Innovation Performance Of Firms Research Articles

Effects of innovation modes and network partners on innovation performance of young firms

PurposeWhile the importance of “science and technology-based innovation” (STI) and “doing, using and interacting-based innovation” (DUI) innovation modes in firm innovation performance has been well-established, little is known about how they affect the innovation performance of young firms. The author examines the most effective innovation mode and boundary conditions for the innovation performance of developing companies.Design/methodology/approachThe author tests the two modes of innovation using data from 159 young firms in China.FindingsThe author’s analysis indicates that a higher level of DUI innovation mode is more relevant to the innovation performance of newly established enterprises. Moreover, the effectiveness of the innovation mode is bound by the networks in which the company operates and interacts. The effectiveness of STI and DUI innovation modes is enhanced when there are high levels of innovation and business network interconnectedness from the technology network partner.Research limitations/implicationsThese findings have important implications on innovation research as they highlight the joint effects of innovation modes and quality of network ties on young firms seeking to improve their innovation performance.Practical implicationsSTI and DUI innovation modes represent different forms of innovation activities that may affect the knowledge and resources of young firms used to improve innovation performance. Knowing this can help young firms to choose effective innovation mode.Originality/valueThis study makes three contributions. The first is to pay specific attention to the neglected topic of the influence of STI and DUI innovation modes on innovation performance of young firms. Understanding that the two innovation modes offer different methods of gaining knowledge and resources can help young firms choose an effective innovation mode for their business; Second, the author examines the boundary conditions of the effectiveness of innovation modes. Specially, the author examines the moderating role of external networks, which can help clarify conflicting results in this regard. 10;The third contribution is to investigate the importance of network relationships for innovation activities moving beyond the extent of network relationships to instead consider the ability of those relationships to expose a firm to innovative techniques and methods.

Impact of knowledge search practices on the originality of inventions: A study in the oil & gas industry through dynamic patent analysis

The paper suggests a new taxonomy of knowledge search modes to describe the creative process of new invention design, in particular how firms combine knowledge components from their own knowledge base—taking into account both the components and the structures of knowledge bases—with those from newly acquired or newly internally developed. Using network theory techniques, we defined four knowledge search modes: (1) refinement, (2) clustering, (3) absorption and (4) recomposition. We conducted an exploratory study on the oil & gas industry, reviewing 50,776 utility patents filed by 16 major firms between 1989 and 2016. The results showed, first, that firms relied to varying extents on different knowledge search modes in their invention design processes. Second, reviewing the technological originality of the designed inventions showed that simply absorbing new knowledge components, without major changes in knowledge base structure, was associated with low technological originality, but constituted one of the main knowledge search modes used by the analyzed firms. In contrast, major changes in knowledge base structure favored technological originality, with or without new knowledge components, but were nevertheless the least used mode. Understanding organizational learning practices associated with the phenomena described here can foster innovation performance in firms.

Innovation Strategies and Firm Performance: A Study of Femine Mill Nigeria, Calabar

This paper investigates the role of innovation strategy on performance of Femine Flour Mill Calabar. The study employed survey research design. The target respondent is the total employees of Femine flour mill Calabar which stand at 126 staff. Self administered questionnaire was used as the instrument for data collection. The instrument was subjected to content validity and test retest statistical analysis was used to ascertain the reliability of the instrument at 0.82. The study adopted simple random sampling technique and Taro Yamane’s statistical formula was used to determine the sample size at 96. Pearson Correlation was employed to establish the relationship between the two variables. Out of 96 distributed questionnaires 85 was properly filled and was used for the analysis. , the relationship between level of process innovation strategies, product innovation strategies and firm performance is positive at 0.419 and 0.419 respectively, indicating that an improvement in level of process innovation strategies and product innovation strategies will lead to increase in the firm performance on the average. The study concluded that marketability of our different segmented products and In-depth understanding of customer needs since is a critical source of competitive advantage. The study therefore, recommended that the management should conduct a comprehensive product analysis and also develop a product technology track in order to actively explore the potential market opportunities.

Can TMT vertical pay disparity promote firm innovation performance? The moderating role of CEO power and board characteristics

PurposeBased on the tournament theory and the principal agent theory, this study aims to empirically investigate how top management team (TMT) vertical pay disparity (the pay disparity between the CEO and non-CEO executives) influences firm innovation performance.Design/methodology/approachThis study empirically tested the hypotheses based on a sample of listed high-tech companies in China during the period between 2007 and 2018.FindingsTMT vertical pay disparity promotes innovation performance; CEO power undermines the positive effect of TMT vertical pay disparity on innovation performance; the negative moderating effect of CEO power is mitigated by board age and gender and educational levels, whereas the proportion of female directors has no such effect at any significant level.Originality/valueThis study uniquely contributes to the theoretical and empirical development of tournament theory and the principal agent theory.

Two Sides of the Same Coin. University-Industry Collaboration and Open Innovation as Enhancers of Firm Performance

Open innovation is proved to be determinant in the rationalization of sustainable innovation ecosystems. Firms, universities, governments, user communities and the overall environment are called to contribute to this dynamic process. This study aims to contribute to a better understanding of the impact of open innovation on firms’ performance and to empirically assess whether university-industry collaborations are complementary or substitutes for this activity. Primary data were collected from a survey encompassing 908 firms, and then combined with performance indicators from SABI (Spanish and Portuguese business information). Econometric estimations were run to evaluate the role of open innovation and university-industry collaboration in the firm innovative propensity and performance. Results highlight the importance of diversity in collaborations with the academia and inbound open innovation strategy as enhancers of firm performance. The two activities reinforce each other. By testing the impact of open innovation practices on company performance, the need for heterogeneity in terms of contact type and university is also demonstrated. Findings cast light on the need to reformulate existing policy packages, reinforcing the ties with academia as well as the promotion of open innovation strategies. The connection to the innovation ecosystem needs to be further encouraged as well as the promotion of persistent connections with the knowledge sources in an open and multilateral framework.

Firm innovation and access to finance: firm-level evidence from India

PurposeBased on 9,281 firm-level survey data on micro, small and medium enterprises (MSMEs) in India, this study aims to investigate how access to different finance sources and collateral requirement facilitates the firm’s innovation activity across industries.Design/methodology/approachThis paper used ordered logit regression models using Stata software for explanatory variables to measure the impact of explanatory variables on firm innovation performance. Firms’ innovation performance is measured through the aggregate innovation index obtained by adding up the no. of “new-to-firm” activities.FindingsThe empirical results reveal that external sources of funding impact innovation activity than other financing sources. Also, the requirement of collateral for financing impacts innovation performance significantly. This paper finds that firms funded by state-owned banks or government agency are more actively engaged in innovation activities. The firm’s size, ownership structure and location of the firm also show the varying innovation performance. This paper found variation in innovation performance across industries as well.Practical implicationsFirst, the present study underlines the significance of funding sources. Second, minimizing the need for collateral to obtain external finance boosts small firms’ innovation activity and will also trigger overall economic growth. Finally, while making policies for ownership transformation of state-owned institutions, policymakers should discuss these policies’ impact on innovative firms.Originality/valueWhat facilitates innovation performance in an emerging market is missing in the literature for MSMEs, largely due to lack of data. It is reasonable not to generalize innovation knowledge in large firms to small firms because of the constraints, particularly MSMEs face.

Scrutinizing innovation performance of family firms in efficiency-driven environment

Although family firms constitute the bulk of economic activity in many world economies, their behavior is still far from understood. This is particularly true when it comes to innovation activities of family firms in efficiency-driven environments with limited indigenous innovation potential, low quality of innovation systems and weak innovation policies. The sample consisting of 293 family firms and we reveal that in such setting internal competencies, collaboration, and public support facilitate innovativeness and diminish the negative effects of firm maturity and innovation barriers among family firms. Tacit R&D knowledge and internal absorptive capacity outweigh the negative effects on innovation of family firms.

Search strategy, innovation and financial performance of firms in process industries

The current literature has investigated the direct link between a firm's external search strategy and performance. However there are limited studies about the role of industry context, innovation type and knowledge sources on this link. Our research aims to examine the mediating role of product and process innovation in the external search strategy-financial performance link of firms within process industries, and understand the effect of public and private knowledge sources on their financial performance. Studying 102 Singapore firms in process industries and 158 in other manufacturing industries, our firm-level results supported all hypotheses. First, we empirically establish positive search depth-financial performance relationship in process firms but not in other manufacturing firms. Second, we found the relationship is mediated by process and product innovation processes. Third, we demonstrate that public (private) institutional knowledge source has a significant positive (negative) relation with the financial performance of process firms, while there is no significant impact of knowledge from private market and other sources on financial performance. With these findings, we have linked the erstwhile disparate discussions on innovation between innovation management and production management, as well as demonstrated process firms can adopt deep search strategy to improve financial performance through product and process innovation.

The more the merrier? Chinese government R&D subsidies, dependence, and firm innovation performance

AbstractWith the understanding that innovation and high technology industries are essential for sustained economic development, government R&D subsidies have become ubiquitous. However, existing studies on the impact of R&D subsidies have found mixed or conflicting results. Insights from resource dependence theory (RDT) and the Attention‐Based View (ABV) help account for these discrepancies. This study of Chinese high technology firms using the Innovation‐Oriented Firms Database from the Ministry of Science and Technology, finds an inverted U‐shaped relationship between R&D subsidies and innovation performance. The article shows that high government resource dependency, expressed through high percentage of R&D spending coming from government subsidies, diverts attention resources in recipient firms and results in declining innovation performance. The article then tests the impacts of different managerial responses on the dependency‐innovation relationship and find that technology alliances and employee feedback systems mitigate these negative effects. These findings have implications for government innovation policies and firm‐level responses to those policies: government subsidy policies have limits to their effectiveness and firms have strategic options for capitalizing on government resources without sacrificing innovativeness.

The Abolition of Immigration Restrictions and the Performance of Firms and Workers: Evidence from Switzerland

We study a reform that granted European cross-border workers free access to the Swiss labor market and had a stronger effect on regions close to the border. The greater availability of cross-border workers increased foreign employment substantially. Although many cross-border workers were highly educated, wages of highly educated natives increased. The reason is a simultaneous increase in labor demand: the reform increased the size, productivity, and innovation performance of skill-intensive incumbent firms and attracted new firms, creating opportunities for natives to pursue managerial jobs. These effects are mainly driven by firms that reported skill shortages before the reform. (JEL J15, J23, J24, J31, J61, K37)

How firm size moderates the knowledge and affects the innovation performance? Evidence from Brazilian manufacturing firms

Objective: Consists in explore the relationship between firm size and knowledge to capture the firm innovation performance in Brazilian manufacturing industries.Methodology: Using the production function approach and following the Resource-Based-View – RBV theory, we investigate how the firm internal RD and the degree of intangible assets are moderated by firm size.Originality: The literature in the past decades has tried different methods to find strategies that improve the innovation of a large number of firms in different countries and regions. Yet, there is a large number of firms from emerging economies looking forward to improve productivity and the firm innovation performance.Main results: The results indicated that investment in RD is relevant to the firm performance. Nonetheless, the relationship between RD and firm size showed negative results. In the case of the degree of intangible resources, the same was observed, but the interaction between firm size and intangible assets showed positive effects on the firm performance. Finally, other important characteristics were observed, such as firm age and technology intensity, which showed positive influence over the firm performance.Theoretical contributions: The study showed that the degree of intangible assets is relevant for the firm, as the theory predicts, and it has become valuable for emerging enterprises, once not all firms may conduct RD activities.Social contributions: The findings update the understanding about RD and other intangible assets and provide new information to managers, researchers, and policymakers to develop new policies to promote and finance these activities.

How does the business cycle affect firm innovation? Evidence from China’s listed companies

ABSTRACT This article investigates how the business cycle affects firm innovation performance by examining patent data for China’s listed companies from 2003 to 2017. The empirical results show that firms apply for more patents and receive more patent authorizations during economic recessions than during expansions. We uncover the mechanism underlying the countercyclical pattern of firm innovation performance by examining how the business cycle affects it through the moderating role of firm leverage while higher market concentration increases its sensitivity to the dynamics of the business cycle. We also find the more pronounced effect in state-owned firms and the positive effect of policy support on patent authorization performance, thus providing alternative explanations for the rise of firm innovation in China.

Knowledge management and firm innovative performance with the moderating role of transformational leadership

PurposeThis study aims to examine the effect of knowledge management on firm innovative performance and the moderating effect of transformational leadership in the relationship between knowledge management and firm innovative performance.Design/methodology/approachIn total, 200 managers of participating Malaysian public listed service companies responded to a self-report set of the survey questionnaire. Partial least squares-structural equation modelling technique is used to estimate the main effects of knowledge management, particularly its infrastructures and processes, on firm innovative performance and the moderating effects of transformational leadership on the relationship.FindingsKnowledge management infrastructures and knowledge management processes both have statistically significant and positive effects on firm innovative performance. In addition, transformational leadership significantly and negatively moderates the relationships.Practical implicationsThe findings of this study can be a reference for the Malaysian public listed service companies to understand how and why managing well knowledge management infrastructures and processes can improve firm innovative performance. Moreover, this study highlights the role of transformational leaders in the context of knowledge management.Originality/valueThis study brings about managerial viewpoints of the relationship between knowledge management and firm innovative performance, with the moderating role of transformational leadership.

Tax policy and innovation performance: Evidence from enactment of the alternative simplified credit

We examine how direct tax incentives affect firm innovation performance using a new U.S. R&D tax credit regime enacted in 2007, the Alternative Simplified Credit (ASC). A difference-in- differences analysis indicates that innovation performance is poorer for ASC users than for firms using the original R&D tax credit method following the ASC enactment. The results are stronger for firms with poorer governance and greater innovation diversity. ASC users suffer from poorer profitability and lower valuations. The findings remain robust to self-selection bias and various robustness checks. Our evidence favors a dark-side view of R&D tax credit effects under the ASC.

Moderation in all things: Industry-university-research alliance portfolio configuration and SMEs’ innovation performance in China

ABSTRACT Industry-university-research (IUR) alliance portfolio configurations are vital for small- and medium-sized enterprises (SMEs). Our study extends the knowledge-based view and transaction cost theory on SMEs’ IUR alliance portfolio configurations and their deployment in different institutional conditions. We analyze these IUR alliance portfolio configurations in a panel data of listed SMEs in China’s manufacturing industry. Our findings indicate that both breadth and depth dimensions of these IUR alliance portfolio configurations have an inverted U-shaped association with SMEs’ innovation performance. Moreover, developed institutional conditions, characterized by high degrees of regional marketization, strengthen the positive effect of both breadth and depth, thereby, intensifying the inverted U-shaped relationship. Consequently, our evidence contributes to the literature on IUR alliances and firm innovation performance, suggesting that medium levels of IUR alliance portfolio breadth and depth in SMEs result in higher firm innovation performance, thereby, offering several useful insights for both SME managers and policymakers in emerging economies.

Exploring redundancies in multichannel knowledge sourcing in high-technology industries

ObjetivoColaborações científicas representam links externos informais que, juntamente com alianças formais de P&D, constituem uma rede de fornecimento de conhecimento multicanal em indústrias baseadas na ciência. Embora essa fonte multicanal de conhecimento beneficie as empresas ao fornecer um acesso mais completo a fontes externas, ela também envolve redundâncias potenciais significativas que merecem consideração. Essas redundâncias resultam da sobreposição de conhecimentos específicos e requisitos de recursos chave semelhantes, incluindo orçamento e pessoal de pesquisa. Apesar de sua importância, a literatura não fornece uma descrição completa das possíveis causas e contingências dessas redundâncias. O presente estudo dá um passo nessa direção, primeiro verificando sua existência, seguido por um estudo das contingências-chave que determinam a extensão dessas redundâncias.Design/Metodologia/AbordagemEste é um artigo empírico que usa o contexto da indústria farmacêutica para testar a interação entre colaborações científicas e alianças de P&D como impulsionadores do desempenho inovador de uma empresa farmacêutica manifestada na produtividade de suas patentes.ResultadosA análise empírica revela que o efeito das colaborações científicas e alianças de P&D é de fato parcialmente substituto ou redundante, e que a referida redundância é maior para empresas com baixa capacidade de absorção, utilização desequilibrada dos dois tipos de links externos e seu tamanho.Originalidadeesta é uma das primeiras tentativas empíricas de explorar os efeitos substitutos de colaborações científicas e parcerias de P&D no nível da empresa. Incorporar contingências importantes, como capacidade de absorção, utilização equilibrada de relacionamentos e tamanho da empresa, aumenta ainda mais a novidade e originalidade de nossa pesquisa.

R&D activities and innovation performance of MNE subsidiaries: The moderating effects of government support and entry mode

In the past few decades, the extant literature has examined the impact of R&D internationalization on innovation performance at the individual team member, team or project, subsidiary, and organizational levels. Despite this progress, however, research on conditional and contextual variables that may underpin the relationships between R&D internationalization and firm innovation performance at the subsidiary level remains scarce, and this area deserves further investigation. Using a large, unique dataset containing 524 foreign firms (216 wholly-owned subsidiaries (WOSs) and 308 international joint ventures (IJVs) with R&D subsidiaries in China), we show that: (a) local government support positively moderates the effect of foreign firms’ local R&D investment on their local subsidiaries’ innovation performance in China; (b) this relationship is stronger for IJVs than for WOSs; and (c) local government support appears to have a stronger moderating effect for IJVs than for WOSs on this relationship. Our study contributes to the growing literature on foreign firms’ internationalization of R&D, emerging market innovations and organizational entry modes.

Family involvement, family member composition and firm innovation

Based on the data of Chinese listed family firms from 2008 to 2016, we investigate the impact of family involvement on firm innovation and the moderating effect of family member composition. The results show that increased family involvement significantly reduces R&D investment intensity and the number of patent applications. With the increased richness of the kinship of family members involved in management, the negative impact of family involvement on patent applications is weakened, but family member composition does not have a significant moderating effect on the relationship between family involvement and R&D investment intensity. Further analysis shows that the number of invention patent applications decreases as the degree of family involvement increases, but family involvement has no significant effect on utility model patent and design patent applications. Family member composition has a significant moderating effect on the relationship between family involvement and invention patent applications. The results have value as a reference for exploring how family involvement affects firm innovation and can also help the actual controller to take effective measures to optimize family member composition and improve the innovation performance of family firms.

R&D alliance partner attributes and innovation performance: a fuzzy set qualitative comparative analysis

PurposeDrawing upon the importance of research and development (R&D) alliances in driving firm innovation performance, extant research has analyzed individually the impact of R&D alliance partner attributes on firm innovation performance. Despite such analyzes, research has generally underestimated the configurations of partner attributes leading to firm innovation performance. This research gap is interesting to explore, as firms involved in R&D alliances usually face a combination of partner attributes. Moreover, gaining a better understanding of how R&D partner attributes tie into configurations is an issue that is attracting particular interest in coopetition research and alliance literature. This paper aims to obtain a better knowledge of this underrated, but important, aspect of alliances by exploring what configurations of R&D alliance partner attributes lead firms involved in R&D alliances to achieve high innovation performance. To tackle this question, first, this study reviews the extant literature on R&D alliances by relying on the knowledge-based view of alliances to identify the most impactful partner attributes on firms’ innovation performance. This paper then applies a fuzzy set qualitative comparative analysis (fsQCA) to explore the configurations of R&D alliance partner attributes that lead firms involved in R&D alliances to achieve high innovation performance.Design/methodology/approachThis study selects 27 R&D alliances formed worldwide in the telecom industry. This paper explores the multiple configurations of partner attributes of these alliances by conducting a fsQCA.FindingsThe findings of the fsQCA show that the two alternate configurations of partner attributes guided the firms involved in these alliances to achieve high innovation performance: a configuration with extensive partner technological relatedness and coopetition, but no experience; and a configuration with extensive partner experience and competition, but no technological relatedness.Research limitations/implicationsThe research highlights the importance of how partner attributes (i.e. partner technological relatedness, partner competitive overlap, partner experience and partner relative size) tie, with regard to the firms’ access to external knowledge and consequently to their willingness to achieve high innovation performance. Moreover, this paper reveals the beneficial effect of competition on the innovation performance of the firms involved in R&D alliances when some of the other knowledge-based partner attributes are considered. Despite these insights for alliance and coopetition literature, some limitations are to be noted. First, some of the partners’ attributes considered could be further disentangled into sub-partner attributes. Second, other indicators might be used to measure firms’ innovation performance. Third, as anticipated this study applies fsQCA to explore the combinatory effects of partner attributes in the specific context of R&D alliances in the telecom industry worldwide and in a specific time window. This condition may question the extensibility of the results to other industries and times.Practical implicationsThis study also bears two interesting implications for alliance managers. First, the paper suggests that R&D alliance managers need to be aware that potential alliance partners have multiple attributes leading to firm innovation performance. In this regard, partner competitive overlap is particularly important for gaining a better understanding of firm innovation performance. When looking for strategic partners, managers should try to ally with highly competitive enterprises so as to access their more innovative knowledge. Second, the results also highlight that this beneficial effect of coopetition in R&D alliances can be amplified in two ways. On the one hand, when the partners involved in the alliance have not yet developed experience in forming alliances. Partners without previous experience supply ideal stimuli to unlock more knowledge in the alliance because new approaches to access and develop knowledge in the alliance could be explored. On the other hand, this paper detects the situation when the allied partners are developing technologies and products in different areas. When partnering with firms coming from different technological areas, the knowledge diversity that can be leveraged in the alliances could drive alliance managers to generate synergies and economies of scope within the coopetitive alliance.Originality/valueExtant research has analyzed individually the impact of R&D alliance partner attributes on firm innovation performance but has concurrently underestimated the configurations of partner attributes leading to firm innovation performance. Therefore, this paper differs from previous studies, as it provides an understanding of the specific configurations of R&D alliance partner attributes leading firms involved in R&D alliances to achieve high innovation performance.

Research on the impact of innovation input on enterprise performance in manufacturing enterprises--- Moderating effect based on governance structure

Manufacturing industry is the lifeblood of national economy, and innovation input is the lifeline of manufacturing enterprises. This paper selects the financial data of China’s listed manufacturing companies from 2015 to 2019 to study the moderating effect of governance structure on the relationship between innovation input and firm performance. It is found that innovation investment has a negative influence on firm performance with lag. In terms of ownership structure, ownership concentration has a negative moderating effect on the relationship between innovation input and firm performance. The degree of equity balance has a positive moderating effect on the relationship between innovation input and firm performance. According to the conclusion of this study, it is expected to optimize the governance structure of China’s manufacturing enterprises and promote industrial development.