Timing of technology adoption and product market competition

This paper examines how product market competition affects firms' timing of adopting a new technology, as well as whether the market provides sufficient adoption incentives. It demonstrates that adoption dates differ, not only among symmetric firms, but also among markets with different market features. More specifically, technology adoption can occur earlier in a market with Cournot competition than in a market with Bertrand competition. It can also occur earlier in a market in which goods are not too close substitutes. Therefore, this paper shows that competition toughness does not always reinforce adoption incentives. When goods are sufficiently differentiated, adoption occurs later than is socially optimal.     

Total factor productivity enablers in the ICT industry: A cross-country firm-level analysis

Advancements in productivity in the digital economy constitute an important engine for economic growth. What drives productivity dynamics in the information and communication technology (ICT) sector? This study examines the productivity dynamics of ICT firms across countries from the perspective of corporate balance sheets. We study the effects of intangible assets and leverage on productivity growth using firm-level panel data from five industrialized countries. We find that intangible assets positively affect the total factor productivity in the ICT sector. The positive effect of intangible assets on total factor productivity growth is larger for ICT manufacturing firms than for ICT service firms. We also find that leverage has a positive relationship with total factor productivity development in the ICT sector. In addition, our empirical results substantiated that productivity is catching up to the technological frontier. Furthermore, larger firms and/or younger firms generally show higher total factor productivity growth than their peers. Economies of scale are more prominent in the ICT service sector than in the ICT manufacturing sector. Our findings contribute to the understanding of cross-country productivity dynamics in the ICT sector at the firm level in the digital economy.     

Patent office in innovation policy: Nobody's perfect

The number of patent applications and “bad” patents issued has been rising rapidly in recent years. Based on this trend, we study the overload problem within the Patent Office and its consequences on the firms' R&D incentives. We assume that the examination process of patent applications is imperfect, and that its quality is poorer under congestion. Depending on policy instruments such as submission fees and the toughness of the non-obviousness requirement, the system may result in a high-R&D equilibrium, in which firms self-select in their patent applications, or in an equilibrium with low R&D, opportunistic patent applications and the issuance of bad patents. Multiple equilibria often co-exist, which deeply undermines the effectiveness of policy instruments. We investigate the robustness of our conclusions as to how the value of patent protection is formalized, taking into consideration the introduction of a penalty system for rejected patent applications, as well as the role of commitment to a given patent protection policy.     

The role of online platforms for media markets — Two-dimensional spatial competition in a two-sided market

We analyze the market for online and offline media in a model of two-dimensional spatial competition where media outlets sell content and advertising space. Consumer preferences are distributed along the style and type of news coverage where the distance costs may vary across dimensions. For integrated provision of online and offline platforms we show that entering the online market reduces average profits and may even constitute a prisoner's dilemma. Specialized provision may yield polarization in the style and type dimensions. This is in contrast to the maximum–minimum differentiation result previously established in the literature on multidimensional horizontal competition. We show that maximal differentiation in both dimensions occurs due to the discrete nature of the type dimension and asymmetric advertising markets.     

Network effects and competition: an empirical analysis of the home video game industry

Building on the resource‐based view of the firm, we advance the idea that a firm's customer network can be a strategic asset. We suggest that network effects are a function of network size (i.e., installed customer base) and network strength (i.e., the marginal impact of a unit increase in network size on demand). We empirically study these network effects in the 16‐bit home video game industry in which the dominant competitors were Nintendo and Sega. In the spirit of the new empirical IO framework, we estimate a structural econometric model assuming the data are equilibrium outcomes of the best fitting noncooperative game in price and advertising. After controlling for other effects, we find strong evidence that network effects are asymmetric between the competitors in the home video game industry. Specifically, we find that the firm with a smaller customer network (Nintendo) has higher network strength than the firm with the larger customer base (Sega). Thus, our results provide a possible explanation for this situation in which the firm with a smaller customer network (Nintendo) was able to overtake the sales of a firm with a larger network size (Sega). Copyright © 2002 John Wiley & Sons, Ltd.     

An analysis of intrabrand competition in the franchise industry

The owner of a franchise chain is analyzed as maximizing profit by selecting the number of establishments, an initial franchise fee, and a royalty on sales revenue. The franchisees are geographically dispersed and imperfectly compete with one another (intrabrand competition). Then, the optimal sales royalty must be strictly positive. If the royalty were set equal to zero, the equilibrium price would be too low to maximize collective profit; the effect of the royalty is to curtail each franchisee's private gain from reducing price. The optimal royalty rises with the intensity of intrabrand competition. The model predicts a positive association of the sales royalty with the density of the chain's establishments. The available evidence is consistent with this prediction.Parts of this paper are based on chapter III of my dissertation (Schmidt, 1990). Further research was supported by the Graduate School of the University of New Hampshire. I would like to thank Roger Blair, David Bradford, Darlene Chisholm, Jon Hamilton, Amy Schmidt, Ed Zabel, and two anonymous referees for their helpful advice. The usual caveat applies.     

Inequalities of opportunity in the access and use of telecommunication services in Togo

The liberalization of the telecommunications sector in Togo aimed at ensuring access to a better quality of telecommunication services at affordable prices to everyone. While the liberalization policy has increased competition in the sector and reduced significantly telecommunication services prices charged to costumers, statistics on the access and use of telecommunication services in Togo reveal disparities with respect to individuals' socio-economic characteristics which could be an indication of the existence of inequalities of opportunities in the access and use of these services.This paper investigates the inequalities of opportunity in the access and use of telecommunication services in Togo using a parametric approach. The results of estimations indicate that, inequalities of opportunities are larger for men and the elderly than respectively women and youths and are more pronounced in urban areas and regions such as the Plateaux and Savanna regions. Moreover, the circumstance variables such as the ‘place of residence’ and the ‘region’ are the key variables in explaining the inequalities of opportunities in the access and use of telecommunication services in Togo. So, policies toward reducing inequalities of opportunity in the access and use of telecommunication services in Togo should be designed with regards to men, the elderly, and people living in urban areas and regions such as the Plateaux and Savanna regions.     

An empirical analysis of supply chain risk management in the German automotive industry

The purpose of this paper is the empirical analysis of supply chain risk management practices. The analysis is based on a survey with 67 manufacturing plants conducted in the German automotive industry. After investigating the vulnerability of supply chains in general and examining key drivers of supply chain risks, the paper identifies supply chain risks by analyzing their likelihood to occur and their potential impact on the supply chain. The results are visualized in the probability-impact-matrix distinguishing between internal and external supply chain risks. Furthermore, instruments for dealing with supply chain risks are investigated. Therefore, the impact of supply chain risk management on performance is tested. In order to distinguish between companies with a high degree of supply chain risk management and those with no or only limited implementation the plants are grouped by means of a cluster analysis based on factors reflecting the instruments of supply chain risk management. In particular, groups are created representing two different approaches to deal with supply chain risks, i.e. reactive and preventive supply chain risk management. The clusters are investigated concerning differences in terms of performance criteria. The analyses reveal that companies with a high implementation degree show a better supply chain performance. Furthermore, the results show that the group using reactive supply chain risk management has higher average value in terms of disruptions resilience or the reduction of the bullwhip effect, whereas the group pursuing preventive supply chain risk management has better values concerning flexibility or safety stocks.     

The R&D and marketing cooperation across new product development stages: An empirical study of Taiwan's IT industry

This study extends the new product development (NPD) process research to a new environmental context (Taiwan's IT industry) and a new business type (original design manufacturing, ODM). Taiwan's IT industry has achieved a very outstanding performance during the last two decades. The island's experience is quite valuable for those emerging countries that are struggling to transform themselves from producing low-value goods to making high-technology products. After analyzing the data collected from 153 research and development (R&D) and marketing managers in Taiwanese IT firms, this study finds that the higher the perceived importance of R&D-marketing cooperation is, the higher the attained level of R&D-marketing cooperation will be. Consequently, a better NPD performance can be achieved. This study additionally reports that a firm that has adopted a Defender innovation strategy attains a lower level of R&D-marketing cooperation, and has a poorer NPD performance than those firms that adopted either Prospector or Analyzer innovation strategies. Finally, environmental uncertainty has no significant impacts on the perceived importance and the attained level of R&D-marketing cooperation.     

Environment-strategy relationship and its performance implications: An empirical study of the chinese electronics industry

This study examined the strategy-environment-performance paradigm in a centrally plannedeconomy (People's Republic of China) in transition to a more market-driven economy. Based on a survey of top Chinese managers in the electronics industry, it was found that during this course of transformation, firms exhibited distinctive strategies despite a long tradition of central planning, and these strategies were signijcantly related to perceived environmental uncertainty. Specifically, managers perceptions of increased environmental uncertainty were found to be negatively related to proactive strategies and positively related to defensive strategies. Defensive strategies were also linked to higher performance.     

Feel free to feel comfortable—An empirical analysis of ergonomics in the German automotive industry

The purpose of this paper is to examine ways to improve ergonomics on the manufacturing shop floor. In particular, the impact of certain ergonomic practices on companies' economic and social objectives is investigated empirically. In order to do so, a survey has been conducted among manufacturing managers of 55 companies in the German automotive industry. The managers have been asked about their estimations on harmful tasks within the production process and on the effectiveness of various practices in the context of ergonomics and health. Worker-oriented and work-oriented practices of ergonomics are operationalized using factor analysis. By means of a cluster analysis, companies with a high degree of implementation of ergonomic practices are identified. The analysis shows that plants with a higher implementation degree of ergonomic practices show a better performance in terms of economic and social objectives. Furthermore, the results reveal that work-oriented practices lead to better performance with respect to the investigated economic and social objectives, whereas worker-oriented practices play a supporting role only. Finally recommendations for manufacturing companies with regard to the field of ergonomics are derived from the empirical results.     

Convergence and diversification in cable industry: An empirical analysis of the deployment pattern of cable telephony in US local telecommunications markets

The primary purpose of this study is to examine the deployment pattern of cable telephony in the US local telecommunications market. A model is established stressing that the size of local markets and the specific cost advantages of local cable systems are associated with the deployment of cable telephony by cable operators.     

Market share,advertising, R&D,and profitability: An empirical analysis of leading industrial firms in Japan

This paper develops a dynamic model of a leader firm which chooses the time paths of R&D and advertising inputs so as to maximize the present value of expected profits. From this theoretical model simultaneous-equations system for market share, advertising, R&D, and profitability is derived and estimated using the data on the leading industrial firms in Japan. Our results show that, as far as top firms are concerned, market share and demand growth have significant positive effects on profitability, and an increase in the stock of goodwill increases market share as well as profitability.This study was financially supported by the Ministry of Education in Japan. Helpful comments were provided by H. Odagiri. Also I am indebted to an anonymous referee for advice and criticism on various points.     

Choice of ownership mode in joint ventures: An event history analysis from the automotive industry

Inter-firm partnerships continue to be a major trend in the B2B context. Firms seek collaborative ventures to enter foreign markets, combine resources, share costs and risks, and build synergies in an increasingly competitive environment. Accordingly, the impacts of firm and host country characteristics on the selection of entry mode have been extensively studied in the literature. Nevertheless, most of these studies regard all entry modes as feasible alternatives for firms, which is rarely the case in practice. Instead, the number of entry modes available to a firm is more likely to be limited by the firm's assets and the context of the host country. As such, these contingencies, coupled with the idiosyncrasies of each entry mode, necessitate more focalized inquiry in the entry mode literature. Drawing from the OLI framework, this study zeroes in on international joint ventures (IJVs) and analyses the impact of ownership and location advantages on firm's decision about the level of control (i.e., internalization level) in an IJV in a given country. Results indicate a positive relationship between the ownership advantages and the level of control. It is also found that firms tend to favor higher control mode where the host country provides better locational advantages.     

Migrating from products to solutions: An exploration of system support in the UK defense industry

This article explores the acquisition of business solutions in complex systems environments, through insights drawn from current literature and a study of the UK defense industry. We seek to counter-balance the dominance of literature focusing on the supplier perspective, as well as provide richer distinctions between different kinds of system suppliers involved in providing business solutions. We do this through the detailed examination of customer support offerings and business relationships that exist at the system customer-supplier interface. Our findings provide a map of solutions models that exist in the UK defense context. These include: (1) product system support, (2) life cycle product system support, (3) functional system support, and (4) enterprise system support. Using these models, we highlight the continued relevance of a product orientation and the challenges involved in adopting a true customer orientation when delivering business solutions. System suppliers seeking to reposition from the supply of product system support towards more integrated and customer-oriented forms of support require a significant organizational step change.     

The effects of fishery harbor-based brands on the brand equity of shore fish: An empirical study of branded mackerel in Japan

In Japan, some fishery cooperative associations use their fishery harbor names as a brand to differentiate their own shore fish. Most notable is the branding of mackerel. In this paper, we analyze the effects of branding using a discrete/continuous model. The results are as follows. First, there is first-mover advantage in the branding of mackerel. For instance, unlike other brands of mackerel, Seki-saba as the pioneering brand can increase its brand equity. Second, other brands have opposing effects that increase and decrease the brand equity of the pioneering brand. We find the former is strongest in the early stages of fishery branding when there are few competing brands of mackerel, while the latter becomes stronger in later stages when many other brands emerge.     

Sales force automation systems: An analysis of factors underpinning the sophistication of deployed systems in the UK financial services industry

This study investigates organizational and strategic context variables that are linked to the sophistication of sales force automation systems in UK financial services firms. We find that increasing sophistication in SFA deployment, evaluated as a count of the number of types of results of sales campaigns that are measured, is driven directly by the information orientation of the host firm. We also find that the “sophistication” of deployed systems is, in fact, limited — the information held on the systems cannot underpin the strategic goals of the sales/marketing managers. We theorise that adoption of SFA systems is driven by managerial imperatives and that these have resulted in sales force resistance — shown by the paucity of information held on adopted SFA systems.     

Managerial ties, control and deregulation: An investigation of business groups entering the deregulated banking industry in Taiwan

This study investigates the determinants of business groups’ entry to the deregulated banking industry in Taiwan, from the perspectives of social capital and agency theory. The principal objective of deregulation is to increase the efficiency of resource utilization by introducing competition. However, the opportunities inherent in deregulation may induce a battle of strengths among interested business groups. Based on secondary data analysis, this study reveals that the managerial ties possessed by key individuals in a business group, and the degree of overlapping investment between the owner-managers, influences the likelihood of whether or not a business group will decide to enter the deregulated banking industry. The results of this study provide a valuable starting point from which to discuss the influence of internal and external personal networks on business strategy during a time of deregulation.