High-tech Firms Research Articles

Influence of Employees’ Intention to Adopt AI Applications and Big Data Analytical Capability on Operational Performance in the High-Tech Firms

Influence of Employees’ Intention to Adopt AI Applications and Big Data Analytical Capability on Operational Performance in the High-Tech Firms

The New Strategy of High-Tech Companies – Hidden Sources of Growth

The recent increase in the share of zero-leverage firms is most pronounced in the Software and Services, Hardware Equipment, and Pharmaceutical and Biotechnical industries. The reasons for these industries’ conservative debt policies are not fully disclosed. How companies in technological sectors manage to perform well attracting no debt and loosing debt tax shield benefits is a mystery. This study aims to determine why high-tech firms are less likely to have debt in the capital structure. On the basis of a sample of US-based firms from the RUSSELL 3000 index for 12 years, we show the factors leading to a zero-debt structure. After dividing the sample into high-tech and non-high-tech subsamples, we demonstrate the gap between zero-debt motives for technological and traditional sectors. We show that the common determinants of corporate structure cannot fully explain why high-tech firms choose a zero-debt policy. Testing the possible motives of debt financing avoidance, we find that high-tech firms are more financially constrained than non-high-tech firms. We further show that unconstrained high-tech firms may avoid debt to maintain their financial flexibility. On top of that, managerial entrenchment also adds to the zero-leverage choice of high-tech companies. The study results are helpful for executive management teams and investors since they shed light on the specific style of financing choice for technological firms.

Hybrid market offering in the medical technology sector and the role of network configuration: an exploratory assessment in both developed and emerging markets

PurposeApplying both the dynamic capability and configuration theoretical perspectives, the paper showcases the role of network configuration and dynamics of hybrid offerings in both developed and emerging markets by high-tech firms.Design/methodology/approachThe current paper uses an exploratory qualitative research methodology based on in-depth case studies of three Finnish high-tech firms operating in the medical technology industry globally.FindingsThe findings from the study showed that dynamic capabilities such as sensing and customer engagement along with internal coordination and adaptation capabilities are critical to the success of hybrid market offerings. Moreover, dynamic capabilities were found to be influential in those emerging and advanced international markets where case firms were less familiar with market dynamics. Moreover, the configuration of these capabilities within functional units and coordination of marketing and R&D activities can be effective for creating hybrid offerings in international markets. Ultimately, this was found to be the case even though target market selection for hybrid offerings was influenced by the level of convergence and fragmentation of the market.Originality/valueApplying the configuration theory, this is one of the first studies to specifically analyze the differences in organizational network configuration changes in relation to hybrid market offerings in both developed economies and emerging economies. The findings contribute to hybrid market offering literature by pointing out that not only internal capabilities are important for enacting hybrid offerings, but the roles of ecosystems and knowledge centers are also extremely important to develop hybrid offerings. This paper also highlights the criticality of under-studied dynamic capabilities such as market sensing and customer engagement in the context of hybrid offerings in international markets. This showcases the wider role of ecosystems in enabling technology firms to develop hybrid offerings.

High-tech firms: Dividend policy in a context of sustainability and technological change

We examine whether the dividend policy of high-tech firms is explained by ESG performance in the triple ESG components (environmental, social, and governance). Using a panel of US-based firms in the technology sector from 2002 to 2021, we find that better ESG scores are linked with a higher likelihood of dividend payments, stability of the amount paid, and implied shareholder returns from the dividend yield. R&D intensity is a constraint of dividend policies, although ESG scores mitigate this adverse effect by helping increase the likelihood of dividend payments. Overall, our findings highlight the role of ESG scores in enabling high-tech firms to implement dividend policies that yield stable returns to investors.

The Impact of CEO IT Ability on Bank Loan Terms

ABSTRACT Although the role that information technology (IT) executives’ expertise has in firm outcomes is well documented, little empirical work investigates the effect of the IT ability of non-IT executives on firm outcomes. We apply upper echelons theory and create a unique measure of chief executive officer (CEO) IT ability to empirically investigate its impact on bank loan pricing and nonpricing terms. Examining a sample of firms between 2002 and 2017, we find that CEO IT ability is associated with lower cost of debt, less collateral, fewer loan covenants, and fewer credit rating downgrades. Further, we show that our results are not due to high tech firms and are incremental to firm-level IT capability. Our results extend upper echelons theory and suggest that IT ability is an important CEO characteristic that can be influential in improving lending outcomes.

Internal Capital Markets and R&D Investment: Evidence from Korean Chaebols

ABSTRACT This study examines how internal capital markets (ICMs) within business groups affect the financing of research and development (R&D) investments, focusing on Korean chaebols. We find that, on average, chaebol-affiliated firms exhibit lower R&D investment – cash flow sensitivity than standalone firms do. We also find that an affiliated firm’s R&D expenditure is significantly positively associated with the net amount of equity capital received from other affiliates but not significantly related to its own cash flow. These findings indicate that ICMs effectively mitigate affiliated firms’ R&D financing constraints. We further find that this financing constraint mitigation is more pronounced during financial crises and for high-tech firms. Finally, we find that, for chaebols, greater ICM effectiveness leads to better innovative performance. Overall, our study highlights the importance of ICMs for promoting corporate innovation via the reduction of R&D financing constraints.

The impact of intellectual property protection on business performance of high-tech enterprises: The mediating effect of political-business relations

The purpose of this paper is to study the mediating role of political-business relationship in the business efficiency of high-tech firms in terms of intellectual property protection. We find that: the improvement of the quality level of IPR protection implementation environment can promote the growth of business performance benefits; the political-business relationship can have a suppressive effect on the business performance benefits; the level of IPR protection implementation environment quality can promote the business performance benefits of high-tech enterprises under the mediating effect of political-business relationship, but there is a masking effect of this mediating effect.

Research on the evaluation of marketing performance influencing factors of high-tech enterprises based on AHP and factor analysis

This article explores the elements impacting the marketing performance of listed high-tech firms with regard to their marketing data from 2000 to 2020 in order to serve as an effective reference for the management and development choices of high-tech enterprises. The final weights of the influence of each level element on marketing performance are derived through the hierarchical analysis method (AHP) by reviewing pertinent literature and expert research, and the significant indicators of various factors are derived from the analysis of the actual operational data of high-tech enterprises using the validated factor analysis method. The findings demonstrate that, among the elements affecting the marketing performance of high-tech businesses, marketing innovation capacity has the highest impact.

Work conformity as a double-edged sword: Disentangling intra-firm social dynamics and employees' innovative performance in technology-intensive firms

Employees' innovative performance determines an organization's long-term sustainability and competitive advantages, particularly in the technology sector. Drawing on social exchange and work conformity theory, we investigate how employees' informational and normative conformity relates to their innovative performance through the lens of instrumental and expressive ties. R&D managers and professional-level employees from Taiwan's 2000 largest high-tech firms participate in the survey. Hypotheses were tested using structural equation modeling with a valid sample of 399 responses from the participants. The findings reveal that, through the mediating roles of instrumental and expressive ties, employees' informational conforming behaviors promote their innovative performance. In contrast, normative conformity may reduce employees' innovative performance by weakening their social ties. Conformist behaviors have long been deemed as the inhibitor of creativity and innovation. Nevertheless, this study adopts a social exchange perspective and clarifies how conformity can both promote and hinder professional employees' innovative performance by affecting their social networking. The paper concludes with managerial implications, discussion, and recommendations for future research.

Uncertainty and Financial Analysts’ Optimism: A Comparison between High-Tech and Low-Tech European Firms

This study investigates the impact of information uncertainty on analysts’ earnings forecasts for a sample of European companies from 2010 to 2019. We argue that representativeness, anchoring and adjustment, and leniency biases jointly influence analysts’ forecasts and lead to optimism. We suggest that uncertainty boosts analysts’ optimism as behavioral biases increase in situations of low predictability. We test analysts’ optimism through the association between forecast errors and, separately, two modifications (forecast revision and forecast change) when these modifications are upwards and downwards. To examine the uncertainty effect, we implement descriptive and regression analyses for two subsamples of high-tech and low-tech firms. The evidence indicates that analysts are optimistic, as they overreact to positive prediction modifications and underreact to negative prediction modifications. The optimism is more significant for high-tech firms and increases considerably with the forecast horizon. For robustness, we utilize analysts’ forecast dispersion as a second proxy for uncertainty, and we obtain comparable results.

Collaborative HRM, climate for cooperation, and employee intra-organizational social ties in high-technology firms in China: A cross-level analysis.

Individual social ties have been an important source of competitive advantages for hightech firms in the knowledge economy. However, the existing cross-level studies have mainly investigated the impact of HRM systems on traditional individual attitudinal or behavioral outcomes, and few studies have examined the effect of SHRM on individual social ties. Based on the data collected from 363 knowledge employees working in 64 high-tech firms in China, we examine the cross-level relationships among collaborative HRM practices, climate for cooperation and employee intra-organizational social ties. The hierarchical linear model results show that organizational-level collaborative HRM practices have significant positive effects on the number and strength of individual-level intra-organizational social ties, and the climate for cooperation mediates the positive cross-level relationship between collaborative HRM and individual intra-organizational social ties. This study makes three contributions to the literature. First, with a cross-level model, this study helps us better understand how collaborative HRM acts as an approach to manage individuals' social capital formation. Second, this study makes contribution to the social network literature by showing how organizational contextual factors (HRM practices and organizational climate) affect employee individual social ties. Third, based on the AMO model, this paper developed a more clear construct and a three-dimension measurement of the collaborative HRM.

How do technological intensity and competition affect R&D persistence?: a new approach using cost asymmetry model

ABSTRACT This study investigates the R&D persistence with different external conditions based on US listed manufacturing firms for the period 2011–2019. Specifically, we analyze whether the fluctuation of R&D investment is related to short-term changes in sales, and how industrial technological intensity and competitive environment influence the relationship. We used the cost asymmetry model to identify the changes in R&D investment by sales behaviour. The results showed that the R&D investment of high-tech firms was stickier when sales declined as compared to low-tech firms. Therefore, R&D persistence tends to be strong in high-tech firms. In addition, R&D persistence was weakened by the competitive environment, and this finding was more pronounced for high-tech firms than for low-tech firms. This study has academic implications in the empirical analysis of the relationship between R&D persistence and external characteristics from a dynamic perspective.

Urban Policy Response to Radical Innovation in Sustainable Energy: The Case of University Spin-Offs and Local Triple Helix Interaction

This paper pictures several risk-taking strategies of young high-tech firms in bringing energy inventions to market and ways urban policy (municipalities) may provide supporting facilities and help accelerate the energy transition. Derived from a longitudinal study of 100 firms in northwest Europe, two findings contribute to practice. Firstly<em>,</em> a share of almost 40 percent of university spin-off firms fails in the market introduction; if the market introduction is reached, 30 percent is relatively late. This development calls for attention to acceleration and risk-taking concerns. However, risk-taking firm strategies, like targeting radical inventions and new markets, tend to hamper early market introduction. Secondly, urban policy supports filling risk-related needs, particularly in large metropolitan networks. Cities (municipalities) may act as launching customers and provide sites and organizations for practical experimentation (e.g., in living labs) alongside steering on cross-faculty application platforms at the university that also connect with city functions. Cities’ initiatives, however, tend to be fragmented and miss priority. Partnering in Triple Helix networks with local universities and businesses may improve the situation, for example, by priority setting, better alignment, and integration. The urban policy also has a role in improving broader conditions, particularly the attraction of related R&D firms to the city/region and the attraction and retention of top-class researchers.

Media coverage and patent trolls: A study on US high-tech firms

This paper investigates the impact of media coverage on a nonpracticing entity (NPE) patent litigation concerning the defendant firms. Using a sample of high-tech and patent-intensive firms from the US market between 2000 and 2020, we find that NPEs tend to target highly visible firms. This result is more pronounced when the firms are large and experience positive sentiment in the market. We ensure the causality of this relationship using the anti-troll law, which is targeted to curb the threat of NPE trolls, as a natural experiment and distance from the nearest news branch as an instrumental variable. We find that after suing the target firms, the return of the plaintiff, or the NPE firm, increases. Our results provide new insight into the effect of media coverage on firms’ litigation environment.

The effect credit term structure of monetary policy on firms' "short-term debt for long-term investment" behavior: empirical evidence from China

<abstract> <p>This paper examines the effects and mechanism paths of monetary policy on firms' "short-term debt for long-term investment (SDFLI)" behavior using panel data of Chinese A-share listed firms from 2007-2019. The findings indicate that loose monetary policy suppresses corporate SDFLI behavior by lengthening corporate credit maturity structure through the credit maturity structure channel. In addition, heterogeneity analysis shows that loose monetary policy significantly inhibits the SDFLI behavior of state-owned enterprises(SOEs), non-high-tech firms, and firms in regions with high bank competition levels through the credit term structure channel, and the monetary policy credit term structure channel fails for non-state-owned enterprises(non-SOEs), high-tech firms, and firms in regions with low bank competition levels. The results of the heterogeneity analysis validate the plausibility that monetary policy affects firms' SDFLI behavior through the credit term structure channel.</p> </abstract>

Digital transformation and corporate cash holdings in China's A-share listed companies

Research background: In the digital era, digital transformation has become a strategic imperative for leadership agenda. Many firms have accelerated their pace in digital transformation to improve their performance and competitiveness. Despite increasing attention in the literature on the role of digital transformation in firms? operations, understanding the effect of digital transformation on corporate finance remains limited. This study focuses on cash holdings, which are essential for firms to survive and thrive. Purpose of the article: The aim of this paper is to examine the critical role of digital transformation on the cash holdings of listed firms in China and provide micro evidence regarding the economic consequences of the digital economy from firm level. This study also aims to deepen our understanding of the influence of digital transformation on firms? operation and financial policy. Additionally, this paper attempts to provide relevant guidance for implementing policies to promote digital transformation and devise corresponding cash holding strategies. Methods: The text analysis method is used to measure the degree of digital transformation of China?s A-share listed companies. The sample covers 19,337 observations from 2007?2020. A multiple regression model with firm and year fixed effect is developed to investigate the relationship between digital transformation and corporate cash holdings. In the robustness test, this paper substitutes the independent and dependent variables, and adopts instrumental variable estimation method. In the mechanism test, this paper uses the sub-sample regression method in the mechanism test. Findings & value added: This study reveals that digital transformation can significantly reduce corporate cash holdings by alleviating the precautionary motive, agency motive and transaction motive of cash holdings. Further analysis shows that the negative effect of digital transformation on cash holdings is more profound in high-tech firms and non-state-owned enterprises. The methodology applied in this paper can be used in other economic research of firms. This study provides insights into the effects of digital transformation on corporate financial policy. This provides a solution for reducing firms? cash holdings. This study also deepens the understanding of digital transformation from a corporate perspective.

Impact of Environmental Tax on Corporate Sustainable Performance: Insights from High-Tech Firms in China.

High-tech enterprises play an important role in leading the future industrial transformation, and their sustainable development deserves attention. Using data of 263 high-tech listed firms in China, we explore the impact of environmental tax on corporate sustainable performance, and the mediating role of green innovation. The results show that environmental tax positively affects corporate green innovation. However, the impact of environmental tax on the sustainable performance of state-owned enterprises and private enterprises is quite different. For private enterprises, environmental tax has an inverted U-shaped impact on both corporate financial performance and environmental-social performance. Furthermore, green innovation mediates the relationship of environmental tax and financial performance. In contrast with private enterprises, for state-owned enterprises, environmental tax has a negative linear impact on corporate financial performance. There is no empirical evidence supporting the effect of environmental tax on the environmental social performance of state-owned enterprises. The results imply that the government should implement different tax policies according to the firms' characteristics, to promote the corporate sustainable development, especially state-owned enterprises.

Entrepreneurial networks, geographical proximity, and their relationship to firm growth: a study of 241 small high-tech firms

Start-up firms in high-tech sectors normally engage in networking to overcome their lack of resources, knowledge, and competence constraints. A newly established firm’s network can provide a source of social capital, which may enhance its growth prospects. In this study, 241 new technology-based firms (NTBFs) in Sweden are studied during their early formative years to investigate how entrepreneurial networks and the geographical proximity to actors in these networks affect the early performance of these firms in terms of growth. Three underlying factors are identified in the analysis: geographical proximity and professional and consultative networks. This study finds that professional networks have a positive and significant effect on NTBFs’ growth, which indicate that utilizing these networks benefit the growth of both young and growing firms. NTBFs in initial stages can acquire business opportunities by constructing professional networks. In addition, several formal links positively affect growth, such as regional business partners, incubator networks, and links to universities.

Management control matching patterns and firm innovation modes

ABSTRACT Using empirical data in China from 2010 to 2018, this paper investigates the relationship between management control matching patterns and different modes of innovation by introducing a text analysis method. The study found that adaptation matching pattern has a significant positive impact on radical innovation, execution matching pattern has a significant positive impact on incremental innovation, and compensatory matching has a significant positive effect on balanced innovation. Additional analyses further show that the positive ‘control-innovation’ relationship becomes more significant in high-tech firms. Environmental uncertainty and the degree of executive risk preference have a heterogeneous regulatory effect on the choice of control matching and innovation model.

The more funds the better? External funds, R&D investment and firm innovation: critical role of firm leaders' international experience

PurposeThe purpose of this study is to examine the moderating effect of two types of external funds in terms of loan and government subsidy on the relationship between R&D investment and firms' innovation performance in emerging markets, as well as the contingent role of firm leader's international experience associated with the effects of loan and government subsidy.Design/methodology/approachThe authors tested the hypotheses using a longitudinal dataset of 716 high-tech firms of Zhongguancun Science Park (ZSP) in China during 2008–2014, covering detailed information on the operations, financial situation and R&D activities, patents, etc. The authors finally identified an unbalanced panel of 2,430 firm-year observations. Considering the dependent variable is the countable data and non-negative values, the negative binomial regression with fixed effects was adopted to test the hypotheses.FindingsThe results show that the more loans or government subsidies the firm receives, the weaker the positive effect of R&D investment on firms' innovation performance in emerging markets. Furthermore, the findings reveal that firm leaders' international experience can mitigate the negative moderating effect of government subsidies, but strengthen the negative moderating effect of loans.Originality/valueThe study provides new insights into how loans and government subsidies as external funds influence the effectiveness of R&D in enhancing innovation performance, and the findings highlight the fact that more external funds can reduce firm R&D efficiency. Moreover, the authors also enrich the resource orchestration theory by revealing the critical role of firm leaders' international experience in the decision-making of resource configuration to mitigate the inefficiency of high subsidies in emerging markets.