High-technology Manufacturing Research Articles

Investment Strategies for Sourcing a New Technology in the Presence of a Mature Technology

To stay competitive, high-technology manufacturers not only frequently source new technologies from their suppliers, but also financially support the development of these new technologies into component products or production tools. We consider a manufacturer that can either source a new but immature technology from a financially constrained supplier, or source a mature technology from an existing supplier if and only if the development of the new technology fails. To support the new technology, the manufacturer can choose to inject capital in the form of an equity or loan. The investment strategy not only affects the new supplier’s development effort and the probability of technical success (PTS), but also affects the existing supplier’s effort to improve the mature technology, which presents the manufacturer with a trade-off. Following the debt financing literature, we find that a loan contract is associated with a cost-shifting effect and often leads to a higher PTS. However, because the manufacturer not only maintains an investment but also a procurement relationship with the new supplier, we find a profit-sharing effect associated with an equity investment, which does not exist in the traditional equity issuance literature. In particular, we show that the profit-sharing effect can dominate the cost-shifting effect and lead to a higher PTS when the new supplier’s technological capability is sufficiently high. Nonetheless, we also show that the strategy that derives a higher PTS does not necessarily generate a higher payoff for the manufacturer. On the one hand, a loan can be preferred even when it leads to a lower PTS because the cost-shifting effect allows the manufacturer to offer a sufficiently low procurement payment while maintaining a sufficiently high PTS. On the other hand, when the existing supplier is very capable of reducing its costs, a loan can over-incentivize the new supplier to exert excessive effort and backfire. This paper was accepted by Charles Corbett, operations management.

The Firm-Specific Factors Influencing the Tax Haven Operations of Indian Multinationals

The present study measures the role of firm-specific factors influencing the likelihood of establishing a subsidiary in tax haven countries. The panel data of Indian companies, which have business operations in foreign countries, are used for the study. The firm-level data for the period from 2007 to 2018 are analysed by using binary logistic regression model. The result shows that the intangible assets, long-term debt, number of subsidiaries and service sector dummy have significant and positive impact on tax haven operations of multinational companies, but the experience of the firm and return on equity are insignificant, and a firm’s size deters the likelihood of setting a tax haven subsidiary. The results also show that firms from high-technology manufacturing and knowledge-intensive sector have more influence on the likelihood of owning a tax haven subsidiary by Indian multinationals. JEL Codes: F21, F23, H25, H26

Совершенствование фильтротканей для горной промышленности

The publication represents a review of three major types of filter-fabrics which are actively applied by domestic industrial enterprises. It's specially noted that contemporary high-technological manufacturing is impossible without highquality materials. The domestic technologies on filter-fabric production deserve attention unconditionally. Nevertheless, together with modernization of domestic industrial production, the technologies on filter-fabric accumulation have to change also. Namely that's why the functioning of such enterprises, which lean on competitive ability principles, product quality and its high technology, is utterly important now. In this regard, it represents an interest the activity of research-production enterprise Filter-Fabrics (RPE Filter-Fabrics Ltd) where from 2013, there has been started the manufacturing of innovational products which basis on, polyamide mini-thread and filament (complex) thread from high-test polyamide with glass filler which is stable to abrasion and having lower shrinkage during exploitation in the liquid medium. Besides, RPE Filter-Fabrics Ltd has significantly expanded filter-fabric market by the way of correction of thread basis and weft that has allowed to introduce the production on many concentrating factories.

Multivariate incapability index for high technology manufacturing processes in presence of the measurement errors: A case study in electronic industry

Process capability indices play a vital role in evaluating the conformity of the process properties to the required specifications. Process incapability indices are created by transformation in the process capability indices, leading to the separation of information related to the process accuracy and precision. This separation of information can be very beneficial to specify whether the process is capable or not and to detect deviations in the production processes that produce high-tech products, such as the electronics industry. The main goal of this study is to propose a process incapability index by considering the measurement error for processes with multivariate quality characteristics. The efficiency of this index is then examined by a numerical example using Monte Carlo simulation method. Moreover, the performance of proposed approach is compared with the case where there is no measurement error. In addition, as a practical example, this index is compared with a number of recently proposed indices in the literature, and sensitivity analysis is conducted, as well. The simulation results showed that the measurement error has a significant effect on process capability and incapability indices. Therefore, we strongly suggest that the measurement error has to be considered in the process analysis.

The problems associated with monitoring of main parameters of working areas and technological environments in high technology industry

The first part of the article describes the regulatory requirements related to the control of the main parameters of working areas and technological environments in high technology manufacturing: number concentration of aerosol particles and cleanrooms classification, mass concentration of aerosol particles in the premises and means for its control, number concentration of particles in liquid media and methods of its control.In the second part of the article, the trend of deterioration of the technical condition of the existing measuring instruments for disperse parameters of aerosols, suspensions and powder materials is described.In conclusion, it is proposed to create service and calibration centers for measuring instruments maintenance, as well as shared-use equipment centers based on national metrological organizations.

Unión Europea-América Latina y el Caribe: comercio e inversión y el acuerdo de asociación Unión Europea-Mercosur en su pilar comercial y sus potenciales efectos en el sector agroindustrial

The relationships between the European Union (EU) and Latin America and the Caribbean (LAC) are based on historical-cultural values that have evolved towards a fluid trade and investment exchange and with potential for expansion and deepening. The study aims to identify the current situation of trade and investment relationships between the EU and LAC, disaggregating the analysis at the level of the Mercosur subregion (MCS), to analyze the trade pillar of the agreement closed on 28.06.2019 and diagnose aspects of its potential impact on the agro-industrial o agri-food sector. The applied methodology follows a normative and positive approach, supported by the latest statistical information available. The results show that the trade relationship between the EU and LAC places the EU, in general, as a third trading partner, and it is characterized by an asymmetric exchange. The MCSsubregion exports to EU primary products and manufactures based onnatural resources and imports from EU medium and high technologymanufactures. In terms of investment, the EU is the main investor in LAC. The EU-MCS agreement was closed and it is in the process of legal review. The economic-commercial chapter may entry into force independent of the rest of the agreement. Specifically for agricultural products, it provides that the EU grants preferential access to 99% of trade with MCS, with tariff elimination for 84% of imports and for the rest quotas or fixed preferences; and MCS will release 88% of imports. As main final considerations, the following stand out: the parties may not maintain, introduce or reintroduce subsidies -or other measures withequivalent effect- to exports on an agricultural product that is exportedor incorporated in a product that is exported; the environmental aspectis foreseen in the chapter of the agreement referring to trade andsustainable development and, through dialogue, it may be evaluated how to improve it.

Testing the role of intra-metropolitan local factors on knowledge-intensive industries’ location choices

This paper contributes to the literature on entrepreneurship and economic geography by identifying factors that determine the attractiveness of a site in a metropolitan area, as the basis for the emergence of high-tech firms’ spatial concentration. The econometric model provides distinct advantages over the largely descriptive approaches that have been dominant in the point pattern analysis literature for clusters. We focus on the role of two types of knowledge spillovers on a firm’s location choices: (1) those that arise from collocating with other companies from the same industry, and (2) universities’ knowledge spillovers. A model is estimated using data on firm births in high and medium–high-technology manufacturing industries, during 2000–2016 in Madrid. Our results show that the main source through which firms benefit from knowledge spillovers is through proximity to firms in the same industry and not from universities.

Risk Assessment of Horizontal Wet Etching Equipment System in Manufacturing Plant Industry

Maintenance is one of the important roles in the high technology manufacturing industry. It is related to the key performance factors of the company such as quality, productivity, and cost. To achieve these factors, a reliability plan should be implemented which helps to maximise production value by implementing successful asset maintenance. This research project aims to focus on the critical process equipment known as Horizontal Wet Etching Equipment (HWEE) used in the wet etching process. The components in the HWEE system were identified by referring to the process and instrumentation diagram (PID) of the equipment and were categorised in different modes. Data on mean time to repair (MTTR) and mean time between repairs (MTBF) were collected based on previous company records. The data were analysed using MAROS software. Failure Mode and Effect Analysis (FMEA) was done to understand the risk of each of the components. The result shows that piping and gearbox have the highest RPN with 126 and 105, respectively. This study helps to identify critical components and is able to help the company to improve equipment reliability and reduce maintenance cost. Corrective action can be implemented to reduce the RPN for both components. Thus, it would help the industry to increase the key performance and become more competitive in the business environment.

Dampak Spillover Penanaman Modal Asing terhadap Produktivitas Industri Manufaktur Medium-High Technology di Indonesia

This study examines the impact of foreign presence in the Medium-High and High technology manufacturing industry in Indonesia. Using a balanced panel data that consists of 2,397 firms and in the year of 2010-2014, the data was estimated using the multiple regression method. The results show that there is positive spillover when local and foreign firms are in the same industry. Conversely, in different industries, negative spillover occurs in forward linkage when local firms buy the output of foreign firms and no spillover occurs in backward linkage when local firms become the suppliers of foreign firms. The Indonesian government must assure that foreign investment policies must benefit the domestic companies, considering there are some potential losses for domestic enterprises by the presence of foreign direct investment in the domestic market.

A Study on the Influence of Financial Factors on the Growth of Small and Medium-sized Enterprises in Portuguese High Technology and Medium-high Technology Sectors

The purpose of this paper is to find important financial influential factors to the growth of small and medium-sized enterprises (SMEs) in high technology and medium-high technology manufacturing sectors in Portugal. Using the fixed effects model and the pooled regression model, the impacts of some financial variables in previous year on firm growth are observed. In addition, the total sample is further classified into the young firm group and the mature firm group in order to compare the differences of the impacts at different age stages. The results show that there are more financial factors (such as, receivables, short-term loans, intangibles, long-term debt and industry dummy) impacting on young SMEs compared to mature SMEs, which means that young SMEs tend to be more susceptible. In particular, the impacts of profitability and leverage are constant for both young and mature SMEs; the two factors of trade credit (accounts receivables and payables) are negatively related to growth. By contrast, firm age and GDP show different effects at different age stages. This paper has two main contributions: it can help SME managers identify important financial factors to firm growth and then promote development of SMEs; it also contributes to the empirical studies on SME growth in high technology and medium-high technology manufacturing sectors from financial perspective.

Complements or substitutes? The contingent role of corporate reputation on the interplay between internal R&D and external knowledge sourcing

Existing research does not provide a clear answer to the question of whether internal knowledge development and external knowledge sourcing are complementary or substitutive innovation activities. This paper adopts a contingent approach for addressing this issue by examining whether and how the interactive effect of internal R&D efforts and external knowledge sourcing on product innovation performance may be affected by the firm’s corporate reputation. In doing so, a three-way interaction model is applied to a sample of 251 Spanish high-technology manufacturing firms. Interestingly, initial results support the substitutive argument: the positive effect of internal R&D on product innovation performance diminishes as the exposure to external knowledge increases. However, in well reputed companies, interaction becomes positive, revealing a complementary effect. Thus, the study extends the traditional approach focused on determining whether internal and external knowledge sourcing are complements or substitutes by showing that their interplay depends on other firm-specific characteristics. Moreover, identifying corporate reputation as a source of complementarity between both activities provides an additional explanation of how corporate reputation contributes to a more effective management of knowledge assets.

The Influential Factors on Capital Structure: A Study on Portuguese High Technology and Medium-High Technology Small and Medium-Sized Enterprises

Using the panel data model, this paper studies the influential factors on the capital structure of small and medium-sized enterprises (SMEs) in high and medium-high technology manufacturing sectors in Portugal. In particular, the total sample is further classified into young SME group and mature SME group for observing the similarities and differences. The research results show that firm size, profitability, firm age, and industry sector impact much on the capital structure and debt ratios; on the other hand, the impacts of tangible assets, intangible assets, and growth are not as strong as the previous factors. The differences of the impacts on young and mature SMEs are mainly shown by growth, intangible assets and industry sector. In particular, intangible assets show more statistical significance in young SMEs compared to mature SMEs, and intangible assets tend to be positively related to long-term debt especially in young SME group; this may reflect the positive attitude of financial institutions on the value of intangibles in generating future benefits for high and medium-high technology young firms. Besides, the findings tend to support the pecking order theory more than the trade-off theory regarding the high and medium-high technology manufacturing SMEs here.

Production- and consumption-based convergence analyses of global CO2 emissions

The convergent trend of CO2 emissions has received wide-spread attention in an attempt to meet the global reduction target, but almost all of the focus has been on the production side. A systematic investigation on the convergence of global CO2 emissions from the production side and the consumption side is of great importance to find the pathways for the worldwide low-carbon development. This study distinguished production- and consumption-based CO2 emissions of 129 economies during the period 1995–2015. Based on traditional sigma (σ), gamma (γ), beta (β), stochastic and club convergence models, we identified convergence progress of CO2 emission on both the production and consumption sides. Taking convergence speed and influential factors into account, we demonstrated different convergence pathways to a reasonable climate strategy. This study obtained four key results. First, in all cases, global per capita CO2 emissions on the production and consumption sides were convergent. Second, the speed of convergence on the production side was higher than on the consumption side. Third, population density, energy intensity, and the share of trade and industrialization had significant effects on the production side, while per capita GDP was more important on the consumption side. Low-carbon development due to medium- and high-technology manufacturing had equal impacts on consumption and production. Forth, different convergence processes among Organization for Economic Co-operation and Development (OECD), European Union (EU), Asia-Pacific Economic Cooperation (APEC) and Rest80 (i.e., the other 80 developing economies) indicate that mitigation policies should differ according to the industrial structure and by economic development. The results of this study will extend our empirical understanding of global CO2 emissions and their policy implications.

The effect of channel innovation knowledge management on competitive advantage: a dual-path model

ABSTRACTDrawing on organizational learning theory, we integrate channels and NPD perspectives to address whether NPD teams can acquire innovation knowledge from channel partners and apply it to gain competitive advantage. Structural equation modeling using a sample of 205 product managers in U.S. high-technology manufacturing firms illustrates organizational ambidexterity that yields competitive advantage through an exploratory route from product novelty and new market accessibility to market pioneering and an exploitative route from product meaningfulness and channel operation efficiency to product quality superiority. We further develop new measures of channel innovation knowledge acquisition capabilities, channel innovation knowledge application capabilities, and market pioneering.

Organizational innovation efforts in multiple emerging market categories: Exploring the interplay of opportunity, ambiguity, and socio-cognitive contexts

Industries with emerging market categories offer greater opportunities for firms to innovate. However, such opportunities are not a matter of “the more, the better.” An increasing number of emerging market categories poses a dilemma. While more emerging market categories arguably bring about increasing growth opportunities, they can also generate greater ambiguity for incumbent firms, which may hinder their innovation efforts. This study attempts to address this dilemma by proposing that the number of emerging market categories in an industry will have an inverted U-shaped relationship with incumbent firms’ innovation efforts. We further argue that this curvilinear relationship will be influenced by the socio-cognitive context of a firm's focal industry, in the sense that the degree of collective identity incoherence at the industry level will intensify the proposed inverted U-shaped relationship, whereas the prevalence of trade associations in the industry will depress this relationship. We test our hypotheses by examining research and development (R&D) investments of a sample of U.S. high-technology manufacturing firms and find support for our main prediction and the hypothesized effect of collective identity incoherence. We also find a surprising but intriguing moderating effect of trade associations.

Enduring rust: the persistence of low-tech pollution amidst New York’s high-tech revolution

ABSTRACTIn the early 2000s, New York’s political leadership began investing in ‘smart growth,’ an economic policy that promotes innovative, sustainable high technology research and manufacturing. Leaving behind its industrial past, the state transitioned from a ‘rustbelt’ to a ‘brainbelt,’ helping to save its economy from the worst effects of deindustrialization. However, the transition from rustbelt to brainbelt may not be as smooth or clean as it seems. This study maps the distribution of industrial pollution in New York State from 2000 to 2015, with special reference to Tech Valley, the geographic hub of the state’s investment in high technology job growth. I find that high technology has not offset the worst aspects of low technology, particularly the pollution that characterized the rustbelt era. Challenging the industry’s claims of environmental sustainability, toxic emissions were found to be higher within Tech Valley than the rest of the state. However, the increased rates of pollution may also be decreasing environmental inequality as toxic exposure is shifting onto more privileged communities in New York State.

The role of entrepreneurial orientation and family control of the firm in the economic recovery of underperforming firms

PurposeThe purpose of this paper is to analyse how entrepreneurial orientation (EO) and the family control of the company influence the performance of underachieving firms and how they contribute to economic recovery.Design/methodology/approachThe authors test the authors’ predictions on a unique and representative sample of 1,500 Spanish small firms in high and medium technology manufacturing and service industries. Given the nature of the dependent variable, the authors estimate a series of regression models to test the hypotheses. In addition, the authors consider two interaction terms where the underperforming firms’ variable is interacted with family firms and EO.FindingsThe results of analyses show that both EO and family ownership separately increase subsequent performance for underachieving firms.Originality/valueThe study contributes to expand the literature on underperforming firms analysing how strategic and structural factors affect the performance of firms that face an economic downturn. It also provides some guidance for practitioners on the decision and contexts that better serve the economic recovery of underperforming firms.

On the importance of variability when managing metrology capacity

In-line quality control is a crucial and increasingly constraining activity, in particular in high technology manufacturing. In this paper, we study a single metrology tool assigned to control the production quality of multiple heterogeneous machines. We introduce, model and study the tradeoff between the quality loss resulting from the sampling policy, and the quality loss induced by delays in the metrology queue. An iterative approach is proposed to optimize sampling periods using the solution of a relaxed problem which assumes full synchronization between production and metrology, and which has been previously formalized and solved. Based on computational and simulation results, and a prediction model, the paper ends with recommendations to better manage metrology capacity utilization under various levels of variability.

Cross-industry distribution of R&D investments and economic growth

ABSTRACTThis study empirically investigates the relationship between the cross-industry distribution of R&D investments and economic growth across 14 countries for the period from 1996 to 2013. Although countries can invest disproportionately in a handful of industries hoping to use their limited resources efficiently and boost economic growth, complementarity between industries calls for balanced investments. Using the Herfindahl–Hirschman Index as the measure of R&D concentration, we find an inverted U-shaped relationship between the concentration of R&D investment and economic growth. Some level of concentration may be good for growth; however, beyond a certain point, concentration has a negative effect on growth. Moreover, heavy investment in high-technology manufacturing industry alleviates this negative effect of concentration. The opposite holds for much investment in the service industry. Lastly, we find that the importance of diversification increases when countries advance, while developing countries can benefit from strategic concentration.

A quantitative analysis of global value chains: why has domestic value-added of China’s exports increased?

This paper focuses on the participation of China into global value chains. First, this paper measures the domestic value-added (DVA) of China’s exports during 2000–2014 based on the World Input–Output Database. The results confirm that the gap between the DVA and gross exports varies between countries and composite industries. Second, this paper uses a structural decomposition analysis to examine nine determinants that affect the change in DVA of China’s exports over time. Moreover, the result of the analysis of China is compared with those of Japan and the USA. Four notable facts are found. First, although the export share of high-technology manufacturing goods has risen significantly, the change in export structure failed to increase the DVA of China’s exports effectively. Second, the substitution of domestically produced intermediate inputs for imported intermediate inputs raised the DVA of China’s exports after the mid-2000s, while it decreased the DVA of Japan and the USA’s exports in most time. Third, the rise in DVA of China’s exports was accompanied by the substitution of labor income for capital income. However, the same result was absent in Japan and the USA. Finally, the increases in labor productivity and wage per person contributed greatly to the growth in DVA of China’s exports.