Innovation Performance Of Firms Research Articles

SME Instrument: an empirical analysis on the impact of the second phase on the performance of Italian enterprises

This article is part of the strand of research on evaluating the effectiveness of public funds in stimulating the growth of research and development activities in the private sector. The research focus is on the SME Instrument, in its original version born within Horizon 2020, and in particular Phase 2 of the instrument. The research question, therefore, is "Has the second phase of the SME Instrument had a positive impact on the Italian SMEs that have joined it? If yes, to what extent?" The evaluation will be based on quantitative data inherent in the innovation (and non-innovation) performance of individual firms. At the conclusion of the analysis, it can be concluded that the second phase of the SME Instrument did not produce significant additional effects on the performance of firms, approximated by the ratio of total sales to total assets. The only exception is for those enterprises aged between 6 and 15 years, for which there is a partially significant increase in the sales/assets ratio after receiving funding. Given the research results and given that public and private management share a common interest in making their investments effective and efficient by seeing a return on them, the implications for policymakers are twofold: personalization of policy and promotion of an integrated innovation model, both of which imply a rethinking of the instrument. However, like any research, the results obtained are never an end-point, but the starting point for new reflections from which to develop further research.

Can Process Digitization Improve Firm Innovation Performance? Process Digitization as Job Resources and Demands

Can Process Digitization Improve Firm Innovation Performance? Process Digitization as Job Resources and Demands

Science and technology parks and their heterogeneous effect on firm innovation

Science and Technology Parks (STPs) have proliferated in many countries as a policy initiative to foster innovation. Previous studies have mostly analysed average effects on the innovation performance of tenant firms, leading to mixed results. This paper aims to explore whether there are heterogeneous STP effects. Creating a novel database of Spanish patents generated on- and off-park, merged with firm and STP characteristics, we find that younger and larger firms benefit more from being on-park and younger and older STPs have a stronger effect on tenants’ patent quality, while STPs promoted by universities do not exhibit a differential effect.

Firm Innovation in Hazy Days: Chinese Evidence

This paper estimates the causal effect of air pollution on firm innovation based on a nationwide sample of Chinese manufacturing firms. Using thermal inversion as instrument variable (IV), we demonstrate that air pollution significantly hurts firm innovation performance: a 1% increase in air pollution (PM2.5) in the past year, from its mean value, amounts to a 1.5% decrease in the number of invention patents compared to the average between 1999 and 2013. We also provide the casual estimate using regression discontinuity design (RDD) by exploiting the exogenous variation in pollution level caused by China’s Huai River policy: the decrease in firms’ invention patents is approximately 2.2% in the regions north of the Huai River Line. The underlying mechanism analyses reveal that poor air quality has detrimental effects on labor productivity, firms’ human capital accumulation, and financing ability. These findings highlight the substantial costs associated with air pollution, which are greater than previously thought, as it hinders innovation, a crucial driver of long-term economic growth.

A Review of Research on Structural Holes and Innovation Performance

With the development of globalization, firms are facing increasingly fierce competition. In such an environment, innovation has become an inevitable choice for companies to survive and develop, and is a hot topic studied by management scholars. Especially in high-tech industries, innovation has a particularly prominent impact on a company’s survival and prosperity. Technical innovation involves high levels of uncertainty and requires significant amounts of time and resources, so firms typically engage in strategic alliances to conduct joint research and exchange knowledge and information. In this process, innovation networks become an important source of innovation for companies, and the transfer, sharing, integration, and absorption of technical knowledge are all accomplished through innovation networks. As an important structure in innovation networks, structural holes can provide novel and heterogeneous information and knowledge. firms occupying positions in structural holes have information and control advantages, and by integrating different information, firms are more likely to create new knowledge. Therefore, the study of structural holes has become a focus of management research, and can play a significant role in promoting the development of social network and social capital theory. This paper systematically studies structural holes and innovation performance by reviewing existing research and defining the basic concepts and classifications of structural holes. In addition, relevant studies on the relationship between structural holes and innovation performance are summarized from the organizational, team, and individual levels, with a focus on the relationship between structural holes and firm innovation performance. Finally, based on the shortcomings of current research on structural holes and innovation performance, future research prospects are proposed to further promote the development of research in this area.

Impact of cross-border mergers and acquisitions on firm innovation performance: from the perspective of dynamic capability theory

ABSTRACT This study constructs an empirical framework from the perspective of dynamic capability theory, and uses a combined dataset of Chinese listed companies from 2008 to 2020 to test the causal impact of cross-border mergers and acquisitions (M&As) on firm innovation performance by using propensity score matching, time-varying difference-in-differences model and instrumental variable method. The findings are as follows: (1) Cross-border M&A has a significant promoting effect on the innovation performance of acquiring firms. (2) Heterogeneity analysis shows that traditionally less innovative state-owned, non-manufacturing, and non-high-tech enterprises experience notable enhancements in their performance through cross-border M&As. The post-M&A innovation performance of enterprises in central China is strong, followed by enterprises in eastern China, while enterprises in western China show limited improvement. (3) Among the internal factors of firm dynamic capability, knowledge breadth and managerial capability positively moderate the impact of cross-border M&As on innovation performance, while knowledge depth and financing constraints play a negative moderating role. (4) Among the external factors of firm dynamic capability, local knowledge externalities and regional trade resilience play a positive moderating role. This study highlights the importance of firm dynamic capabilities in the cross-border M&As process and provides new insights into innovation strategies in emerging economies.

MAXIMIZING INNOVATION: ANALYZING THE INFLUENCE OF TECHNOLOGY PARTNERSHIP PORTFOLIOS ON FIRM PERFORMANCE

Innovation is a cornerstone of competitive advantage in today's dynamic business environment, and firms often collaborate with external partners to enhance their innovation capabilities. This study examines the influence of technology partnership portfolios on firm innovation performance. Drawing on data from a diverse sample of firms across industries, we analyze the composition and dynamics of technology partnership portfolios and their impact on various dimensions of innovation performance, including product innovation, process innovation, and overall firm competitiveness. Our findings shed light on the strategic importance of managing technology partnerships effectively to maximize innovation outcomes and sustain long-term competitive advantage.

The strength of a weak tie in the innovative performance of firms: A case of Korean high‐tech manufacturing small and medium‐sized enterprises

AbstractThis study explores whether the ‘strength of weak ties’ theory, derived from social network theory, can equally apply to business activities. To address this question, we conduct an empirical analysis, utilising 3‐year panel data encompassing 3881 samples of Korean small and medium‐sized enterprises (SMEs) in the high‐tech manufacturing sector. The primary objective is to examine the effects of inter‐corporate tie strength on innovative performance. The results reveal an interesting pattern in high‐tech manufacturing corporations, where the strength of a tie demonstrates an inverted U‐shaped relationship with an SME's patent achievement. Moreover, we observe that the effect of tie strength on an SME's patent achievement is positively moderated by its research and development (R&D) intensity. Furthermore, when an SME maintains weak ties within its relationship with a large corporation, its innovative performance experiences a more positive impact than in cases where no relationship with a large corporation exists, or strong ties are maintained. These findings suggest that for SMEs, maintaining an appropriate level of embeddedness with large corporations is an effective strategy for generating sustained innovative performance within an environment characterised by active technological innovation and intense competition. The principal contribution of this paper lies in the empirical validation of the theory of weak ties concerning a firm's innovative performance.

Financial information, spillovers, and innovation performance

We hypothesize that high-quality financial information can, through its spillovers to peer firms’ strategic decision-making, have an adverse effect on the disclosing firm’s innovation performance. Using the degree of disaggregation in financial reports and patent-based measures to proxy for financial information quality and significance of innovative outputs, respectively, we find that the patented inventions of firms with more disaggregated financial reports are less innovative. We also document that the negative association is more pronounced for firms with more intense product market threats, a situation in which the spillover of more detailed information is costlier. We further validate our argument by documenting that disclosures of more and finer information actually help peers increase innovation activities and investments, consistent with the peers’ effective strategic responses to the disclosing firm’s innovation. Overall, the results from the cross-sectional analysis and validation tests confirm the channel through which more disaggregated financial information can lead to a decline in firm innovation performance. This study contributes to the literatures on information spillovers, economic consequences of financial reporting, proprietary costs of disclosures, and innovation.

A Study on the Impact of Digital Transformation on the Corporate Innovation Performance

Over the past few years, the digital economy has become the mainstream of the business world, and the digital transformation path in the manufacturing industry has become the prevailing theme. Many results of studies also indicate that manufacturing innovative models and competitive advantages are dimensions that should not be overlooked during the digital era nowadays. Digital transformation fundamentally changes the way companies operate and interact with customers, with digitalization driving product, procedure, and technology innovation across factories. Digital transformation is no more an alternative to traditional manufacturing, but a necessity to remain relevant and competitive within the marketplace. Building on these backgrounds, this study is a qualitative literature review, implying that the data will be analyzed and explained utilizing information and documentation acquired from a variety of existing literature. To recognize the influences of digital transformation on manufacturing business performance, this research will review and summarise the relevant literature on digital transformation, competitive advantage, and innovation performance of firms, describing interactions among the three and exposing shortcomings of past literature. Therefore, this study will provide companies with valuable insights that help them stay relevant and competitive in this digital age of digitalization.

The secret of speech: Executive extraversion and firm innovation performance based on telephone communication

Innovatively departing from conventional methodologies such as questionnaires, interviews, or text analysis, this study introduces a single-gender speech personality measurement approach to identify extraversion traits in executives from a speech perspective. Central to the research is how executive extraversion influences firm innovation performance. The research samples are derived from the audio recordings of performance conference communication calls held by Chinese listed companies on the Wind 3C conference platform. Through hierarchical regression analysis, empirical results demonstrate an inverted U-shaped relationship between executive extraversion and firm innovation performance (measured by R&D personnel input, R&D expenditure, and patent applications). The study also reveals that situational factors, including the proportion of shareholding by pressure-resistant institutional investors, incentive compensation, and equity concentration, significantly moderate the inverted U-shaped relationship. This research provides compelling evidence of the importance of executive extraversion in firm innovation performance and offers a new perspective on the mechanisms through which executive extraversion influences firm innovation performance. The single-gender speech personality recognition method allows researchers to effectively utilize executives’ speech information in the big data era. The research viewpoint and findings contribute beneficially to the Upper Echelons Theory and offer actionable insights for leveraging executive traits to bolster innovation.

Exploring the Relationship between Open Innovation and Innovation Performance in Big Data Environment: The Moderating Effects of Innovation Expropriability

In the era of big data, the industry environment is complex and volatile, and enterprises need to innovate their business models by creating innovative value networks and reconstructing transaction systems to avoid being eroded in the process of global economic transformation. The traditional closed innovation processes are no longer deemed suitable for advancing firm innovation. Instead, open innovation has become a pivotal strategic choice in the quest to foster innovative developments. This study builds upon the paradox of open innovation (OI) in the age of big data, and introduces the innovation expropriability theory. Utilizing survey data from high-tech industrial park firms in the Yangtze River Delta region of China, it empirically examines the influence of open innovation on firm innovation performance (FIP). Furthermore, it explores the independent and joint moderating effects of rival absorptive capacity (RAC) and appropriability regimes (ARs). The findings reveal that OI significantly improves FIP. The effect of OI on FIP is positively moderated by ARs, while the independent moderating effect of RAC is not significant. However, a joint moderating effect is observed between RAC and ARs. Further investigation reveals that the moderating role of RAC depends on the presence of ARs, indicating a matching relationship between RAC and ARs. This research holds significant implications for firms in implementing open innovation strategies and ensuring effective intellectual property protection to enhance innovation performance in the era of big data.

The effect of industrial solution services (ISS) on innovation performance: The moderating role of sustainable development goals (SDGs)

This article analyzes the innovation performance antecedents of manufacturing firms that implement servitization-based industrial offerings in OECD countries. These servitized offerings can be conducted either digitally (remotely) and/or physically (on-site), and provide a comprehensive solution for industrial settings. Specifically, this article proposes that firms adopting Industrial Solution Services (ISS) in their different forms, namely Digital ISS, Operational ISS and Green ISS, exhibit higher innovation performance. In order to test this assumption, a linear regression model is used to investigate the effect of the different firms’ ISS strategies - Digital, Operational and Green - which are moderated by the Sustainable Development Goal (SDG) Index in the country where the manufacturers operate. The results provide evidence that adopting Digital ISS can lead to higher innovation performance when SDGs are not taken into account. Conversely, Operational and Green ISS strategies are conducive to superior innovation performance in firms operating in countries with higher degrees of SDG accomplishment. These findings have significant theoretical and managerial implications regarding the advantages of ISS strategies for promoting innovation outcomes, particularly in alignment with nationwide SDG objectives.

Unraveling the nexus of academic founders and innovation performance: The suppression effect of ownership structure within Sci‐Tech enterprises

AbstractThis paper aims to examine the influence of academic founders on firm innovation performance from the perspective of equity distribution in entrepreneurial teams. Based on the prospectus data of 466 science and technology enterprises that applied for registration on the STAR Market from 2016 to 2020, we use textual analysis to classify founder identities into academic founder, technical founder, and business founder. Our results show that the performance of technical innovation in Sci‐Tech enterprises is optimal for academic founder‐led firms, followed by technical founders, and finally business founders. Ownership structure suppresses the positive direct relationship between the academic founder and innovation performance.

Technological diversification and innovation performance: the moderating effects of organizational slack and ownership in Chinese listed firms

PurposeThe purpose of this study is to examine the impact of technological diversification (TD) on enterprise innovation performance, meanwhile focusing on the moderating effects of various organizational slack (i.e. absorbed and unabsorbed slack) and ownership types (i.e. state-owned or privately-owned) in the context of Chinese listed firms.Design/methodology/approachThis study formulates five hypotheses based on organization and agency theories. Our empirical analysis employs a fixed-effect regression estimator with a unique panel dataset of Chinese-listed manufacturing firms and 13,566 firm-year observations over 9 years from 2012 to 2020.FindingsOur findings show that an inverted U-shaped relationship exists between TD and innovation performance, varying with different types of organizational slack and ownership. In state-owned enterprises (SOEs), unabsorbed slack negatively moderates the inverted U-shaped relationship; however, in privately-owned enterprises (POEs), this relationship is positively moderated. Although absorbed slack has negative moderating effects in both SOEs and POEs, its impact is only significant for POEs.Practical implicationsOur results imply that organizational slack has a contrasting impact on the relationship between TD and innovation performance when the type of ownership varies. Therefore, the managers that intend to achieve optimal innovation performance through TD should understand how organizational slack can be leveraged.Originality/valueThis study contributes to the existing literature by applying the relationship between TD and innovative performance to the transition economy, as well as examining the double-edged sword impact of state ownership on firm innovation performance.

The synergistic effects of green innovation strategies on sustainable innovative performance with the mediation of green innovative competitive advantage

AbstractThis study offers valuable insights into the factors underpinning the cultivation of green innovation competitive advantage (GICA) and the stimulation of sustainable innovative firm performance (SIFP). While previous research has predominantly fixated on assessing the financial ramifications of green innovation endeavors, the current discourse of governmental and non‐governmental authorities, has witnessed a surge in discussions surrounding green innovation strategies (GIS) to address climate change. We contend that constructing GICA through innovative products rather than traditional ones poses a formidable challenge. To address this lacuna, our research dissects GIS into three dimensions (i.e., green product, process, and service innovation) to enhance GICA and SIFP. To probe these intricate relationships, we meticulously examined data from 545 Chinese firms, seeking to unravel the complex connections between GIS, GICA, SIFP and moderation of CSR. We constructed a comprehensive model grounded in established theories, resource‐based theory (RBT), and the theory of competitive advantage. Structural equation modeling via SPSS and AMOS was employed to analyze the data rigorously. Our findings unequivocally underscore the pivotal role of GIS in nurturing GICA. As a moderating factor, firms that integrate GIS into their CSR initiatives are strategically positioned to secure a substantial competitive edge. Moreover, the primary impetus for businesses to adopt GIS lies in their pursuit of gaining a competitive edge while concurrently sustaining innovative performance over the long haul. These findings underscore the allure of GIS as an avenue to attain SIFP.

An evolutionary game-theoretic approach for analysis of green innovation and environmental performance of tech firms under stakeholders’ policies based on system dynamics

An evolutionary game-theoretic approach for analysis of green innovation and environmental performance of tech firms under stakeholders’ policies based on system dynamics

Endogenous Innovation and Export Performance in Firms

We investigated whether export activity is correlated with innovation in a large sample of European companies. We explicitly considered five types of innovation: a) process innovation; b) product innovation; c) process and product innovation; d) product innovation new to the firm; and e) product innovation new to the market. We considered innovation as endogenous and determined by R&D through a process characterized by the regional technological environment. Our analysis enabled us to propose an integrated model incorporating R&D, innovation, and export in a scheme of simultaneous decisions which considers their mutual correlations.Econometric results showed that product and process innovation positively affect the export intensity of manufacturing firms in Europe. The results also indicated complementarity effects between process and product innovation. The average effect on export intensity from engaging in process innovation is larger than that found for product innovation, except in cases where the product is new to the market. When both types of innovation have been carried out, a larger effect results than that observed for product or process innovation alone. Furthermore, the average marginal effect on export intensity from innovation of any kind is highly positive and significant.

Geographical and cognitive proximity effects on innovation performance: Which types of proximity for which types of innovation?

AbstractThe purpose of the paper is to explore the multi‐dimensional and intersecting nature of proximity to drive innovation performance. Applying a multi‐dimensional proximity framework, the study provides a deeper understanding of the importance of substitution and overlap mechanisms in the relation between geographical and cognitive proximity dimensions in innovation performance. The paper further analyses the moderation effect of organisational innovation in this relationship. Multivariate analysis proves the interaction effects between geographical and cognitive proximity, where cognitive proximity both substitutes and complements geographical proximity. However, external knowledge search for innovation along proximity dimensions differs depending on the type of innovation. Our findings corroborate the proximity paradox caused by lock‐in effects with the optimal level of proximity influenced by the interdependencies between proximity dimensions. This inverse U‐shaped relationship is flatter for firms that have adopted organisational innovation. External knowledge linkages should be tailored to the favourable characteristic of proximity to enhance firm innovation performance.

Innovation barriers as triggers of firms’ eco-innovations: the mediating role of public and market knowledge sourcing

ABSTRACT This study expands the existing knowledge about the impact of innovation barriers on firms and tests whether such barriers stimulate their environmental behaviours. For these purposes, we focus on the specific region of Central Europe, which was considered lagging in previous years. It was caused, on the one hand, by the lower innovation performance of firms and states in comparison with their western neighbours, but also due to a lower environmental perception on the part of the whole society. By using data on 14,808 firms from three Central European countries (Czech Republic, Slovakia, and Hungary) and the Partial Least Square Structural Equation Modelling (PLS-SEM) method, this study contributes to the ongoing debate regarding the eco-innovation performance of the Central European territory, where such analyses are still rare. Our results show that firms facing innovation barriers tend to create eco-innovations. We confirm our expectation that Central European firms depend on external sources of knowledge acquired on the market. Moreover, we show that even public knowledge resources obtained from universities and research institutions support the creation of eco-innovations. These results allow us to propose several implications for practitioners and policymakers.