This monthly selection of articles has been carried out by Philippe Gugler and Damiano Lepori, the Center for Competitiveness, University of Fribourg. The entire selection, carried out since 2013, can be consulted on the academic articles page of our web.

Post internationalization strategies of born global service firms

By: K. Dhandapani, R. Srinivas Upadhyayula, R. Basant. Competitiveness Review, Vol. 29, No. 5, pp. pp. 481-496, 2019.

Abstract: “Extant literature suggests that post-entry internationalization strategies and performance implications of born globals are an under-researched area. This paper aims to examine the internationalization strategies of born global service firms (BGSFs) and performance implications thereof through strategic group analysis of hand-collected data from Indian information technology (IT) firms. Strategic group analysis has been used to examine if there are any differences in the strategic decisions across firms and if there are any implications of these strategies on the performance of firms. The strategic group approach helps understand not only the antecedents but also the strategic trade-offs that different groups of BGSFs face after internationalization. The study uses Indian IT industry as the context for analysis of BGSFs, as studies have found that the Indian IT industry to have significant presence of born globals. Four distinct strategic paths were found to be followed by BGSFs. In addition, the nature of services and ways of mobilization or deployment of resources explain the different internationalization paths and consequently performance. The performance differences primarily stem from the choice of degree of commitment and scope of internationalization. This study provides distinct insights to practice by charting internationalization paths for an emerging born global. This paper contributes to the theory on born globals by using strategic lens to explain the internationalization paths and their performance implications.” [ABSTRACT FROM AUTHORS]

Does competition explain growth in OECD and BRICS countries?

By: N. Tahir, P. Tahir. Competitiveness Review, Vol. 29, No. 5, pp. 515-533, 2019.

Abstract: “This paper aims to explain the empirical relationship between competitiveness and economic growth in a globalizing world. In recent times, the advanced economies have experienced a slowdown of growth, whereas the BRICS countries continue to experience high growth. The authors explore the following question: Does competitiveness of nations’ degree of competition explains this differential in growth? The authors explore competiveness and growth in a macroeconomic perspective for the large economies in the OECD and BRICS countries. The authors use dynamic panel data modelling technique to find the relationship between competitiveness and economic growth. This technique enables to control heterogeneity problem of this group to some extent. The focus variable of this study is annual GDP growth rate for the period 2007-2017. The proxies for measuring competitiveness in this paper are trade as percentage of GDP, product market regulation, unit labour cost and global competitive index. Innovation prevalence of foreign ownership, efficiency, competition, state of cluster development, venture capital availability, extent of market, research and development expenditure as percentage of the GDP mergers and acquisitions and multifactor productivity are the control variables. The authors find that the degree of competitiveness competition is less likely to impact economic growth in the OECD countries because they have more or less similar competitive environment. Innovation, extent of market and state of cluster development and venture capital availability explaining growth differential. Increased competition is likely to affect growth negatively. This explains the oligopolistic structures of the world economy. However, the BRICS countries vary significantly in competitive environment. This is the reason of volatility in their growth. The conclusion is that competitiveness is important for sustained growth. Competitiveness is, however, an outcome of a set of policies, not a policy itself. Productivity data for OECD and BRICS countries are not available. Various series are not comparable. OECD countries have discontinued yearly unit labour cost series, and high frequency series are available but no such series for BRICS exists. First, this paper proposes that wage growth, measured by the unit labour cost growth rate, is an important determinant of competitiveness amongst the nations. Wage growth is falling short of productivity growth in the OECD countries. This has implications for the long run sustainability of growth, skill development and inequalities in the region. Since 2011, world economic recovery is slow. Wage growth is imperative for generating sufficient private demand in the OECD countries. Second, this paper provides evidence that competitiveness is important for explaining growth in the OECD and the BRICS countries. However, it also highlights that competitiveness can be measured effectively by the trade differential or with the help of unit labour cost. Unaligned real effective exchange rate in terms of unit labour costs is the real cause of the problem. Research in this area is still in infancy. This research finds that how competitiveness affects growth. A more competitive nation can sell more, but not necessarily grow rapidly. In development process, growth comes first, and at the latter stages, countries have to introduce effective reforms for competitiveness. This is the effect of competitiveness on growth by comparing various indexes.” [ABSTRACT FROM AUTHORS]

The effects of cooperation on the innovation activities and firm  performance 

By: C. I. Fernandes, J. J. Ferreira, P. M. Veiga, C. Marques. Competitiveness Review, Vol. 29, No. 5, pp. 622-645, 2019.

Abstract: “The purpose of this paper involves evaluating the impact of coopetition on the innovation activities and innovation performance of companies. The study deployed data from the Community Innovation Survey – CIS 2012 and subject to the application of different multivariate statistical analysis processes. The authors furthermore conclude that coopetition and the transfer of knowledge to and from competitors generates a statistically significant positive impact on company innovation-related activities and performance. This work enriches the theory of innovation from the perspectives of game-theoretic strategic and resource theory approach. Moreover, the findings provide several recommendations for managers to effectively conduct firm’s coopetition strategy on innovation performance.” [ABSTRACT FROM AUTHORS]

Do EU regions benefit from smart specialization?

By: D. L. Rigby, C. Roesler, D. Kogler, R. Boschma, P.-A. Balland. Utrecht University, Human Geography Planning, Papers in Evolutionary Economic Geography, Paper No. 19.31, 2019.

Abstract: “Smart specialization was conceived as a “bottom-up” framework to identify new growth paths connected to the existing knowledge cores of regions. Operationalization of smart specialization has proven difficult, though a recent “mapping” of technologies in terms of knowledge relatedness and complexity suggests a useful cost-benefit framework. We extend these ideas, locating EU cities in a smart specialization space and tracking their development of alternative technologies over the period 1981 to 2015. Panel models show employment growth and GDP growth are faster in cities that exhibit a logic of technological development consistent with the tenets of smart specialization.” [ABSTRACT FROM AUTHORS]

Does long-term proactive agency matter for regional development?

By: M. Grillitsch, A. Bjørn, H. Nielsen. Lund University, Department of Human Geography, CIRCLE, Papers in Innovation Studies, Paper No. 2019/16, 2019.

Abstract: “Agency is concerned with the ways and the extent to which individuals, groups of individuals and organisations shape regional development within and beyond the corset of historically developed pathways. Linking the time horizon of agency to the exploration-exploitation trade-off in regional development and the recent literature on industrial path development, we argue that agency becomes more powerful with a long-term perspective. In the long-run knowledge, networks, and institutions can be moulded in a strategic manner, whereas in the short-term these are highly rigid. We illustrate our arguments with an in-depth case study of a labour market in Western Norway, which, over the past 20 years, was subject to two crises and one remarkable growth phase. We show that long-term agency with a focus on innovation shaped the development opportunities and identity of the region. Conversely, short-term agency was mainly about exploiting existing opportunities, often associated with entrepreneurship. The unintended consequence of short-term agency was an increasing vulnerability of the regional economy to changes in demand. This has far-reaching policy implications because short-term pressures and policy cycles often undermine long-term perspectives.” [ABSTRACT FROM AUTHORS]

Explaining the past, predicting the future: the influence of regional  trajectories on innovation networks of new industries in emerging economies

By: M. Plechero, K. Mandar, C. Chaminade, P. Balaji. CIRCLE, Papers in Innovation Studies, Paper No. 2019/15, 2019.

Abstract: “Economic geographers have recently made important contributions to the relationship between regional transformation, industrial specialisation and innovation networks in the emergence of new industries. However, most contemporary research has focused on the influence of networks on regional trajectories, paying lip service to how regional trajectories also influence network configurations. Furthermore, international comparative research on how specific regional innovation system (RIS) trajectories may shape innovation networks in new industrial sectors is underdeveloped. The paper investigates how the trajectories of Bangalore and Beijing RISs influence the objectives and geographical configuration of innovation networks in the new media industry. The coevolution of the different elements of the RIS trajectory points to the unfolding of politically and institutionally driven trajectory in Beijing and cognitively driven trajectory in Bangalore. These trajectories lead to specific barriers and opportunities for the development of innovation networks in new industries.” [ABSTRACT FROM AUTHORS]

Trademarks as an indicator of regional innovation: Evidence from Japanese  prefectures

By: J. Block, C. Fisch, K. Ikeuchi, M. Kato. Kwansei Gakuin University, School of Economics, Discussion Paper No. 200, 2019.

Abstract: “Regional science has long been concerned with measuring the spatial distribution of innovation activity. While patents are frequently used as an indicator of regional innovation, we introduce trademarks as an additional indicator. Specifically, we explore the spatial distribution of trade- mark applications using a detailed and comprehensive dataset of 47 Japanese prefectures from 1999 to 2012. In addition to mapping differences in trademarks across regions, we identify correlates at the regional level that provide initial insights into potential determinants of re- gional innovation. For example, regional trademark activity is positively associated with re- gional entrepreneurship and with strong private service and finance sectors. Overall, our results reveal associations unique to trademarks that patent-based measures of innovation cannot un- cover. With these results, we contribute to research in regional science and to the evolving literature on trademarks of this discipline.” [ABSTRACT FROM AUTHORS]

New financial geographies of Asia

By: K. P. Y. Lai, F. Pan, M. Sokol, D. Wójcik. Regional Studies, DOI: 10.1080/00343404.2019.1689549, 2019.

Abstract: “This special issue examines the recent trends and impacts of financial development in Asia and its implications for regional studies in this rapidly growing region. This editorial introduces the dynamics of the financial landscape in Asia and its growing influence in global finance. Overall, the papers in this special issue highlight the important roles of both the local institutional contexts and global capital markets in shaping new financial geographies in Asia. The conclusion offers some critical reflection on ‘Asia’ as a working category in examining financial networks and practices, and identifies some key research strands for understanding future financial development in Asia.” [ABSTRACT FROM AUTHORS]

Territorial innovation models in less developed regions in Europe: the  quest for a new research agenda?

By: S. Moreno Pires, A. Polido, F. Teles, P. Silva, C. Rodrigues. European Planning Studies, DOI: 10.1080/09654313.2019.1697211, 2019.

Abstract: “Territorial, economic and social cohesion in European Union (EU) regions are major challenges that regional policies are aimed at. These policies have a strong focus on innovation-driven models as key processes for reducing disparities and promoting regional development. Since the 1980s, innovation and technology policies have gained momentum and legitimacy to stimulate multiple development patterns and growth models, mainly from national economic dynamics to well performing regional systems. Theories of knowledge and learning have been developed in more successful places, producing concepts that seem unattainable for less successful ones. Given that less developed regions have been overlooked in innovation studies, this paper reviews the literature on territorial innovation models in Europe in order to understand theoretical and practical gaps for these regions and to identify trends that support the need to redirect conceptual, political and instrumental attention of territorial innovation systems. It debates the different forms of innovation in regions, the variety and role of actors, the quest for geographical and place-based resources, the determinants for innovation and the ‘how’ and ‘for what’ demands of regional development. The discussion anticipates critical questions that try to promote a ‘normative turn’ in innovation policy, propose research avenues and discuss policy implications.” [ABSTRACT FROM AUTHORS]