Firm-level Innovation Performance Research Articles

Trade with innovation benefits: A re-appraisal using micro data from China

In recent years, the impact of international trade on firm innovation has received increasing attention. Some scholars argue that knowledge spillovers from trade are beneficial to innovation, while others argue that the intense competition from trade leads to a reduction in innovative activity, based on the Schumpeterian effect. To address this issue, we creatively construct a dataset of Chinese listed firms from 2000 to 2014 and conduct empirical tests using propensity score matching to investigate the impact of firms' intermediate goods import behavior on innovation performance at the micro level. We construct models of firms' decisions under closed market conditions and of the impact of intermediate goods imports on firms' innovation activities under open market conditions. Our study shows that firms that import intermediate goods are more innovative, and we validate the robustness of this result. We further discuss the potential mechanisms of how exposure to international markets affects innovation, and we find that firms' import behavior affects innovation through scale effect, technology effect, and profit effect. In short, importing intermediate goods enhances firm-level innovation in developing countries. Our study provides significant evidence on the impact of imports on firm-level innovation performance, and our findings provide a rationale for promoting the co-development of trade and firm innovation. This paper also has important policy implications that governments should continue to reduce trade barriers, promote trade openness, and enhance technology transfer and cooperation in order to reap more innovation benefits from trade.

R&D, exports and employment growth: firm-level evidence using administrative data from South Africa

This paper asks two main research questions. First, what is the relationship between firm-level innovation and export performance? Second, what is the direct effect of innovation on employment, while accounting for the indirect innovation-export link? I use a novel longitudinal administrative dataset of all firms registered to pay tax in South Africa, over 2010–2016. The first main result suggests a positive and significant relationship between innovation and export performance. Second, the fixed effects results show that direct innovation positively impacts employment growth in manufacturing firms, however, R&D-induced exports – the indirect channel – negatively impacts employment growth. This points to the notion that productivity enhancements necessary for South African manufacturing exporters to compete internationally might promote labor-saving innovations. Nonetheless, the overall innovation effect on firm employment growth is positive.

Linking entrepreneurial passion and innovation under the dynamic influence of entrepreneurs’ age: The case of Vietnamese SMEs

Drawing upon the broaden-and-build theory of positive emotions, this research focuses on examining two mediating mechanisms linking entrepreneurial passion and firm-level innovation performance under the dynamic influence of entrepreneurs’ age. The study uses a survey with a sample of 186 entrepreneurs who were owners or founders of small and medium enterprises (SMEs) in Vietnam. The empirical study shows that entrepreneurial passion directly improves firms’ innovation performance, and indirectly via two mediators: entrepreneurial alertness and self-efficacy. Furthermore, the findings reveal that entrepreneurs’ age has a U-shaped moderating effect on the link between entrepreneurial passion and self-efficacy, and a positive moderating effect on the link between passion and alertness. This study is among the few to explore the impact of entrepreneurial passion as an entrepreneur-level emotion on a critical firm-level business outcome. Besides, it contributes to the innovation literature by examining the mediating mechanisms through which entrepreneurial passion turns into improvements in firm-level innovation performance. Finally, the research extends the entrepreneurship literature by confirming how these mediating mechanisms differ at different stages of an entrepreneur's lifecycle.

The influence of informal mechanisms of university knowledge transfer on firm level innovation performance: an empirical analysis in Ghana

ABSTRACT This study seeks to investigate firm-level innovation, exploring whether social relationships located in knowledge networks influence the transfer of university knowledge to Ghanaian firms. Firms’ informal relationships with universities have been under-researched in developing economies. The extant literature suggests that informal relationships in the context of economies with advanced regional and national innovation systems have a positive association with firm level innovation performance. The research project employs a cross-sectional survey of 245 firms in Ghana. The aim of the project is to explore the influence of informal mechanisms of university knowledge transfer on firm level innovation performance in Ghana. The study adopts a structural model with partial least squares as an analytical technique. The findings reveal that to deliver positive results in a firm’s innovation performance by informal means, a well-coordinated social system to attract research knowledge from all aspects of the university system is required. The research project’s implications for Ghana’s innovation system include a need to be aware of the impact of corruption and lack of intellectual property rights on the efficacy informal knowledge transfer.

The Changing Nature of Corporate R&D: Taking Stock in Recent Progresses in Research

Researchers and practitioners alike have noted the changing landscape of research and development (R&D) in firms over the last several decades, but little consensus has been built around how and why the nature of corporate R&D has changed over time. The three paper presentations in this symposium advance this exciting research agenda by putting forth several explanations of how and why the rate and direction of firm innovation have shifted over time. Through these studies, diverse groups of scholars leverage unique theoretical lenses, novel data sources and methodological advancements to identify important trends in the internal and external environment of a firm and how these trends shape the processes and outcomes of R&D activities. Collectively, we demonstrate that the temporal shifts in the nature of firm R&D are associated with fundamental changes in the flows of capital, knowledge, and talent over time. This symposium will conclude with research commentary by an expert in this area and interactive discussions between audiences and presenters. Missing the Forest for the Tree: Short-termism & Technological Influence of US Firms Presenter: Rafael Corredoira; The Ohio State U. Fisher College of Business Presenter: Brent Goldfarb; U. of Maryland Presenter: Rachelle Sampson; U. of Maryland Presenter: Yuan Shi; Cornell SC Johnson College of Business First Mover Advantage and the Private Value of Public Science Presenter: Ashish Arora; Duke U. Presenter: Sharon Belenzon; Duke U. Presenter: Bernardo Dionisi; Duke U. The Impact of High-skilled Migrant inward Mobility on Firm-level Innovation Performance Presenter: Keld Laursen; Copenhagen Business School Presenter: Bart Leten; KU Leuven Presenter: Ngoc Han Nguyen; Hasselt U. Presenter: Mark Vancauteren; Hasselt U.

Intricacies of firm-level innovation performance: An empirical analysis of latecomer process industries

This study examines the relationships between aspects of firm-level innovation performance from the perspective of under-researched process industries in an emerging economy. We consider primary evidence from 63 firms in five Brazilian process industries over a 10-year period to examine firm-level innovation input and output performance. Our results reveal the following: (1) Regarding innovation input performance, (a) although most firms upgraded their technological capability levels, more firms moved from production capability to basic and intermediate innovation capability levels than from intermediate to advanced capability, while only a few firms moved from advanced to world-leading innovation capability levels, and (b) combinations of the acquisition of external knowledge and the creation, sharing, integration, and codifying of knowledge within firms positively and significantly influenced firms' accumulation of capabilities, but these combinations' effectiveness varied depending on the accumulation of specific levels of capabilities. (2) Concerning innovation output performance, (a) firms' accumulated capability levels underpinned the implementation of non-R&D and R&D-related innovative activities; (b) firms that accumulated high-level innovation capabilities were more productive, but accumulating technological capability had even greater positive effects on labour productivity for low-productivity firms; and (c) increasing technological capabilities for higher-exporting firms produced a higher proportion of exports in their revenue than for those that exported less. This study's comprehensive, nuanced analysis draws on mixed methods to advance our understanding of the intricacies involved in firm-level innovation performance, particularly from the perspective of a less R&D- and patenting-intensive setting. We also provide a basis for exploring this issue in other research contexts.

How is Corporate R&D Changing? Recent Research on Trends Affecting the Nature of Corporate R&D

Little consensus has been built around how and why the nature of firm R&D has changed. This symposium examines firm R&D and reflects on how and why firm innovation has changed over the last few decades. The four paper presentations and discussion will collectively tackle this question around the changing nature of corporate R&D by leveraging unique theoretical lenses, novel data sources, and methodological advancements. Results capture how specific macro trends manifest in individual firms and impact various metrics of R&D. Short-Termism & Technological Influence of US Firms Presenter: Rafael Corredoira; The Ohio State U. Fisher College of Business Presenter: Rachelle Sampson; U. of Maryland Presenter: Yuan Shi; Cornell SC Johnson College of Business First Mover Advantage and the Private Value of Public Science Presenter: Ashish Arora; Duke U. Presenter: Sharon Belenzon; Duke U. Presenter: Bernardo Dionisi; Duke U. The Impact of High-Skilled Migrant inward Mobility on Firm-level Innovation Performance Presenter: Keld Laursen; Copenhagen Business School Presenter: Bart Leten; KU Leuven Presenter: Ngoc Han Nguyen; Hasselt U. Presenter: Mark Vancauteren; Hasselt U. A New Direction or Lack of Direction? The Story of Innovation with Outsider CEOs Presenter: Leonardo Mayer Kluppel; Ohio State U. Presenter: Trey Cummings; Johns Hopkins Carey Business School

Mounting corporate innovation performance: The effects of high-skilled migrant hires and integration capacity

We adopt an organizational learning approach to examine how firms’ recruitment of high-skilled migrants contributes to subsequent firm-level innovation performance. We argue that due to migrants’ often different experience from that of native high-skilled workers, their perspectives on problem-solving and access to non-overlapping knowledge networks will also differ. The implied complementarity between these worker types makes migrant hires a particularly valuable resource in the context of firm-level innovation. We refine our diversity hypothesis further by predicting that migrant hires who add to the firm's cultural diversity should contribute more to firm innovation performance than new high-skilled migrant hires who do not add cultural diversity. Finally, we conjecture that firms with high integration capacity as a function of prior experience of employing high-skilled migrants should derive more innovation-related benefits from migrant hiring than firms with a low integration capacity. We track the inward mobility of high-skilled workers empirically using patents and matched employer-employee data for 16,241 Dutch firms over an 11-year period. We find support for our hypotheses.

Contributory role of dynamic capabilities in the relationship between organizational learning and innovation performance

PurposeThe direct impact of organizational learning (OL) on organizational performance has been studied over the past two decades. However, how OL contributes to organizational innovation still remains under-researched. Based on the knowledge-based view of the firm and dynamic capability theory, we developed a theoretical framework in order to empirically examine how OL offers organizations the essential tools for creating dynamic capabilities (DCs), which pave the way for innovation performance (IP).Design/methodology/approachThe authors apply a time-lagged, multisource and survey-based research designed to test the proposed model in the pharmaceutical industry where knowledge is a source of innovation. The data collected from companies operating in such an industry were analyzed by utilizing hierarchical regression analysis to explore how OL could lead to IP through DC.FindingsThe results indicated that OL is positively, significantly associated with DCs, as well as its dimensions of learning, integrating and reconfiguring capabilities. The findings showed that these capabilities are significant predictors of innovation performance. In addition, the findings revealed that innovation culture significantly moderates the relationship between DCs and innovation performance.Originality/valueBy dedicating more time and resources, managers can reinforce dynamic capabilities as a strategic tool to generate new knowledge and distribute it across the organization, which can go a long way toward boosting innovation performance in the pharmaceutical industry. This study offers researchers and practitioners invaluable insights into how effective OL can enhance firm-level innovation performance through dynamic capabilities.

External knowledge modes and firm-level innovation performance: Empirical evidence from sub-Saharan Africa

This paper examines the significance of external knowledge sources as impacting factors on innovation by incorporating a variety of external sourcing strategies, the firm's internal competencies and the industry attributes, into a unique analytical framework in predicting the innovative capabilities of firms in developing countries. The World Bank Enterprise and Innovation follow-up dataset for manufacturing, service and retail firms in 11 countries in sub-Saharan Africa is utilised to assess the degree to which firms utilize external sources of information (customers, competitors, consultants, new employees and workshops) in the implementation of product, process, marketing and organizational innovation. Sectoral and country-specific estimations are performed with IV binary treatment and Tobit models, respectively. The findings demonstrate that, although internal sources are essential, external sources of information are also necessary to attain the desired level of innovativeness. These findings confirm the open innovation literature in that firms that open their innovation process and utilise distinct knowledge sources have a superior capability to introduce innovations. The paper provides significant contributions to the literature. The paper uncovers three sources of external knowledge linking indirect players in the market that are not common in the literature (consultant, new employees and workshop). The study shows that the baggage of knowledge inherent in these three sources is indeed essential to the innovative capabilities of the firms. Second, the results also reveal that the essentiality of external sources of knowledge differs conditional on the type of innovation considered (product, process, marketing or organisational), dependent variable operationalisation, sectoral, methodical configurations, and country specifics. Third, the study contributes to the understanding of how firms in emerging economies develop competencies for innovativeness through the interplay of knowledge from both direct and indirect market players. The findings offer essential insights on how management could invest in the distinct, useful and preferred external sources to best foster a compelling introduction of any innovation. The study further provides robust and novel evidence of the role of new consultants, employees and workshops on firms' propensity to innovate.

THE IMPACTS OF INFORMALITY ON ENTERPRISE INNOVATION, SURVIVAL AND PERFORMANCE: SOME EVIDENCE FROM PAKISTAN

The aim of this paper is to evaluate the relationship between informality, innovation and firm survival. To do so, a study of a cluster of electrical fittings firms in Pakistan is reported. Reporting bivariate and multivariate probit models to analyze two surveys conducted between 2008 and 2017, the finding is that there is a significant relationship between informality and the extent of innovation, firm survival and firm performance. Informality has an adverse negative effect on firm-level innovation, firm survival and firm performance. Given that formal enterprises in this cluster are better performing in terms of innovation, survival and employment growth than informal businesses, the paper concludes by discussing the theoretical, policy and research implications.

Joining forces: collaboration patterns and performance of renewable energy innovators

This article explores the pattern and breadth of collaboration activities of innovating firms active in renewable energy (RE), and the impact of collaboration on firm-level innovation performance. We deploy a unique dataset from a special section of the 2014 CIS survey in Denmark, in which we included questions that enable us to unambiguously identify RE innovators. In a quantitative analysis, we contrast collaboration patterns of RE and non-RE innovators, where we find RE innovators to show a higher tendency to collaborate, and with a more diverse set of partners. We complement this analysis with a qualitative single-case study within the offshore wind industry in order to illuminate longitudinal and contextual effects that were only indicative in the quantitative analysis. We focus particularly on changes in the pattern of collaboration as the firm matures and its links with performance. The case shows that because the needs of RE innovators vary through their development, the purpose and types of collaborations change. Further, both from our quantitative and qualitative studies, we find weak relationship between RE firms’ collaboration breadth and innovative performance. We ascribe this to the long time-lags between product innovation and market penetration in RE. We thereby highlight the heterogeneity of collaboration rationales, patterns, and impact across sectors and over time.

Entrepreneur’s creativity and firm-level innovation performance: bricolage as a mediator

ABSTRACTPrior literature focuses on the direct influence of entrepreneur’s creativity on firm-level innovation performance, but it ignores the intermediate mechanism of how. This study examines the role of bricolage in mediating the relationship between entrepreneur’s creativity and innovation performance. We propose that in SMEs, entrepreneur’s creativity can facilitate bricolage, which in turn influences innovation performance. Furthermore, the extent to which entrepreneur’s creativity can influence bricolage depends on firm age. Survey data from 249 SMEs indicate that bricolage functions as a mediator in the relationship between entrepreneur’s creativity and innovation performance. Entrepreneur’s creativity has a stronger effect on bricolage for young firms than for old firms.

Corporate innovation, default risk, and bond pricing

We propose firm-level innovation performance to be an important determinant of corporate creditworthiness and examine this relation from the perspective of bond investors. We find that firms' default probabilities are negatively related to the quantity, impact, originality, and generality of their patent portfolios. Moreover, bonds issued by more innovative firms have lower issuance premiums and lower realized excess returns. Our findings are further supported by instrumental regressions that use monetary and time costs of innovation, and by difference-in-differences tests based on exogenous shocks from state-level R&D tax credits.

SEARCH FAR AND DEEP: FOCUS OF OPEN SEARCH STRATEGY AS DRIVER OF FIRM'S INNOVATION PERFORMANCE

The effects of open search strategies (i. e., search for firm-external knowledge) on firm-level innovation performance are still ambiguous in the existing literature. We introduce the concepts of focused search strategy and multi-focus search strategy as differentiating factors for a firm. The results of a cross-industrial survey from Finnish markets suggest that applying one focused search strategy intensively generally enhances the firm-level innovation performance. It also seems that emphasizing multiple search strategies intensively improves performance even more, and that the effect becomes stronger, the greater the number of knowledge sources used. Furthermore, the results show that firm-specific technological capabilities have a negative moderating effect in terms of highly focused search strategies, but this diminishes when the focus gets more diverse.

Firm-level Innovation and New Venture Performance: The Moderating Role of Industry Innovativeness

The causal relation between innovations developed by a focal firm and its performance has for some time been inconclusive. In this paper, we focus on the Australian manufacturing industries of the 1990s as a relatively efficient context and functional institutional environment, to hypothesize potentially confounding effects of the state of innovation in an industry sub-sector, as well as an innovating new venture embedded within that sub-sector. Our results show that in general, new ventures commercializing an innovation enjoy higher sales growth and returns on assets. In addition, while an average new venture enjoys significant positive growth in sales in an industry sub-sector where innovativeness is high—capturing a 'rising-tide-raises-all-boats' effect, however, for new ventures themselves developing innovations, high industry innovativeness also presents as a high barrier to overcome, limiting sales growth and returns on assets. In particular, the interaction effect can be so large in magnitude so as to overwhelm the main effect of innovation on performance.

How Firms Benefit from U-I collaborations: the Mediating Role of Knowledge Integration Capability

Although the direct effects of university-industry (U-I) collaborations on innovation performance are well-documented, little remains known about how U-I collaborations affect innovation performance. This study develops a parsimonious model that links U-I scientific collaborations and U-I technological collaborations, through the mediating mechanism of knowledge integration capability, to firm-level innovation performance. Drawing on a data set of 105 firms in Chinese organic fine chemistry industry, we find positive effects of both U-I scientific collaborations and technological collaborations on innovation performance measured as number of registered patents. In particular, by employing “bridging scientists” as the proxy of the firm-level knowledge integration capability, we find strong statistical evidence for the mediated effect of U-I scientific collaborations on innovation performance. But the mediated effect of U-I technological collaborations is not supported. These findings contribute to the understanding of how indirect effects supplement the direct effects of U-I collaborations on innovation performance via knowledge integration capability embedded in bridging scientists.

Discussion of “The Effect of Research and Development (R&D) Inputs and Outputs on the Relation between the Uncertainty of Future Operating Performance and R&D Expenditures”

Pandit, Wasley, and Zach (2011) examine whether both research and development (R&D) input (R&D expenditures) and output measures (patent counts and citations) and their interaction associate with the level and variability of future earnings and operating cash flows. The associations examined contribute to the literature because they help determine whether the relationship between firm-level innovation and operating performance is conditional on the success of a firm’s R&D efforts. The conditioning is important because it can sort out more successful from less successful R&D firms. In my discussion, I focus on the models employed and on the empirical results. Some results are consistent with expectations and some other results are not. I think that the mixed results are due to the models employed and I make some suggestions for model improvements.

Entrepreneurial orientation, learning orientation, and innovation in small and medium enterprises

From the resource-based perspective, entrepreneurial orientation and market orientation are two separate but complementary strategic orientations that emphasize the business philosophy and behavior in proactively detecting industrial environment, including market information and competitors strategy, in order to innovate and respond to the customers needs timely. Empirical studies have separately discussed the variables of entrepreneurial orientation and market orientation in relation to firm-level innovation performance. However, there is limited research simultaneously examined the direct effect of entrepreneurial orientation and market orientation on innovation performance, especially individual-level innovation performance. Scholars have suggested that future research may examine strategic human resource practices to explore if organizational factors may enhance or diminish the entrepreneurial orientation on innovation. Both entrepreneurial orientation and market orientation still require organizational learning practices to facilitate higher-order learning and innovation. Although scholars are interested in figuring out if additional moderator variables simultaneously affect market orientation and entrepreneurial orientation on firm performance, limited empirical studies have existed. An organization with high degree of entrepreneurial orientation and market orientation still require learning orientation mechanism to create an environment where mutually beneficial relationships between employees and their organizations to facilitate learning and innovation. Therefore, learning orientation may make an organization innovate effectively. As a result, the overall purpose of this study is to assess the influence learning orientation on relationships between entrepreneurial orientation, market orientation and individual-level job related performance variable, employee innovative behaviors.

Examining the relationships between information acquisition, Entrepreneurial Opportunity Recognition, and innovation performance through the development and validation of a new measure to assess information acquisition in the high technology sector in Taiwan

The purpose of this research was to develop and validate a new measure of information acquisition (IA) and investigate the relationships between IA, Entrepreneurial Opportunity Recognition (EOR), and innovation performance in the high technology sector in Taiwan. This study drew upon Dixon's (1992) conception of IA as a construct of organisational learning to develop a new measure of IA. Dixon's theoretical framework was mostly empirically supported, and the IA measure appeared to be reliable. The results suggest that both IA and EOR positively contribute to individual-level and firm-level innovation performance. IA and EOR were also significantly positively correlated.