Innovation Performance Of Firms Research Articles

Effects of Policy Reforms on Firm Innovation

The regulatory environment in a country is an important factor that affects firm performance. This study investigates the impact of a particular regulation—license requirements for certain firm activities—on the innovation performance of Indian firms in the 1990s. Using a unique firm-level panel data set, it shows that the removal of license requirements led to an eight percentage points higher innovation rate within two years following the reform. We measure innovation as the introduction of new product varieties that had not been produced by the firm before. It takes a longer time for firms to innovate in industries in which they were not producing before. The findings of this study are also robust to the inclusion of controls for other policy reforms that occurred during the period of licensing reform. They also persist in tests with different subgroups of firms and with the use of alternative estimation methods.

Stakeholder Green Pressure and New Product Performance in Emerging Countries: A Cross‐country Study

AbstractDespite the burgeoning literature on stakeholder green pressure, research is scarce on how it influences eco‐product innovation and new product performance. This article examines stakeholder green pressures as antecedents of eco‐product innovation and new product performance in firms operating in resource‐constrained countries. Using data gathered from surveys in Vietnam (N = 183) and Ghana (N = 217), we find that the positive effects of stakeholder green pressures on new product performance are serially mediated by environmental sustainability orientation and eco‐product innovation. Our findings contribute to ongoing efforts to clarify the mechanisms channelling stakeholder pressures into new product performance in resource‐constrained environments.

Knowledge spillovers, R&D partnerships and innovation performance

A prime motive for innovative firms to seek collaboration is to gain access to knowledge resources. Firms that already benefit from knowledge spillovers without establishing formal collaborative agreements, may abstain from embarking on such agreements as they are costly. The propensity to (start to or continue to) collaborate with other business partners (customers, suppliers, competitors) will be associated with whether firms already benefit from access to knowledge resources, either through existing collaboration or otherwise. This research studies the interplay of formal collaboration and incoming spillovers by distinguishing four collaboration-spillovers scenarios: ‘connected’, ‘detached’, ‘informed’ or ‘extraneous’. Using a large panel data set of Spanish firms during the period 2004–2016 we examine effects of the four scenarios on firms' propensity for continuing or starting collaboration. We subsequently estimate the effect of these scenarios on firm innovation performance. Our findings suggest that incoming knowledge spillovers may amplify or limit collaboration, but that they only partly substitute formal collaboration when it comes to impact on performance.

The innovation paradox of TMT political capital in transition economy firms

Does TMT political capital enhance or hinder firm innovation? While both the innovation benefits and costs of TMT political capital are acknowledged in the literature, we lack a systematic understanding of the theoretical context in which each perspective regarding the innovation outcomes of TMT political capital applies, specifically when the institutional environments are subject to fundamental and ongoing changes. Drawing on insights from upper echelons theory (UET), we propose a non-linear relationship between TMT political capital and firm innovation performance. Based on an analysis of 620 publicly listed firms in China, we find that TMT political capital has a U-shaped relationship with innovation performance. This curvilinear U-shaped relationship is negatively moderated by the marketization of commercial activities and resource allocation. Our study evokes new theoretical mechanisms for the innovation paradox of TMT political capital and sheds light on its boundary conditions in the context of transition economies.

Exploring the Relationship Between Value Modularity, Knowledge Transfer, and Firm Innovation Performance: Evidence From China.

This study aimed to explore the influence the value modularity and a firm’s innovation performance, directly and indirectly, using knowledge management as mediating variable. Moreover, in this study, we used the resource integration ability as a moderator between the relationship value modularity and firm innovation performance. We collected data from the Chinese state-owned and state-controlled high-tech firms from 2011 to 2018. In this study, we used the gray comprehensive evaluation method to test the degree of value modularity, and hierarchical regression analysis is used to analyze the relationship among variables. The outcomes of this study indicate that value modularity and firm innovation performance has inverted U-shaped and significant association. Similarly, results also confirm that knowledge acquisition and knowledge internalization mediate the relationship between value modularity and firm innovation performance. The finding of this research also confirms that resource integration ability negatively affects the relationship between value modularity and firm innovation performance. This paper enriches the research of the value modularity and gives certain inspiration to knowledge management. At the end of this study, we also suggest some significant practical implications.

Repeated partnerships in university‐industry collaboration portfolios and firm innovation performance: roles of absorptive capacity and political connections

There is little empirical evidence on the relationship between repeated partnerships and firm innovation performance in the university‐industry collaboration (UIC) portfolio context. This study investigates how repeated partnerships in UIC portfolios influence focal firms’ innovation performance. Using a panel dataset of 768 UIC portfolios in the Chinese manufacturing industry, we theorize and reveal that repeated partnerships in UIC portfolios exert a negative effect on firm innovation performance. Besides, UIC portfolio repeated partnerships have a positive effect on absorptive capacity and that absorptive capacity partially mediates the relationship between UIC portfolio repeated partnerships and firm innovation performance, and political connections strengthen this relationship. These findings contribute to previous research on repeated partnerships and alliance portfolios, and provide practical implications for both firm managers and policymakers.

The Influence Mechanism of Knowledge Heterogeneity of Venture Capital Syndication on Innovation Performance of Entrepreneurial Firms: Evidence from China

Venture capital syndication (VCS), an investment model, is gaining increasing attention. This paper uses a new perspective on knowledge transfer to explore the influence mechanism of knowledge heterogeneity in VCS on the innovation performance (IP) of entrepreneurial firms. We use firm‐year panel data from the Shenzhen Stock Exchange for 2000–2017 and find that the knowledge heterogeneity of VCS includes, at least, management knowledge heterogeneity, investment knowledge heterogeneity, and technical knowledge heterogeneity. In particular, management knowledge heterogeneity and technical knowledge heterogeneity positively affect the IP of entrepreneurial firms. We further find that the intellectual capital (IC) of entrepreneurial firms mediates these positive relationships. Moreover, the equity concentration of VCS positively moderates the relationship between knowledge heterogeneity and IP and negatively moderates the relationship between knowledge heterogeneity and IC. This paper provides a new theoretical explanation of the relationship between VCS and IP of entrepreneurial firms from a knowledge transfer perspective and explores the impact paths of this relationship.

Gender of top manager and firm innovation performance

Gender of top manager and firm innovation performance

A Study on the Correlations among Organizational Learning, Dynamic Capabilities, and Innovation Performance of Innovative Firms

Innovation is the core of China’s national policy and the lifeline of enterprises at the local and global market. There has been a huge amount of research on innovation and elements contributing to innovation performance; however, few of them built a theoretical model to study the correlations among organizational learning, dynamic capabilities, and innovation performance. Based on the existing studies and literature at home and abroad and considering the development status of innovative enterprises in China, this paper decomposes organizational learning into three dimensions of learning commitment, shared vision, and open‐mindedness and divides dynamic capabilities into three dimensions of environmental insight capability, resource integration capability, and organizational flexibility capability. To verify the model of LDP (learning‐capability‐performance) and hypotheses, the authors conducted a survey in Beijing, Tianjin, Hebei, Shanghai, and Qingdao, which have ranked top in the number of innovative enterprises in China in recent years. A sample of 232 valid questionnaires were collected and validated with SPSS23.0 software. The result shows that organizational learning and its three dimensions have significant positive effects on innovation performance, while only two dimensions of dynamic capabilities, resource integration capability and organizational flexibility capability, have significant positive effects on innovation performance. The third dimension of environmental insight capability has no significant positive effects on innovation performance. The dynamic capabilities and its three dimensions play a partial intermediary role between organizational learning and innovation performance.

Organizational Learning Capacity Impacting Innovation Performance of Firms

Organizational Learning Capacity Impacting Innovation Performance of Firms

Information technology investment and innovation performance: does investment paradox exist?

PurposeThe purpose of this study is to deepen the understanding of the effects of information technology (IT) investment on firm innovation performance and examining the investment paradox effect in China.Design/methodology/approachUsing a sample of China’ public firms IT investment data between 2010 and 2016, the authors establish a test model of IT investment and innovation performance.FindingsThe result indicates that IT investment in firms have no effect on innovation performance in the investment period. However, in the full sample and manufacturing sample, the IT investment has a significant positive effect on innovation performance in the post-investment years. In addition, this study finds that large companies and low-age companies may contribute more to innovation when firm investment in IT.Research limitations/implicationsThere are several limitations in this research. First, the authors are failed to obtain a larger sample about the IT investment information data set in China, so this study was compelled to use limited sample data from China, hence, this could lead to errors of too early generalization. Second, the authors use the number of invention patent applications to represent the performance of enterprise innovation, which may not show enterprise innovation effectively. Third, the firms in the sample are all in China Listed Companies, so this may not accurately reflect the entire environment of firm innovation performance, and could possibly.Practical implicationsThe research confirms that there is a paradox and time lag effect in IT investment, which enterprises should pay attention to.Originality/valueExisting research confirms that corporate IT investments can bring new products or services. However, the authors still do not know whether IT investment has improved the company’s ability of innovation. This study will fill this gap and the industry effect and time lag effect of the influence of IT investment on innovative performance are also examined.

Cross‐listing on the Hong Kong Exchange and Chinese firm innovation: New evidence

AbstractIt has been well documented that cross‐listing can improve firms' governance quality and reduce equity financing costs, which are crucial for firms' innovation activities. In this paper, we investigate the effect of cross‐listing on the Hong Kong (HK) market on the innovation performance of Chinese mainland firms. We find that both innovation outputs and qualities increase significantly when Chinese mainland firms list their shares on the HK market. Concerning the channels through which cross‐listing encourages innovation, we demonstrate that cross‐listed firms can raise low‐cost funds in the HK market, which facilitates their innovation activities. Moreover, the HK market generates more informative stock prices, which mitigate innovation information asymmetry and also encourage firms' innovation. In general, our paper sheds light on a new factor (cross‐listing) that motivates firms to engage in innovation and highlights cross‐listing's function in improving innovation.

Outward FDI and Innovation Performance of Chinese Firms: Why Can Home-Grown Political Ties Be A Liability?

We explain how home-grown political ties of Chinese firms negatively influence the effect of outward foreign direct investment (OFDI) on the innovation performance of their parent firms. Our results show that these ties can turn into a liability in the host countries (particularly developed ones) due to their misfit with the local institutional environment, hampering the parent firms’ innovation performance from OFDI. We also clarify how absorptive capacity of the parent firm mediates the relationship between OFDI and innovation performance. Our study furthers understanding of the link between internationalization and innovation performance and the ‘dark side’ of political ties.

Big data analytics capability as a major antecedent of firm innovation performance

Purpose: This study aimed to investigate the big data analytics capabilities (BDAC) model using resource-based theory (RBT) and dimensions of big data analytics (management, technological, and talent) that influenced the firm innovation performance. Design/methodology/approach: The research uses quantitative research design where 548 respondents were selected for the survey from Pakistan electronic media regulatory authority (PEMRA), national database and registration authority (NADRA), and cellular companies. Only 394 useable responses were received from the respondents. Findings: The findings revealed that BDAC has a statistically positive impact on firm innovation performance. All of the proposed hypotheses were approved in this study. Research limitations/implications: The study gives future direction to the researchers and practitioners to implement this model in other industries. Practical implications: The research makes important theoretical and methodological contributions to the business and society's nexus in developing country firms that are under economic pressure. Originality/value: The paper is new in the context of the developing firm's innovation.

Tax Incentives, R&D Manipulation, and Corporate Innovation Performance: Evidence from Listed Companies in China

This study investigated the R&D manipulation of Chinese listed companies under preferential tax policies based on the bunching approach. On this basis, differences in organizational performance aspirations were used to distinguish firm heterogeneity. This was to clarify how tax incentives affected firm innovation performance. The empirical results show that preferential tax policies can effectively reduce the actual tax burden of high-tech enterprises. Some companies have enjoyed corporate income tax breaks by manipulating R&D spending. The counterfactual estimate of R&D intensity shows that the elasticity of taxable income of R&D investment of listed companies in China is between 0.55 and 0.8. The elasticity of taxable income of manufacturing enterprises is between 0.6 and 0.75. Furthermore, within the R&D operating range, firm-level variations will affect innovation performance. The incentive effect of R&D activities of enterprises with a negative organizational performance aspiration gap is higher than that of enterprises with a positive organizational performance aspiration gap. The conclusion provides the basis for the country to improve preferential tax policies for high-tech enterprises.

IT Usage and Innovation Performance of SMEs in China: A New Perspective

Existing studies on the information technology (IT) usage of firms are constrained within the perspective of “IT tool” or “IT investment.” Few studies have analyzed the IT usage of firms from a new perspective. This study aims to fill this gap by examining the impact of IT usage on the innovation performance of small- and medium-sized enterprises (SMEs) from the perspective of the product value chain (PVC). A research model integrating IT usage width, IT usage frequency, manufacturing flexibility, human capital quality, and firm innovation performance was proposed for this analysis. Furthermore, a quantitative analysis was performed on a sample of more than 1300 Chinese manufacturing firms using the newest data provided by the World Bank. Results validate that IT usage width and IT usage frequency have a significantly positive impact on the innovation performance of SMEs. Manufacturing flexibility plays a partially mediating role between IT usage frequency and the innovation performance of SMEs. Moreover, human capital quality has a significantly positive moderating effect on IT usage width and the innovation performance of SMEs. IT usage width and IT usage frequency appear to be important predictors of the innovation performance of SMEs, whereas there are substantial differences in the influencing mechanism of IT usage width and IT usage frequency on the innovation performance of SMEs.

The effect of external knowledge on innovation capacity of SMES: Does the source of knowledge matter?

This paper aims to analyze the effects of different sources of external knowledge (market sources, institutional sources and business network affiliation) on firms’ capacity to innovate. Using cross-sectional data collected with the help of questionnaires on a sample of 514 SMEs in 2014, we employ the maximum likelihood method to estimate logistic regression models from which follow three main results: firstly, market sources significantly reduce innovative capacity; secondly, institutional sources of knowledge significantly increase innovative capacity; and thirdly, the net effect of business network affiliation, taking into account the other two sources of knowledge, is quite small. Thus, these results show that the institutional and operating environment of SMEs needs to be improved in order to discourage opportunistic behaviours and reduce information asymmetries in the hope that, in the long run, market sources can be transformed into an advantage for innovation, on the one hand. On the other hand, there is a need for a broad national coordination policy that encourages collaboration between universities and industry, as well as the commercialization of university research results. Hence, these results enrich the current understanding of the link between collaborative networks and the innovation performance of firms.

Management innovation and firm innovation performance: a moderated moderation effects of absorptive capacity and environmental dynamism

Innovation plays an influential role in the firm's development and sustainability in an exhaustively aggressive business environment. Yet extant literature has not considered the influence of management innovation (MI) on firm innovation performance (FIP) in emerging economies. Building upon the dynamic capabilities view, we construct a moderated moderation model to address how MI affects FIP. Explicitly, we investigate whether the linkage amongst MI and FIP is contingent on absorptive capacity (AC) and environmental dynamism (ED). Using a dataset from 314 firms operating in the manufacturing and service industries in China. Our findings through hierarchical linear modelling reveal that: (1) MI affects FIP positively; (2) AC affects the linkage amongst MI and FIP positively; (3) AC impacts on the linkage amongst MI and FIP upsurges when ED is high than low. Our research offers new insights on how MI enhances the innovation performance of firms operating in emerging economies.

FOREIGN TRADE, EDUCATION, AND INNOVATIVE PERFORMANCE: A MULTILEVEL ANALYSIS

This study analyses the innovative performance of 5,273 companies across 64 different economic sectors and 32 different regions in Colombia. We assess the effects of education and open economy variables on the innovative performance of firms by analyzing firm, sectoral, and regional level determinants. The study takes the multilevel approach of the innovation process considering the structure and behavior of innovation systems in developing countries. We furthermore focus on technology transfer from foreign trade and the role of education in the process of innovation. We find that education and open economy variables have a significant relationship with innovation performance at the firm and regional levels. We finally conclude that Colombia has a fragmented innovation system with a weak institutional structure, and low interaction between policymakers, industry, universities, research centers.

Personality traits and firm innovation performance: the mediation effect of entrepreneurial innovativeness

PurposeThe purpose of this paper is to examine the effect of entrepreneurs’ personality traits on firm innovation performance through the mediation role of entrepreneurs’ innovativeness.Design/methodology/approachThe data consist of 2,574 firms from a survey of small and medium-scale manufacturing enterprises (SMEs) in Vietnam, a developing and transitioning economy where SMEs constitute an integral part of the economy. The estimation results based on the structural equation model was applied to analyze the data.FindingsThe results indicate that an entrepreneur’s innovativeness is positively associated with his extraversion, conscientiousness, and openness to experience but negatively accompanied with his neuroticism. Besides, the three traits – openness to experience, conscientiousness and extraversion have positive indirect effects, while neuroticism has a negative indirect effect on technological improvement and new technology adoption. However, the effects of agreeableness on entrepreneurial innovativeness and firm innovation performance are insignificant. In addition, the diverse backgrounds of the entrepreneur such as education and ethnics are also found to influence his innovativeness and to have indirect effects on firm innovation performance.Originality/valueThis study may contribute to the immature literature on the entrepreneurial process within SMEs by presenting empirical evidence on the relationship between entrepreneurial personality traits and firm innovation with a large sample of SMEs in Vietnam, an emerging economy where SMEs constitute an integral part of the economy.