Breaking down the barriers to firm growth in Europe: The fourth EFIGE policy report. Bruegel Blueprint 18, 28 August 2012

Large firms contribute disproportionately to the economic performance of countries: they are more productive, pay higher wages, enjoy higher profits and are more successful in international markets. The differences between European countries in terms of the size of their firms are stark. Firms in Italy and Spain, for example, are on average 40 percent smaller than firms in Germany. The low average firm size translates into a chronic lack of large firms. In Italy and Spain, a mere 5 percent of manufacturing firms have more than 250 employees, compared to a much higher 11 percent in Germany. Understanding the roots of these differences is key to improving the economic performance of Europe’s lagging economies. So why is there so much variation in firm size in different European countries? What are the barriers that keep firms in some countries from growing? And which policies are likely to be most effective in breaking down those barriers? This policy report aims to answer these questions by developing a quantitative model of the seven European countries covered by the EFIGE survey (Austria, France, Germany, Hungary, Italy, Spain and the UK). The EFIGE survey asked 14,444 firms in those countries about their performance, their modes of internationalisation, their staffing decisions, their financing structure, and their competitive environment, among other topics.

Voluntary export restraints between Britain and Japan: the case of the UK car market (1971–2002)

The rise in international markets of new, productive Japanese car manufacturers provoked intense world competition, which created serious doubts about the economic sustainability of an industry mostly dominated until the 1970s by European and North-American multinational companies. Ultimately, this crisis provoked a deep transformation of the industry, with consequences that had a permanent impact on European companies in the sector. American and later European manufacturers were successful in lobbying governments to provide protection. Using a rich source of data from the UK, I show that the ‘new trade policy’, voluntary export restraint (VER), placed on Japanese exports of new cars from 1977 to December 1999, was binding. This case study illustrates the strategies used by Japanese manufacturers to gain access to the European market through the UK market via strategic alliances and later through transplant production, against which continental European nation states were unable to fully insulate themselves. It is also shown that the policy had a profound effect on the nature of Japanese products, as Japanese firms responded to the quantity restraints by radically altering the product characteristics of their automobiles and shifting towards larger autos and new goods, to maximise their profits subject to the binding constraint.

Low-frequency volatility of real estate securities in relation to macroeconomic risk

Real estate securities have a number of distinct characteristics that differentiate them from stocks generally. Key amongst them is that under-pinning the firms are both real as well as investment assets. The connections between the underlying macro-economy and listed real estate firms is therefore clearly demonstrated and of heightened importance. To consider the linkages with the underlying macro-economic fundamentals we extract the ‘low-frequency’ volatility component from aggregate volatility shocks in 11 international markets over the 1990-2014 period. This is achieved using Engle and Rangel’s (2008) Spline-Generalized Autoregressive Conditional Heteroskedasticity (Spline-GARCH) model. The estimated low-frequency volatility is then examined together with low-frequency macro data in a fixed-effect pooled regression framework. The analysis reveals that the low-frequency volatility of real estate securities has strong and positive association with most of the macroeconomic risk proxies examined. These include interest rates, inflation, GDP and foreign exchange rates.

The Strategic outsourcing Decision of IT and eCommerce: The Case of Small Businesses in New Zealand

In New Zealand, small to medium-sized enterprises (SMEs) play a very important role in the economy by their contribution to both employment and gross domestic product. Addressing issues pertinent to SMEs is of paramount importance in driving this sector forward. Information Technology (IT) emerges as one main enabler for SMEs in automating their operations, seeking new opportunities and enhancing their strategic business positioning in local and international markets. However, the inability of SMEs to handle the dynamic nature of IT due to problems inherent in their size, structure and resources, makes it difficult for them to take appropriate decisions to benefit from the IT technologies. The advent of eCommerce (EC) has only compounded this problem. One way out of this complex situation is to outsource the IT and EC technology requirements by the SMEs. This study endeavours to identify the pattern of IT and EC outsourcing issues of SMEs within New Zealand. This research attempts to identify the main driver for IT/EC outsourcing in SMEs as well as to explore the problems of IT outsourcing and makes suggestions for further research in this crucial sector.

IT and ecommerce outsourcing in small to medium-size enterprises in New Zealand : an exploratory research

In New Zealand, small to medium-sized enterprises (SMEs) play a very important role in the economy by their contribution to both employment and also to gross domestic product. Addressing issues pertinent to SMEs is of paramount importance in driving this sector forward. Information Technology (IT) emerges as one main enabler for SMEs in automating their operations, seeking new opportunities and enhancing their strategic business positioning in local and international markets. However, the dynamic nature of IT and inability of SMEs, due to problems inherent in their size and structure, makes it difficult for them to take appropriate decisions to benefit from the IT technologies. The advent of eCommerce (EC) has only compounded this problem. One way out of this complex situation is to outsource the IT and EC technology requirements by the SMEs. This study endeavours to identify the pattern of IT and EC outsourcing issues of SMEs within New Zealand. It reveals that the main driver for IT outsourcing is access to expertise and used mainly for maintenance purposes only. The study also identifies the problems in IT outsourcing and makes suggestions for further research in this crucial sector.

The global biopharma industry and the rise of Indian drug multinationals: implication for Australian generics policy

This article provides a synopsis of the new dynamics of the global biopharma industry. The emergence of global generics companies with capabilities approximating those of 'big pharma' has accelerated the blurring of boundaries between the innovator and generics sectors. Biotechnology-based products form a large and growing segment of prescription drug markets and regulatory pathways for biogenerics are imminent. Indian biopharma multinationals with large-scale efficient manufacturing plants and growing R&D capabilities are now major suppliers of Active Pharmaceutical Ingredients (APIs) and generic drugs across both developed and developing countries. In response to generic competition, innovator companies employ a range of life cycle management techniques, including the launch of 'authorised generics'. The generics segment in Australia will see high growth rates in coming years but the prospect for local manufacturing is bleak. The availability of cheap generics in international markets has put pressure on Pharmaceutical Benefits Scheme (PBS) pricing arrangements, and a new policy direction was announced in November 2006. Lower generics prices will have a negative impact on some incumbent suppliers but industrial renewal policies for the medicines industry in Australia are better focused on higher value R&D activities and niche manufacturing of sophisticated products.

Internationalisation process for construction design service SMES on multi national projects

The internationalisation process has four key factors including market selection, decision to enter, entry modes and factors affecting entry modes. Small and medium sizes enterprises (SMEs) in the architectural engineering construction design services sector have demonstrated an increasing involvement in international markets. Consequently, activities and processes involved in internationalisation of these SME types present important issues for understanding from entrepreneurial, managerial and research perspectives. A research gap exists, however, through emphasis in past research having been given to large firms, and in particular those within manufacturing. This investigation identified similarities and differences between two construction design service SMEs who have been exporting to various localities including Eastern Europe, Africa, Middle East, UK, Asia and South America for typically more than two decades. Similarities and differences were identified within eight major constructs including: purpose, firm type, market image and design philosophy, entry mode strategy, institutional arrangement, factors affecting mode of entry, marketing selection and firm strategy in relation to project selection. The primary reasons for firms in both cases working in international markets were associated with the firms' motivations related to growth and enhancement of financial viability. Both firms were categorized as client following. This paper discusses the various internationalization processes and explains the reasons intrinsic to each case study. The two firms have been highly successful in the internationalization processes on multi-national projects die to a reflexive capability philosophy which incorporates continuous analysis and alignment between firm and locality characteristic to transform traditional barriers into enablers of success.

The role of cultural capital towards the development of a sustainable business model for design firm internationalization

This paper reports the results of three case studies of firms involved with design for the built environment who have been working in international markets for more than two decades. The first two firms are architectural practices and the third is a construction firm which designs and constructs. Their markets are diverse and their strategies have evolved over the two decades. There are numerous differences between countries including cultural, social, project governance structures, regulatory, procurement strategies, terminology, codes, etc. What is it that makes these firms able to develop sustainable business models in internationalisation? A grounded theory approach was used to examine the three case studies and develop a reflexive capability model drawing from the sociological theory of reflexivity to interpret the characteristics of the firms' ability to be able to adapt different international conditions. Twenty-two interviews were conducted across the three firms. Results indicated that sustainable business models rely upon the management of social, cultural and intellectual capital. The strategic management of capital leads to the development of increasing reflexive capability within the processes related to internationalisation. Reflexive capability is a characteristic of the three successful case study firms internationalising and working within global models of practice. This paper focuses on the role of cultural capital in a reflexive capability model for sustainable internationalisation.

Towering over all : the Italianate villa in the colonial landscape

The Picturesque aesthetic emerged in the later 18th century, uniting the Sublime and the Beautiful and had its roots in the paintings of Claude Lorrain. In Britain, and in Australia, it came to link art, literature and landscape with architecture. The Picturesque aesthetic informed much of colonial culture which was achieved, in part, through the production and dissemination of architectural pattern books catering for the aspirations of the rising middle classes. This was against a background of political change including democratic reform. The Italianate villa, codified and promoted in such pattern books, was a particularly successful synthesis of style, form and function. The first Italianate villa in England, Cronkhill (1803) by John Nash contains all the ingredients which were essential to the model and had a deeper meaning. Deepdene (from 1807) by Thomas Hope gave the model further impetus. The works of Charles Barry and others in a second generation confirmed the model's acceptability. In Britain, its public status peaked with Osborne House (from 1845), Queen Victoria's Italianate villa on the Isle of Wight, Robert Kerr used a vignette of Osborne House on the title page of his sophisticated and influential pattern book, The Gentleman's House (1864,1871). It was one of many books, including those of J.C, Loudon and AJ. Downing, current in colonial Victoria. The latter authors and horticulturists were themselves villa dwellers with libraries and orchards, two criteria for the true villa lifestyle. Situation and a sense of retreat were the two further criteria for the villa lifestyle. As the new colony of Victoria blossomed between 1851 and 1891, the Italianate villa, its garden setting and its landscape siting captured the tenor of the times. Melbourne, the capital was a rich manufacturing metropolis with a productive hinterland and international markets. The people enjoyed a prosperity and lifestyle which they wished to display. Those who had a position in society were keen to demonstrate and protect it. Those with aspirations attempted to provide the evidence necessary for such acceptance, The model matured and became ubiquitous. Its evolution can be traced through a series of increasingly complicated rural and suburban examples, a process which modernist historians have dismissed as a decadent decline. These villas, in fact, demonstrate an increasingly sophisticated retreat by merchants from ‘the Town’ and by graziers from ‘the Country’. In both town and country, the towers of villas mark territory newly acquired. The same claim was often made in humbler situations. Government House, Melbourne (from 1871), a splendid Italianate villa and arguably finer than Osborne House, was set in a cultivated landscape and towered above all It incorporated the four criteria and, in addition, claimed its domain, focused authority and established the colony's social status. It symbolised ancient notions of democracy and idealism but with a modem appreciation for the informal and domestic. Government House in Melbourne is the epitome of the Italianate villa in the colonial landscape and is the climax of the Picturesque aesthetic in Victoria.

Developing reflexive capability for successful joint ventures between Australian and Malaysian property and construction professionals

Increasingly Malaysian property and construction firms are seeking to work internationally. Firms enter international markets through various strategies and typically property and construction professionals rely on developing various forms of cooperative and collaborative arrangements. The common modes of entry include international alliances, project joint ventures, partnerships, company joint ventures and large consortiums; which arise as a response to clients seeking expressions of interests from the international community or the firms seeking to internationalise approaching clients and/or potential host country partners. Increasingly project teams on international mega projects are composed of multiple key partners from different countries coming together to achieve a higher level of strategic flexibility. Establishing and maintaining local connections and business networks are therefore critical to ensure the success of exporting firms. This paper reports the findings of a project which explores factors affecting the performance of Malaysian property and construction professionals working internationally through effective joint ventures. The project seeks to develop a performance measurement framework to examine the extent to which Malaysian firms are developing sustainable business models internationally which adapt and respond to changing conditions. A generic framework was initially developed prior to this study through a grounded theory approach merging theory from internationalisation, design management and market knowledge literature followed by a case study empirical investigation and then further literature review based upon the themes which emerged from the case study analysis. A reflexive capability model for firms in managing both economic and non-economic capital; including social, cultural and intellectual capital was developed. This project seeks to build upon the reflexive model by adapting it to the unique contexts related to the specific geographic localities of exporting Malaysian firms. Specifically, the project explores the extent to which the performance measurement framework can be used to map capabilities Malaysian construction firms have and Which they need to develop in relation to developing and maintaining international collaborative partnerships. The preliminary results of one case study Malaysian architectural firm are discussed.

Culturally-linked leadership styles

Purpose – This paper seeks to examine whether cultural context facilitates the emergence of different leadership styles. The key objective of the paper is to consider whether leadership styles are
culturally-linked and/or culturally-biased.
Design/methodology/approach – A multifactor leadership questionnaire was utilised to measure differences in leadership styles and to offer explanations as to why the “one size fits all” view is not appropriate. Analysis of variance and t-tests were utilised to compare means for more than two managerial groups.
Findings – The analysis found significant differences between leadership styles and cultural groups, hence, supporting the argument that culture and leadership interact in different ways in diverse
contexts. Transactional leadership was found to be strongly aligned with the ratings of managers from Malaysia, and transformational leadership scales correlated with the Australian respondents’ mean
ratings.
Practical implications – Variations in leadership styles are due to cultural influences because people have different beliefs and assumptions about characteristics that are deemed effective for leadership. Therefore, it is fundamental to know what leadership skills and knowledge are valued most by managers on a global level. This information is critical as it offers insight into developing competencies in different workplaces, especially as organisations expand their geographical boundaries into international markets.
Originality/value – The findings of the study provide empirical understanding for culturally-linked leadership styles. The paper contributes to understanding the importance of workforce diversity and attention to other cultures and, thus, enhances our appreciation of today’s “global village”.

Design management methodology to strengthen firm and industry competitiveness in the construction design services export sector

The aim of this research was to investigate strategies deployed by successful construction design-related firms towards achieving high levels of firm competitiveness in international markets. A reflexive capability model, developed through a critical analysis of related internationalisation literature, is composed of three key areas; internationalisation process, market knowledge and design management. Firm reflexive capability is explored through the management of social, cultural and intellectual capital. The concept of reflexivity is borrowed from sociology. Reflexivity is reinterpreted as the ‘firm’s’ ability to be aware, responsive and adaptable to self, market and project needs assessment. A cross case analysis explored the barriers and success factors through three constructs; internationalisation process, design management and market knowledge of three firms. This paper demonstrates that international firm competitiveness is dependent upon the strategic inter-relational management of social, cultural and intellectual capital for maximum advantage of the utilisation and leverage of one form of capital to gain another. This leads to the development of increasing reflexive capability to support internationalisation. An outcome of this research is the identification of the central relation between a level of reflexive capability within the firm and the firm’s level of success in international markets. This research is part of an ongoing program of research on international collaborative practice. A Reflexive Capability Matrix was developed from the findings of one research project and then validated through a second research project (only the capability matrix is presented in this paper though). The reflexive capability approach is appropriate to all firms but what is speculated upon is that the reflexive capability is particularly intrinsic to small to medium sized construction design firms who work globally. A reflexive capability is a characteristic of successful and innovative firms internationalising and working within global models of practice.

The development of a theoretical model for firm design management to support internationalisation processes

The aim of this research was to investigate strategies deployed by successful construction design related firms towards achieving high levels of firm competitiveness in international markets. A reflexive capability model, developed through a critical analysis of related internationalisation literature, is composed of three key areas; internationalisation process, market knowledge and design management. Firm reflexive capability is explored through the management of social, cultural and intellectual capital. The concept of reflexivity is borrowed from sociology the philosophers, Bourdieu and Giddens. Reflexivity is reinterpreted as the ‘firm’s’ ability to be aware, responsive and adaptable to self, market and project needs assessment. This research is part of an ongoing program of research on international collaborative practice. A Reflexive Capability Matrix is proposed. The reflexive capability approach is appropriate to all firms but what is speculated upon is that the reflexive capability is particularly applicable to small to medium sized construction design firms who work globally. A reflexive capability is a characteristic of successful and innovative firms internationalising and working within global models of practice. This paper is the theoretical development to support the paper in this congress “Design Management Methodology to Strengthen Firm and Industry Competitiveness in the Construction Design Services Export sector” where the methodology and results of a cross case analysis of three construction design firms are presented.

Australian films at large: expanding the evidence about Australian cinema performance

International markets have in recent years become a critical component of the business model for Hollywood cinema, opening up a renewed interest in the global dimensions of film diffusion. Smaller film-producing nations such as Denmark have similarly emphasised global distribution as a key component of the industry's success. Typically, however, claims for Australian film industry success rely almost exclusively on a film's domestic box office performance. This paper considers the possibilities for an expanded approach to measuring success and failure in the Australian film industry. Adopting analytic methods from cinema studies, cultural economics and geo-spatial sciences, this paper will examine the international theatrical circulation of Australian films using a unique global database of cinema showtimes. This data set captures all formal film screenings in 47 countries over an 18-month period ending 1 June 2014 and enables detailed empirical study of the locations visited by Australian-produced films. In conjunction with relevant box office data and contextual critical commentary, we propose a revised and expanded ‘film impact rating’ for assessing the reported performance of Australian films.

A relação entre nacionalidade, valores pessoais e o comportamento do consumidor em shopping centers regionais de Eugene (Estados Unidos), Montevidéu (Uruguai) e Porto Alegre (Brasil)

A globalização e o surgimento dos mercados internacionais têm trazido no bojo de sua evolução o interesse pela compreensão da relação entre a nacionalidade e o comportamento do consumidor ao redor do mundo. Embora a globalização seja um tema em evidência na literatura de marketing (Hadjimarcou, 1998), poucos são os estudos que analisam o comportamento trans -cultural do consumidor em ambientes de varejo na América do Sul. Verifica-se, nesta área, um franco predomínio da produção científica norte-americana, que se restringe a investigar a dinâmica do comportamento do consumidor entre as diversas “nações” existentes nos Estados Unidos (Czinkota e Ronkainen, 2001). Diante do desafio de se compreender a dinâmica existente entre a nacionalidade e o comportamento do consumidor em ambientes de varejo no contexto internacional, elegeu-se como cenário de pesquisa três países que guardam entre si similaridades e distinções marcantes: Brasil, Uruguai e Estados Unidos. Na busca de se colaborar com a consolidação do tema no escopo da área de marketing, este estudo investigou a relação entre a nacionalidade e o comportamento do consumidor nos shopping centers regionais em contextos internacionais. Brasileiros e uruguaios encontram-se imersos num caldo étnico e econômico que se confunde com a própria formação sócio-cultural dos dois países. Os resultados alcançados neste estudo revelam que a proximidade que eiva a relação histórica comum de Brasil e Uruguai manifestam-se valores pessoais e na forma como brasileiros e uruguaios se comportam nos shopping centers. Empregando-se a técnica de modelagem de equações estruturais, revelou-se que a nacionalidade guarda uma relação causal com os valores pessoais e o comportamento do consumidor nos shopping centers regionais dos três países. O modelo estrutural final obteve bons índices de ajustamento, indicando que a nacionalidade exerceu influência indireta sobre comportamento do consumidor nos shopping centers regionais através da mediação dos valores pessoais e atitudes em relação aos atributos daqueles centros de compras. No capítulo de conclusão apresenta-se as implicações dos resultados obtidos, as limitações do estudo e novas possibilidades de pesquisa que surgiram com a realização deste estudo.