nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2023‒01‒02
eleven papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Skilled Immigration, Task Allocation and the Innovation of Firms By Anna Maria Mayda; Gianluca Orefice; Gianluca Santoni
  2. Does FDI increase product innovation of domestic firms? Evidence from China By Lu, Yue; Deng, Lijing; Tang, Yao
  3. Digital Technologies for Digital Innovation: Unlocking Data and Knowledge to Drive Organizational Value Creation By Koppe, Timo
  4. R&D Subsidies and Technological Progress in the Chinese ICT Manufacturing Industry By Li, Junjun
  5. Entangled Modes: Boundaries to effective international knowledge sourcing through technology alliances and technology-based acquisitions By Jojo Jacob; Rene Belderbos; Boris Lokshin
  6. Personality and regional innovativeness: An empirical analysis of German patent data By Reher, Leonie; Runst, Petrik; Thomä, Jörg
  7. Effects of Conferring Business Resource on Rivals By Ajit, Tejaswi Channagiri; Jamison, Mark A.
  8. Management of Big data: An empirical investigation of the Too-Much-of-a-Good-Thing effect in medium and large firms By Claudio Vitari; Elisabetta Raguseo; Federico Pigni
  9. Identifying and characterising AI adopters: A novel approach based on big data By Flavio Calvino; Lea Samek; Mariagrazia Squicciarini; Cody Morris
  10. Characterising innovations and sustainability in wine firms. An exploratory study of French wine industry By Louis-Antoine Saïsset; Iciar Pavez; Thalia Astruc; Leïla Temri
  11. Foreign Direct Investment and Inclusive Green Growth in Africa: Energy Efficiency Contingencies and Thresholds By Ofori, Isaac K.; Gbolonyo, Emmanuel Y.; Ojong, Nathanael

  1. 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 activ-ity, 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
  2. By: Lu, Yue; Deng, Lijing; Tang, Yao
    Abstract: Exploiting a change in policy governing the entry of foreign direct investment (FDI) in 2002, we apply the difference-in-differences model to estimate the effect of FDI on the product scope of domestic Chinese firms. In industries that experienced relaxation in FDI regulations, the average product scope increased by 5% which indicates a rise in product innovation. FDI's spillovers along vertical linkages are also important, as we find that the product scope of firms is positively affected by FDI in upstream industries, but negatively affected by FDI in downstream industries. Further analysis shows that the negative effect of FDI in downstream industries is mainly concentrated in industries with a high level of processing trade, as firms in those industries rely more on imported inputs and have less contact with domestic suppliers. The main channels of effect are firm-level R&D and industry-level technological distance, as the entry of FDI leads to an improvement in these variables. Positive effects are found in medium- and low-tech industries but not in high-tech industries, indicating that indigenous effort is important for product innovation in high-tech industries.
    Keywords: Foreign direct investment, product scope, Chinese firms
    JEL: F2 L5 O3
    Date: 2022–11–26
  3. By: Koppe, Timo
    Abstract: The rise of digitization has radically transformed innovation processes of today's companies and is increasingly challenging existing theories and practices. Digital innovation can describe both the use of digital technologies during the innovation process and the outcome of innovation. This thesis aims to improve the understanding of digital innovation in today's digitized world by contributing to the theoretical and practical knowledge along the four organizational activities of the digital innovation process: initiation, development, implementation, and exploitation. In doing so, the thesis pays special attention to the use of digital technologies and tools (e.g., machine learning, online crowdsourcing platforms, etc.) that unlock knowledge and data to facilitate new products, services, and other value streams. When initiating digital innovations, organizations seek to identify, assimilate, and apply valuable knowledge from within and outside the organization. This activity is crucial for organizations as it determines how they address the increasing pressure to innovate in their industries and markets while innovation processes themselves are changing and becoming more distributed and open. Papers A and B of this thesis address this phase by examining how digital technologies are changing knowledge gathering, e.g., through new ways of crowdsourcing ideas and facilitating cooperation and collaboration among users and innovation collectives. Paper A focuses on organizational culture as a critical backdrop of digital innovations and explores whether it influences the implementation of idea platforms and, in this way, facilitates the discovery of innovations. The paper reveals that the implementation of idea platforms is facilitated by a culture that emphasizes policies, procedures, and information management. Additionally, the paper highlights the importance of taking organizational culture into account when introducing a new technology or process that may be incompatible with the existing culture. Paper B examines newly formed innovation collectives and initiatives for developing ventilators to address shortages during the rise of the COVID-19 pandemic. The paper focuses on digital technologies enabling a transformation in the way innovation collectives form, communicate, and collaborate - all during a period of shutdown and social distancing. The paper underlines the role of digital technologies and collaboration platforms through networking, communication, and decentralized development. The results show that through the effective use of digital technologies, even complex innovations are no longer developed only in large enterprises but also by innovation collectives that can involve dynamic sets of actors with diverse goals and capabilities. In addition, established organizations are increasingly confronted with community innovations that offer complex solutions based on a modular architecture characteristic of digital innovations. Such modular layered architectures are a critical concept in the development of digital innovations. This phase of the digital innovation process encompasses the design, development, and adoption of technological artifacts, which are explored in Sections C and D of this paper. Paper C focuses on the latter, the adoption of digital services artifacts in the plant and mechanical engineering industry. The paper presents an integrative model based on the Technology-Organization-Environment (TOE) framework that examines different contextual factors as important components of the introduction, adoption, and routinization of digital service innovations. The results provide a basis for studying the assimilation of digital service innovations and can serve as a reference model for informing managerial decisions. Paper D, in turn, focuses on the design and development of a technology artifact. The paper focuses on applying cloud-based machine learning services to implement a visual inspection system in the manufacturing industry. The results show, for one, the value of standardization and vendor-supplied IS architecture concepts in digital innovation and, for another, how such innovations can facilitate further innovations in manufacturing. The implementation of digital innovations marks the third phase of the digital innovation process, which is addressed in Paper E. It encompasses organizational changes that occur during digital innovation initiatives. This phase emphasizes change through digital innovation initiatives within the organization (e.g., strategy, structure, people, and technology) and across the organizational environment. Paper E investigates how digital service innovations impact industrial firms, relationships between firms and their customers, and product/service offerings. The paper uses work systems theory as a theoretical foundation to structure the results and analyze them through the lens of service systems. While this analysis helps to identify the organizational changes that result from the implementation of digital innovations, the paper also provides a basis for further research and supports practitioners with systematic analyses of organizational change. The last phase of the digital innovation process is about exploiting existing systems/data for new purposes and innovations. In this regard, it is important to better understand the improvements and effects in the domains beyond the sheer outcome of digital innovation, such as organizational learning or organizational change capabilities. Paper F of this thesis investigates the exploitation of digital innovations in the context of organizational learning. One aspect of this addresses how individuals within the organization leverage innovation to explore and exploit knowledge. Paper F utilizes the organizational learning perspective and examines the dynamics of human learning and machine learning to understand how organizations can benefit from their respective idiosyncrasies in enabling bilateral learning. The paper demonstrates how bilateral human-machine learning can improve the overall performance using a case study from the trading sector. Drawing on these findings, the paper offers new insights into the coordination of human learning and machine learning, and moreover, the collaboration between human and artificial intelligence in organizational routines.
    Date: 2022
  4. By: Li, Junjun
    Abstract: In the past decades, the Chinese ICT industry has received fiscal, taxation, and financial policy support in technology R&D. This research adopts causal inference methods for mediation analysis with interaction to empirically examine the direct and indirect effects of R&D subsidies in the Chinese ICT manufacturing industry. We found that the impact of R&D subsidies on private R&D expenditure and innovation outputs is positive and statistically significant. However, higher subsidy intensity crowds out private R&D expenditures. Second, in the Eastern region, firms invest more in R&D but more in incremental rather than radical innovation. And, the enterprise average private R&D expenditure is insufficient in the ECE sector. Finally, openness and information levels positively contribute to innovation outputs. Based on the findings, we propose several policy suggestions.
    Keywords: R&D subsidies,innovation output,private R&D investment,Chinese ICT manufacturing,causal mediation analysis
    Date: 2022
  5. By: Jojo Jacob; Rene Belderbos; Boris Lokshin
    Abstract: In today’s globalized era, corporate technology strategy is increasingly oriented towards accessing international sources of knowledge that can improve the novelty and variety of firms’ knowledge bases. Technology alliances and technology-based acquisitions have become two ubiquitous modes used in pursuing such an internationally-oriented technology strategy. We propose two boundaries to the effectiveness of pursuing geographically dispersed portfolios of alliances and acquisitions, arising from managerial complexities and knowledge redundancies that the combined portfolio of these modes may engender. We find support for our predictions in an analysis at the technology level of 165 leading firms across multiple industries. The findings of this paper highlight the need for managing the interrelatedness of diverse alliance and acquisition portfolios for their effective performance.
    Keywords: alliance portfolios, acquisitions, complexity, redundancy, geographic diversity, technological performance
    Date: 2022–11–21
  6. By: Reher, Leonie; Runst, Petrik; Thomä, Jörg
    Abstract: This paper contributes to the new literature on the role of personality for regional innovativeness by examining whether this role varies between different types of regions. Building on regionally aggregated levels of individual Big Five personality traits, we find that only extraversion has a positive effect on patenting in German regions. Its impact is particularly important in lagging regions. We interpret this result as an indication of the compensatory role of collaboration for the innovativeness of lagging regions characterized by low levels of (business) R&D, which demonstrates the need for place-sensitive policies that take into account different modes of innovation.
    Keywords: Innovation,Big Five,Personality,Lagging regions
    JEL: J24 O18 O30 R1
    Date: 2022
  7. By: Ajit, Tejaswi Channagiri; Jamison, Mark A.
    Abstract: We examine how requiring platforms to give rivals resources, such as data, affects innovation. Using simulations in which an initial firm obtains a head start on rivals and uses that head start to build a valuable resource that subsequently gives it a competitive advantage over rivals when competing in the initial technology, we contrast scenarios in which the initial firm is or is not required by a government regulator to provide this resource to rivals. We develop pricing provisions that incentivize the initial firm to voluntarily provide the resource to rivals. We then contrast incentives to create substitutes for the initial technology.
    Keywords: platforms,innovation,competition
    JEL: L13 L15 L51
    Date: 2022
  8. By: Claudio Vitari (AMU - Aix Marseille Université, CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon); Elisabetta Raguseo (Polito - Politecnico di Torino = Polytechnic of Turin); Federico Pigni (EESC-GEM Grenoble Ecole de Management)
    Abstract: Firms adopt Big data solutions, but a body of evidence suggests that Big data in some cases may create more problems than benefits. We hypothesize that the problem may not be Big data in itself but rather too much of it. These kinds of effects echo the Too-Much-of-a-Good-Thing (TMGT) effect in the field of management. This theory also seems meaningful and applicable in management information systems. We contribute to assessments of the TMGT effect related to Big data by providing an answer to the following question: When does the extension of Big data lead to value erosion? We collected data from a sample of medium and large firms and established a set of regression models to test the relationship between Big data and value creation, considering firm size as a moderator. The data confirm the existence of both an inverted U-shaped curve and firm size moderation. These results extend the applicability of the TMGT effect theory and are useful for firms exploring investments in Big data.
    Keywords: Too-Much-of-a-Good-Thing effect,inverted U-shaped curve,Big data,business value,medium and large firms
    Date: 2022
  9. By: Flavio Calvino; Lea Samek; Mariagrazia Squicciarini; Cody Morris
    Abstract: This work employs a novel approach to identify and characterise firms adopting Artificial Intelligence (AI), using different sources of large microdata. Focusing on the United Kingdom, the analysis combines data on Intellectual Property Rights, website information, online job postings, and firm-level financials for the first time. It shows that a significant share of AI adopters is active in Information and Communication Technologies and professional services, and is located in the South of the United Kingdom, particularly around London. Adopters tend to be highly productive and larger than other firms, while young adopters tend to hire AI workers more intensively. Human capital appears to play an important role, not only for AI adoption but also for firms’ productivity returns. Significant differences in the characteristics of AI adopters emerge when distinguishing between firms carrying out AI innovation, those with an AI core business, and those searching for AI talent.
    Keywords: artificial intelligence, productivity, technology adoption
    Date: 2022–12–19
  10. By: Louis-Antoine Saïsset (UMR MoISA - Montpellier Interdisciplinary center on Sustainable Agri-food systems (Social and nutritional sciences) - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - IRD - Institut de Recherche pour le Développement - CIHEAM-IAMM - Centre International de Hautes Etudes Agronomiques Méditerranéennes - Institut Agronomique Méditerranéen de Montpellier - CIHEAM - Centre International de Hautes Études Agronomiques Méditerranéennes - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement); Iciar Pavez (UMR MoISA - Montpellier Interdisciplinary center on Sustainable Agri-food systems (Social and nutritional sciences) - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - IRD - Institut de Recherche pour le Développement - CIHEAM-IAMM - Centre International de Hautes Etudes Agronomiques Méditerranéennes - Institut Agronomique Méditerranéen de Montpellier - CIHEAM - Centre International de Hautes Études Agronomiques Méditerranéennes - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement); Thalia Astruc (Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement); Leïla Temri (UMR MoISA - Montpellier Interdisciplinary center on Sustainable Agri-food systems (Social and nutritional sciences) - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - IRD - Institut de Recherche pour le Développement - CIHEAM-IAMM - Centre International de Hautes Etudes Agronomiques Méditerranéennes - Institut Agronomique Méditerranéen de Montpellier - CIHEAM - Centre International de Hautes Études Agronomiques Méditerranéennes - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement)
    Abstract: Objective The objective of this study is to understand how the characteristics of the different types of firms, i.e. wine estates, wine cooperatives and wine merchants, and their forms of governance, can influence innovations and sustainability decisions in the wine industry. This study has been run as part of the action plan of the Chaire Inq'Faaqt (Innovating in Agricultural and Agrifood chains, Quality and Territories), and more particularly the Axis 4 "firms and jobs". Methods Our methodology is qualitative and based on semi-structured interviews with the three main types of French wine firms: wine estates, wine cooperatives and wine merchants. A total of 16 businesses, located in Occitanie, Provence and Alsace, were interviewed. These interviews were quasi totally recorded and transcribed. These firms have very different production orientation, size and strategies. In this poster, as a first exploratory step, we analyzed in deep one of each type of firms. This will allow us to perform a subsequent analysis of the full sample. Results We observed that process-related innovations were the most frequent, followed by organizational ones, related to governance. Marketing and logistic innovations were more frequent in the biggest and more decentralized firms (wine co-op and wine merchant). Also, sustainability-related innovations were very contrasted from a firm to another, the wine estate showing a more balanced sustainability strategy on the economic, environmental and social pillars. Standards seem to be the most spread means to signal sustainability, especially for the wine co-op. The sustainability performance is not easy to measure because of its complexity. Firms preferred to implement more flexible voluntary commitment strategies (partnerships with stakeholders, returnable or recycling bottles systems, among others). Conclusion This exploratory study underlined the great diversity of the wine firms in terms of types of innovations and sustainability orientation. It is difficult to design a typology of wine firms, but it is now possible to have a more detailed idea about the main concerns, as water management, pesticides shortening or the relevance of organic wines.
    Date: 2022–10–11
  11. By: Ofori, Isaac K.; Gbolonyo, Emmanuel Y.; Ojong, Nathanael
    Abstract: Despite the growing number of empirical studies on foreign direct investment (FDI) and energy efficiency (EE) as they relate to green growth, there remains an empirical research gap with respect to whether EE can engender positive synergy with FDI to foster inclusive green growth (IGG) in Africa. Also, little has been done to show the IGG gains from improving EE in both the short and long terms. Thus, this paper aims to investigate whether there exists a relevant synergy between EE and FDI in fostering IGG in Africa by using macrodata for 23 countries from 2000 to 2020. According to our findings, which are based on dynamic GMM estimator, FDI hampers IGG in Africa, while EE fosters IGG. Notably, in the presence of EE, the environmental-quality-deterioration effect of FDI is reduced. Additional evidence by way of threshold analysis indicates that improving EE in Africa generates positive sustainable development gains in both the short and long terms. This study suggests that a country’s drive to attract FDI needs to be accompanied by appropriate policy options to promote energy efficiency.
    Keywords: Africa; Energy efficiency; FDI; Inclusive Green Growth; Greenhouse Gases; Environmental Sustainability
    JEL: F2 F21 O11 O44 O55 Q01 Q43 Q56
    Date: 2022–07–17

This nep-cse issue is ©2023 by João José de Matos Ferreira. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.