nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2022‒12‒19
eighteen papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Relationship between Innovation and Corporate Performance in Japanese SMEs by Two-stage Panel Data Analysis: Focusing on the Joint Effect of ICT and R&D By Matsuzaki, Taisuke; Shigeno, Hidenori; Taher, Sheikh Abu; Tsuji, Masatsugu
  2. DUI it yourself: innovation and activities to promote learning by doing, using, and interacting within the firm By Haus-Reve, Silje; Fitjar, Rune Dahl; Rodríguez-Pose, Andrés
  3. Skilled Immigration, Task Allocation and the Innovation of Firms By Anna Maria Mayda; Gianluca Orefice; Gianluca Santoni
  4. Patents that match your standards: firm-level evidence on competition and innovation By Antonin Bergeaud; Julia Schmidt; Riccardo Zago
  5. Global Engagement and Innovation Activities: The Case of Malaysian Manufacturing Firms By Shiang, Lim Ee; Lee, Cassey
  6. Is Hiring Foreign Worth It? Spillover from Foreign Firms’ Human Capital and Local Firms’ Productivity By Pyun, Ju Hyun; Sun, Jong-in
  7. An Examination of the Informational Value of Self-Reported Innovation Questions By Zheng Tian; Timothy R. Wojan; Stephan J. Goetz
  8. How does Internationalisation affect the productivity of R&D activities in large innovative firms? A conditional nonparametric investigation By Patricia Laurens; Pierluigi Toma; Antoine Schoen; Cinzia Daraio; Philippe Larédo
  9. Entrepreneurship through Employee Mobility, Innovation, and Growth By Salomé Baslandze
  10. Harnessing Foreign Technology to Improve Firm Performance: Evidence from Philippine Manufacturing Enterprises By Gaspar, Raymond
  11. Simultaneity and Heterogeneity in Import and Productivity: Case Study of Indonesian Manufacturing By Putra, Chandra; Narjoko, Dionisius
  12. Trains of Thought: High-Speed Rail and Innovation in China By Georgios TSIACHTSIRAS; Deyun YIN; Ernest MIGUELEZ; Rosina MORENO
  13. Exploring factors contributing to creativity performance among entrepreneurs using the Bayesian Mindsponge Framework By Vuong, Quan-Hoang; Le, Tam-Tri; Zhang, Tao; La, Viet-Phuong; Quang-Loc, Nguyen; Hoang, Giang; Nguyen, Minh-Hoang
  14. From public labs to private firms: magnitude and channels of R&D spillovers By Antonin Bergeaud; Arthur Guillouzouic; Emeric Henry; Clement Malgouyres
  15. Technology Adoption and Late Industrialization By Choi, Jaedo; Shim, Younghun
  16. Thailand’s Maize Seed Companies’ R&D Investment and Business Performance By Napasintuwong, Orachos
  17. Technology Spillover and Absorptive Capacity of Firms and Countries By Urata, Shujiro; Baek, Youngmin
  18. The Effect of Artificial Intelligence on Job Performance in China's Small and Medium-Sized Enterprises (SMEs) By , editor2021; Younus, Ahmed Muayad

  1. By: Matsuzaki, Taisuke; Shigeno, Hidenori; Taher, Sheikh Abu; Tsuji, Masatsugu
    Abstract: The innovation theory tends to focus on innovation capabilities and estimate how these promote innovation. However, the final aim of innovation is not innovation itself but enhancing profits or sales. To complete the innovation theory, it is required to show whether innovation achieved contributes to improve in business performances. A further focus of this paper is on the role of ICT and R&D in the innovation process. ICT plays a vital role in absorbing information from outside the firm, while R&D is essential for assimilating obtained information with existing resources to create something novel. This paper focus on the joint effect of these two factors. The estimation is based on the twostage provit IV panel model and authors' own data of 2012 and 2017. The dependent variables are innovation in the first equation and sales in the second. The results obtained show that (i) Innovation enhances sales; (ii) R&D is significant for innovation; (iii) ICT is not significant for neither of equations; and (iv) the cross term of R&D and ICT is significant for innovation, implying ICT is an enabler of innovation. This is a novel result of the paper.
    Keywords: Open innovation,instrumental variable,mediation,cross term,enabler
    Date: 2022
  2. By: Haus-Reve, Silje; Fitjar, Rune Dahl; Rodríguez-Pose, Andrés
    Abstract: Implicitly or explicitly, much innovation policy treats investments in research and development (R&D) as the main input to innovation. A large body of literature in innovation studies has challenged this, highlighting the role of external sources of innovation and of innovation based on learning by doing, using and interacting (DUI). Nonetheless, there has been limited empirical research on how firm-internal activities to promote DUI affect innovation, and on how important such activities are relative to internal R&D and to external sources of knowledge. We also know little about how internal DUI activities interact with internal R&D and with external knowledge sourcing. We address these gaps using Norwegian Community Innovation Survey data from 2010. We find that internal DUI is an important driver of new-to-market product innovation. Further, the results show partial substitution effects between internal DUI and internal R&D, as well as between internal DUI and external DUI.
    Keywords: DUI; experience-based knowledge; firms; innovation; STI
    JEL: J50
    Date: 2022–10–31
  3. By: Anna Maria Mayda; Gianluca Orefice; Gianluca Santoni
    Abstract: This paper analyses the impact of skilled migrants on the innovation (patenting) activity of French firms between 1995 and 2010, and investigates the underlying mechanism. We present district-level and firm-level estimates and address endogeneity using a modified version of the shift-share instrument. Skilled migrants increase the number of patents at both the district and firm level. Large, high-productivity and capital-intensive firms benefit the most, in terms of innovation activity, from skilled immigrant workers. Importantly, we provide evidence that one channel through which the effect works is task specialization (as in Peri and Sparber, 2009). The arrival of skilled immigrants drives French skilled workers towards language-intensive, managerial tasks while foreign skilled workers specialize in technical, research-oriented tasks. This mechanism manifests itself in the estimated increase in the share of foreign inventors in patenting teams as a consequence of skilled migration. Through this channel, greater innovation is the result of productivity gains from specialization.
    Keywords: Skilled Immigration;Innovation;Patents
    JEL: F22 J61
    Date: 2022–11
  4. By: Antonin Bergeaud; Julia Schmidt; Riccardo Zago
    Abstract: When a technology becomes the new standard, the firms that are leaders in producing this technology have a competitive advantage. Matching the semantic content of patents to standards and exploiting the exogenous timing of standardization, we show that firms closer to the new technological frontier increase their market share and sales. In addition, if they operate in a very competitive market, these firms also increase their R&D expenses and investment. Yet, these effects are temporary since standardization creates a common technological basis for everyone, which allows followers to catch up and the economy to grow.
    Keywords: standardization, patents, competition, innovation, text mining
    Date: 2022–10–24
  5. By: Shiang, Lim Ee (Asian Development Bank Institute); Lee, Cassey (Asian Development Bank Institute)
    Abstract: We examine how the diversity of global engagement is related to firms’ participation in innovation input and output activities in the Malaysian manufacturing sector. We use firm-level data obtained from the World Bank’s Enterprise Survey 2015. Firms are classified into four different groups based on their engagement in global activities, i.e., foreign trade and foreign direct investment. Incidences of innovation for 10 innovation activities are computed. The incidence of innovation was used to examine the extent to which different global engagement groups participate in 10 various types of innovation activities. Logit models are used to estimate the probability of engaging in innovation input and output activities for firms with differing global engagements. Generally, the results clearly highlight that globalized firms, i.e., firms engaging in global activities, participate in innovation activity more actively than their nonglobalized counterparts, despite there being some evidence that the pattern of engagement in innovation activity varies across globalized firms. Empirical findings propose that trade policies promoting exporting and policies attracting foreign direct investment may be useful in driving firms’ participation in innovation activity. A number of export-related policies can be formulated to assist domestic firms in integrating into the global value chain. These include providing easier access to information about foreign markets, export marketing development assistance, and training programs. In addition, foreign direct investment liberalization policies may be used to attract selective foreign direct investments, and tax-related incentive policies may be formulated to encourage firms to set up in-house R&D activities for product development.
    Keywords: exports; foreign ownership; global engagement; innovation; R&D
    JEL: F61 L60 O31
    Date: 2022–08
  6. By: Pyun, Ju Hyun (Asian Development Bank Institute); Sun, Jong-in (Asian Development Bank Institute)
    Abstract: We examine the effect of foreign direct investment (FDI) on local firms’ productivity via human capital transfer from multinational enterprises (MNEs) to local firms. Using the firm-level data for 2010–2015 from the Republic of Korea, we identify human capital spillovers using local firms’ hired permanent foreign employees in an industry and region where MNEs and local firms operate. This identification is valid because permanent foreign workers hired by local firms tend to be visa holders from MNEs due to the Republic of Korea’s visa regulations. We find that the industry and regional FDI positively affect local firms’ productivity, particularly firms with higher growth in hiring skilled foreign employees. This human capital spillover from FDI is also more pronounced in high R&D-intensive industries. Our results are robust with various measures of skilled foreign employees hired by local firms, variations of specifications, and controlling for endogeneity issues. Our findings on positive FDI spillovers via human capital transfer to a local firm suggest that policy makers may relax unnecessary regulations for highly skilled foreign workers and provide a platform where a local firm’s manager and skilled foreign employees find each other.
    Keywords: FDI; firm productivity; human capital; foreign employees; technology spillover; knowledge spillover; visa status
    JEL: D24 F21 F23 J24 J63 O33
    Date: 2022–06
  7. By: Zheng Tian; Timothy R. Wojan; Stephan J. Goetz
    Abstract: Self-reported innovation measures provide an alternative means for examining the economic performance of firms or regions. While European researchers have been exploiting the data from the Community Innovation Survey for over two decades, uptake of US innovation data has been much slower. This paper uses a restricted innovation survey designed to differentiate incremental innovators from more far-ranging innovators and compares it to responses in the Annual Survey of Entrepreneurs (ASE) and the Business R&D and Innovation Survey (BRDIS) to examine the informational value of these positive innovation measures. The analysis begins by examining the association between the incremental innovation measure in the Rural Establishment Innovation Survey (REIS) and a measure of the inter-industry buying and selling complexity. A parallel analysis using BRDIS and ASE reveals such an association may vary among surveys, providing additional insight on the informational value of various innovation profiles available in self-reported innovation surveys.
    Keywords: Self-reported innovation, substantive and incremental innovation, latent innovation measure, logistic regression
    JEL: O00 O30
    Date: 2022–10
  8. By: Patricia Laurens (LISIS - Laboratoire Interdisciplinaire Sciences, Innovations, Sociétés - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Université Gustave Eiffel); Pierluigi Toma (University of Salento [Lecce]); Antoine Schoen (LISIS - Laboratoire Interdisciplinaire Sciences, Innovations, Sociétés - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Université Gustave Eiffel); Cinzia Daraio (Sapienza University of Rome - Department of Informatics and System Sciences - UNIROMA - Università degli Studi di Roma "La Sapienza" = Sapienza University [Rome]); Philippe Larédo (LISIS - Laboratoire Interdisciplinaire Sciences, Innovations, Sociétés - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Université Gustave Eiffel, University of Manchester [Manchester])
    Abstract: This work explores the relationship between multinational R&D and innovation productivity among top corporate knowledge and R&D producers by adopting a twofold concept of internationalisation: (1) the firm's degree of R&D internationalisation, and (2) the firm's geographic diversification. We model the patent production process with an appropriate and robust conditional Data Envelopment Analysis (DEA) estimator, using a unique database of firms that matches financial indicators and patent information. Our results reinforce the fundamental role of internationalisation in the knowledge production process when the internationalisation process is properly and strategically managed. We interpret our empirical evidence through the theoretical lens of the learning theory of internationalisation, and we postulate that a high R&D intensity is a key driver to overcoming the challenges of internationalisation.
    Keywords: R&D productivity,Multinationality,Conditional efficiency,Patents,DEA modelling,multinationality,conditional efficiency,patents,DEA modelling JEL classification O32,F23,L25,C44
    Date: 2022
  9. By: Salomé Baslandze
    Abstract: Firm-level productivity differences are big and largely ascribed to ex-ante heterogeneity in the entrepreneurs’ growth potential at birth. Where do these ex-ante differences come from, and what can the policy do to encourage the entry of high-growth entrepreneurs? I study empirically and by means of a quantitative growth model the spinout firms: the firms founded by former employees of the incumbent firms. By focusing on innovating spinouts identified through the inventor mobility in the patent data, I document that spinout entrants significantly outperform regular entrants throughout their life. Firms with a bigger technological lead spawn more successful spinouts. Building on these observations, I build a structural model of innovation and firm dynamics, where firm heterogeneity arises from endogenous decisions of innovation workers to become entrepreneurs and create spinouts. The spinout dynamics affect productivity growth through four main channels: direct entry, incumbents’ disincentive effect, knowledge diffusion, and the firm composition channel. Growth decompositions show that accounting for spinout dynamics is quantitatively important for our understanding of the growth process. I analyze the role of noncompete laws affecting employee entrepreneurship for aggregate innovation and growth.
    Keywords: innovation; spinouts; entrepreneurship; noncompete laws; firm dynamics
    JEL: O30 O43
    Date: 2022–09–26
  10. By: Gaspar, Raymond (Asian Development Bank Institute)
    Abstract: We examine the impact of foreign-licensed technology and identifies channels to effectively leverage such technology to improve the performance of manufacturing firms in the Philippines. Using the fixed effects approach to World Bank Enterprise Survey panel data for the Philippines covering 2009 and 2015, we find no statistically significant impact of introducing foreign-licensed technology to manufacturing firms in terms of annual sales, employment, and energy intensity. Interestingly, the impact is more pronounced and significant among manufacturing firms that conduct workforce trainings, thereby improving absorptive capacity through better quality of labor. The empirical findings call for the Philippine government to bolster skills training and human capital formation initiatives, further incentivizing in-house training, to support the advancement of local absorptive capacity and better assimilate the use of foreign technologies.
    Keywords: technology transfer; technology licensing; firm performance; local absorptive capacity; Philippines
    JEL: L24 L25 L60
    Date: 2022–06
  11. By: Putra, Chandra (Asian Development Bank Institute); Narjoko, Dionisius (Asian Development Bank Institute)
    Abstract: We examine the impact of imported intermediates on plant productivity and the role of plant capability in explaining the heterogeneity of the impact. We use a survey database of medium-sized and large Indonesian manufacturing establishments from 2000 to 2015. Imported intermediates are presented as a proportion of total intermediates, while capability factors are represented by the plant’s age, foreign direct investment (FDI) status, exporting status, and capital intensity. We find that import intensity does not significantly affect productivity. However, the impact of import intensity on productivity is positive and significant for exporters and for plants with higher capital intensity. Meanwhile, older and FDI plants do not seem to differ in terms of productivity gain from higher import intensity compared with either younger or non-FDI plants. The result underlines the importance of plant capability in determining productivity gain from imported intermediates. Our study improves policy makers’ understanding for better outcomes in the industry, such as the purpose of trade negotiation. Our study also recommends that policy makers carefully consider implementing a restriction or ban on imported intermediates, as doing so will penalize capable firms and reduce the competitiveness of exporters in the global market.
    Keywords: imported intermediates; productivity; capability; technology transfer
    JEL: D22 D24 F14 F61
    Date: 2022–06
  12. By: Georgios TSIACHTSIRAS; Deyun YIN; Ernest MIGUELEZ; Rosina MORENO
    Abstract: This paper explores the effect of the High Speed Rail (HSR) network expansion on local innovation in China during the period 2008-2016. Using exogenous variation arising from a novel instrument - courier’s stations during the Ming dynasty, we find solid evidence that the opening of a HSR station increases cities’ innovation activity. We also explore the role of inter-city technology diffusion as being behind the surge of local innovation. To do it, we compute least-cost paths between city-pairs, over time, based on the opening and speed of each HSR line, and obtain that an increase in a city’s connectivity to other cities specialized in a specific technological field, through the HSR network, increases the probability for the city to specialize in that same technological field. We interpret it as evidence of knowledge diffusion.
    Keywords: high speed rail, innovation, technology diffusion, patents, specialization
    JEL: R40 O18 O30 O33
    Date: 2022
  13. By: Vuong, Quan-Hoang; Le, Tam-Tri; Zhang, Tao; La, Viet-Phuong; Quang-Loc, Nguyen; Hoang, Giang; Nguyen, Minh-Hoang
    Abstract: Creativity is a crucial aspect of entrepreneurship. However, research on the information-processing mechanism of creativity in relation to entrepreneurship is still very limited. To explore factors contributing to creativity performance among entrepreneurs in terms of information processing, we applied the Bayesian Mindsponge Framework. We used the Serendipity-Mindsponge-3D (SM3D) knowledge management theory to construct models and conducted Bayesian analysis on the most comprehensive and well-designed dataset of 3071 Vietnamese entrepreneurs up to date. We found that entrepreneurs who give more time to their startup attempts are likely to have lower levels of creativity. Both factors of higher levels of knowledge within one’s discipline and better connections to out-of-discipline knowledge are positively associated with more creativity. While the effect of openmindedness on the relationship between within-discipline knowledge and creativity is unclear, openmindedness was found to have a positive moderating effect on the association between out-of-discipline knowledge and creativity. These findings support entrepreneurs in understanding the information processing mechanisms behind creativity for creating more effective knowledge management strategies.
    Date: 2022–11–16
  14. By: Antonin Bergeaud; Arthur Guillouzouic; Emeric Henry; Clement Malgouyres
    Abstract: Introducing a new measure of scientific proximity between private firms and public research groups and exploiting a multi-billion euro financing program of academic clusters in France, we provide causal evidence of spillovers from academic research to private sector firms. Firms in the top quartile of exposure to the funding shock increase their R&D effort by 20% compared to the bottom quartile. We exploit reports produced by funded clusters, complemented by data on labor mobility and R&D public-private partnerships, to provide evidence on the channels for these spillovers. We show that spillovers are driven by outsourcing of R&D activities by the private to the public sectors and, to a lesser extent, by labor mobility from one to the other and by informal contacts. We discuss the policy implications of these findings.
    Keywords: knowledge spillovers, policy instruments, technological distance
    Date: 2022–10–26
  15. By: Choi, Jaedo; Shim, Younghun
    Abstract: We study how the adoption of foreign technology and local spillovers from such adoption contributed to late industrialization in a developing country during the postwar period. Using novel historical firm-level data for South Korea, we provide three empirical findings: direct productivity gains to adopters, local productivity spillovers of the adoption, and complementarity in firms' adoption decisions. Based on these findings, we develop a dynamic spatial model with firms' technology adoption decisions and local spillovers. The spillovers induce dynamic complementarity in firms' technology adoption decisions. Because of this complementarity, the model potentially features multiple steady states. Temporary adoption subsidies can have permanent effects by moving an economy to a new transition path that converges to a higher-productivity steady state. We calibrate our model to the microdata and econometric estimates. We evaluate the effects of the South Korean government policy that temporarily provided adoption subsidies to heavy manufacturing firms in the 1970s. Had no adoption subsidies been provided, South Korea would have converged to a less industrialized steady state in which the heavy manufacturing sector’s share of GDP would have been 15 percentage points lower and aggregate welfare would have been 10% lower compared to the steady state with successful industrialization. Thus, temporary subsidies for technology adoption had permanent effects.
    Keywords: Technology adoption, industrialization, knowledge spillover, path dependence, big push
    JEL: O14 O33 O53 R12
    Date: 2022
  16. By: Napasintuwong, Orachos
    Keywords: Agribusiness, Crop Production/Industries
    Date: 2021
  17. By: Urata, Shujiro (Asian Development Bank Institute); Baek, Youngmin (Asian Development Bank Institute)
    Abstract: We examine the foreign direct investment (FDI) spillover effects in developing countries and investigate the importance of the absorptive capacity of a firm and a country in realizing and facilitating FDI spillover. We use data obtained from the World Bank’s Enterprise Surveys for 107 countries from 2007 to 2020. We find that firms in developing countries do not benefit from horizontal FDI but benefit from forward and backward vertical FDI. We also find that firms can benefit from horizontal, forward, and backward FDI by improving the absorptive capacity of firms and host countries. Based on these findings, we present several recommendations to help firms benefit from FDI spillover.
    Keywords: foreign direct investment; technology transfer; absorptive capacity
    JEL: D22 F21 O30 R10
    Date: 2022–06
  18. By: , editor2021; Younus, Ahmed Muayad
    Abstract: Applications of artificial intelligence (AI) in business have garnered much attention in recent years, but the implementation issues posed by AI have not been addressed. The purpose of this study was to shed light on the effect of artificial intelligence and its associated variables on job performance. Privacy, consent, security, scalability, the role of corporations, and the changing nature of business are used as a study community and focused in Small and Medium Enterprises (SMEs) in China, business sector. To collect data from the random sample, a questionnaire was constructed. 220 managers were included in the sample. Additionally, the study took a descriptive method and analyzed the data using SPSS. The findings indicated that artificial intelligence has a statistically significant effect on employment. Performance is determined solely by factors. Additionally, the findings indicated that gender, academic credentials, and years of experience all have a statistically significant impact on work performance If the implementation science community wants to aid in the general adoption of business, the concerns outlined in this research will demand significant attention in the future years.
    Date: 2022–06–10

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