Corporate Innovation Strategy Research Articles

Are Good Deeds Rewarded?—The Impact of Traditional Morality and Modern Responsibility on Green Innovation

The essence of intergenerational sustainability emphasizes the necessity of incorporating altruistic thinking and culture. While prior studies primarily examined corporate innovation strategies from a self-interested lens, this paper aims to investigate the drivers of corporate green innovation from an altruistic perspective. Analyzing a sample of Chinese A-share listed companies from 2011 to 2019, we employ both the OLS model and the mediation effect model to explore how traditional morality and modern responsibility impact corporate green innovation, as well as the mechanisms underlying this relationship. Our findings reveal that both traditional morality and modern responsibility significantly enhance corporate green management innovation, with social trust serving as a key mediating factor. Furthermore, traditional morality and modern responsibility play distinctive roles depending on the stage of economic development: traditional morality primarily influences green innovation in the early stages of economic development, whereas modern responsibility becomes more influential as development progresses. This study provides meaningful insights for research and practice in corporate sustainability, business ethics, and innovation strategy.

Breaking boundaries: the influence of social insurance collection system reform on corporate innovation strategies

ABSTRACT This study employs a staggered difference-in-differences (DID) approach to explore the impact of the exogenous shock policy of the Social Insurance Collection System Reform (SICSR) on corporate innovation strategies in China. The findings suggest that SICSR has a significant positive effect on corporate breakthrough innovation, while it does not impact incremental innovation. Moreover, the study finds that the impact is more pronounced among non-state-owned enterprises and enterprises with high-labour-intensity. Additionally, a mechanism analysis reveals that SICSR has a stronger promotional effect in regions characterized by high levels of marketization, while this effect diminishes as the level of corruption increases.

Public data openness and firm innovation strategies

ABSTRACT This paper investigates the impact of urban-level public data open platforms on corporate innovation strategies by using them as a quasi-natural experiment and employing the difference-in-differences (DID) method. The findings indicate that public data openness significantly promotes incremental innovation rather than breakthrough innovation, with economic and public service data playing a particularly influential role. Moreover, the preference for incremental innovation by enterprises reduces innovation quality, but this issue can be mitigated by introducing industry competition and strengthening intellectual property protection.

Supply chain risks and corporate innovation strategy: from the perspective of breakthrough innovation and incremental innovation

ABSTRACT This paper investigates the impact of supply chain risks on corporate innovation in China. Our findings indicate that firms with high supply chain risks are more inclined towards incremental innovation rather than breakthrough innovation. This relationship is further strengthened by high customer concentration and strong financial constraints, and it is more pronounced in industries characterized by higher levels of competitiveness and within the high-tech sector. Furthermore, the influence of supply chain risks on corporate innovation is jointly driven by supply and demand risks. Crucially, strategic adjustments in response to supply chain risks not only improve operational performance but also enhance the stability of customer relationships.

Managerial myopia and corporate innovation strategy

We investigate the consequences of managerial myopia on both the quantity of innovation input and the quality of innovation outputs in China. Managerial myopia not only leads to a reduction in R&D investment but also results in a deterioration in the outputs, captured by the decrease in those substantive innovations and the degradation of patents’ knowledge breadth. Encouragingly, effective corporate governance mechanisms tend to mitigate the adverse effects of managerial myopia on innovation, but external pressures from stock market and product market may prompt myopic management to hastily engage in R&D efforts, but with further deterioration in innovation quality.

Green Technology Innovation and Enterprise Performance: An Analysis Based on Causal Machine Learning Models

As increasingly stringent environmental regulations are put into effect, Environmental, Social, and Governance (ESG) concepts are being seamlessly integrated into the core of corporate innovation strategies. Due to the quasi-public product perspective of green innovation, the performance of enterprises as a result of green innovation activities exhibits significant heterogeneity. This heterogeneity exists not only between corporate value and financial performance but also among individual enterprises. This paper is based on a sample of 1510 listed Chinese companies examined from 2013 to 2020 and uses machine learning algorithms and quasi-natural experiments to precisely estimate the causal relationship and mechanisms between green innovation and corporate performance. The findings elucidate several critical aspects of green innovation within the corporate sphere: Firstly, rather than attracting green incentives from financial markets, green innovation activities inadvertently stifle the enhancement of corporate value. Secondly, these activities markedly bolster corporate financial performance, primarily by diminishing operational costs, which in turn elevates the return on assets (ROA). Lastly, of all corporate characteristics examined, enterprise size and equity concentration stand out as key determinants influencing the variability in outcomes of green innovation performance. The above findings provide information on the significant implications of enhancing green technology innovation systems and green incentive mechanisms.

Sustainable city development from the perspective of corporate green innovation and governance

The global consensus on green and city sustainable development is reshaping corporate innovation concepts, strategies, and practice. In the context of Chinese "carbon peak" and "carbon neutrality", encouraging corporate green innovation has become the focus of academic and government attention. As the core element to achieve the goal of city sustainability, corporate green transformation brings technological innovation and the business model change, which impact on firm pollutant discharge, consumer behavior and stakeholder value. These synergies effect provides a green, healthy, and sustainable living environment for city development. Based on the perspective of Stakeholder Influence Theory, this study explores the positive effects of Shareholder Influence on corporate green innovation by empirically testing 17,923 observations of 3205 A-share listed companies in China from 2011 to 2020. The results shows that the decision-making efficiency with Shareholder Power Influence and information advantage with Shareholder Network Influence both promote corporate green innovation. Among them, the power and network of the Top Management Team (TMT) play a moderating role. This study emphasizes the driven force of corporate governance in the context of city sustainable development and puts forward the economic agenda and requirements to achieve cities' low-carbon transformation.

Common ownership and corporate innovation strategy

It is empirically challenging to test the effect of common ownership on corporate innovation as the observed impact of common ownership on corporate innovation is a net effect due to two offsetting powers: technological spillover and market stealing. This paper tends to mitigate that issue by investigating the impact of common ownership on the strategic features of corporate innovation. We analyze the effect of common ownership on corporate innovation activities using stacked difference-in-differences analyses based on events of financial institutional mergers and acquisitions. We find no significant effect of common ownership on research and development (R&D) expenditures, patent applications, and citations, whereas we find a positive effect of common ownership on exploitative innovation strategy. Our findings suggest that the weak market-stealing effect of exploitative innovation incentivizes common owners to encourage a higher weight of exploitative innovation among innovation outputs. Our study contributes to the current literature in three ways. First, it provides new evidence of the anti-competitive effect of common ownership. Second, it empirically examines competing theoretical predictions of common ownership impacts on corporate innovation. Third, it identifies common ownership as one of the determinants for variations of innovation strategy.

Stock price idiosyncratic information and corporate innovation: A discussion of corporate innovation strategy

Using data from Chinese A-share listed companies from 2010 to 2017, this paper examines the impact of stock price idiosyncratic information on corporate innovation and explores the choice of corporate innovation strategies. It is found that stock price idiosyncratic information can optimize the efficiency of corporate resource allocation, alleviate financing constraints, and thus enhance corporate innovation. In addition, we also found that the choice of corporate innovation strategy changed with the fluctuation of stock price idiosyncratic information. Of course, the innovation effect of stock price information is heterogeneous across firms.

Introduction to the special issue on “the twin (digital and green) transition: handling the economic and social challenges”

ABSTRACT In an era of increasing global challenges, two paradigmatic shifts – the digital and green transitions – have gained traction due to their potential impacts on industrial ecosystems and societal inequalities. Termed the ‘twin transition’, these shifts underscore the synergies between technological advancements and environmental sustainability. Highlighting its importance in post-COVID-19 recovery, the special issue examines the twin transition’s potential to drive industrial innovation and affect social, economic, and geographical inequalities. The seven articles in this special issue explore the impact of the twin transition on corporate innovation strategies and investment, alongside the economic, social, and geographical implications. Key findings underscore the need for diversified technological investments, especially in AI, and enhanced digital infrastructures. Policy recommendations advocate for aiding firms lagging in digitalisation and developing region-specific innovation policies. The research sets a roadmap for future inquiries into the interplay of digital and green transition, broader economic impacts, and policy-driven strategies.

Cybersecurity risk and corporate innovation

Using a text-based metric of firms' ex-ante exposure to cybersecurity risk, we document that the rise of cyber threats is redesigning corporate innovation and appropriation strategies. As firms' exposure to cybersecurity risk increases, managers' reliance on trade secrets declines, as they seek to protect their firms' intellectual capital under the umbrella provided by patent and intellectual property laws. In particular, we document that firms exposed to cyber threats file for simpler patents to accelerate their innovation cycle. This strategic adjustment is not costless, as it causes firms' returns to research and development (R&D) investments to decline significantly.

PRIORITY AREAS OF INNOVATION IN CORPORATE STRATEGIES OF MULTINATIONAL PHARMACEUTICAL COMPANIES IN GLOBAL COORDINATES

The purpose of the article is to substantiate global trends in the research and innovation activities of multinational pharmaceutical companies and to identify key directions of transformation in corporate innovation strategies in the context of increased international competition in the global pharmaceutical market. Methodology. The methodological basis of the work is the following methods of scientific research: dialectical, historical-logical, system-structural analysis of economic processes and phenomena, analysis and synthesis, the method of quantitative and qualitative comparisons. Results. One of the key global sustainable development goals of the United Nations for the period up to 2030 is to ensure the health and well-being of nations, which in global terms can be achieved primarily on the basis of the large-scale research activities of multinational pharmaceutical companies and the systematic commercialisation of the results of corporate research and development. In recent decades, under the influence of technoglobalisation processes, the innovatisation of pharmaceutical companies' activities has accelerated. It finds its concentrated expression in the steady increase of R&D costs, diversification of their structure, mass commercialisation of innovative developments and strengthening of their transdisciplinarity, accelerated capitalisation of R&D costs, etc. According to the world experience, the most effective innovative strategies of pharmaceutical companies today are such as mergers and acquisitions, strategic alliances of pharmaceutical and biotechnology companies, innovative outsourcing and insourcing, cointegration and pseudo-concentration, corporatisation of patent portfolios and research technologies, venture financing of R&D of pharmaceutical companies. At the same time, mergers and acquisitions are increasing the capitalisation of the global pharmaceutical industry, strengthening its expansion into global markets, redistributing its regional segments and diversifying the sources of funding for pharmaceutical companies' research activities. Value/оriginality. Current trends and features of corporate strategy formation in multinational pharmaceutical companies are identified. Strategic orientations of research activities of pharmaceutical companies in specialised areas of clinical research in the context of therapeutic categories are determined. The process of capitalisation of pharmaceutical companies is analysed and the tendency to activate the use of corporate mergers and acquisitions (M&A) strategy in the pharmaceutical business is revealed. It is proposed to create strategic alliances of multifunctional pharmaceutical companies with biotech companies using the M&A strategy. It is recommended that pharmaceutical companies strengthen their innovation orientation in the design of their strategies by combining patent portfolios and research technologies, as well as jointly implementing large-scale innovation programmes and projects.

How does CEO narcissism affect enterprise ambidextrous technological innovation? The mediating role of corporate social responsibility.

In the context of a dynamic environment and increasing competition, innovation is the key for companies to gain long-term growth. And narcissism, as an important psychological factor influencing CEOs to make corporate decisions, has a significant impact on corporate innovation strategies. This study explores localized dimensions and ways of measuring narcissism among Chinese CEOs. Based on the upper echelons theory, using data from R&D-intensive firms listed in Shanghai and Shenzhen A-shares from 2015-2020, this study empirically examines the effect of CEO narcissism on exploratory and exploitative innovation and the mediating role of corporate social responsibility. The results show that: CEO narcissism has a positive effect on corporate ambidextrous technological innovation and a more significant effect on exploratory innovation; the mediating role of corporate social responsibility is all verified. These findings provide a reference for listed companies to select and hire CEOs scientifically and rationally, and have important implications for companies to develop long-term innovation strategies.

Operationalization of the corporate strategies for innovation development: Capabilities of technology roadmaps

Goal: identify the key barriers hindering operationalization of the corporate innovation strategies (i. e. the transition from the adopted strategy to its implementation at the operational level) and define the capabilities of technology roadmaps (TRM) to overcome these barriers. Metodology: consists of two logically connected parts: 1) the comparative analysis of relevant international empirical research to identify the main issues of putting the agreed-upon corporate innovation strategies into action; 2) real case study analysis of TRMs application in the large corporate entities working as a tool to deal with the identified issues. Findings: identification and characterization of a core set of typical issues representing the most significant barriers to translate corporate innovation strategies into action; definition of the main advantages of TRMs as an effective tool for operationalization of corporate innovation strategies; the conclusions on the relevance of TRMs for developing and monitoring the programmes for innovation development of Russian companies with State participation. Originality and contribution of the authors: the novelty of the paper relates mainly to identification of significant potential and the main avenues for TRMs application in dealing with the “strategy-execution gap” in the context of innovation activities of large companies. From this perspective, it would be no less important to note that the key issues and mechanisms of integration between strategy and operationsrelated functionalities of TRMs are defined and specified.

Substantial Innovation or Strategic Innovation: The Influence of ESG Performance on Corporate Innovation Strategy

The effectiveness of ESG performance in promoting corporate innovation has been widely demonstrated. However, a significant research gap remains unexplored that prior scholars have neglected the research into the influence of ESG performance on corporate innovation strategy. Using the sample of China’s A-share listed companies from 2007 to 2020, this paper analyzes the influence of ESG performance on corporate innovation strategy. It is found that ESG performance can promote substantial innovation and strategic innovation in different degrees. Further analyses show that ESG performance can promote substantial innovation more than strategic one. Therefore, while pursuing upgrading and transformation, corporations should pay more attention to the influence of ESG performance on innovation strategies, and promote a virtuous circle of long-term development of corporations.

A one-two punch to the economy: Climate vulnerability and corporate innovation strategies

Using firm-level R&D and patent data for 88 countries, we find that country climate vulnerability is negatively related to firms’ R&D investment and innovation. The potential mechanisms include decreased responsiveness of R&D to investment opportunities, reduced incentives to innovate, lower private value of innovations, and stronger managerial career concerns. We further show that climate vulnerability is positively associated with the ratio of climate change mitigation technologies (CCMTs) and global collaborative patents in innovations and promotes international strategic alliances (e.g., research collaboration and licensing). Moreover, climate risk exposure through global supply chains and customer locations also relates to corporate innovation, and firm-level climate risk is negatively associated with innovation. Finally, using a difference-in-differences regression, we find that treated firms’ sensitivity of innovation to climate vulnerability increases after climate disasters. Our findings suggest a potential indirect effect of climate risk on the global economy through the reduction of corporate innovation activities.

Structural power distribution between family and non-family executives and innovation performance in family firms

The top management team (TMT) of family firms is divided into two groups: family and non-family executives. Each group of executives is driven by different and multiple goals and motivations with distinct strategic innovation decision preferences. The centralized ownership and control of firms confer natural authority on family executives, and the appropriateness of the structural power distribution in the TMT has a significant impact on the level of participation and contribution of non-family executives to corporate innovation strategies that affects the innovation performance of family firms. Based on research of the power distribution of TMTs, this paper argues that a balanced structural power distribution (titles, compensation, representation) between family and non-family executives can improve the TMT interaction process, integrate information and knowledge of non-family executives, help balance economic and non-economic goals, and increase innovation performance. Moreover, we posit that this relationship becomes stronger with increasing board independence and environmental dynamism. We find support for these proposed relationships using a sample of publicly traded family firms in China representing 2,379 firm-year observations from 2009 to 2018. The implications of these findings extend to both family business and TMT research. and we offer practical guidance to encourage professional managers to actively participate in strategic decision-making and planned execution in family firms.

Government R&D subsidies and the manipulative innovation strategy of Chinese renewable energy firms

Renewable energy technology innovation is the key to alleviating environmental issues. The Chinese government promotes corporate innovation in the renewable energy industry by providing R&D subsidies. This paper investigates the impact of R&D subsidies on innovation strategies in Chinese renewable energy listed firms from 2008 to 2017. The results show that R&D subsidies induce firms to adopt a manipulative innovation strategy that increases innovation quantity but reduces innovation quality, especially in regions with low marketization or unfair competition. We further find that the choice of manipulative innovation strategy is caused by the flawed subsidy distribution system and examination procedures of subsidy use. This paper deepens the understanding of the relationship between government subsidies and corporate innovation strategy and provides new enlightenments for emerging economies to enhance the effectiveness of subsidy policies.

Corporate net zero strategy—Opportunities in start‐up driven climate innovation

AbstractDuring the era of industrialization, over the period 1850–2019, the total anthropogenic emissions, caused by human activities, have been around 2390 billion tons of carbon dioxide. These concentrations are now higher than any time during the past 2 million years. Mitigating climate change is on top of the strategic agenda of most global leading enterprises. Climate change solutions demand unprecedented levels of innovation in technology, policy, finance, and business models. In this respect, the global innovation ecosystem is highly reliant on large corporations, research institutions, and academia. However, start‐ups are also in the core of innovation, and new start‐up businesses can accelerate and drive climate innovation. In this article, we discuss the role of start‐ups in corporate innovation and sustainability strategies, for mitigating climate change. We analyze the progress of start‐up businesses in driving decarbonization, identified as climate innovation. In addition to studying start‐up companies' deal counts, capital investments, and pre‐ and post‐valuations, we studied the industrial sectors in which the start‐ups in climate innovation businesses operate. The results show that the total combined 2000–2022 post‐valuation of climate innovation start‐ups was 27 billion EUR, and the share of these start‐ups and financial investments or deals grew by 2000% and 2811%, respectively. Our research highlights the importance of start‐up companies specifically in corporate innovation and sustainability strategies while implementing their highly ambitious corporate carbon zero targets and commitments.

The Contradictory Role of Corruption in Corporate Innovation Strategies

This study considers the influence of the work experience of Russian top managers on the willingness to stimulate innovative processes in companies, including using at a certain stage some corruption schemes to bypass bureaucratic barriers.Using a logit model based on enterprise surveys carried out by the World Bank, data on managers of small and medium-sized businesses were analyzed.It was revealed that the presence of "corruption competencies" has a positive effect on the innovative activity of enterprises in developing countries. This effect is due to the fact that corruption in such countries acts as a mechanism to reduce transaction costs associated with innovation. The level of corrupt activity of managers increases as they accumulate experience due to the high degree of bureaucratization and the weakness of institutions, which turn into time and financial costs for enterprises. In the short term, corruption can accelerate the development of innovation, but cannot serve as a permanent tool in this regard, since its long-term consequences turn out to be extremely negative.