’s innovative performance. We disentangle two mechanisms through which internal basic research affects technology development: (1) as strengthening of the firm’s absorptive capacity to build on externally conducted science, and (2) as a direct source of the firm’s innovation. We find that the positive relationship between internal basic research and innovation performance is significantly mediated by these two mechanisms, with the absorptive capacity mechanism relatively more important. The mediation relationships are more pronounced in recent years, with basic research as a direct source of innovation increasing in importance. This pattern is associated with a decline of corporate investments in basic research over time, and suggests that firms have adopted a more judicious and targeted approach to basic research aimed at getting more leverage out of a smaller commitment to basic research.
    Date: 2021–11–19
  2. By: Tavassoli, Sam (CIRCLE, Lund University); Jienwatcharamongkhol, Viroj (Blekinge Institute of Technology); Arenius, Pia (RMIT University)
    Abstract: Geographical clustering (colocation) influences new firm survival; however, not all new firms within a cluster are impacted equally. In this paper, we elaborate on how the colocation of local entrepreneurs may have different influences on new firm founder’s learning depending on his/her fit, in terms of his/her experiential relatedness, to that of local entrepreneurs. We then associate such founder’s learning with the higher survival of his/her new firm. We test our hypotheses using a matched founder-firm dataset that covers the population of the knowledge-intensive business service sector in Sweden during 2001-2012. We find support for our propositions concerning the relatedness of new firm founders’ experiential background to that of local entrepreneurs. Specifically, we find that high level of relatedness to local entrepreneurs enhances the survival rate of a new firm started by a novice founder, whereas intermediate level of relatedness suits better for a new firm started by an experienced founder.
    Keywords: Colocation; Entrepreneurial learning; New firm survival; Experiential relatedness; Entrepreneurial performance
    JEL: M13
    Date: 2021–11–24
  3. By: Domenico Buccella; Luciano Fanti; Luca Gori
    Abstract: This work revisits the R&D model à la D’Aspremont –Jacquemin (1988) (AJ) in a context with socially responsible firms. In the traditional model firms invest but, in equilibrium, they are cast into a prisoner’s dilemma. Socially responsible firms also invest in equilibrium. However, provided that firms consider sufficiently high consumer welfare, to invest is firms’ utility-enhancing: the prisoner’s dilemma vanishes, and the R&D investment is the firms’ Pareto-efficient choice. That is, while in the traditional AJ context to invest in R&D is Pareto-inferior for the whole society, when firms are of CSR type their R&D innovation becomes a Pareto-superior choice.
    Keywords: Process innovation; Corporate social reponsibility; Nash equilibrium; Social welfare
    JEL: D43 L13 O31
    Date: 2021–11–01
  4. By: Jeffrey Eisenach (NERA Economic Consulting, Inc., George Mason University Law School, and the American Enterprise Institute); Robert Kulick (NERA Economic Consulting, Inc., George Mason University Law School)
    Abstract: This study reports estimates from a model of the economic effects of 4G mobile wireless technology adoption in the United States on employment and economic growth and, based on those results, projects the benefits of 5G adoption under different counterfactual scenarios.
    Keywords: 5G wireless, Economic growth, employment, technology and innovation
    JEL: A
    Date: 2020–05
  5. By: Georgieva, Daniela; Popova-Terziyska, Radostina; Neykov, Nikolay
    Abstract: Innovation is primarily associated with a high level of uncertainty, risk, and a lot of investments. These negatively affect the Bulgarian forest enterprises, which in general are “low-tech” and are investing less in innovation. The main goal of the paper is, by the use of the Markov Chains methodology, to propose an adapted methodology for risk assessment at the beginning of the innovation process in Furniture production in Bulgaria. Additionally, the study presents possible situations and describes them throughout the theoretical approaches in a probabilistic way. The research results can be used to avoid some decision-making mistakes before the start of the innovation process through an easy-to-use methodology
    Keywords: innovation, furniture enterprises, Markov Chains, decision-making
    JEL: M20 O10 O30 O32
    Date: 2021
  6. By: Chiara Criscuolo; Peter Gal; Timo Leidecker; Giuseppe Nicoletti
    Abstract: Relying on linked employer-employee datasets from 10 countries, this paper documents that the skills and the diversity of the workforce and of managers – the human side of businesses – account on average for about one third of the labour productivity gap between firms at the productivity “frontier” (the top 10% within each detailed industry) and medium performers at the 40-60 percentile of the productivity distribution. The composition of skills, especially the share of high skills, varies the most along the productivity distribution, but low and medium skilled employees make up a substantial share of the workforce even at the frontier.High skills show positive but decreasing productivity returns. Moreover, the skill mix of top firms varies markedly across countries, pointing to the role of different strategies pursued by firms in different policy environments. We also find that managerial skills play a particularly important role, also through complementarities with worker skills. Gender and cultural diversity among managers – and to a lesser extent, among workers – is positively related to firm productivity as well. We discuss public policies that can facilitate the catch-up of firms below the frontier through skills and diversity. These cover a wide range of areas, exerting their influence through three main channels: the supply, upgrading and the matching across firms (the SUM) of skills and other human factors.
    Keywords: diversity, linked employer-employee data, managers, productivity, skills
    JEL: D24 J24 M14
    Date: 2021–12–06

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