Does services liberalization benefit manufacturing firms?: Evidence from the Czech Republic

While there is considerable empirical evidence on the impact of liberalizing trade in goods, the effects of services liberalization have not been empirically established. This study examines the link between services sector reforms and the productivity of manufacturing industries relying on services inputs. Several aspects of services liberalization are considered, namely, the presence of foreign providers, privatization and the level of competition. The results, based on firm-level data from the Czech Republic, show a positive relationship between services sector reform and the performance of domestic firms in downstream manufacturing sectors. Allowing foreign entry into services industries appears to be the key channel through which services liberalization contributes to improved performance of manufacturing sectors. This finding is supported by evidence that foreign acquisitions of Czech services providers result in profound changes in the labor productivity and sales of acquired firms. As most barriers to foreign investment today are not in goods but in services sectors, the findings of this study may strengthen the argument for reform in this area.     

Are there regional spillovers from FDI in the Swiss manufacturing industry?

This paper examines whether there are signs of regional spillovers from FDI, although evidence is still very scarce. It hypothesizes that (a) the assessment of regional spillovers relies on a detailed analysis of these effects, according to the channels by which they occur (namely, increasing competition, worker mobility, and demonstration effects); (b) the size and the extent of these effects depend on the interaction between their channels and the levels of existing technological capacity of local firms; and (c) spillover benefits tend to occur in regions where local firms largely invest in absorbing the best foreign knowledge. Using detailed firm-level manufacturing data from Switzerland, we have found that local firms gain from the presence of foreign firms in their region, but lose out if the firms are located elsewhere. Competition-related spillovers appear to be fully absorbed by local firms, with high technological capacities; worker-mobility-related spillovers are fully absorbed by low technology firms; while demonstration-related spillovers are absorbed by all groups of firms with mid technology firms experiencing the larger benefit. In addition, our results demonstrate that only local firms which have invested largely in the absorptive capacity benefit from spillovers, stemming mainly from technology transfer. This benefit seems to occur at both regional level and outside.     

Is American manufacturing in decline?

There is a widespread view that American manufacturing is in decline. This view reflects many factors. First, real GDP growth during the current business expansion has been the weakest in the post-World War II period. Second, over the decade from 2000 to 2010 manufacturing employment declined by about 6 million. Third, persistent manufacturing trade deficits have led many observers to conclude that U.S. competitiveness has eroded. This paper discusses these arguments and suggests that, instead, U.S. manufacturing is a leading growth sector and has remained strongly competitive internationally. We show that traditional domestic economic forces adequately explain recent trends in U.S. manufacturing output and employment growth. The recent reduction in the corporate income tax rate may further boost the fortunes of the U.S. manufacturing sector, although this favorable development could be offset by a more restrictive international trade regime.     

Are champions different from non-champions?

Research on the innovation process has shown that the presence of an innovation champion—Someone who takes a personal risk to overcome organizational obstacles to innovation—is an important part of the new business development, new technology development, and organizational change processes.Champions play six valuable roles in the innovation process. They provide autonomy from the rules, procedures, and systems of the organization so that innovators can establish creative solutions to existing problems. They gather organizational support for the innovation by building coalitions between managers in different functional areas of the organization. They create loose monitoring mechanisms that allow innovators to make creative use of organizational resources. They establish mechanisms for making consensus decisions on innovations. They use informal methods to persuade other members of the organization to provide support for the innovation, and they protect the innovation team from interference by the organizational hierarchy.Some,but not all managers believe in the desirability of these championing roles.Existing research suggests that managers willing to serve as champions differ in many ways from those who are not. However, almost all of the existing research on championing has been conducted in the United States. This raises two fundamental questions: First, do champions and non-champions differ in their preferences for championing roles? Second, are these differences universal or limited to American culture?This study attempts to answer these questions by comparing the preferences for the six championing roles of individuals with championing experience and those without across 43 organizations and 68 countries. The study shows that individuals with championing experience have significantly different preferences from individuals without championing experience for five of these championing roles—building cross-functional ties, establishing autonomy from organizational norms and rules, enabling innovators to circumvent organizational hierarchy, using informal means to persuade others to support the innovation effort, and building a decision-making mechanism that includes all organization members. These differences exist after controlling for differences in the national culture of the respondents, the companies in which they work, and demographic characteristics. The results of this study suggest that differences in the preferences of champions and non-champions for the behaviors that champions adopt are consistent across cultures.     

What is going right in manufacturing?

Business Economics - This study looks into whether the manufacturing sector has experienced a stronger-than-expected recovery and identifies five potential drivers of the manufacturing...     

Volvo – A Force for Fordist Retrenchment or Innovation in the Automobile Industry?

The article deals with the question: What does the ‘Volvo model’ stand for’? Two car assembly plants within the Volvo Car Corporation are the main exponents of the ‘Volvo model’, namely the Kalmar and Uddevalla plants, which were innovative and successful. There has been an open atmosphere to new ideas in the company at the top level and innovative ideas were stimulated at Kalmar and Uddevalla. However, simultaneously there was no strategy for spreading the innovations within the company, and resistance to the new ideas within the other operative units was strong. Therefore the diffusion of internal, Volvo-generated innovations was taken on solely by individuals or groups of individuals who were already committed to the ideas. In the Volvo TWR joint venture Autonova AB, the principles of the Reflective Production System, once developed within the Volvo Uddevalla plant, are being further developed. So, Volvo still has a joker left in the pack…     

Do Competition Improve Persistence in Innovation Effort? Sectoral Patterns and Evidence from India

Journal of Industry, Competition and Trade - This paper studies the persistence of innovation efforts by Indian manufacturing firms and how the innovation effort gets affected by the extent of...     

Entrepreneurial processes in social contexts: how are they different, if at all?

Scholars have compared and contrasted commercial and social entrepreneurship along a variety of dimensions, suggesting that entrepreneurial antecedents and outcomes differ within a social context. However, little is known about whether entrepreneurial processes differ within social contexts. In this paper, we ask to what extent the antecedents and outcomes that make social entrepreneurship unique influence entrepreneurial processes. Using an inputs–throughputs–outputs framework, we assess the relationship between four antecedents (social mission/motivation, opportunity identification, access to resources/funding, and multiple stakeholders) and three outcomes (social value creation, sustainable solutions, and satisfying multiple stakeholders) to the dimensions of entrepreneurial orientation (innovativeness, proactiveness, risk-taking, competitive aggressiveness, and autonomy) (Lumpkin and Dess, Acad Manag Rev 21(1):135–172, 1996). Our analysis suggests that many entrepreneurial processes remain essentially the same or are affected only slightly. However, autonomy, competitive aggressiveness, and risk-taking are influenced to some extent by the presence of multiple stakeholders and access to resources/funding. Entrepreneurial processes may also differ when applied to efforts to satisfy multiple stakeholders and achieve sustainable solutions. We subsequently discuss the implications of our analysis for future social entrepreneurship research and practice.     

Does outward FDI generate higher productivity for emerging economy MNEs? – Micro-level evidence from Chinese manufacturing firms

This paper investigates whether emerging economy multinational enterprises (EMEs) that undertake outward foreign direct investment (OFDI) become more productive, controlling for the self-selection into the global investment market. Particularly, we focus on the moderating effects of firm heterogeneity on the OFDI-productivity nexus. A theoretical framework incorporating the resource-based views and institutional theory is established and the propensity-score matching and difference-in-difference (DID) approaches are combined to test the framework, utilizing unique data on Chinese manufacturing firms over the sample period 2002–2008. We find that EMEs turn to be generally more productive after they conduct OFDI, but this productivity effect varies depending on the parent firm and investment strategy heterogeneity. Our results suggest that EMEs without state ownership but with stronger absorptive capability gain higher and more sustainable productivity effects and such gains are higher for EMEs investing in OECD than in non-OECD countries. Policy and managerial implications are discussed.     

Does integration of services differ from integration of goods?

The theory of economic integration has been well developed over time but mainly with regard to goods. Conceptually integration for services needs to be differentiated from goods according to the characteristics of services and the nature of barriers to integration. The need for personal interaction between supplier and user gives rise to different ways in which services are traded from goods with suppliers and users crossing borders and a different balance between cross-border trade and permanent presence. Obstacles to trade take place behind rather than at the border. The European Union has been chosen as an example of integration for services both on the basis of past experience and because of its ability to remove obstacles for services using specific institutional powers. Existing levels of integration for goods and services are compared with those to be expected on the basis of theory. Market integration for manufactured goods is lower than previously estimated and services higher, although services remain considerably less integrated. Finally, explanations for differing levels of integration both compared to goods and those expected among different services are sought in terms of the barriers to cross-border trade and permanent presence in the form of regulation, market structures and cultural factors.     

The new framework for global trade in services – all about GATS

This article is concerned with the globalization of services, and specifically the impact of the new regulatory framework set up under the 1996 General Agreement on Trade in Services. The article sets out the organisation and protocols of GATS and their likely impact on global trade in services. The paper clarifies the role of GATS as not merely to ‘regulate’ trade in services, but to foster the global expansion in services under a fair, transparent set of rules, with procedures for recourse by those governments and enterprises which claim to have been unfairly discriminated against in one or other service sector. The article concludes with some interim comments on the impact and effectiveness of GATS on the business community, and the need for further research in the future.     

Does innovativeness of knowledge-intensive business services differ from other industries?

This article seeks to determine whether the innovative capabilities of knowledge-intensive business services (KIBS) do actually differ from other industries through comparing the innovation capacities and financial performance of KIBS with firms operating in other sectors (non-KIBS). Based upon a 1000-firm sample, the results of our estimated econometric model demonstrate that non-KIBS firms are in possession of significantly greater innovation capacities than KIBS firms. These differences were observed across factors such as organisational process innovation, the launch of already existing products in new markets, branding and new product designs. Nevertheless, as regards the actual importance attributed to product/service innovation, KIBS firms place a greater comparative importance on innovation in comparison with their non-KIBS peers. In addition, the empirical evidences display a significantly different range of effects of innovation capacities on financial performance and concludes that non-KIBS firms turn in better comparative performances than specialist KIBS firms.     

Exploring the impact of mobile money services on marketing interactions in relation to consumer well-being in subsistence marketplaces – lessons from rural Cambodia

Abstract

The mobile phone has increasingly become a channel for providing access to formal financial services. There is a need to understand how financial service offerings, increasingly accessed through mobile phones, impact marketing interactions, specifically marketing exchange activities and social network relationships, to enhance consumer well-being (CWB) in subsistence marketplaces. Through interviews and contextualised observational research in rural Cambodia, findings reveal that the impacts of mobile money services on marketing interactions in relation to CWB can be categorised at two distinct levels. The first-level impact is the actual physical money transfer transactions as part of the marketing exchange activities which leads to the second-level impact on the social network relationships at interpersonal, social group and cultural levels. Drawing from these insights, policy-makers and industry stakeholders can formulate strategies and develop innovative service offerings through mobile phone technology to enhance CWB in subsistence marketplaces.     

How different is neo-Aristotelian virtue from positive organizational virtuousness?

The purpose of this article is to explain the differences between neo-Aristotelian virtue and positive organizational virtuousness from the virtue ethics perspective. Most studies use virtues and virtuousness interchangeably. A few others try to explain their differences from the positive organizational science perspective. Although closely related, we believe that these two notions are not identical. If we understand neo-Aristotelian virtue correctly, then it cannot be judged exclusively on what is externally verifiable, as is the case with virtuousness. For these reasons, we attempt our own differentiation, highlighting the gains and losses realized in the migration from neo-Aristotelian virtue to positive organizational virtuousness, and establishing guideposts to meaningfully combine the strengths of both concepts.     

Does external technology acquisition determine export performance? Evidence from Chinese manufacturing firms

Although technology profile has been one of the key determinants of firms’ export performance in the international business literature, most research has focused on only the role of internal technology efforts rather than the role of external technology. This study thus aims to extend our understanding of the determinants of export performance by examining the impact of the inter-organizational dimension of innovation strategy to export performance, which has been ignored in the prevailing “strategy tripod” perspective of exporting research. This study is based on a sample of 141 Chinese indigenous manufacturing firms that engaged in inward technology licensing between 2000 and 2003. The empirical results indicate that external technology acquisitions positively influence Chinese firms’ export performance. Moreover the exporting performance of using external technology varies depending on the their sources (domestic and foreign). The exporting firms that acquired technology from foreign countries outperformed those relied on domestically developed technology.     

Does rising import competition harm local firm productivity in less advanced economies? Evidence from the Vietnam's manufacturing sector

This paper examines whether rising import penetration has an effect on the productivity of domestic firms. The study uses data on a 10-year unbalanced panel of firms in the manufacturing sector in Vietnam from 2000 to 2009. Panel and instrumental variable methods are used to control firm heterogeneity and endogeneity of import penetration. We find statistically significant and negative effects of import competition on local firms’ productivity, but the effect in terms of magnitude is economically small. Further investigation shows no clear evidence of variations in the effects by firm size and technological level. However, we find that rising import penetration is associated with the likelihood of firm death.     

Analysing China's foreign direct investment in manufacturing from a high–low technology perspective

Since China opened its economy to foreign investment in 1979, it has become the second largest foreign direct investment (FDI) destination in the world after the USA. Over the past three decades, the manufacturing sector has dominated China's FDI inflow, however, when manufacturing activity is bifurcated into low and high technology classes, it becomes evident that China is in a transition stage moving from FDI in traditional low-tech activity to a high-tech manufacturing environment. This paper attempts to analyse the key determinants of FDI inflow across low and high technology manufacturing industry across four geographical regions of China. In the paper we empirically investigate the determinants of FDI high–low tech inflow by market size, labour cost, labour quality, and government spending on human capita.     

Benefitting from Chinese FDI? An assessment of vertical linkages with Vietnamese manufacturing firms

Previous studies have suggested that foreign direct investment between emerging economies can benefit domestic firms more than investments from industrialised countries because of a lower technology gap and more appropriate technology being transferred. Empirical evidence for this is scarce. Addressing this gap, we investigate the impact of Chinese direct investment on local firms through vertical linkages in manufacturing industries of Vietnam. We find that the share of local sourcing of Chinese firms is similar to other foreign investors while their forward linkages are more extensive. Although this supports assertions about the benefits of investment by emerging market firms, the overall potential gains seem limited. This is due to little value-adding interaction with local firms, the local sourcing of low-technology goods, and the sparse provision of training and financial support.     

From selling to supporting – Leveraging mobile services in the context of food retailing

To safeguard their existence in the face of harsh competition, food retailers have shifting their attention from goods to service. In this development, mobile services have emerged as suitable venues for intensifying companies' service orientation. To address this phenomenon, the purpose of this study is to explore and analyze how mobile services are leveraged to serve customers better in the context of food retailing. With the help of 10 case examples the perspective is extended from food retailers' in-store activities to supporting customers' processes at the pre- and post-purchase stages. As a result, a tentative framework is suggested that captures the ways in which companies can use mobile services in their strategic quest to move from selling to supporting.