José Ángel Zúñiga-Vicente

ASSESSING THE EFFECT OF PUBLIC SUBSIDIES ON FIRM R&D INVESTMENT: A SURVEY

This survey examines the empirical literature on the relationship between public R&D subsidies and private R&D investment over the past five decades. The survey reveals a considerable heterogeneity of empirical results that cannot be explained fully by methodological issues. We aim to provide further explanations of the possible causes of that heterogeneity. In particular, we emphasise a set of issues that, in our view, are critical to understanding the potential effect of public R&D subsidies on private R&D spending. Special attention is paid to the dynamic aspects and composition of firm R&D, the constraints faced by the firm (such as financial constraints), and the amount and source of public subsidies. None of these issues have been investigated in depth. We formulate a set of research assumptions to guide future empirical research in this field.

Four decades of research on product diversification: a literature review

Purpose – The purpose of this study is to gain new insight into the true nature of the relationship between product diversification and performance, as well as to explore the roles the home country environment and time can play on this relationship.Design/methodology/approach – The study reviews a large part of the research that has addressed the relationship between product diversification and performance over the last four decades.Findings – This study identifies the main views (models) that can help scholars to adequately understand, both theoretically and empirically, the potential effect of product diversification on performance: the premium diversification model; the discount diversification model; and the U‐inverted model. The study confirms a wide diversity of results. Drawing from the institutional‐based view, it is argued that a significant part of this heterogeneity stems from the effect of two factors that have often been ignored: the home country environment and time period. The review of rec...

Dynamics of the strategic group membership-performance linkage in rapidly changing environments

Abstract This study focuses on answering the following question: Do performance differences exist among strategic groups and are these differences stable over time in a population of firms which has undergone continuous and radical environmental transformations? Two alternative theoretical approaches are provided to answer this question, namely, the Industrial Organization Theory (IOT) and the Resource-Based View of the Firm (RBVF). The Spanish private bank population is the empirical setting used to test the hypotheses; this population experienced continuous and dramatic environmental shifts over the period 1983–1997. A new cluster technique is used to longitudinally identify strategic groups—the MCLUST. This study shows that significant performance differences among strategic groups exist in three years—1991, 1992 and 1997—in all performance indicators used in this research, as the IOT states, but such differences do not exist in other years, as the RBVF predicts. These findings support the conclusions of more recent longitudinal and dynamic studies in this field, which show consistent evidence to support both theoretical approaches. Future studies may be necessary to consider both perspectives as complementary in order to explain the performance consequences of strategic group membership over time.

Effects of process and product‐oriented innovations on employee downsizing

Purpose - The purpose of this paper is to examine the role played by different types of firm innovation on employee downsizing. Drawing on economic and management views, the authors aims to assess the potential positive or negative effect of different types of processes (i.e. new technology via the introduction of new equipment as well as new methods of organizing the workforce) and product (i.e. number of innovations) innovations on employee downsizing. Design/methodology/approach - The empirical setting is a sample of Spanish manufacturing firms over the period 1994-2006. The authors employ probit models for panel data as an empirical tool. Findings - The results show a negative and significant effect of process innovations associated with acquiring and deploying new production equipment and product-oriented innovations on the probability of carrying out important reductions in workforce. However, a positive and significant effect is found when process innovations are linked to the adoption of new methods of organizing the workforce. Practical implications - Managers might play a significant role in employment creation, especially when they carry out process innovations related to the acquisition of complementary production assets (i.e. new equipment) and market highly innovative products. Policy makers might contribute to diminish the potential number of employees affected by firms’ downsizing strategies by designing, for example, public subsidies systems that deliberately prompt both types of innovations. Originality/value - The authors make an effort to provide alternative explanations about why firms downsize, as they analyze different types of process and product innovations whose effects on employment (and, thus, downsizing) do not seem to be clear. Moreover, the paper furthers ones understanding of the effect of firm innovation by focusing on the potential effect of one type of process innovation which has not been examined until now: the adoption and implementation of new methods of organizing the workforce owing to new technology.

Classroom Experiments: A Useful Tool for Learning about Economic and Entrepreneurial Decisions

This article discusses the implementation and advantages of classroom experiments for teaching and learning about economic and entrepreneurial decisions. We argue that this methodology is not only appealing from the students’ perspective but also is consistent with the European Higher Education Area philosophy. Particularly, classroom experiments can help to promote or reinforce different generic and specific skills (e.g. ‘auto-learning’, ‘problem-solving’, ‘capacity to adapt to new situations’ or ‘economics and managerial decision making’) and facilitate the evaluation of such skills. In this method, students play a central and proactive role throughout the whole learning process and they have the opportunity to apply theoretical concepts and train their own skills. Feedback provided by experimental outcomes help students to identify strategies that improve their own methods and rules to make better economic and entrepreneurial decisions by recognizing and correcting potential bias in their perceptions. The methodology is illustrated with a straightforward experiment designed to detect potential deviations from the rational assumption (i.e. profit maximizing behavior) when subjects face investment decisions in a context of adjustment costs and heterogeneous (physical and human) resources.

The U-shaped effect of R&D intensity on employee downsizing: evidence from Spanish manufacturing firms (1994–2010)

Abstract This study explores an empirically untested issue: the relationship between the level of a firm’s R&D intensity and employee downsizing. Basing our conceptual development on the Resource-Based View of the firm, we argue that a linear relationship is a poor approximation of the proposed relationship. Instead, we find theoretical insights supporting the logic that employee downsizing decreases as firms shift from low to moderate levels of R&D intensity but increases as firms change from moderate to high levels. This prediction suggests that a U-shaped link is a better representation of the way in which a firm’s R&D intensity can affect downsizing. This hypothesis is tested and confirmed using a sample of Spanish manufacturing firms during the 1994–2010 period. We also propose a novel empirical tool (i.e. dynamic probit models) that is especially useful for addressing the potential endogeneity and simultaneity problem in studying this relationship. Implications for future research and practice are presented along with the conclusions of our findings.