Impact of the inter-firm cooperation on company's performance: major changes during the economic crisis November 27, 2013 Oksana Kabakova

2 Paper structure Introduction Literature review Research design Data analysis Database Methodology Results Conclusions and limitations

3 Introduction. Research question Are investments in the creation of the strong inter-firm cooperation allow the company to be better off, even if the markets go down?

4 Value & significance to knowledge Lack of information about alternative crisis- management strategies Need for investigating the creation of company’s value through the intangible factors, particularly, inter-firm collaboration Lack of researches combining the idea of inter- firm cooperation and financial performance of a company during crisis periods

Ellis, Jarboe, 2010 Jagannathan, Wang, 1996 Lev, Sougiannis, 1999, Chan et al., 2001, Chambers et al., Literature review Types of cooperation Reasons for cooperation Inter-firm relationships in the framework of the value-creation theory

6 Research design. Hypothesis H1: Inter-firm relationships contribute to improving the financial performance of the company in a crisis environment.

7 Database 1692 public companies from such European countries as Germany, Italy, France, Spain, the UK The data is available for 8 years from 2004 to 2011 Information about more than 150 parameters

8 Methodology: econometric specification Inputs Control variables Output/outcome Participation in the inter-firm relationships Board of directors qualification Company’s age Number of patents Intangible assets Number of employees Industry Economic Value Added

9 Results VariableModel 1, 2006Model 2, 2008Model 3, 2011 EVA®(millions €)Coef.St.Er.t-stat.Coef.St.Er.t-stat.Coef.St.Er.t-stat. IR_INTERFIRM134,73*61,072,86112,83**62,321,8198,61*70,131,59 IH_N_EMP0,01***0,0015,840,003***0,0012,690,001*0,0011,68 W_ENERGY 53,5651,521,02195,67***52,653,75124,9* *58,422,14 IS_PATENTS 474,33***111,664,25541,02***109,84,87635***1265,06 IH_BOARD_QF 0,49***0,05510,810,37***0,049,460,27***0,0456,64 C_AGE 3,1668,590,04-176,40*73,5-2,41-100,98 251,2 7 -0,40 IS_INT_ASSETS -0,23***0, ,63 -0,108***0,007-13,9-0,010,011,06 C-95,174,1-1,50-338,45***73,7-4,61-218***81,59-2,72 Adj. R-264%37%16%

10 Conclusions Hypothesis Companies should participate in the inter- firm cooperation in order to survive during economic crisis. Moreover, collaboration positively influence financial performance in both growth and recovery periods.

11 Research Limitations A lot of proxy-indicatorsOnly one business cycleLow quality of models in 2008 and 2011

12 Research Opportunities I Change of the model specifications (nonlinear) C Comparative study of different markets: prosperous economies VS economies with protracted economic crisis C Comparative study of different industries: traditional vs. innovative, production vs. services, high concentrated vs. industries with high competition, etc. Implementation of the model to the Russian market

13 Thank you for attention!