The Impact of M&A on Technology Sourcing Strategies

The paper investigates the effects of Mergers and Acquisitions (M&A) on corporate research and development (R&D) strategies using Community Innovation Survey (CIS) data on the Dutch manufacturing sector. The focus of the research is whether M&A affect corporate innovation strategies, favouring in-house R&D and innovation expenses versus external technological sourcing. The results show that M&A activities have a positive and significant impact on innovation investments by firms, and particularly on R&D intensity and total expenditure on innovation. M&A affect corporate innovation strategies, favouring in-house R&D versus external technological sourcing. Firm post-merger behaviour favours the consolidation of the knowledge, competences and capabilities that have been acquired by merging with or by buying another firm, confirming that the reasons for a merger or acquisition are most often related to firms' innovative performance. Following involvement in a M&A, firms tend primarily to focus on fully integration of their resource bases in order to enable them to produce and sell innovative products that are new to the market.Technology sourcing; Innovation; M&A; Heckman two-stage; Bi-Tobit.

Clustering tales from the Greek construction sector: lessons from experience

The idea of increasing regional and national economic competitiveness through the implementation of cluster strategies is not something new. In each business sector, in each country, the creation of clusters has been used to capitalise on sector characteristics and address country specific productivity needs. While clusters have met with significant success in many context, the Greek context and in particularly the Greek Construction sector has not been so fruitful. This paper, through the development of a conceptual framework, questionnaires with 92 firms and interviews with 10 key firms, sought to investigate the critical success factors for the creation of a cluster within the challenging context of the Greek construction sector. Using evidence of good practicefrom other European countries facing similar challenges and the empirical data, the findings indicated a series of factors which firms could adopt, mitigate against or manage to help improve the potential success of the cluster. The findingstherefore have important implications for interventions not only by the state and local authorities that will encourage construction firms to participate in a cluster, but also by the managers/owners/practitioners for the creation of the required foundations for their participation in an environment where competitors cooperate

Subsidiarity and Proportionality in the Single Market: An EU fit for inclusive growth

This report offers a fresh perspective on the principles of subsidiarity and proportionality in the European Union based on a thorough-going economic analysis. Specifically, the report uses the EU Single Market as a case to discuss shortcomings and potential improvements in five key policy areas. It reviews how the principles of subsid- iarity and proportionality can help boost growth in the EU at the aggregate country level – while at the same time allowing EU regions to benefit from growth. The report focuses on the regional level as economic growth has been uneven across the EU’s regions over the last decade and, consequently, growing disparities between re- gions have emerged. This alone merits a review on how we can reconcile the twin objectives in the future

The Impact of R&D Innovation Success on the Relationship between R&D Investment and Financial Leverage

This paper explores the interrelationship between R&D investment, financial leverage, and a firm’s R&D innovation success. Using a sample of UK and EU firms, we predict that changes in oneyear- ahead R&D investment are negatively associated with changes in financial leverage in the current period. Crucially, we also predict that this negative association is positively moderated by the extent to which firms are successful in generating commercially viable and technically feasible innovations from their R&D work. We use insights from International Accounting Standard (IAS) 38: Intangible Assets to measure R&D innovation success. Our empirical findings offer strong support for each of our theoretical predictions. Consequently, we contribute to the extant literature by demonstrating that R&D innovation success influences how firms finance their subsequent investments in R&D. Our work also shows that accounting disclosures have the potential to play an important role in open innovation networks

Investment, R&D and Financial Constraints in Britain and Germany

This paper tests for the importance of cash flow on investment in fixed capital and R&D using firm-level panel data in two countries between 1985 and 1994. For German firms, cash flow is not informative in simple econometric models of fixed investment or R&D. In identical specifications for British firms, cash flow is informative about investment, although not about the level of R&D spending conditional on the R&D participation decision. In the UK, we also find that investment is less sensitive to cash flow for R&Dperforming firms, and that cash flow predicts whether firms perform R&D or not. We confirm that these differences do not simply reflect a greater role for current cash flow in forecasting future sales. These results suggest that financial constraints are more significant in Britain, that they affect the decision to engage in R&D rather than the level of R&D spending by participants, and that consequently the British firms that do engage in R&D are a self-selected group where financing constraints tend to be less binding.Investment, R&D, cash flow, financial constraints, panel data

ERAWATCH country reports 2011: Austria

The main objective of the ERAWATCH Annual Country Reports is to characterise and assess the performance of national research systems and related policies in a structured manner that is comparable across countries. EW Country Reports 2011 identify the structural challenges faced by national innovation systems. They further analyse and assess the ability of the policy mix in place to consistently and efficiently tackle these challenges. The annex of the reports gives an overview of the latest national policy efforts towards the enhancement of European Research Area and further assess their efficiency to achieve the targets. These reports were originally produced in November - December 2011, focusing on policy developments over the previous twelve months. The reports were produced by the ERAWATCH Network under contract to JRC-IPTS. The analytical framework and the structure of the reports have been developed by the Institute for Prospective Technological Studies of the Joint Research Centre (JRC-IPTS) and Directorate General for Research and Innovation with contributions from ERAWATCH Network Asbl.JRC.J.2-Knowledge for Growt

The macroeconomic conditions of EU-inspired employment policies

With its impulses and coordination initiatives the EU makes efforts to influence the employment and labour policies in its Member States. Here the principal instruments are the European Employment Strategy and its main constituent, the Employment Guidelines. The latter, while based on modern professional ideas about the institutional determinants of the labour market, have been incomplete up to 2005: due to departmentalism reflected in the tensions between the EU institutions responsible for employment and macro-policies crucial fields were kept out of the employment guidelines such as wage-setting policies, the wage bargaining system as well as the budgetary implications of active labour market policies. The macroeconomic support of the EU-inspired employment policies is theoretically not sound. An example of this is the objective of the Lisbon Process of simultaneous ambitions improvement of both macro-level productivity and employment. This target ignores the trade-off between these two factors prevailing even in the long term. The division and inconsistency between the philosophy and operation of various EU institutions is reflected in the moderate, but disturbing inconsistencies between the mid-term macroeconomic and employment strategies of the Hungarian government (the Convergence Programme and the National Action Plan for Employment). There are, however, possibilities for the member countries, including Hungary, to prepare and carry out employment policies in the EU framework that are supported by sound macro-policies: they have to be less slavish abiding by specific EU recommendations, have to take into account the domestic conditions realistically, and get rid of detrimental institutional divisions, at least in their indigenous administration.European integration, employment strategy, coordination of policies