Juan Alcacer

10 Results


Zooming In: A Practical Manual for Identifying Geographic Clusters

The concept of clusters-high concentrations of economic activity in a specific geographic unit-is the foundation for a vast amount of research in economics, management, urban planning, sociology, and public policy. Despite notable exceptions, little research has looked carefully at the key issue of cluster identification. In this paper the authors detail the reasons, procedures, data, and results of their effort to identify geographic clusters. They want to increase awareness of the complexities behind cluster identification, and to provide a concrete method that can help researchers define clusters more accurately. In particular, the authors address three related questions in cluster identification: (1) What economic activity should be measured to determine clustering? (2) What is the appropriate geographic unit over which economic activity should be measured? (3) What levels of economic concentration are high enough for the geographic unit to be labeled a cluster? They answer these questions with a combination of literature review, theoretical discussion, and illustrations with various algorithms. While they use a specific empirical context-the global semiconductor industry-for illustrative purposes, the insights and methodologies are general enough for other contexts. The organic cluster identification methodology they propose is especially useful when researchers work in global settings, where data available at different geographic units complicates cross-country comparison. Read More

Applying Random Coefficient Models to Strategy Research: Testing for Firm Heterogeneity, Predicting Firm-Specific Coefficients, and Estimating Strategy Trade-Offs

Textbooks generally define firm strategy as a set of decisions focused on managing organizational trade-offs in order to achieve long-term competitive advantage. Although strategy models theorize why the same actions by different firms lead to different effects on firm performance, empirical work typically estimates the average effect of an action across firms. The authors discuss how Random Coefficient Models (RCMs) can close the gap between theoretical and empirical research in strategy. Among other advantages to using RCMs, researchers can make a critical distinction between firm actions (or explanatory variables) that are statistically significant and those that are strategically significant. Read More

Spatial Organization of Firms: Internal and External Agglomeration Economies and Location Choices Through the Value Chain

How do firms decide location strategy for distinct activities in the value chain, such as manufacturing, research and development, or sales? Does strategy depend on geographically bounded spillovers between firms, or within firms? This paper uses data for organic expansions in the US by firms in pharmaceuticals in 1993-2005 to consider two types of expansions. The first is internal: an increase in employment in existing establishments. The second is external: opening new establishments. Alcacer (HBS) and Delgado (Fox School of Business) argue that decisions about geographical location are a tradeoff between external drivers pulling firms to geographically disperse activities and internal drivers pushing within-firm collocation, either across activities (such as manufacturing and R&D) or within activities (such as multiple R&D labs). Read More

Location Choices Under Strategic Interactions

How do firms decide their location when expanding geographically? This paper explores how strategic interaction among competitors affects firms' geographic expansion across time and markets. HBS professor Juan Alcacer builds a model in which two firms that differ in their capabilities enter sequentially into two markets with different potentials for profit. The model is solved using game theory under three learning scenarios that capture the ability of a firm to transfer its capabilities across markets: no learning, local learning, and global learning. Three equilibrium strategies emerge: accommodate, marginalize, and collocate. Alcacer identifies how these strategies are more or less likely to emerge depending on three parameters: initial relative firm capabilities, relative market profitability, and learning rates. For managers, the paper illustrates different ways that firms can use location choices across time and geographic markets as a tool to enhance or preserve their competitive position within an industry. Read More

Learning by Supplying

Offshore outsourcing of manufacturing and related activities to China and other emerging economies is changing the competitive landscape in many industries. Some predict that lessons learned by emerging market firms in their role as suppliers to major branded producers will allow them to develop the capabilities necessary to become viable world-class competitors, possibly at the expense of current market leaders. In this paper Juan Alcacer and Joanne Oxley subject this "learning by supplying" hypothesis to the test, analyzing data on evolving technological and marketing capabilities of suppliers in the mobile handset industry. Contrary to some of the more alarmist commentary in the popular press, the researchers' observations suggest that the progression from trusted supplier to threatening competitor among electronics manufacturing firms is far from inevitable. Findings also point to the existence of quite distinct pathways to technological and market learning for suppliers. The divergent learning outcomes for suppliers serving operators and branded producers reinforce the idea that, while operators involve suppliers in all aspects of production, branded producers strictly limit access to customer-facing activities, thus reducing suppliers' opportunities for learning in this domain. Read More

Location, Location, Location: The Strategy of Place

Business success in one geographic location doesn't necessarily follow a company to a new setting. Professor Juan Alcácer discusses the importance of taking a long-term strategic view. Open for comment; 12 Comments posted.

Location Strategies for Agglomeration Economies

Locations thick with similar economic activity expose firms to pools of skilled labor, specialized suppliers, and potential inter-firm knowledge spillovers that can provide firms with opportunities for competitive advantage. While certainly attractive, the lure of these agglomeration economies varies. Some firms should be wary of aiding their competitors by co-locating with them, for example, because each "agglomeration economy" differs in how readily competitors can leverage contributions made by others. HBS professor Juan Alcácer and Wilbur Chung of the University of Maryland develop a framework to better understand how firms respond to agglomeration economies. Read More

Local R&D Strategies and Multi-location Firms: The Role of Internal Linkages

While geographic co-location has obvious benefits for firm innovation, it can also have serious drawbacks. HBS professor Juan Alcácer and Ross School of Business professor Minyuan Zhao explore how firms tap into the rich resources of technology clusters while protecting the value of their innovations. To understand R&D dynamics in a cluster, the scholars argue, we must recognize that a firm located in a particular cluster may also be part of an extended network, with its operations strategically integrated across multiple locations and multiple business lines. Read More

Spanning the Institutional Abyss: The Intergovernmental Network and the Governance of Foreign Direct Investment

Economic globalization presents severe governance challenges. The insufficiency of states as a source of surety for transactions that transcend national borders creates an opportunity for an increased role for organizations in the global institutional framework. The authors of this paper applied a network methodology to show how one type of organization, the intergovernmental organization (IGO), facilitates the cross-border investments of another type, the multinational corporation (MNC). They further document the interdependence between domestic institutions, and international institutions represented by IGOs. The results help to understand and explain which countries attract FDI, and from which senders. Results also point to an emerging rivalry between states and organizations as sources of governance in the global economy. Read More

Applicant and Examiner Citations in U.S. Patents: An Overview and Analysis

The ready availability of patent citation data has been a tremendous boon to applied research on knowledge and innovation. The role of examiners in the generation of patent citations has been thought to potentially complicate these analyses, but has been difficult to study. Taking advantage of a change in the way patent citation data has been reported starting in 2001, this paper summarizes basic facts on examiner citations, and provides a descriptive analysis of factors associated with citations in a patent. Read More