High-tech Manufacturing Firms Research Articles

Regional institutional environment and R&D performance: Evidence from marketization index of China’s provinces and panel data of high-tech manufacturing firms

Purpose How does the regional institutional environment of China’s transitional economy influence the relationship between a firm’s R&D investment intensity and innovation performance? Based on the resource-based view and institution-based view, an empirical study was executed to identify the moderating effects of institutional environment variables from the Marketization Index of China’s Provinces: National Economic Research Institute (NERI) Report on the relationship between a firm’s R&D investment intensity and innovation performance. This paper aims to study how effectively improve the impact of R&D investment intensity on innovation performance under the influence of the institutional environment. Design/methodology/approach Against the background of China’s transitional economy, the authors present empirical evidence from panel data covering 374 Chinese A-share listed high-tech manufacturing firms on the Shanghai and Shenzhen Stock Exchange to examine the relationship between R&D investment intensity and innovation performance. Findings Empirical results illustrate the following: The R&D investment intensity and innovation performance displayed an inverse U-shaped relationship, and R&D investment intensity had a lagged effect on R&D output according to the uncertainty and industrialization period of R&D activities. The level of financial market development can intensify the effects of R&D investment intensity on innovation performance. The degree of government intervention weakens the effect of R&D investment intensity on innovation performance. Originality/value Based on the background of China’s institutional environment during the transition period, combined with previous research and the Marketization Index of China’s Provinces: NERI Report, selecting financial market development, government intervention level and legalization level as moderating variables to study how effectively improve the impact of R&D investment intensity on innovation performance under the influence of the institutional environment. Due to the different ownership of firms during the transition period, the appropriate impact of the institutional environment on the relationship between R&D investment intensity and innovation performance will vary. Moreover, the level of legalization would impact on innovation insignificantly.

R&D Investment and Debt Financing of High-Tech Firms in Emerging Economies: The Role of Patents and State Ownership

Substantial R&D investment can increase high-tech firms’ potential to establish long-term competitive advantages. Yet it can also cause high levels of transaction costs that may be an obstacle to accessing debt financing. In this article, we examine the influence of R&D investment on firms’ debt financing in emerging economies. Then, we explore how a firm's patents and state ownership alter this influence. Leveraging a panel dataset comprising 1084 Chinese high-tech manufacturing firms during a 12-year period from 2007 to 2018, we find that R&D investment has a direct negative effect on a firm's debt financing, which may be mediated by a firm's patents. Explicitly, R&D investment increases a firm's likelihood of having a patent, which in turn facilitates access to debt financing, because the patent acts as a signal. State ownership makes the negative direct influence of R&D investment more salient as a moderator, whereas it also moderates the positive influence of patents on debt financing in an inverted U-shaped pattern. Thus, our article not only reveals that R&D-intensive firms do face financing constraints in emerging economies but also indicates how patents and state ownership can relax or tighten the constraints.

Does black-box supplier involvement help buyers' product modular and architectural innovation? The moderating role of product modularity

PurposeIn product modular design tasks, especially in the high-tech manufacturing industry, buyers and supplies play distinct roles, which may have different impacts on product architectural and modular innovation. Prior research has tended to view product innovation as a holistic concept, overlooking the importance of this differentiated influence. This study, from a modular design perspective, aims to clarify the impact of black-box supplier involvement on product architectural and modular innovation, as well as the influence of product modularity on these relationships.Design/methodology/approachBased on the theory of product modular design, this study decomposes product innovation into architectural and modular innovation from the perspective of the product internal structure to conduct in-depth theoretical analysis and model construction. A total of 276 valid questionnaires are collected from typical Chinese high-tech manufacturing firms and used to empirically test the constructed theoretical model using multiple hierarchical regression analysis.FindingsThe results show that black-box supplier involvement positively affects modular innovation and takes an inverted U-shape, as moderated by product modularity. However, the impact of black-box supplier involvement on architectural innovation shows contradictory differences at different modularity levels. Under a low level of product modular design, black-box supplier involvement has a negative impact on architectural innovation, but under a moderate level of modular design, it has a positive impact. After the degree of modular design exceeds a certain threshold, the impact gradually weakens.Practical implicationsThe results provide valuable insights for managers, highlighting the need to avoid oversimplifying the innovation impact of black-box suppliers solely based on overall product innovation. Instead, a more accurate assessment of the innovation contributions of both the buyer and supplier should be based on the degree of architectural and modular innovation. Additionally, the findings suggest that managers should consider the alignment between their company's product modular design features and innovation priorities (i.e. modular innovation or architectural innovation) when determining an appropriate supplier collaborative development strategy.Originality/valueThis study not only reveals the different impacts of black-box supplier involvement on architectural and modular innovation, but also proves the significant synergistic innovation effect of the relationship between black-box supplier involvement and product modularization. It constitutes an enriched and deepened exploration in the existing research on supplier involvement in product innovation.

Economic Policy Uncertainty and Enterprise Financing Efficiency: Evidence from China

This study investigates the effect of economic policy uncertainty on financing efficiency in China’s high-tech manufacturing industry from static and dynamic perspectives. Using data envelopment analysis (DEA) and the Malmquist index, we measure financing efficiency and its changes over time. The results show that China’s high-tech manufacturing firms exhibit low static financing efficiency, yet they exhibit relatively high dynamic efficiency. A significant positive relationship is found between economic policy uncertainty and both static and dynamic financing efficiency. The uncertainty motivates firms to improve their financing efficiency, mainly by enhancing technical and scale efficiency and by increasing comprehensive efficiency. Moreover, different financing channels, such as commercial credit, equity financing, bank credit, and internal financing, have varied effects on the relationship between economic policy uncertainty and static financing efficiency. This study demonstrates that high-tech manufacturing enterprises can respond to economic policy uncertainty by improving their financing efficiency.

Teach well, learn better - Customer involvement and new product performance in B2B markets: The role of desorptive and absorptive capacity

Customer involvement has received significant attention in the B2B relationship literature and is identified as an undeniable source of sustainable competitive advantage for manufacturing industries. Our study extends this research stream and re-examines the relationship between customer involvement and new product performance, employing the dynamic capability perspective. We hypothesise the moderating effects of absorptive and desorptive capacity on the relationship between customer involvement and new product performance. A survey of 225 high-tech Iranian manufacturing firms is used to test our research hypotheses. The research findings reveal the existence of an inverted U-shaped relationship between customer involvement and new product performance. Our findings also confirm the complementary effects of absorptive and desorptive capacity and suggest when, and under what levels of these two dynamic capabilities, involving key customers in new product development projects could be a successful strategy for developer firms.

Factors influencing knowledge sharing in new product development in high-tech manufacturing firms

Knowledge sharing is considered an important promotor of new product development (NPD) performance. However, studies have shown that making experts share knowledge in new product development (NPD) projects is often a challenging task. Consequently, this topic has attracted substantial attention in academic research. However, although studies have produced valuable insights, more detailed accounts of the mechanisms shaping knowledge sharing processes in NPD projects are sparse. To add to the knowledge on this topic, this study conducts a series of interviews with NPD professionals at manufacturers of high-tech industrial products to identify ‘factors influencing knowledge sharing’ (FIKS). The identified FIKS are explained through the socio-physiological theory, the ‘reasoned action approach’ (RAA). This involves several contributions. First, the study provides a detailed explanation of the role of FIKS by describing how they affect the behaviour of knowledge providers and receivers in NPD processes. Second, by identifying 161 FIKS in NPD processes, organised under 18 categories, the study offers the so far most extensive account of FIKS in NPD processes. Third, the findings suggest a special characteristic of knowledge sharing in NPD contexts concerning the relatively high importance of knowledge receiver behaviour.

The role of technology capability in supporting firm performance in the high-tech manufacturing industry

Background: Technology has influenced many aspects of life, particularly in the digital era of today. Companies that are closely related to technology are also challenged to keep innovating to stay competitive in the market, especially the higher their technology intensity their products and services are related. This study focuses on examining the technology capability of high-tech manufacturing firms in Indonesia. According to the International Standard Industrial Classification, high-tech manufacturing firms are firms that manufacture computer, electronic, and optical products. The aim of this study is to identify the role of technology capability that influences a firm’s performance and identify whether the value chain mediates the relationship between technology capability to firm performance. Methods: The method used in this study is descriptive quantitative analysis, using multi-linear regression and path analysis to test the hypothesis. The data used in this study is secondary data that came from Badan Pusat Statistik (BPS), Indonesia's official statistics agency. The survey data used in this study comes from Indonesia's annual survey of manufacturing firms in 2017. Result: Technology capability and value chain have significant effects on firm performance. Nonetheless, the value chain as an intervening variable has no significant effect on firm performance. In other words, with or without technology utilization of the value chain, both produce similar results. Conclusion: Firms in the high-tech manufacturing industry are expected to have sufficient knowledge and capability in utilizing their technology resources to ensure the firm's long-term viability and to enable them to continuously create innovations, which leads to improved firm performance and thus to their competitive market survival. By identifying the effect of the value chain as an intervening variable and identifying the difference between direct and indirect effects, this study also adds to previous research on the effects of technology capability and value chain on firm performance.

Business-to-business platform ecosystem practices and their impacts on firm performance: evidence from high-tech manufacturing firms

PurposeThis study attempts to reveal product platform strategy via business-to-business (B2B) platform ecosystems. The authors advance the views of platform ecosystems in the innovation literature by introducing a contingency perspective that underscores the role of market, organizational and technological innovativeness in product platform strategy.Design/methodology/approachThis study explores three contingent factors, specifically market innovativeness, technological innovativeness and organizational innovativeness that affect the product platform strategy of high-tech firms. The theoretical model is empirically validated using survey data from 191 high-tech firms.FindingsUsing a data set of high-tech manufacturing firms, the results show that product platform strategy is positively related to firm performance. Additionally, the results provide evidence supporting the positive moderating effect of the three-way interaction among market, organizational and technological innovativeness on the contribution of product platform strategy to firm performance.Research limitations/implicationsA platform product strategy is a determining factor in firm performance that requires firms to have a “fit” with their innovation activities. This study contributes to theoretical development at the intersection of product platform strategy and innovativeness.Practical implicationsWhen firms seek to align their technological innovativeness with their organizational innovativeness, the benefits of such innovativeness may be more pronounced in a platform product context. Moreover, the results may help guide platform managers and decision makers in identifying and securing appropriate innovation activities to enhance product platform strategies.Originality/valueThis study provides a product platform strategy in B2B platform ecosystems and shows how different innovation activities interact to improve the product platform strategy.

How do followership behaviors encourage job performance? A longitudinal study

Followers have often been reported as recipients in previous leadership studies and have usually been associated with negative connotations. Drawing from self-determination theory (SDT) and social exchange theory, we argued that followers can be proactive and that followership behaviors are positively related to leader–follower relationships. The purpose of this study was to examine how followership behaviors promote job performance in terms of perceived supervisor support (PSS) and dyad tenure. Data from a three-wave survey of 219 leader–follower dyads in high-tech manufacturing firms were analyzed using structural equation modeling. The results indicated that active engagement (AE) and independent critical thinking (ICT) were positively related to PSS and that PSS mediated the relationship between followership behaviors and job performance. Additionally, dyad tenure positively moderated the relationship between AE and PSS but negatively moderated the relationship between ICT and PSS. This study revealed that followers’ support for leaders can encourage supervisor support, which may result in high job performance. Furthermore, considering the important roles of followers found in this study, leaders should endeavor to support and promote followership.

R&D investment along the firm life-cycle: new evidence from high-tech industries

Traditional life-cycle theory typically holds that firms are more innovative in earlier life-cycle stages than in later stages. However, this may not apply to firms in high-tech industries that heavily rely on innovation to build competitive advantages and that are equipped with rich innovation-related knowledge. This paper analyses R&D investment along the life-cycle for high-tech firms, and investigates the boundary conditions of the hypothesised baseline effects by considering the moderating effects of three environmental factors (environmental complexity, environmental dynamism and environmental munificence). Analyses of high-tech manufacturing firms during 1989-2018 reveal that in comparison with firms in other stages, firms in introduction and decline stages make more R&D investment, especially in complex and moderately munificent environments. Besides, environmental dynamism significantly reduces R&D investment motivation in the decline stage but does not influence it in the introduction stage. Our results offer insights into high-tech firms' innovation pattern along their life-cycle.

Information technology competencies as antecedents for absorptive capacity and innovation capabilities in a high-tech industry

PurposePrevious studies equated information technology (IT) with the notion of effective resources. ITs improved firms’ competitive advantage and innovativeness. Yet, far fewer studies investigated types of IT competencies that corresponded to innovation capabilities, particularly in developing countries. The aim of this paper is to provide an investigation concerning the types of IT competencies and examine their influence on the innovation capabilities across high-tech firms.Design/methodology/approachA survey was randomly distributed to 274 respondents across four main sectors of Malaysian high-tech firms. The main sectors were electric and electronic, aerospace, computers and office machinery and pharmaceuticals. A structural equation model, Amos, was used to analyse data.FindingsThree findings were surmised. First, IT competencies driven by IT infrastructure, alignment, management affected high-tech firms’ innovation capabilities. Second, absorptive capacity (AC) partially determined the relationship between IT infrastructure and IT alignment and innovation capabilities. AC also determined the relationship between IT management and innovation capabilities. The significance of IT competencies in the improvement of innovation capabilities was presented as a key predictor in bolstering high-tech manufacturing firms’ competitive advantage.Originality/valueTwo points on novelty were presented. First, by conceptualising IT competencies from resource-based theory (RBV), a shift in understanding RBV was presented. Second, alternative key predictors concerning how IT competencies could improve aspects of AC and innovation capabilities were presented.

Supplier centrality, innovation value and supplier acquisition: evidence from US high-tech manufacturing firms

PurposeThe importance of supply chain network centrality has been widely recognized in the manufacturing literature. This study extends this literature by investigating the relationship between network centrality and innovation value. “Innovation value” refers to an innovation's impact, quality and potential future contribution to technological development in a business community. This study also aims to examine whether the relationship between supplier centrality and innovation value is contingent upon supplier acquisition.Design/methodology/approachThe study hypotheses are tested with archival data collected from US high-tech manufacturing industries over the 17-year period. Negative binomial regression analysis was used to test the hypotheses.FindingsThe authors found that supplier centrality has a significant positive relationship with innovation value. Moreover, an increase in supplier acquisition activities makes the relationship between supplier centrality and innovation value more positive.Originality/valueThis study contributes to the manufacturing and technology management research by exploring the impact of supplier centrality on innovation value. The results of this study shed light on the importance of a firm's central network position in enhancing the impact and quality of innovation. This study uncovers contingencies that help realize the potential benefits of holding a central network position.

The moderating effect of absorptive capacity on the technology search and innovation quality relationship in high-tech manufacturing firms

Based on the knowledge-based view, we conceptualize the technology search of high-tech manufacturing firms into three dimensions, namely search breadth, search depth, and balanced search, and construct the functional paths of the relationships between the different technology search dimensions and innovation quality of high-tech manufacturing firms. Grounded in absorptive capacity theory, we analyze how such relationships will change with the absorptive capacity level. Using data from China’s high-tech manufacturing industry from 2009 to 2017, we construct a panel data model to test the moderating effect of absorptive capacity on such relationships. Our research findings suggest: (i) Technology search breadth and depth each have a significant, inverted U-shaped relationship with innovation quality, i.e., technology search breadth and depth have an optimal point, and innovation quality exhibits an initial increasing and then decreasing trend. (ii) Balanced search has a significant positive relationship with innovation quality, i.e., there is a balanced point between technology search breadth and depth, and the higher the balance point is, the higher is innovation quality. (iii)Absorptive capacity does not merely positively moderate the relationship between technology search and innovation quality, but has different moderating effects under different search levels.

Accelerating Green Innovation Performance from the Relations of Network Potential, Absorptive Capacity, and Environmental Turbulence

The demand for sustainable development and the advantages of industries are expediting over time with the triggering of green innovation performance (GIP). Improving a firm’s GIP, especially in manufacturing industries, can accelerate green development and mitigate the global-concerned environmental issues. Thus, to investigate GIP from its antecedent factors, we delineate the relationship between network potential, absorptive capacity, environmental turbulence, and GIP based on social network theory, organizational learning theory, and contingency theory. We tested our hypotheses based on 233 sets of questionnaire surveys from high-tech manufacturing firms in China through deploying the hierarchical regression and bootstrap method. Our empirical findings reveal that the network potential dimensions, including network position centrality (NPC), network structure richness (NSR), and network relationship closeness (NRC), significantly positively impacted the GIP. The absorptive capacity (AC) partially mediated the relationship between the network potential dimensions and GIP. Environmental turbulence (ET) as an essential mechanism not only positively moderated the relationship between AC and GIP but also enhanced the AC mediation effect. These findings indicate that manufacturing firms should continue to improve network potential and AC and respond rapidly to changes in the external environment to enhance GIP, consequently contributing to the sustainable development of the economy.

Effect of supplier supply network resources on buyer–supplier collaborative product innovation: a contingency perspective

PurposeThis study aims to examine the effect of supplier supply network (SSN) resources on buyer–supplier collaborative product innovation. The existing relevant studies from the network perspective are focused more horizontally on the mobilization of the firm’s entire supplier network resources and less vertically on the utilization of the individual supplier's supply network resources. Therefore, this paper takes a contingency perspective, regards the buyer as the receiver of a supplier’s supply network resources and, based on the theoretical motivation–opportunity–ability framework, explores the important motivation and ability factors that may weaken or enhance the product innovation value of the network resources.Design/methodology/approachThis paper develops a new research model that assesses how the innovation utilization effectiveness of SSN resources is contingent on a buyer’s perception of the SSN effects and relative absorptive capacity on the SSN. A large sample questionnaire is designed and collected from 300 Chinese high-tech manufacturing firms and their suppliers. An empirical test is carried out in which multiple regression analysis is applied to 246 valid sample data.FindingsThe results show that SSN resources can significantly enhance buyer–supplier collaborative product innovation; however, the innovation utilization effectiveness is limited by the buyer’s relative absorptive capacity for the SSN and perception of the SSN effects. Specifically, if a buyer perceives that a greater innovation effect of a supplier’s supply network is correlated with an improved relative position in the SSN or with higher network structural equivalence and network cognitive congruence between the buyer and the supplier on the SSN, then the buyer will be more motivated and capable of transforming the SSN resources into actual product innovation value.Practical implicationsThe research results provide useful guidance for firms to effectively mobilize their SSN resources to tap into the supplier innovation value for a sustainable competitive advantage.Originality/valueThis paper extends the research on supplier innovation value to the SSN field. Through linking dyadic and network levels of analysis, this paper reveals the value and uniqueness of product innovation utilization of a specific supplier’s supply network resources in the buyer–supplier relationship and provides a new research perspective for future studies on related issues.

THE INFLUENCE OF INITIAL BUSINESS MODELS ON EARLY BUSINESS PERFORMANCE: A STUDY OF 589 NEW HIGH-TECH FIRMS

The initial business model of start-ups affects the performance and development of new ventures. Therefore, new technology-based firms (NTBFs) must choose a suitable initial business model to survive, perform, and grow. We propose a measurement framework comprising of nine elements described using 16 variables for NTBFs’ initial business models. We test our framework by surveying 589 young manufacturing and knowledge-intensive high-tech firms established in 2013 in Sweden, Finland, and France. We identify differences between the business models across countries and measure sales growth during 2014–2016. We find significant differences between high-tech manufacturing firms and high-tech knowledge-intensive firms regarding key partners, activities, and resources, as well as value propositions and the ranking of elements. In the second part of the analysis, we apply correlation and regression tests for the nine elements regarding early business performance (sales growth) for the manufacturing and knowledge-intensive high-tech firms.

A cost-benefit analysis of R&D and patents: Firm-level evidence from China

We extend the empirical framework by Peters et al. (2017) to include both R&D and patents in the productivity evolution. We provide a decomposition of the benefits of R&D into the patent and non-patent components, and a novel measure of the patent value conditioning on the firm’s R&D investment. Using a sample of Chinese high-tech manufacturing firms, we find that (1) 47.8% to 67% of the benefits of R&D investment comes from non-patent R&D activities; (2) On average an invention (a utility model) patent causes around 0.76 (0.66) percent increase in the firm value; (3) The start-up costs of R&D are around ten times as large as the maintenance R&D costs. The counterfactual analysis shows that the lump-sum subsidy is more effective than the proportional subsidy in increasing the expected firm value and innovation probability. R&D continuers respond more actively than the R&D starters to the R&D subsidy.

The influence of workforce agility on high-growth firms: The mediating role of innovation

An agile workforce refers to a workforce that is proactive, flexible and resilient in dealing with non-routine and unpredictable circumstances. Even though past research suggests that agility could have a positive effect on firm performance, there is hardly any empirical evidence on whether agility matters for high-growth firms (HGFs). The purpose of this research is therefore to investigate the extent to which workforce agility increases the likelihood of firms becoming HGFs in the high-tech manufacturing sector of a developing economy, and whether the relationship is mediated by new product innovation. We develop a theoretical framework that explains how and why a firm that has an agile workforce that is proactive in creating new products, flexible in responding to changing environment, and resilient in turbulent times, is more likely to create innovative products, and thus secure temporary monopoly, which increases the likelihood of the firm becoming a HGF. Then, utilizing firm-level data from high-tech manufacturing sector of a developing country, Iran, we test several hypotheses using logistic regressions. We find that workforce agility significantly increases the probability of high-tech manufacturing firms becoming HGFs, but that this relationship is mediated by new product innovation. Implications are drawn for theory and practice.

The Carbon Dilemma: Intervening Effects of Technological Competition and Open Innovation

The relationship between carbon emissions and firms’ performance has long been the subject of debate, but no solid conclusions have yet been reached. This study provides a dynamic view of this relationship and presents a performance paradox derived from carbon emissions with an additional analysis on the roles of both technological competition and open innovation. Based on a sample of 584 Taiwanese high-tech manufacturing firms over six years (2012-2017) with 3,504 firm-year observations, and applying the least square with dummy variable (LSDV) regression model, we find support for our proposed hypotheses. Specifically, we find that carbon emissions present a performance paradox for firms, in that prior profitability performance (e.g., ROA) induces a high level of carbon emission which, in turn, deteriorates subsequent market performance (e.g., Tobin’s Q). We also find that the intensity of technological competition strengthens the positive relationship between prior profitability and carbon emissions, while firms’ engagement in coupled open innovation weakens the negative relationship between carbon emissions and market performance. Our study provide explanations for why firms do not or cannot reduce their carbon emissions while they are profitable, as well as how they can avoid this paradox. We also offer suggestions for theory and practice.

The multiple mediation effect of absorptive capacity on the organizational slack and innovation performance of high-tech manufacturing firms: Evidence from Chinese firms

Previous studies have been conducted on how organizational slack impact on the firms' innovation performance. However, there are few researches on how slack availability impact on the firms' innovation performance. In addition, absorptive capacity is also an important factor affecting innovation performance, but there is no literature focusing on the important role of absorptive capacity on organizational slack and firms' innovation performance. Therefore, it is necessary to combine organizational slack, absorptive capacity and innovation performance to analyze. In addition, high-tech manufacturing firms are the pillars of the country's economic development, and its development affects the country's international competitiveness. Therefore, it is very important to analyze the promotion mechanism of innovation performance for promoting national competitive advantage. Based on this, we classify organizational slack from the perspective of slack availability, and analyze the effects of different dimensions of organizational slack and absorptive capacity on innovation performance in high-tech manufacturing firms. Additionally, we compare and analyze the multiple mediation effects of two absorptive capacities on organizational slack and innovation performance. Using the data from Chinese high-tech manufacturing firms from 2016 to 2018, we construct a panel data model to conduct empirical analysis and obtain the following research findings: with the increase of available slack and potential slack, the innovation performance of high-tech manufacturing firms exhibits an initial increasing trend and then a decreasing trend. In contrast, with the increase of recoverable slack, the innovation performance of high-tech manufacturing firms exhibits an initial decreasing trend and then an increasing trend. In addition, we use the bias-corrected bootstrap method to test the multiple mediation effects of the two absorptive capacities, and find that available slack can influence the innovation performance of high-tech manufacturing firms through realized absorptive capacity. In addition, potential slack can influence the innovation performance of high-tech manufacturing firms through potential absorptive capacity and realized absorptive capacity.