High-technology Firms Research Articles

NPD TOOLS, THOROUGHNESS AND PERFORMANCE IN SMALL FIRMS

This paper draws on survey data to clarify whether small high-technology firms benefit most from adopting greater numbers of new product development (NPD) tools to support NPD projects, or from using tools more thoroughly. This is an important issue given that small firms adopt NPD tools despite facing acute resource limitations and using informal processes. Prior studies of the performance impact of NPD tools have focused on large firms, and very few have assessed the performance impact of using NPD tools to higher levels of thoroughness.The paper covers tools across functional/technical and management/marketing aspects of NPD, and measures performance in process, product and market. We found that increasing the number of tools adopted did not measurably improve performance, in contrast to prior findings in larger firms. Instead, we found that firms obtained meaningfully improved NPD performance from using tools at higher average levels of thoroughness. Higher average thoroughness produced statistically significant performance benefits across seven of our nine performance measures. Our findings imply that small firms should emphasize selective but thorough and well-designed implementation of NPD tools.

Inventor CEOs

One in five U.S. high-technology firms are led by CEOs with hands-on innovation experience as inventors. Firms led by “Inventor CEOs” are associated with higher quality innovation, especially when the CEO is a high-impact inventor. During an Inventor CEO's tenure, firms file a greater number of patents and more valuable patents in technology classes where the CEO's hands-on experience lies. Utilizing plausibly exogenous CEO turnovers to address the matching of CEOs to firms suggests these effects are causal. The results can be explained by an Inventor CEO's superior ability to evaluate, select, and execute innovative investment projects related to their own hands-on experience.

Joint actions with large partners and small-firm ambidexterity in asymmetric alliances: The mediating role of relational identification

This article investigates the role of relational identification in the relation between joint actions and small-firm ambidexterity in asymmetric alliances. Using survey data on Chinese high-technology firms, we find that joint problem-solving and joint sensemaking are both positively associated with a small firm’s relational identification. We also find a positive relationship between a small firm’s relational identification and knowledge exploration and exploitation. More importantly, we show that relational identification mediates the relationships between joint actions (i.e. joint problem-solving and joint sensemaking) and small-firm ambidexterity, except for the relationship between joint sensemaking and small-firm knowledge exploitation. This study advances our understanding of the association between joint actions and ambidexterity by providing a social identification explanation.

Exploration versus exploitation in technology firms: The role of compensation structure for R&D workforce

We investigate the relationship between a firm’s compensation structure and the extent to which its innovation is more exploration versus exploitation oriented. Specifically, we assess two aspects of a firm’s compensation design—horizontal dispersion within job levels and vertical tournament incentives between job levels. A six-year panel of compensation records of 671,028 employees working at 81 U.S.-based high technology firms between 1997 and 2002 are used to construct measures that characterize a firm's pay structure, which are linked to these firms’ patents filed in the U.S. We find that firms with higher-powered tournament incentives in vertical compensation structure report higher fraction of innovation directed towards exploration. Horizontal pay dispersion, on the other hand, shows a negative relationship with the exploration in firms where R&D employees’ age variance is low. In firms where R&D employees’ age variance is high, the negative relationship between horizontal pay dispersion and exploration is muted.

Two-way relationship between innovation and market structure: evidence from Indian high and medium technology firms

ABSTRACTThis study analyses a two-way relationship between innovation and market structure in Indian high and medium technology firms. We perform an empirical analysis based on a simultaneous equation model on data for 991 high and medium technology firms during 2000–2015. Patent applications and patent grants capture innovation activity of the firms. We find that the market structure has an insignificant impact on innovation. A separate analysis of neck-and-neck firms also suggests that market structure has no impact on innovation. On the other hand, patenting has a positive and significant impact on market structure in both high and medium technology firms. The study concludes that in-house technology creation is a vital source of market dominance in Indian high and medium technology firms.

Entrepreneurial orientation and firm performance: the mediating role of generative and acquisitive learning through customer relationships

The concept of entrepreneurial orientation (EO) attracts much discussion and debate in the academic literature. As knowledge about EO has expanded, increased consideration is being given to the causal processes linking EO with superior firm performance. Building on the growing body of research on learning through interorganizational relationships, we introduce acquisitive learning and generative learning through key customer relationships as distinct conduits for the translation of EO into performance effectiveness. The research model is empirically examined using structural equation modeling on data obtained from small-and-medium sized high-technology firms in the United States. Findings indicate that EO boosts generative and acquisitive learning through customer relationships, and both generative and acquisitive learning have significant positive impact on firm performance. Notably, although generative learning and acquisitive learning through customer relationships act as mediators of the EO-performance link, the mediating effect through generative learning is significantly stronger than through acquisitive learning. Implications and directions for future research are discussed.

Gaining legitimacy through proactive stakeholder management: The experiences of high-tech women entrepreneurs in Russia

In this article, we offer insights into the critical role played by stakeholder relationships for female-owned high-technology firms in their pursuit of the legitimacy they need to acquire the resources that, in turn, will lead to sustainable innovation and firm growth. By reporting the findings drawn from interviews conducted with Russian female business owners, we showcase how, being faced with the liabilities of smallness and newness—which are further exacerbated by gender-associated liabilities—these entrepreneurs develop strategies suited to assist their entrepreneurial ventures. Within the nascent high-technology global sphere, these female entrepreneurs develop legitimacy for their ventures abroad by accessing external international stakeholders, which leads them to securing much-needed financial and knowledge resources. In addition, their ties with international stakeholders enable them to gain legitimacy among internal Russian stakeholders, thus further enhancing the innovation and performance of their ventures.

Computer modelling and identification of factors important for the success of business clusters

Business clusters are often intended to provide the environment needed to stimulate the financial growth of corporate inhabitants. However, many fails, prompting scholars to strive to identify the relevant success factors. In this paper, we identify factors promoting the growth of high-technology firms using a longitudinal dataset for both on- and off-cluster firms in Mjardevi Science Park (MSP) at Linkoping, Sweden. A panel data approach was used to investigate factors influencing the growth of on-cluster firms using off-cluster firms as a control group. Size and age influence turnover, as does the ability to innovate, but whereas size and age have a quadratic (non-linear) impact on financial growth, innovation capabilities have a positive linear impact. Employment is mainly correlated to age, previous years’ innovation and shareholder investment. Innovation output, (the ratio of patents asset value to turnover) is correlated to networking measured as social expenditure, which in turn exhibits a positive influence on innovation capabilities.

Computer modelling and identification of factors important for the success of business clusters

Business clusters are often intended to provide the environment needed to stimulate the financial growth of corporate inhabitants. However, many fail, prompting scholars to strive to identify the relevant success factors. In this paper, we identify factors promoting the growth of high-technology firms using a longitudinal dataset for both on- and off-cluster firms in Mjardevi Science Park (MSP) at Linkoping, Sweden. A panel data approach was used to investigate factors influencing the growth of on-cluster firms using off-cluster firms as a control group. Size and age influence turnover, as does the ability to innovate, but whereas size and age have a quadratic (nonlinear) impact on financial growth, innovation capabilities have a positive linear impact. Employment is mainly correlated to age, previous years' innovation and shareholder investment. Innovation output, (the ratio of patents asset value to turnover) is correlated to networking measured as social expenditure, which in turn exhibits a positive influence on innovation capabilities.

Can international supply chain induce a return premium? Evidence from U.S. leading high-technology firms and Taiwan stock market

This study aims to explore relationships between return linkages on international supply chain, idiosyncratic volatility and abnormal returns in local markets. Empirically, focusing on the seven top U.S. high-technology firms and local market of their Taiwanese suppliers, we find significant daily return spillovers from U.S. stocks to the suppliers, electronic industry indices, market index, and non-electronic index in Taiwan, possibly resulting from fundamentals connections or investor sentiments diffusion. Furthermore, stocks strongly sensitive to the U.S. stocks, have high idiosyncratic volatility and a return premium. Moreover, we provide an external sensitivity factor for asset pricing in Taiwan.

Managerial incentives and investment efficiency in high technology firms

This study explores the effect of the CEO equity incentive on the investment efficiency of high technology firms. Previous studies suggest that the...

Intellectual capital and firm performance: the mediating role of innovation speed and quality

The purpose of this study is to explore the influence of intellectual capital (IC) on firm performance, considering the mediating role of innovation speed and quality. We develop a research model based on the IC perspective and innovation literature. We test the model by using structural equation modeling to analyze data collected from 328 high-technology firms in China. The results show that the three components of IC, namely human capital, structural capital, and relational capital, are positively related to innovation speed and quality, which in turn facilitate the operational and financial performance of a firm. The impacts of human and structural capital on financial performance are fully mediated by innovation speed and quality, whereas the impact of relational capital on financial performance is partially mediated. Innovation speed and quality partially mediate the effect of IC on operational performance. As one of the first studies to investigate how IC may influence firm performance through the mediating effects of innovation speed and quality, this study not only contributes to HRM literature on IC and innovation, but also offers managers with insights on how to align their HRM strategies and practices to develop IC when pursuing innovation and performance outcomes.

Achieving Excellence in Exploration and Exploitation by Matching Appropriate Resources

Exploration and exploitation are two fundamental activities for a firm's long-term success. Based on a panel data of 125 high technology firms collected using a text mining technique, this study shows a three-stage “horizontal S” relationship between exploration and firm performance. Further, this study reveals that it is critical to align appropriate type of resources between exploration and exploitation. Different type of resources each has its own unique way of benefiting or hampering a firm's exploration and exploitation activities. In particular, absorbed slack resource facilitates exploitation but impairs exploration, while unabsorbed slack resource facilitates exploration.

Leveraging learning forces in asymmetric alliances: Small firms’ perceived power imbalance in driving exploration and exploitation

Prior studies on power and interfirm learning in alliances have devoted limited attention to multiplicate influences of diverse power sources on exploration and exploitation and whether such influences on these two strategies are similar or different. This study investigates the joint effects of two types of perceived power—capability-driven power and position-driven power—on exploration versus exploitation in asymmetric alliances. Using a sample of 205 high-technology firms in China, the analyses suggest that each of the two types of perceived power separately has no direct effects on either exploration or exploitation. However, they complement (multiplicative effects) each other in promoting exploitation and exploration. Interestingly, the balanced effect of perceived position-driven power and perceived capability-driven power is positively related to exploration, while no such an impact is found in terms of exploitation. This study provides alternative insights about inter-organizational learning in asymmetric alliances and points out a direction for future research.

Research on the Influence of Firm’s Innovation Driven on New Product Innovation Performance

New product innovation and R&D are important sources for firms to obtain competitive advantages, and market knowledge is the core element for firms to obtain new product innovation performance. However, it can be also found out that the relevant discussion upon innovation has been still limited to restricted theories and the developing empirical researching area by reviewing the literature. Based on knowledge-based theory, a questionnaire survey of 220 high-technology and internet firms in China was conducted to empirically analyze the relationship between innovation driven, potential absorptive capacity, and new product innovation performance. The study found that: the potential absorptive capacity mediates the relationship between market orientation and new product performance, technological opportunity and new product performance, and the potential absorptive capability positively adjusts the relationship between technological opportunities and realized absorptive capacity. It is possible to understand more clearly the process of firms acquiring and digesting information, transforming and mining knowledge to achieve new product innovation performance by analyzing the process of knowledge absorption and conversion.

Snapchat's Gift: Equity Culture in High-Tech Firms

Snap, Inc., the company that owns the platform Snapchat, controbersially offered nonvoting common shares to the public in 2017. This Article asks what it means to invest in Snap or other (mostly technology-based) companies in which common shareholders collectibely have little or no power to influence corporate policy. In particular, why do such investors expect to be compensated? This Article explores the familiar rationales for equity investing, including stock appreciation and dividends, and the logical shortcomings of those rationales in these circumstances. Adopting Henry Manne's two systems approach to corporate affairs through both law and economics, we show that corporation law fails to ensure that corporations return business profits to shareholders. A similar analysis of the market for corporate control concludes that, without shareholder boting, the market for corporate control also fails to ensure a return to shareholders. Shareholders who invest in firms in the absence of legal or market mechanisms to secure a return on their inbestment, howeber, are not irrational. Instead, inbestors rely on cultural understandings of appropriate reciprocity. This Article employs Marcel Mauss's cultural anthropology classic, The Gift, to explain the equity culture in which shareholders invest in Snap and other high-technology firms, and in which such firms operate. This Article concludes by suggesting some ramifications of understanding shareholding, and consequently management, in terms of equity culture. This Article also complements the substantial work of behabioral economics in explaining inbestor choice and organizational behabiors. The field of corporate finance traditionally has been organized around the figure of the rationally self-interested indibidual. Behabioral economics argues that people are not as rational as orthodox corporate finance assumes. This Article argues that people in markets are not as individual as corporate finance assumes.

Linking Proactive Personality to Creative Performance: The Role of Job Crafting and High‐Involvement Work Systems

AbstractThis study proposed that job crafting serves as a mechanism reflecting how proactive personality affects creative performance, and this study explored whether these relationships are moderated by high‐involvement work systems. Drawn from the conservation of resources theory to develop a cross‐level moderated mediation model, a three‐wave longitudinal study was conducted with 346 employees and their supervisors in 27 high technology firms in China. This study found that proactive personality was positively related to creative performance and that job crafting mediated the relationship between proactive personality and creative performance, and an indirect effect of proactive personality on creative performance through job crafting was significant when high‐involvement work systems was low but not high. Thus, the research results indicate that when human resource management involves less participatory management, incentive rewards, extensive training and information sharing, proactive employees can draw from their personality to craft their job tasks, relations and cognitions, thereby improving creative performance. The theoretical and managerial implications, limitations, and future research directions are discussed.

The Day Ahead: IPO Today, Acquired Tomorrow?

<p><em>We study the double exit phenomenon—new IPO firms get acquired quickly in the M</em><em> </em><em>&</em><em> </em><em>A market. In this paper, we attempt to discern the distinct characteristics of new public firms that made them acquired soon after their IPOs. Specifically we find that double exit firms are those backed by venture capital. Double exit firms generally have prestigious investment banks underwrite their IPOs. High technology firms are more likely to be taken over soon after their IPOs. Also, double exit firms have higher level of intangible assets. We suggest that IPO may play an important role in firms’ following acquisition incidence. First, IPO helps to reduce ex ante transaction costs between firms and financial markets, such as raising external capitals. Second, IPOs wink signals concerning the quality of the firm.</em><em> </em></p>

Innovation and internationalisation processes of firms with new-to-the-world technologies

While there has been considerable research into the internationalisation of high-technology firms, it mostly assumes that these firms are pursuing global opportunities for technologies which are ready to be sold. This assumption does not hold for firms with ‘new-to-the-world’ technologies still under development. We investigate the internationalisation patterns of such firms by means of a qualitative case study. Our findings show the internationalisation patterns of the case firms to be uneven and discontinuous in nature. We attribute these patterns to the dialectical tensions which decision-makers confront between expanding internationally and developing their technologies. The nature and duration of the uncertainty inherent to bringing new-to-the-world technologies to global markets explains why tensions between innovation and internationalisation dominated, rather than synergies. In these conditions of fundamental uncertainty, the case firms were unable to benefit from the positive, self-reinforcing learning mechanism that underlies both the Uppsala internationalisation process model and the accelerated (early and rapid) internationalisation postulate. Instead, the dialectical process model which we develop recognises the socio-technical nature of technology, the impact of fundamental uncertainty, and the need to account for nonlinearity and interdependencies in the internationalisation process.

Intermediary Organizations in Labor Markets

We propose a job matching model of intermediary labor markets by developing the seminal work of Kelso and Crawford. Using this model, we show that for an arbitrary fixed broker-fee rate, the salary-adjustment process converges to a core allocation in intermediary labor markets where high-skilled workers are matched to high-technology firms by the private middleman and low-skilled workers are matched to low-technology firms by the public middleman. This result means that the dual labor market is emerged as a stable outcome of job-matching promoted by the private and public middlemen. Finally, we discuss empirical relevance of our theoretical model by using the data of job placement services in Japan.