The battleship strategy: The complementing role of born globals in MNC’s new opportunity creation

In the high-tech industries, new innovations affect a multinational company’s (MNC’s) competitive advantage. This article empirically explores why and how MNCs complement their in-house R&D by forming strategic alliance constellations with small, innovative born globals. We focus on loose, non-equity opportunity-seeking co-opetitive relationships. We call this approach the battleship strategy. The critical elements of an MNC’s battleship strategy include an open innovation commercialization strategy and creation of forums for facilitating open innovation and capturing ideas generated externally. Hence, we suggest that MNCs may externalize some of their innovation activities while gaining a competitive advantage through access to open innovation. This article contributes in several ways to earlier research focusing on the strategic alliances and networks formed between MNCs and born globals by examining the relationship from an MNC’s perspective.     

R&;D,International Trade and Creative Destruction—Empirical Findings from Finnish Manufacturing Industries*

The determinants of productivity-enhancing micro-level restructuring are examined empirically with a panel of the twelve Finnish manufacturing industries. It is hypothesized that R&D leads to productivity diversity among plants, which in turn leads to the gradual reshuffling of input shares in the presence of dynamic competitive pressure. The effect of the creative destruction on industry productivity growth is measured with the between-component of productivity decomposition. Econometric results indicate with reasonable robustness that R&D generates creative destruction with a lag of several years. Some evidence is found that imports stimulate productivity-enhancing restructuring, especially when domestic R&D is low.JEL classification: O12, 014, 019, O31, O47*This paper is based on the chapter 8 of my PhD thesis which has been accepted by the Helsinki School of Economics (2003). The research has received financial support from Tekes (the National Technology Agency), and from the Yrjö Jahnsson Foundation. This paper has benefited from comments by Petri Böckerman, Pekka Ilmakunnas, Kabor Kezdi, and Petri Rouvinen, to whom I am grateful. I am also thankful to the referees for helpful comments. Lisa Roponen has checked my English. An earlier version of this paper has been presented at the EARIE 2002 conference in Madrid and at the Summer at CEU Workshop in Budapest in 2003. Data work and computations have been carried out at Statistics Finland, in accordance with the terms and conditions of confidentiality. I also wish to thank many individuals at Statistics Finland for their guidance regarding the properties of the data. Please contact the Research Laboratory of the Business Structures Unit, Statistics Finland, FIN-00022, Finland, for access to these data. The usual disclaimer applies.     

Evaluation of investment subsidies: when is deadweight zero?

In the evaluation of investment subsidies one of the critical issues concerns the assessment of deadweight, that is, the degree to which projects would have been carried out without grant assistance. With the increasing restrictions on and cuts in subsidies for investment projects in the EU countries maximisation of the impact of the public resources that remain can be achieved through their allocation for projects with minimum deadweight. This paper studies the profile of subsidised zero deadweight investment projects – projects that would be abandoned without public subsidies – in Finland. The empirical analysis is conducted using micro level data on investment projects by private sector firms. The data set comprises 3,423 projects that were granted public investment subsidies between 2001 and 2003. Our results show that the likelihood of zero deadweight is significantly dependent on the characteristics of the subsidised firm, the characteristics of the investment project and the location of the subsidised firm.     

The Performance of Trading Firms in the Services Sectors – Comparable Evidence from Four EU Countries

We examine trade complexity and the implications of adding additional dimensions of trade for firm performance among services producers. We use unique firm‐level data to compare these patterns across four EU countries. Overall, services firms are relatively less engaged in trade than manufacturing firms; they mostly trade goods and are more likely to import than to export. Trade in services is quite rare; services are more likely to be traded by firms already trading goods. Trading firms in the services sectors are significantly larger, more productive and pay higher wages than non‐traders. Two‐way traders outperform one‐way traders. Changes in trading status by either adding another dimension of trade (imports, exports) or another type of product (goods, services) are infrequent and are associated with significant preswitching premia. In contrast, learning effects from switching trading status are uncommon. This points to significant fixed cost of being engaged in trade and confirms some previous findings that trading services firms have similar traits as their manufacturing counterparts. Apart from greater trade participation in smaller countries, we do not observe systematic differences in terms of trade or switching premia between the four countries that might be attributable to differences in country characteristics.     

Estimating Mortality and Economic Costs of Particulate Air Pollution in Developing Countries: The Case of Nigeria

The value of statistical life is an essential parameter used in ascribing monetary values to the mortality costs of air pollution in health risk analyses. However, this willingness to pay estimate is virtually non-existent for most developing countries. In the absence of local estimates, two major benefit transfer approaches lend themselves to the estimation of the value of statistical life: the value transfer method and the meta-regression analysis. Using Nigeria as a sample country, we find that the latter method is better tailored than the former for incorporating many characteristics that vary between study sites and policy sites into its benefit transfer application. It is therefore likely to provide more accurate value of statistical life predictions for very low-income countries. Employing the meta-regression method, we find Nigeria’s value of statistical life estimate to be $489,000. Combining this estimate with dose response functions from the epidemiological literature, it follows that if Nigeria had mitigated its 2006 particulate air pollution to the World Health Organisation standards, it could have avoided at least 58,000 premature deaths and recorded an avoided mortality related welfare loss of about $28 billion or 19 % of the nation’s GDP for that year.     

A multi-division efficiency evaluation of U.S. electric power companies using a weighted slacks-based measure

Prior to the 1990s, the electric power industry was highly regulated across the world. Under a liberalization policy to open markets and to grow competition commenced in the early 1990s, efficient management has become a necessity for companies in this industry. The current study examines the divisional efficiencies of multi-functional, vertically integrated companies seeking to optimize their overall management efficiency. For this purpose, divisional cost data are used as input into a slacks-based measure (SBM) model. This provides divisional efficiency indices based on slacks, as well as one for the larger firm-level management function. Further, given the important role of cost structure, we introduce a modified SBM, named the weighted SBM (WSBM), which directly incorporates division-specific weights into the objective function. Results reveal that the power generation divisions of the companies studied have significant influence on the overall cost, whereas the impact of the other four divisions - transmission, distribution, sales and general administrative - is limited.     

Uncovering procedural knowledge in craft,design, and technology education: a case of hands-on activities in electronics

Different knowledge types have their own specific features and tasks in the learning process. Procedural knowledge is used in craft and technology education when students solve problems individually and share their working knowledge with others. This study presents a detailed analysis of a one student’s learning process in technology education and the procedural knowledge used during learning tasks. Thus, procedural knowledge is mainly produced when acting, and includes students’ goal-directed actions related to the craft, design and technology processes and their learning content. These knowledge practices also include multiple interactions with teachers and other students. The findings show six different knowledge practices: observing, checking and asking, revising, guided representative action, self-directed representative action, and comprehended action. These knowledge practices actively relate to each other, and, in concert, they constitute chains of actions that constitute two different types of procedural knowledge: proactive knowledge and executive knowledge. We conclude by discussing how these knowledge practices can be used to develop our understanding of the teaching and learning of craft, design and technology.