nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2023‒04‒03
four papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Thailand and the Middle-Income Trap: An Analysis from the Global Value Chain Perspective By Upalat Korwatanasakul
  2. Economic stimulus effects of product innovation under demand stagnation By Daisuke Matsuzaki; Yoshiyasu Ono
  3. Foreign Affiliates versus Domestic Firms in the Information and Communication Services Sector in Central and Eastern Europe By Svilena Mihaylova
  4. Marketing of SMEs in the digital age: Challenges and issues By Saida Filali; Nassima Faraj

  1. By: Upalat Korwatanasakul
    Abstract: The study provides a novel analysis through the lens of the global value chain (GVC) framework with empirical data of trade in value added, which has not been explored much in the literature, to explain the issue of the middle-income trap in the context of Thailand by matching GVC data at the firm, industry, and country levels with the economic development path. The findings support the previous studies that GVC participation helps induce initial industrialisation and economic development. However, it does not guarantee technological upgrading at a later stage due to the risk of falling into the middle-income technology trap (MITT). Thailand depends heavily on passive technology and specialisation given by headquarter economies, which lock the country in the middle of value chains with limited knowledge and technology transfer. As a result, the country fell into the MITT. The MITT, together with other confounding factors, such as eroding competitiveness in labour-intensive production, made Thailand unable to sustain its growth and catch up with more innovative advanced economies and, in turn, fell into the middle-income trap. To escape from both traps, the government may consider policies that can deal with the issues of insufficient knowledge and technology transfer and a lack of local firms’ capacities as they are the primary causes of the limited upgrading. In addition, the study manifests the necessity of a contextual analysis at the industry level to understand value-added components and the importance of the quality of domestic value added sources.
    Keywords: Economic development; Global value chain (GVC); GVC participation; Middle-income trap; Thailand
    JEL: F13 F14 L25 O24
    Date: 2023–03
  2. By: Daisuke Matsuzaki; Yoshiyasu Ono
    Abstract: When faced with economic stagnation, innovation, product innovation in particular, is often cited as an effective stimulus because it is thought to encourage household consumption and lead to higher demand. Using a secular stagnation model with wealth preference, we examine the effects of product innovation on employment and consumption. Two types of product innovation are examined: quantity-augmenting-like innovation and addictive innovation. The former works as if a larger quantity were consumed although the actual quantity remains the same. The latter reduces the elasticity of the marginal utility of consumption. We find that the former reduces both consumption and employment whereas the latter expands them.
    Date: 2023–03
  3. By: Svilena Mihaylova (University of Economics Ð Varna)
    Abstract: Given the important role of foreign direct investment in Central and Eastern Europe, the paper explores the performance of foreign affiliates versus domestic firms in the information and communication services sector in eleven countries in the region. Based on Eurostat data for the period 2010-2020, the paper conducts descriptive and comparative analysis of foreign-owned and domestic firms in terms of size, productivity and profitability, as well as their dynamics over time. The results reveal that, on average, foreign-owned firms in the sector tend to be bigger and perform better than their local counterparts, but in the same time there are significant variations across countries.
    Keywords: Firm performance; Foreign direct investment; Multinational enterprises
    JEL: L25 F21 F23
    Date: 2023–03
  4. By: Saida Filali (Université Mohamed 1 Oujda MAROC); Nassima Faraj (Université Mohamed 1 Oujda MAROC)
    Abstract: Digital marketing is revolutionizing organizational structures including businesses, especially Moroccan SMEs, offering a set of opportunities to improve the traditional way of operating while building a more authentic relationship with customers. Indeed, digital marketing brings forward important characteristics for SMEs in search of efficiency and performance, and it is considered as an interesting alternative to traditional approaches. To this end, the interest of our study is to show the main issues and challenges that the digitalization of the marketing function can have on Moroccan SMEs. In this context, the problematic we will try to answer is an original one aiming to explore the impact of the introduction of digital within the marketing function by taking the case of SMEs. To this end, we opted for a sample of 4 consultants to respond to the exploratory phase and 41 respondents for the confirmatory phase. The results have shown that digital marketing is a double-edged sword in that it can have different impacts on SME structures. With respect to the contributions of the study, we first point out the results will be beneficial for SMEs which constitute a large part of the Moroccan economic fabric, and a concise methodology based on the triangulation between the qualitative and quantitative approach. As for the limitations, we mention that the number of respondents is somewhat limited.
    Keywords: Digital marketing SME challenges issues Morocco. JEL Classification : M31 Paper type : Empirical research, Digital marketing, SME, challenges, issues, Morocco. JEL Classification : M31 Paper type : Empirical research
    Date: 2022–11–30

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