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on Economics of Strategic Management |
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Issue of 2024–12–16
six papers chosen by João José de Matos Ferreira, Universidade da Beira Interior |
| By: | Sabrina Di Addario; Zhexin Feng; Michel Serafinelli |
| Abstract: | This paper presents direct evidence on how firms’ innovation is affected by access to knowledgeable labor through co-worker network connections. We use a unique dataset that matches patent data to administrative employer–employee records from "Third Italy"—a region with many successful industrial clusters. Establishment closures displacing inventors generate supply shocks of knowledgeable labor to firms that employ the inventors’ previous co-workers. We estimate event-study models where the treatment is the displacement of a "connected" inventor (i.e., a previous coworker of a current employee of the focal firm). We show that the displacement of a connected inventor significantly increases connected inventors’ hiring. Moreover, the improved access to knowledgeable workers raises firms innovative activity. We provide evidence supporting the main hypothesized channel of knowledge transfer through firm-to-firm labor mobility by estimating IV specifications where we use the displacement of a connected inventor as an instrument to hire a connected inventor. Overall, estimates indicate that firms exploit displacements to recruit connected inventors and the improved capacity to employ knowledgeable labor within the network increases innovation. |
| Keywords: | social connections, firm-to-firm labor mobility, patents, establishment closure |
| JEL: | J60 O30 J23 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11432 |
| By: | Tacsir, Ezequiel; Pereira, Mariano; Favata, Federico; Leone, Julian |
| Abstract: | Using a multilevel analysis and the new Harmonized Latin American Innovation Surveys Database (or LAIS database) augmented with indicators from the U.S. Census Bureau's Survey of Business Owners (SBO) and the World Banks World Integrated Trade Solution (WITS), this paper presents estimates of the effects of import competition and distance to the technological frontier on firm innovation in Latin American countries. Although innovation is recognized as a multilevel phenomenon, with investment decisions not solely affected by the firm characteristics but also by the context in which each firm is embedded, the empirical literature adopting a multilevel design is still nascent and scarce. Using a two-level random slope model allows us to overcome some of the pitfalls of traditional regression models when dealing with the hierarchical structure of data while allowing us to capture the influence of contextual factors. The results suggest that the fostering effect of foreign competition depends on the firms distance to the technological frontier. The estimates suggest that the lower the foreign competition and the greater the productivity gap, the lower the probability of firms engaging in innovation. In contrast, when a firm operates in a sector that is relatively closer to the technological frontier, firms invest in innovative activities to remain at the top. These results offer a clear and useful guide for designing policies in Latin America regarding innovation among firms. While it is important to promote and stimulate innovation efforts by firms, these factors should not be overlooked as considerations: sectoral characteristics associated with the economies, sectoral openness to foreign competition, and firms distance to the technological frontier. |
| Keywords: | innovation;Latin America;multilevel modeling;LAIS database;Productivity;Competition |
| JEL: | O31 O32 C21 C25 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:13833 |
| By: | Thomas Licht; Klaus Wohlrabe |
| Abstract: | This paper examines the adoption of Artificial Intelligence (AI) among German firms, leveraging firm-level data from the ifo Business Survey. We analyze the diffusion of AI across sectors and firm sizes, showing a significant increase in AI usage from 2023 to 2024, particularly in manufacturing and services. The survey data allows us to explore not only sectoral patterns of adoption but also the drivers and barriers that firms face, including firm-specific characteristics and industry dynamics. Additionally, we investigate the role of managerial traits, such as risk tolerance and patience, in shaping AI adoption decisions. Finally, we assess the potential pro-ductivity impacts of AI at the firm level, with a focus on the expected long-term benefits of AI for different sectors of the German economy. Our findings contribute to the growing body of research on AI adoption by providing new evidence from a non-US context, offering valuable insights for both academia and politics. |
| Keywords: | artificial intelligence, AI, ifo business survey, productivity |
| JEL: | M15 O30 C83 L20 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11459 |
| By: | Panle Jia Barwick; Hyuk-Soo Kwon; Shanjun Li; Yucheng Wang; Nahim B. Zahur |
| Abstract: | This paper examines the impact of industrial policies (IPs) on innovation in the global automobile industry. We compile the first comprehensive dataset linking global IPs with patent data related to the auto industry from 2008 to 2023. We document a major shift in policy focus: by 2022, nearly half of all IPs targeted electric vehicles (EV)-related sectors, up from almost none in 2008. In the meantime, there has been a clear technological transition from internal combustion engine (GV) technologies to EV innovations. Our analysis finds a positive relationship between policy support and innovation activity. At the country level, a one-standard-deviation increase in five-year cumulative EV-targeted IPs is associated with a four-percent rise in new EV patent applications. Firm-level analyses (using OLS, IV, and PPML) indicate that a ten-percent increase in EV financial incentives received by automakers and EV battery producers leads to a similar four-percent increase in EV innovations. We confirm the importance of path dependence in the direction of technology change in the automobile industry but find no evidence that EV-targeted IPs stimulate innovation in GV technologies. |
| JEL: | H20 L5 L60 L62 O3 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33138 |
| By: | Saul Estrin; Andrea Herrmann; Moren Levesque; Tomasz Mickiewicz; Mark Sanders |
| Abstract: | We present a Schumpeterian growth model with new venture creation, under uncertainty, which explains the tradeoff between speed-to-breakeven, revenue-at-breakeven and relates this to the level of innovation. We then explore the tradeoffs between these outcomes empirically in a unique sample of 331 information and communication technology (ICT) ventures using a multi-input, multi-output stochastic frontier model. We estimate the contribution of financial capital and labor input to the outcomes and the tradeoffs between them, as well as address heterogeneity across ventures. We find that more innovative (and therefore more uncertain) ventures have lower speed-to-breakeven and/or lower revenue-at-breakeven. Moreover, for all innovativeness levels, new ventures face a tradeoff between speed-to-breakeven and revenue-at-breakeven. Our results suggest that it is the availability of proprietary resources (founder equity and labor) that helps ventures overcome bottlenecks in the innovation process, and we propose a line of research to explain the (large) unexplained variation in venture creation efficiency. Plain English Summary. This study examines how new businesses deal with uncertainty, focusing on the tradeoff between how quickly they become profitable (speed-to-breakeven) and how much revenue they generate when they do. We analyze data from 331 ICT ventures to understand these tradeoffs better, considering factors like financial resources and labor inputs. We find that more innovative ventures, which tend to be more uncertain, often take longer to reach profitability and may earn less when they do. Moreover, regardless of their level of innovation, all new ventures face a tradeoff between speed-to-breakeven and revenue. The study highlights that unique resources, such as founder equity and founder labor, help businesses overcome challenges in the innovation process. It also suggests further research to understand why some ventures are more efficient than others in the early stage of creating new businesses. |
| Keywords: | entrepreneurship, innovation, new venture creation, proprietary resources, stochastic frontier analysis, Schumpeterian growth model |
| Date: | 2024–11–15 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2054 |
| By: | Fauzan Choon bin Abdullah (Wawasan Open University, Penang, Malaysia Author-2-Name: Logaiswari Indiran Author-2-Workplace-Name: Faculty of Management , Universiti Teknologi Malaysia, Skudai Johor, Malaysia Author-3-Name: Anbalagan Krishnan Author-3-Workplace-Name: Wawasan Open University, Penang, Malaysia Author-4-Name: Saranya Nair Pavithran Author-4-Workplace-Name: Faculty of Management , Universiti Teknologi Malaysia, Skudai Johor, Malaysia Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:) |
| Abstract: | " Objective - The building sector is essential to Malaysia's economic expansion. Despite its significance, large construction companies usually experience delays and project failure, affecting 95% of homebuyers due to 580 delayed projects in 2022. By February 28, 2023, 581 projects had been reported as delayed. Methodology/Technique - This study experimentally examines the relationship between effective project governance and project performance in 390 Malaysian construction companies, using a framework based on agency theory and assessed with partial least squares structured equation modeling. Finding - Benefit management serves as a mediator between project performance and effective project governance, and top management support has a positive moderating influence. Novelty - The study highlights the importance of preventive measures, enhancing team and project manager roles, and forming strategic alliances for improved project governance. Type of Paper - Empirical" |
| Keywords: | Effective project governance; project management risk; benefit management; top management support; project performance. |
| JEL: | H60 H61 M10 M11 |
| Date: | 2024–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:gtr:gatrjs:gjbssr652 |