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on Economics of Strategic Management |
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Issue of 2007‒09‒30
seven papers chosen by Joao Jose de Matos Ferreira University of the Beira Interior |
| By: | Isbasoiu, George - Marian |
| Abstract: | Today’s economic climate is dominated by inter-firms networks, which have become powerful instruments for building economic capacity for regions to compete in the global market place. Industry clusters are recognised as playing a significant role both in regional economic development and in improvements to quality of life. The aim of this paper is to investigate this influence and to tackle the issues of de-localisation, decentralisation and cluster development as strategy for urban regeneration by comparing two clusters: Montebelluna and Timisoara. Clusters are a common reality in all economies and have traditionally been equated with cities. Across all European regions and cities there is a growing specialisation and concentration or clustering of industries in response to increasing competition and outsourcing as a result of economic reforms and globalisation. Industry clusters comprise groups of firms that share common suppliers, distributors and know-how and find advantage in a specific geographic location. Based on such insights, the paper suggests a theoretical proposal, supported by practical evidence. |
| Keywords: | Industrial district; De-localisation; Urban governance; Internalisation; Regional development. |
| JEL: | F22 R11 L16 |
| Date: | 2006–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:5037&r=cse |
| By: | batiz-lazo, bernardo |
| Abstract: | Through case study research this paper illustrates opportunities presented by IT-based technological change in British retail bank markets (1985-1995). For the managers of the Royal Bank of Scotland IT appeared to lower entry barriers, exit barriers and deliver high sustainability of competitive advantage. The strategic intent behind diversification patterns of the Royal Bank of Scotland suggested competitive considerations were at a premium because unsolicited take-over bids in the early 1980s put pressure on managers to create growth opportunities. Direct Line Insurance was a subsidiary from the Royal Bank of Scotland. Direct Line was also the first retail finance institution to establish a clear competitive advantage based on information technology. The success of Direct Line enabled an increase in the market share of British retail financial services of The Royal Bank of Scotland. Direct Line is a case of planned success that questions the extent to which banks’ competencies must change to master alternative delivery channels. The success of Direct Line also suggested more effective execution than other activities explored by managers of the Royal Bank of Scotland. |
| Keywords: | Financial institutions; technological change; corporate strategy. |
| JEL: | N24 L10 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:5046&r=cse |
| By: | Piergiuseppe Morone; Carmelo Petraglia; Giuseppina Testa (School of Economics, Mathematics & Statistics, Birkbeck) |
| Abstract: | In order to assess the relationship between internal and external innovative inputs and innovative output at firm level, a knowledge production function is estimated for a representative sample of Italian manufacturing firms over the period 1998-2003. To account for endogeneity of R&D effort in the knowledge production function, we estimate a Heckman selection model on R&D decisions. Results support the view that R&D intensity is positively linked to firm size, age and human capital endowment as well as to higher exposure to international competitive pressure. Then, the knowledge production function is estimated using a standard probit, where the probability to innovate of each firm depends upon intramural R&D effort, regional and industrial spillovers and on a vector of interaction and control variables. Our measures of external knowledge, which circulates and potentially transfers across firms belonging to the same geographical or industrial spaces, are based on predicted values for R&D effort in the region and industry respectively. Our results suggest a positive relationship between sectoral spillovers and innovation; knowledge diffusion in the regional space positively impacts on the probability to innovate of the recipient firm only if the latter has an appropriate endowment of human capital. |
| Keywords: | Innovation, knowledge, spillovers |
| JEL: | O3 L6 C25 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:bbk:bbkefp:0713&r=cse |
| By: | Plantinga, Auke |
| Abstract: | This chapter discusses methods and techniques for measuring and evaluating performance for the purpose of controlling the investment process. However, many of the methods discussed in this chapter are also used in communicating investment performance between the investment management company and it’s (potential) customers. Therefore, performance measurements also play an important role in the competition between investments management companies. Substantial evidence from the net sales of mutual funds shows that investors buy mutual funds with good past performance records although they fail to sell funds with bad past performance. |
| Keywords: | Performance measurement; risk-adjusted performance |
| JEL: | G11 |
| Date: | 2007–09–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:5048&r=cse |
| By: | Lucinda Trigo Gamarra (University of Rostock) |
| Abstract: | Until its liberalisation in 1994 exclusive agents dominated the distribution of products in the German life insurance industry. Since then, their importance has been declining for the benefit of both distribution via direct distribution channel and independent agents. However, the market shares of specialized direct and independent agent insurers have remained small, while multi-channel insurers increasingly incorporate direct and independent distribution channels, and represent the dominant distribution strategy. The aim of this paper is twofold: First, it analyses the performance of single and multi-channel distribution firms in the German life insurance. Thus, we are able to explain the development and the coexistence of the industries' distribution systems. Our study contributes to research on coexistence of different distribution systems in insurance industry which had been limited to the comparison of exclusive versus independent agent insurers so far. Second, our paper gives insight into cost and profit efficiency levels of German life insurance firms for the period 1997-2005, and delivers information about scale economies in the German life insurance industry. Applying an empirical framework developed by Berger et al. (1997) we estimate cost and profit efficiency for three groups of life insurance firms differing in their distribution systems: multichannel insurers, direct insurers, and independent agent insurers. Non-parametric DEA is used to estimate efficiencies for a sample of German life insurers for the years 1997-2005. Testing a set of hypothesis, we find economic evidence for the coexistence of the different distribution systems which is the absence of comparative performance advantages of specialised insurers. Further, we find evidence for scale economies in the German life insurance industry. |
| Keywords: | Insurance markets, distribution systems, efficiency analysis |
| JEL: | G22 L15 L22 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:ros:wpaper:81&r=cse |
| By: | Giroud, Xavier; Mueller, Holger M |
| Abstract: | By reducing the fear of a hostile takeover, business combination (BC) laws weaken corporate governance and create more opportunity for managerial slack. Using the passage of BC laws as a source of identifying variation, we examine if such laws have a different effect on firms in competitive and non-competitive industries. We find that while firms in non-competitive industries experience a substantial drop in performance, firms in competitive industries experience virtually no effect. Though consistent with the general notion that competition mitigates managerial agency problems, our results are, in particular, supportive of the stronger view expressed by A. Alchian, M. Friedman, and G. Stigler that managerial slack cannot survive in competitive industries. When we examine which agency problem competition mitigates, we find evidence consistent with a “quiet-life” hypothesis. While capital expenditures are unaffected by the passage of BC laws, input costs, wages, and overhead costs all increase, and only so in non-competitive industries. We also conduct event studies around the dates of the first newspaper reports about the BC laws. We find that while firms in non-competitive industries experience a significant decline in their stock prices, the stock price impact is small and insignificant in competitive industries. |
| Keywords: | corporate governance; product market competition |
| JEL: | G34 L1 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6446&r=cse |
| By: | Giuseppe Danese |
| Abstract: | This essay deals with two issues. First, it tries to delineate, via the concept of enlarged fiduciary proviso, the contribution of Corporate Social Responsibility (CSR) to the implementation of the EU Sustainability Strategy. The primary aim of the European institutions in delineating such strategy was to promote a concern for the environment, interpreted here as a proxy for the welfare of future generations of stakeholders. Progresses towards sustainable development can be made if we interpret CSR as a governance framework that extends fiduciary protection from a mono-stakeholder perspective, in which the sole relevant constituency for the design of corporate policy is the shareholders’, to a multi-stakeholder perspective, in which legitimate claims are held by a variety of constituencies, possibly operating at different times. Secondly, the essay tries to establish an organic link between the concept of sustainability and a Social Contract account of the business enterprise. The Social Contract of the stakeholders, an ideal reference point for corporate policy-makers, is formed behind a veil of ignorance, resulting in an agreement that is both impartial and nonhistorical. |
| Keywords: | Corporate Social responsibility (CSR), Sustainability Strategy, Fiduciary Duties. |
| JEL: | M14 O16 Q01 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpde:0721&r=cse |