How constraints and knowledge impact open innovation

Laursen and Salter (2006) examined the impact of a firm's search strategy for external knowledge on innovative performance. Based on organizational learning and open innovation literature, we extend the model hypothesizing that the search strategy itself is impacted by firm context. That is, both ‘constraints on the application of firm resources’ and the ‘abundance of external knowledge’ have a direct impact on innovative performance and a firm's search strategy in terms of breadth and depth. Based on a survey of Swiss‐based firms, we find that constraints decrease and external knowledge increases innovative performance. Although constraints lead to a broader but shallower search, external knowledge is associated with the breadth and the depth of the search in a U‐shaped relationship. Copyright © 2013 John Wiley & Sons, Ltd.     

Evaluating Irish industrial policy in terms of deadweight and displacement: a quantitative methodological approach

Evaluation should consider what would have happened in the absence of assistance. To produce an assessment of this counter-factual scenario involves considering the twin concepts of deadweight and displacement. An evaluative framework is developed for measuring the impact of grant assistance to individual firms. Logit regression analysis is used to estimate predictive models for deadweight and displacement. The data were gathered during face-to-face interviews with the managing directors of firms that received grants from Shannon Development in the Shannon region of Ireland (self-assessment approach). The objective was to establish whether certain characteristics of grant-assisted firms can predict probable deadweight and displacement effects. In the case of deadweight, it was found that grant type, size of firm, whether investment appraisal carried out by firm included grant received and whether firm was a first-time or repeat grant recipient all impact on the level of deadweight. Regarding displacement, it was found that size of firm and type of ownership impact on displacement. While the evaluative framework has been ‘tested’ in an Irish regional context, the logic of the approach is clear and has a much wider international applicability regarding the evaluation of industrial policy interventions.     

Co-creation and innovation in public services

Public-sector services feature some very specific characteristics that frequently prove to be obstacles to innovation. This article therefore discusses how co-creation, within a Service-Dominant (S-D) logic, may contribute to innovation in these organisations and overcome the challenges posed by scarce resources and a multiplicity of clients and objectives and maintain citizen consensus around these activities. This discussion is backed up by examples drawn from the United Nations awards made annually for the best public-sector practices and innovations.     

Value-Driving Activities in Euro-Zone Banks

We develop and test accounting-based valuation models for commercial banks. We extend Begley et al.'s framework (2006) and propose a valuation model where goodwill is generated by virtually all commercial and investment banking activities. Key features of our model are: the development of a relation between future cash flows from fee income and the bank value that depends on lending, borrowing and off-balance sheet business; and the inclusion of proprietary investment and trading as value-driving activities. Empirical tests on a sample of Euro-zone banks from 1998 to 2006 provide the following evidence. Unrealised expected cash flows from fee income are the most important source of unrecorded goodwill. This is consistent with the increasing importance of revenue from the sale of financial services to banks' income. The contribution of fee income to goodwill is higher for banks with large deposits and new loans. Equity securities are a source of unrecorded goodwill, but the introduction of fair value accounting, with the adoption of the International Financial Reporting Standards (IFRS), reduces their valuation role. Yet equity securities remain positively associated with unrecorded goodwill after IFRS adoption, suggesting that the fair value standards do not fully capture market expectations about future cash flows of investment assets.     

Institutional quality and the duration of agri-food trade flows

Recent trade disruptions and their consequences on supply chains show the importance of stable trade relations for exporters' economic planning and importers' supply security. Both instability in trading partners' economic and institutional environment and differences between them are likely to exacerbate these disruptions. We investigate the role of exporters' institutional quality (IQ) and its similarity with importers' IQ in the stability of trade links. We focus on the trade links of agri-food products exported from sub-Saharan African (SSA) countries to the European Union (EU-28) and consider three dimensions of IQ: ‘government selection, monitoring, and replacement’; ‘efficiency of policy formulation and implementation’; and ‘respect of citizens and state for institutions’. Using a discrete-time duration model, we show that the duration of SSA exports to the EU-28 increases with higher exporters' IQ and similarity of trading partners' IQ. The strongest impact of exporters' IQ is associated with ‘government selection, monitoring, and replacement’. In terms of the similarity of trading partners, ‘respect of citizens and state for institutions’ has the largest impact on trade durations. Our findings suggest that the improvement of countries' IQ may boost the stability of trade relationships. Moreover, the similarity of IQs between trading partners supports the stability of trade links and should be carefully considered when establishing new trade relations.     

Farmers' adoption of ecological practices: A systematic literature map

Understanding the factors associated with adoption of ecological farming practices is a well-established topic of interest to agricultural economists. As the transition to more sustainable agriculture has become a policy priority for the European Union, broad and balanced reviews of this literature are important. We develop a systematic map of quantitative observational studies which describes the ecological practice(s) adopted, the frequency of inclusion and significance of a range of independent variables, and how the dependent variable is measured. We also conduct a quality assessment. We find that while socio-demographic variables and farm structural variables are frequently included, they were insignificant more often than they were significant. For behavioural factors we find stronger evidence for the importance of cognitive or attitudinal variables compared to dispositional attitudinal variables. We also find a growing interest in social factors which will be valuable for researchers to explore further and reflect on the policy implications of our findings.     

Income distribution and the diffusion of networks: An empirical study of Brazilian telecommunications

Telecommunications is often considered to be an important contributor to economic growth, and most countries have therefore adopted several initiatives to improve coverage of fixed as well as mobile telephones. This paper focuses on the role of income distribution on the diffusion of fixed telecommunications in Brazil. The focus is on how the distribution of income may affect affordability and thereby the market size. The result is that an uneven income distribution may result in higher coverage for the poorest municipalities in the study since the uneven distribution allows for at least some consumers to reach the critical level of income. For municipalities above a certain average income level, the effect is reversed and coverage will be adversely affected by high inequality. The findings are robust to different measures of inequality.     

Capturing zero‐trade values in gravity equations of trade: an analysis of protectionism in agro‐food sectors

With significant improvements in its theoretical underpinnings, the gravity model has gained renewed interest in the agro‐food trade literature. Notwithstanding, there is a dearth of literature examining the relative trade restrictiveness of tariff barriers across a broad range of agro‐food sectors. This represents an important research gap, which this study sets out to fill. Furthermore, this research reconciles the application of zero‐inflated models with a sectorally disaggregated analysis. More specifically, employing a fully specified gravity equation, a Poisson estimator and variants of the Poisson model (Negative Binomial, Zero‐Inflated Poisson, and Zero‐Inflated Negative Binomial) provide statistically significant and theoretically consistent estimates, while allowing for the inclusion of zero‐trade values. A panel data model with fixed effects is also employed to improve the estimation of the parameters of interest. Estimation results reveal that in the vast majority of sectors examined, import tariffs are found to be statistically significant, whereas export refunds exhibit a statistically smaller role due to the nonsystematic nature of their application in world food markets. Model simulations of tariff barrier eliminations reveal limited trade gains, although there is encouraging evidence of “low” and “lower middle” per capita income country trade gains in wheat, red meat, dairy, sugar, and (particularly) rice markets.     

The land that lean manufacturing forgot?

We have conducted the first large ‐ scale survey on management practices in transition countries. We found that Central Asian transition countries, such as Uzbekistan and Kazakhstan, have on average very poor management practices. Their average scores are below developing countries such as India. In contrast, the Central European transition countries such as Poland and Lithuania operate with management practices that are only moderately worse than those of Western European countries such as Germany. As we find these practices are strongly linked to firm performance, this suggests that poor management practices may be impeding the development of Central Asian transition countries. We find that competition, multinational ownership, private ownership and human capital are all strongly correlated with better management. If causally interpreted, this would imply that the continued opening of markets to domestic and foreign competition, privatization of state ‐ owned firms and increased levels of workforce education should promote better management, and ultimately faster economic growth.     

The economic value of volatility transmission between the stock and bond markets

This study has two main objectives. Firstly, volatility transmission between stocks and bonds in European markets is studied using the two most important financial assets in these fields: the DJ Euro Stoxx 50 index futures contract and the Euro Bund futures contract. Secondly, a trading rule for the major European futures contracts is designed. This rule can be applied to different markets and assets to analyze the economic significance of volatility spillovers observed between them. The results indicate that volatility spillovers take place in both directions and that the stock‐bond trading rule offers very profitable returns after transaction costs. These results have important implications for portfolio management and asset allocation. © 2008 Wiley Periodicals, Inc. Jrl Fut Mark 28:1066–1094, 2008