nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2023‒11‒20
eight papers chosen by
João José de Matos Ferreira, Universidade da Beira Interior

  1. Reaching beyond the acquirer-Target Dyad in M&A – Linkages to External knowledge sources and target firm valuation By Christoph Grimpe; Katrin Hussinger; Wolfgang Sofka
  2. Dynamics of innovation in makerspaces and fabrication labs: a systematic literature review By Sharma, Gautam; Haldar, Stuti
  3. Global Technology Cycles and Local Economic Performance By Sebastian Heinrich; Samad Sarferaz; Martin Wörter
  4. Innovation and trade in the automotive industry: evidence from European countries (1990-2018). By Novaresio, Anna; Patrucco, Pier Paolo
  5. Are Innovation Barriers Different for Chilean Exporters and Non-Exporters? By Roberto Alvarez; Miguel A. Gonzalez
  6. Endogenous rural dynamics: an analysis of labour markets, human resource practices and firm performance By Anne Margarian; Cécile Détang-Dessendre; Aleksandra Barczak; Corinne Tanguy
  7. The intellectual spoils of war? Defense R&D, productivity, and international spillovers By Moretti, Enrico; Steinwender, Claudia; Van Reenen, John
  8. Adoption and Diffusion of Digital Technologies By Heinz Hollenstein

  1. By: Christoph Grimpe (CBS, DK - ZEW, DE); Katrin Hussinger (DEM, Université du Luxembourg); Wolfgang Sofka (CBS, DK - University of Liverpool, UK)
    Abstract: Access to unique knowledge of a target firm is the strategic rationale for many firm acquisitions with the expectation of improving the acquirer’s innovation performance. We argue that the ac- quisition price reflects opportunities for value creation through innovation and investigate whether acquirers pay not just for the target firm’s knowledge but also for the opportunity to access local- ized knowledge when targets are embedded in the knowledge flows of their region. Accordingly, we integrate embeddedness theory with literature on the expectations for knowledge-based value creation in M&A. We hypothesize that target firms that are highly embedded in local knowledge flows have higher acquisition prices. Using data on 520 technology-oriented firm acquisitions in Europe between 2001 and 2010, we find that the acquisition price increases with the target firm’s local embeddedness. The effects are weaker when an acquirer’s knowledge base is closely related to the localized knowledge and stronger when the target’s knowledge base is closely related to the localized knowledge, suggesting that local embeddedness conditions the ability of acquirer and
    Keywords: firm acquisitions, local embeddedness, localized knowledge, patents, knowledge relatedness.
    JEL: G34 O3 P48
    Date: 2023
  2. By: Sharma, Gautam (CIRCLE, Lund University); Haldar, Stuti (CIRCLE, Lund University)
    Abstract: Makerspaces and fabrication laboratories (fablabs) have received extensive attention recently due to their potential to drive innovation and entrepreneurship. These spaces provide access to high-tech tools to the people and encourage community building and collaborations around technology-oriented projects. This paper analyzes the existing research on the innovation dynamics within these spaces. Seventy peer-reviewed studies were selected and thematically analyzed from the Scopus and Web of Science databases. The results are analyzed and presented as descriptive statistics and thematic analysis. We found nine significant themes from the extant literature: 1) Collaborations, learning and sharing practices in makerspaces; 2) Motivations and spatial environment affecting makerspace innovations; 3) Physical Resources, experimentations, and knowledge dimension of makerspaces; 4) Diversity and inclusion aspects of makerspaces; 5) Social and economic impact of innovation in makerspaces; 6) Regional innovation policies and maker cultures; 7) Maker movement in different regions; 8) Maker movement and the city culture; and 9) Academic makerspaces and innovation. The paper contributes to the broader literature on innovation dynamics within informal spaces like makerspaces and fablabs.
    Keywords: makerspaces; fabrication laboratories; fab labs; creative open spaces; innovation; systematic literature review; thematic analysis
    JEL: O30 O32
    Date: 2023–10–31
  3. By: Sebastian Heinrich (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Samad Sarferaz (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Martin Wörter (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: This paper studies the global synchronicity of technology and its impact on the economy. We employ dynamic factor analysis to decompose patent data in different digital technologies for various countries into global and country-speciffc factors. Our findings confirm the existence of global and local technology cycles. We further find a significant positive correlation between the estimated global technology index and a country's economic performance. This positive effect is stronger in countries with broad tech-nological exposure. However, a concentration in only few dominant techno-logical fields seems to reduce the positive impact of the global technology cycle on a country's economic performance.
    Keywords: innovation index, dynamic factor model, patent data, produc- tivity growth, knowledge diffusion, digitalization, globalization
    JEL: O31 O33 O47 C38 L86
    Date: 2023–05
  4. By: Novaresio, Anna; Patrucco, Pier Paolo (University of Turin)
    Abstract: The goal of the paper is threefold: 1) to empirically investigate whether out-of-equilibrium conditions in international economic performances (exports & imports) are correlated with greater innovative efforts (R&D expenditures) in the automotive industry, by means of both descriptive and inferential techniques; 2) to explore, by using descriptive means, whether and which countries display the abovementioned path, in search for possible local-specific dynamics; 3) to provide empirical evidence in support of the existence of a self-feeding loop between trade indicators (exports & imports) and R&D expenditures in the European automobile sector, by using an appropriate econometrical strategy inspired by the “Crépon-Duguet-Mairesse†(CDM) method. Our empirical analysis, based on a panel sample of European countries between 1990-2018, provide substantial support to the hypothesis that a “creative response†to out-of-equilibrium export conditions drives innovation also in the automotive industry. Finally, our study confirms the existence of a self-reinforcing loop between exports, imports and innovation in the automotive industry, which is yet mediated by the industry size, suggesting that the economies of scale are still the major driver of the sectoral growth and innovation capability.
    Date: 2023–05
  5. By: Roberto Alvarez; Miguel A. Gonzalez
    Abstract: In this paper, we study the existence of different innovation barriers between exporters and non-exporters in Chile. We deal with endogeneity of exporting using several econometric models. Our findings are very robust. For most of the aspects analyzed, exporters perceive lower innovation obstacles compared to non-exporters. Consistent with the concept of learning by exporting, it seems that the internationalization process allows firms to access new knowledge and technologies to improving their innovation capabilities. This can have relevant implications for public policy, particularly suggesting that public support for innovation would be more important for non-exporter firms.
    Date: 2023–10
  6. By: Anne Margarian (Thünen Institute of Market Analysis); Cécile Détang-Dessendre (CESAER - Centre d'Economie et de Sociologie Rurales Appliquées à l'Agriculture et aux Espaces Ruraux - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Dijon - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement); Aleksandra Barczak (Département EcoSocio - Département Économie et Sciences Sociales pour l'Agriculture, l'Alimentation et l'Environnement - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CESAER - Centre d'Economie et de Sociologie Rurales Appliquées à l'Agriculture et aux Espaces Ruraux - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Dijon - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement); Corinne Tanguy (CESAER - Centre d'Economie et de Sociologie Rurales Appliquées à l'Agriculture et aux Espaces Ruraux - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Dijon - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement)
    Abstract: Abstract Some rural locations in industrialized countries have experienced considerable employment growth in the last decades, while others suffer from depopulation and decline. The paper aims to contribute to the development of an evolutionary approach that allows for the identification of those often difficult-to-observe evolving factors that explain success and failure of rural locations. It also wants to show how the combined recognition of evolutionary labour market perspectives, the dynamic capability view of the firm, and human resource management (HRM) theories can serve the operationalisation of evolutionary explanations in this context. According to the derived model, apparent locational disadvantages might be compensated for by subtle, potentially self-enforcing labour market dynamics that generate opportunities for certain firms and industries. Empirically, the ideas are substantiated by means of a mediation model. The empirical analysis is based on latent class analysis and discrete choice models using data from an own survey of 200 food-processing firms in urban and rural locations of one German federal state. For these observations, our results support the idea that the exploitation of HRM opportunities may be more important for good performance in rural labour markets than the direct implementation of specific innovation modes. Investment in HRM allows rural firms in our sample to realise those gains in terms of innovation and growth offered by the creation of a stable and experienced workforce. Their focus on internal labour markets potentially generates external effects, which further encourages neighbouring firms to also invest in involved HRM measures.
    Keywords: Agglomeration advantages, Innovation, Human resource management, Mediation
    Date: 2022–07–05
  7. By: Moretti, Enrico; Steinwender, Claudia; Van Reenen, John
    Abstract: We examine the impact of government funding for R&D—and defense-related R&D in particular—on privately conducted R&D, and its ultimate effect on productivity growth. We estimate longitudinal models that relate privately funded R&D to lagged government-funded R&D using industry-country level data from OECD countries and firm level data from France. To deal with the potentially endogenous allocation of government R&D funds we use changes in predicted defense R&D as an instrumental variable. In many OECD countries, expenditures for defense-related R&D represent by far the most important form of public subsidies for innovation. In both datasets, we uncover evidence of “crowding in” rather than “crowding out, ” as increases in government-funded R&D for an industry or a firm result in significant increases in private sector R&D in that industry or firm. On average, a 10% increase in government-financed R&D generates a 5% to 6% additional increase in privately funded R&D. We also find evidence of international spillovers, as increases in government-funded R&D in a particular industry and country raise private R&D in the same industry in other countries. Finally, we find that increases in private R&D induced by increases in defense R&D result in productivity gains.
    JEL: J1
    Date: 2023–02–06
  8. By: Heinz Hollenstein (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: The study provides evidence with respect to some topics of inter- and intra-firm diffusion of digital technology so far neglected in research. The analysis is based on a slightly extended version of the encompassing model of Battisti et al. (2009). We use a unique dataset that provides for the entire business sector information on the diffusion of 24 digital technologies ranging from old ones up to others developed only in recent years. We use the model, firstly, to analyse the determinants of the inter- and intra-firm diffusion of the entire set of digital technologies. Secondly, we do the same for six subfields of digital technology we identified by use of a factor analysis. Thirdly, we examine the effect of in-house learning on the intra-firm diffusion of digital technology. We distinguish between “cross-learning†(learning from previous experience with such technologies in subfields other than that considered) and “cumulative learning†(effect of previous application of relatively “old†digital technologies on the intensity of usage of advanced technology in the same or a closely related subfield). Finally, we analyse the determinants of a firm’s decision to digitalise a particular combination of two or more functional fields of its activity (fabrication, storage, marketing, etc.). The findings of this paper strongly support the underlying model in the case of the first and the second topic, whereas the evidence is somewhat weaker with regard to the third and the fourth element of the study. Finally, we find that complementing the “Battisti model†with variables representing firm-specific anticipated benefits is highly sensible, as these are powerful drivers of adoption and diffusion, which points to a strong forward-looking behaviour of firms in the diffusion process.
    Keywords: Adoption and diffusion of digital technologies, extent of digitalisation of business, inter- and intra-firm diffusion, Rank, stock/order and epidemic effects, effects of learning on the diffusion of IT, digitalisation of functional fields of firm activity
    JEL: O30 O31 O32 O33
    Date: 2022–06

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