Armed Conflict and Firm Performance: Evidence From the 2008 Georgia‐Russia Conflict

PurposeWhile most extant research focused on different dimensions of the entrepreneurs’ social network such as the size and quality of the network, the focus of this paper is on the extent to which entrepreneurs utilize their personal network with suppliers, competitors, customers, and government officials to support the operations of their ventures. This paper also takes into account the effects of industry level determinants that can influence the relationship between entrepreneurs’ personal network usage and young firms’ performance.Design/methodology/approachThe paper employs confirmatory factor analysis and moderated hierarchical multiple regressions on a sample of 246 young firms in Kuwait.FindingsThe results indicate that entrepreneurs' personal network usage is positively associated with young firms' performance. The results also reveal that industry dynamism strengthens this relationship, while in hostile industries the relationship between network usage and young firms' performance becomes weaker.Originality/valueThe present study provides insights into how the extent of utilization of an entrepreneur's personal network affects the firm's performance. Furthermore, by unpacking how industry dynamism and industry hostility influence the entrepreneurs' ability to reap benefits from their personal networks, this paper enriches the research on the role of industry factors in the performance of young firms.

PurposeCorporate responsibility and sustainability (CRS) have emerged as an important topic today. At the same time, alliances and coopetition arrangements, as vehicles for inter-firm collaboration have been shown to support firm performance. Still, there has been a lack of research into how coopetition (collaboration with competing firms) in this area may support firm performance.Design/methodology/approachThis study aims to untangle the relationship between coopetition arrangements including CRS and firm performance. The model permits garnering social performance, which is a key to CRS, and to move beyond the traditional view of the coopetition–firm–economic–performance relationship. This study is based on a survey and primary data from 215 firms in Australia. This study uses multiple indicators for the concepts. Relationships are estimated by multiple regression analyses.FindingsUsing survey data from 215 firms in Australia, the research findings confirm that coopetition in CRS can lead to improved firm performance, both in relation to financial and social performances. However, the association between coopetition in CRS and financial performance loses its significance when social performances is introduced as an additional control variable. Further, stakeholder attributes (i.e., effective power and legitimate stake) moderate the relationship between coopetition in CRS and firm financial performance. However, there was no evidence of moderation for the coopetition in CRS – firm social performance relationship.Research limitations/implicationsThis study contributes to both coopetition and corporate social responsibility research. This study demonstrates that improved firm performance may be achieved through the promotion of CRS initiatives when a coopetitive approach is adopted, particularly where an understanding of stakeholder attributes is also evident. Firms do not need to shoulder corporate social responsibility alone. They need to find well-fitting partners. There are new ways to improve sustainability in terms of nature and human relationships.Practical implicationsFirms do not need to shoulder Corporate Social Responsibility (CSR) alone. They need to find well-fitting partners.Originality/valueThis study provides very novel insights by having integrated the literature on coopetition, corporate social responsibility and sustainability resulting in a new conceptual framework that combines coopetition in CRS and performance. The new conceptual framework has both practical and research implications for coopetition in CRS and firm performance.

The moderating effects of customer driven complexity on the structure and growth relationship in young firms

This article analyses the determinants of research and development (R&D) and the role of innovation on labour productivity in Catalan firms. Our empirical analysis found a considerable heterogeneity in firm performances between the manufacturing and service industries and between low- and high-tech industries. The frontiers that separate manufacturing and service industries are increasingly blurred. In Catalonia high-tech knowledge-intensive services (KIS) play a strategic role in promoting innovation in both manufacturing and service industries, and driving growth throughout the regional economy. Empirical results show new firms created during the period 2002–2004 that have a greater R&D intensity than incumbent firms (54.1% in high-tech manufacturing industries and 68.8% in high-tech KIS). Small and young firms in the high-tech KIS sector are very prone to carrying out R&D and they invest more in innovation projects. R&D expenditures, output innovation, investment in physical capital, market share and export have positive effects on labour productivity in both the manufacturing and service sectors. Firm size, on the other hand, has a positive effect on productivity in manufacturing industries but not in services.

Discussion

PurposeWhile the importance of “science and technology-based innovation” (STI) and “doing, using and interacting-based innovation” (DUI) innovation modes in firm innovation performance has been well-established, little is known about how they affect the innovation performance of young firms. The author examines the most effective innovation mode and boundary conditions for the innovation performance of developing companies.Design/methodology/approachThe author tests the two modes of innovation using data from 159 young firms in China.FindingsThe author’s analysis indicates that a higher level of DUI innovation mode is more relevant to the innovation performance of newly established enterprises. Moreover, the effectiveness of the innovation mode is bound by the networks in which the company operates and interacts. The effectiveness of STI and DUI innovation modes is enhanced when there are high levels of innovation and business network interconnectedness from the technology network partner.Research limitations/implicationsThese findings have important implications on innovation research as they highlight the joint effects of innovation modes and quality of network ties on young firms seeking to improve their innovation performance.Practical implicationsSTI and DUI innovation modes represent different forms of innovation activities that may affect the knowledge and resources of young firms used to improve innovation performance. Knowing this can help young firms to choose effective innovation mode.Originality/valueThis study makes three contributions. The first is to pay specific attention to the neglected topic of the influence of STI and DUI innovation modes on innovation performance of young firms. Understanding that the two innovation modes offer different methods of gaining knowledge and resources can help young firms choose an effective innovation mode for their business; Second, the author examines the boundary conditions of the effectiveness of innovation modes. Specially, the author examines the moderating role of external networks, which can help clarify conflicting results in this regard. 10;The third contribution is to investigate the importance of network relationships for innovation activities moving beyond the extent of network relationships to instead consider the ability of those relationships to expose a firm to innovative techniques and methods.

PurposeThe current paper extends previous studies on the match between CEO and firm and explores whether certain characteristics of young CEOs make them more desirable to young firms. Results in this paper will provide useful information to startup companies when they need to find managers leading the firms.Design/methodology/approachThis study use a large sample of panel regression to study the match between CEOs and firm via a difference-in-differences approach.FindingsThe author finds that young firms hire a disproportionately higher percentage of young CEOs than established firms. Young firms led by young CEOs exhibit higher growth rates in sales and assets and invest more in capital expenditure and R&D activities than similar firms led by older CEOs. Young CEOs in young firms also receive higher compensation than both older CEOs working in young firms and young CEOs working in established firms.Originality/valueThere are many studies examining how CEO age affect their decision-making process. There are also many studies examining the differences between young firms and established firms. However, there is no study so far examining the intersection of the two questions above. Specifically, whether the differences between young vs established firms make certain characteristics of young CEOs beneficial to young firms.

The paper provides new empirical evidence on the relationship between environmental efficiency and labour productivity using industry level data. We first provide a critical and extensive discussion around the interconnected issues of environmental efficiency and performance, firm performances and labour productivity, and environmental and non-environmental innovation dynamics. The most recent literature dealing with environmental innovation, environmental regulations and economic performances is taken as reference. We then test a newly adapted EKC hypothesis, by verifying the correlation between the two trends of environmental efficiency (productivity, namely sector emission on added value) and labour productivity (added value on employees) over a dynamic path. We exploit official NAMEA data sources for Italy over 1990-2002 for 29 sectoral branches. The period is crucial since environmental issues and then environmental policies came into the arena, and a restructuring of the economy occurred. It is thus interesting to assess the extent to which capital investments for the economy as a whole are associated with a positive or negative correlation between environmental efficiency of productive branches and labour productivity, often claimed by mainstream theory dealing with innovation in environmental economics. We believe that on the basis of the theoretical and empirical analyses focusing on innovation paths, firm performances and environmental externalities, there are good reasons to expect a positive correlation between environmental and labour productivities, or in alternative terms a negative correlation between mission intensity of production and labour productivity. The tested hypothesis is crucial within the long standing discussion over the potential trade-off or complementarity between environmental and labour productivity, strictly associated with sectoral and national technological innovation paths. The main added value of the paper is the analysis of the aforementioned hypothesis by exploiting a panel data set based on official NAMEA sectoral disaggregated accounting data, providing both cross section heterogeneity and a sufficient time span. We find that for most emissions, if not all, a negative correlation emerges between labour productivity and environmental productivity. Though this trend appears driven by the macro sectors services, manufacturing and industry, this evidence is not homogenous across emissions. In some cases U-shapes arise, mainly for services, and the assessment of Turning Points is crucial. Manufacturing and industry, all in all, seem to have a stronger weight. Overall, then, labour productivity dynamics seem to be complementary to a decreasing emission intensity of productive processes. The extent to which this evidence derives from endogenous market forces, industrial restructuring and/or from policy effects is scope for further research. The relative role of manufacturing and services in explaining this pattern is also to be analysed in future empirical analyses. In addition, the role of capital stocks and trade openness are extensions which may add value to future analyses carried out on the same NAMEA dataset.

Environmental Efficiency, Emission Trends and Labour Productivity: Trade-Off or Joint Dynamics? Empirical Evidence Using NAMEA Panel Data

New digital technologies can generate substantial gains for adopting businesses. In this paper we analyse the impact of new technologies associated with the Industry 4.0 paradigm on labour productivity, average wages and sales growth. The analysis is based on microdata produced by the Italian National Institute for the Analysis of Public Policies (INAPP) on a large representative sample of Italian firms. We merge INAPP data with Orbis data covering the period 2010–2014-2018. By applying a Diff-in-Diff methodology, we show that the economic size of the effect of new technologies on productivity and sales is approximately twice as large as the effect on average wages. The positive impact is stronger for small and medium-size firms, even though the effects appear to be concentrated among more mature rather than younger firms and are heterogeneaous along the distributions. Results are robust to unobserved heterogeneity and endogeneity issues.

Until recently, little evidence suggested that the computer revolution of recent decades has had much impact on aggregate economic growth. Analysis at the worker level has found evidence that use of computers is associated with higher wages. Although some research questions whether this finding is solely due to unobserved heterogeneity in worker quality, others point to such results as evidence that the wage premia for skilled workers have increased over time. Adoption of new technologies is associated with higher productivity and higher productivity growth. As in the worker literature, firms adopting computers may simply be more productive firms. Using new data from the 1998 Survey of Small Business Finances, I examine the determinants of computer adoption by small, privately-held firms and analyze whether computer use affects profits, sales, labor productivity, or other measures of firm success. I am able to control for many firm characteristics not available in other data sets. I find that computer adoption is more likely by larger firms, by younger firms, by firms whose markets are national or international, and by limited liability firms. Adoption is also more likely by firms founded or inherited by a current owner and by firms whose primary owners are more educated. Firms with more than 50% of their ownership shares held by African Americans or Asians, and, in some specifications, firms with more than 50% of their shares held by Hispanics are less likely to have adopted computers, echoing results for households in the literature. Evidence concerning the link between computer use and firm performance is mixed. Current performance as measured by profits or sales is not associated with current computer use in the full sample. In some specifications, use of computers for specific tasks is associated with higher costs. Estimates of the effects of computer use on costs are larger (in absolute value) when the sample is restricted to manufacturing or wholesale trade firms or to larger small businesses. Estimates using the more parsimonious set of control variables widely available in other firm level data show large and positive effects of computer use on firm costs, sales, and profits, suggesting that controlling for managerial, firm, and owner characteristics is important.

This study examines the effects of frugal innovation on firm performance among young firms located in the U.S. Though frugal innovation is a concept that originated from innovation practices among emerging market firms, firms in the developed economies have absorbed a frugal mindset and are regularly exercising frugal innovation. We develop a framework for frugal innovation by building on entrepreneurial bricolage theory. One of our research findings shows that young firms in the U.S. find frugal innovation useful in gaining firm performance. In addition, interaction effects on firm performance are tested; those between frugal innovation and venture capital (VC) equity financing and frugal innovation and debt financing are found to be significant. Both moderators are found to weaken the positive effects on firm performance. These findings are interesting because we had initially hypothesized that the interaction effect on firm performance of frugal innovation and VC equity financing would be positive while the moderator that includes debt financing would be negative. This paper contributes to the innovation and entrepreneurship literature by empirically testing frugal innovation, a concept which has not been quantitatively studied thus far. In addition, the study establishes a link between frugal innovation and entrepreneurial bricolage.

MotivationThis article provides the first comprehensive evidence on the relationship between skills and labour productivity among manufacturing firms across Africa. It makes two contributions. First, we re‐examine the relationship between skills and labour productivity using nuanced firm‐level data. Second, we examine whether the relationship between employee skills and firm productivity varies by size and age of the firm.PurposeThis paper poses two questions. What is the relationship between skills and labour productivity using nuanced firm‐level data? Is the relationship between employee skills and firm productivity mediated by firm size and age?Approach and MethodsWe used the World Bank’s Enterprise Survey data and employed the pooled Ordinary Least Squares estimation. Owing to endogeneity concerns, we used Instrumental Variables, where country‐sector‐size averages instrument for high school and university education. Propensity Score Matching was used to estimate the effects of training.FindingsWe find that the effects of high school and university education are higher among small and young firms respectively. Training is positively associated with labour productivity, particularly among older and large firms.Policy implicationsOverall this article highlights the importance of skills development in Africa’s aspiration to boost manufacturing. Key to this is encouraging schoolchildren to complete the education cycle. It helps too if employers can identify the level of education that suits their needs for skills, given firm size and age. They need to identify skill gaps, then match training to the skills employees require.

Labour productivity and firm performance: evidence from certified firms from the EFQM excellence model

We collected multi‐wave survey data to assess the lagged effects of entrepreneurial self‐efficacy (ESE) and entrepreneurial orientation (EO) on firm performance over a five‐year period. The results of our study indicate that ESE and EO are both positively associated with firm performance but in different, and interesting, ways. Entrepreneurially self‐efficacious founder/managers may help improve the performance of very young firms but such benefits dissipate over time. An EO, on the other hand, does not appear to be particularly beneficial to very young firms. However, our results suggest an EO may play an increasingly valuable role as new firms mature.