Firm-specific Learning Research Articles

Developing and utilizing coopetitive relationships: Evidence from small and medium-sized enterprises in sub-Saharan Africa

The study proposes the notion of coopetition capability as an ability to cooperate and compete with rival firms simultaneously. We draw on the tenets of the resource-based and dynamic capability theories as well as insights from in-depth qualitative studies of small and medium-sized enterprises (SME) in two Sub-Saharan African markets – Kenya and Zambia – to explore the conceptual domain of the coopetitive capability phenomenon. We further examine how external and internal environmental forces trigger the development of coopetition capability, and how coopetitive capability contributes to firm success outcomes. Findings from the study indicate that coopetitive capability is manifested in SMEs’ ability to proactively develop, coordinate, and learn from portfolios of inter-firm relationships with competitors. The study further finds that interactivities between regulatory requirements, customer demands, and firm-specific learning processes are major triggers of SMEs’ propensities to develop and benefit from coopetition capability. The study extends the literature on inter-organizational relationships by highlighting the conceptual domain and drivers of coopetition capability.

Short-sighted managers and learnable sunspot equilibria

This paper assumes that firm managers make choices over a finite horizon while households plan over an infinite horizon. Following Shea (2013), I assume that labor exhibits firm-specific learning by doing so that newly employed labor is less productive than experienced labor. In the model, optimization requires that firm managers make conjectures about how their choices affect the labor demand choices of their successors. The model yields two steady states; one where the firm manager behaves as if she cares only about the present period and another where she is forward looking. The former (myopic) steady state usually exhibits higher output than the non myopic steady state. The non-myopic steady state also exhibits two regions of indeterminacy where extraneous, self-fulfilling expectational errors add volatility. One of these regions of indeterminacy is usually stable under adaptive learning while the other never is stable under learning.

Employee Bonding and Turnover Efficiency

I revisit the role that bonding contracts, such as pension or minimum employment terms, have on employee turnover. I focus on efficiency of such bonds as well as the necessary contractual structure that it must have in competitive labor markets. I develop a two stage turnover model that, in the absence of bonding contracts, results in inefficiently high quit rates. I find that bonding contracts only reduce turnover if they are structured effectively; the agent who sets the workers’ wages must not have claim on the bond should the worker decide to quit. This finding is consistent with previous empirical literature that suggests that pensions given at larger companies have a greater effect on turnover and total compensation than pensions offered at smaller companies. I then show how bonding may be more or less important based on the amount of firm specific learning by doing inherent to that job. Finally, I compare the predictions of this model to the vast empirical literature on pensions and tuition reimbursement plans.

An evolutionary view of the infant-industry argument

As opposed to the conventional view of the infant-industry argument as a rationale for temporary trade-impairment measures, this paper submits an evolutionary view of the argument, founded on insights from catch-up experience, as a long-run collective-learning enterprise providing a rationale for trade creation. This is operationalised by introducing system, institutional and policy learning, in addition to firm-specific learning, to complete a triad that unfolds within a multi-phased dynamic sequence eventually leading to infant-industry emergence. We factor-in radical uncertainty, complexity and path dependence, while spelling out positive and normative implications. Crucial interphase transition junctures are identified with emphasis on generative, as opposed to functional, properties.

Learning by Doing, Short‐sightedness and Indeterminacy

This article introduces firm-specific learning by doing into a real business cycle (RBC) model. This assumption results in indeterminacy of the wage over a large portion of the parameter space: when firms use sufficiently high discount factors and when newly employed labour is relatively unproductive. When firms and households use the same discount factor, the effects of indeterminacy are limited to adding volatility to the wage rate. If these discount factors differ, however, then indeterminacy also destabilises newly employed labour and total hours. This result helps to explain the high amount of volatility that newly employed labour exhibits in the US data.

Firm-Specific Learning and the Investment Behavior of Large and Small Firms

We examine a model of the size distribution and growth of firms whereby firms learn about idiosyncratic productivity parameters. Aggregate shocks, by adding noise to learning at the firm level, can produce differentiated response across firms with their reactions depending on the position of the firms in their individual life cycle. In particular, young firms, which are smaller on average than older firms, can 'overreact' to aggregate shocks. Such differences across firm sizes and ages, which arise here in a model with perfect financial markets, are often attributed to financial frictions that to financial frictions that hit small and large firms differently.

ON THE DETERMINANTS OF TOTAL FACTOR PRODUCTIVITY GROWTH: EVIDENCE FROM SPANISH MANUFACTURING FIRMS

This paper explores the main determinants of productivity growth. The analysis is performed using Spanish firm-level data. We define a framework where the relative magnitudes of alternative, but not exclusive, sources of technical change are simultaneously estimated. Our main finding is that the average total factor productivity (TFP) growth is fully explained by embodied technical progress (i.e., either new capital goods or human capital). Our results contradict the existence of a positive contribution of economywide neutral technological progress in determining average TFP growth. They also leave little room for large, unpriced effects external to the firm, both at the aggregate and at the industry level. We find evidence of firm-specific learning by doing, short-lived and due to adoption of new processes.

Why do international assignees stay? An organizational embeddedness perspective

We apply an organizational embeddedness perspective to examine international assignees’ retention with the organization. Specifically, we hypothesize that assignees’ social ties within and their perceived fit with the host unit positively relate to two sacrifices on leaving the organization: their firm-specific learning during the assignment, and their perceived career prospects in the organization. Perceived career prospects are expected to predict subsequent retention, moderated by firm-specific learning. These hypotheses are tested using a sample of 143 inpatriates in 10 German multinationals, with retention measured 2 and 4 years later. We show that inpatriates’ trusting ties with HQ staff and their fit with the HQ positively relate to their firm-specific learning and their perceived career prospects, and that the latter predicts their retention 2 and 4 years later. Perceived career prospects mediate the direct relationship between inpatriates’ fit with the HQ and inpatriate retention, and the indirect relationship between inpatriates’ trusting ties with HQ staff and their retention. Furthermore, inpatriates’ firm-specific learning mitigates the effect of perceived career prospects on retention decisions 2 years later. We contribute to the organizational embeddedness, careers, and international business literatures by explaining when and how facets of organizational embeddedness relate to assignee retention.

Industrial Design as a Source of Innovation of the Firm: Knowledge, Linkages and Dynamic

Exploring the sources of innovation of the firm has central in the economics of innovation research. While both internal and external sources of innovation have been addressed, R&D activity is regarded as the main internal source of innovation and learning. Using a multiple case study approach, this articles investigates the role of industrial design as an internal source of innovation and learning of the firm. It arises that innovation activity in industrial design is characterized by firm-specific knowledge and learning processes, as well as intra-functional linkages within the firm and outside it. Also, industrial design stimulates not only product innovation, but also process innovation.

The causal effects of organizational internal labor market on firm-specific learning – the mediating effect of willingness to internal transfer

While most of the research work addressed the internal labor market (ILM) issues from the aspect of internal and social equity point of view, our current research is, however, aimed to present the ILM model from the angle of learning the employees' firm-specific and job-specific skills. We took one step further to explore the determinants of firm-specific learning within the organizational ILM using three main criterion comprised of (1) job-related training, (2) advancement via sequence of jobs, and (3) long-term attachment to the organization. With a survey tackling the willingness to transfer internally among employees as our mediator, questionnaires were disseminated among the five traditional manufacturing industries selected in Taiwan. Our statistical results not only demonstrate the positive direct effects of all the dimensions of ILM on firm-specific learning, but also testify the indirect positive effects of ILM through willingness for internal transfer on firm-specific learning.

The development of actuarial-based pension accounting at the Bell System, 1913—40

This article evaluates the process of firm-specific learning relating to the development of actuarially based pension accounting at the Bell System in the USA from 1913 to 1940. Drawing on Alfred D. Chandler's notion of an “integrated learning base”, it analyzes the steps taken by the firm in learning how to order the multiple forms of specialized knowledge necessary for effective pension liability management. The study also explains how this change moderated relationships between such stakeholder groups as employees, investors, regulators, professional advisors and tax authorities. The pension plan was a key economic benefit that sought to increase employee retention and morale through the promise of retirement compensation for diligent, long-term service. It also sought to address humanely the economic problems of old age in a rising urban-industrial society, which had scant resources dedicated to social welfare. Although originally a pay-as-you-go system, the escalating costs associated with a rapidly expanding workforce forced its abandonment in favor of an actuarially based system in 1927. The article analyzes this evolution in management practice through the New Deal era and the emergence of a national social security system in 1935.

Firm-Specific Learning and the Nature of the Firm

<titre>R&#233;sum&#233;</titre>Cet article discute les limites d&#8217;une explication de l&#8217;existence de la firme fond&#233;e exclusivement sur les co&#251;ts de transaction en indiquant quelques facteurs additionnels susceptibles d&#8217;intervenir. Un mod&#232;le heuristique simple montre que les effets d&#8217;apprentissage sp&#233;cifiques &#224; la firme peuvent surmonter les co&#251;ts de surveillance des employ&#233;s et expliquer l&#8217;existence de la firme m&#234;me en l&#8217;absence de co&#251;ts de transaction li&#233;s au mode d&#8217;organisation de march&#233;. Une comparaison de l&#8217;importance relative des explications fond&#233;es sur les co&#251;ts de transaction et celles fond&#233;es sur les comp&#233;tences en ce qui concerne l&#8217;existence de la firme montre qu&#8217;il n&#8217;y a aucune raison a priori de supposer la supr&#233;matie d&#8217;un type d&#8217;explication &#224; l&#8217;autre. Nous soutenons qu&#8217;un programme de recherche conjoint, comprenant &#224; la fois les co&#251;ts de transaction et les comp&#233;tences, doit &#234;tre d&#233;velopp&#233; et examin&#233; empiriquement.JEL Classification: D23, D83, L22, M14

Returns to scale, productive efficiency, and optimal firm size evidence from Taiwan's firm data

By using Taiwan's census firm data, this paper estimates and tests the variable returns to scale hypothesis for aggregate manufacturing and two-digit industries. An efficiency measure is constructed to further examine the size-efficiency relations among two-digit industries. Analysis indicates that increasing returns exist at the aggregate manufacturing level and its magnitude is higher for exporting firms than for non-exporting firms. Moreover, trade is beneficial only for small firms. However, the property of increasing returns diminishes for most of the industries at the two-digit level, particularly for the exporting firms. This sharp comparison between aggregate and two-digit level results suggests that trade is conducive to productivity, and provides an indication of the specific form of technology spillovers among firms and across industries. Further investigation of the relationship between productive efficiency and firm size renders the result that optimal firm size is small for exporting firms in most industries, particularly in the most export-oriented ones. The technology spillover effect among firms and across industries is likely the reason for being small and efficient. Our results also indicate that an industry-wide spillover effect across firms within the same industry is roughly one-sixth of the firm-specific export-induced learning effect. Findings in this study provide valuable insight into Taiwan's economic development and also provide a development strategy for developing countries to follow.