Innovation Performance Of Firms Research Articles

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.

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

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

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.

Strategic innovation system and firm innovation performance: empirical analysis based on dynamic capabilities and knowledge base view

ABSTRACT The accelerating pace of consumer and market demand poses a substantial challenge for firms aiming to develop knowledge-intensive strategies to address demand gaps. These strategies are designed to establish and maintain competitive advantage by innovatively leveraging their competencies and capabilities. This study employs the dynamic capabilities and knowledge capabilities views to investigate the impact of strategic innovation systems (SIS) on firm innovation performance (FIP). To achieve this objective, the study analyzes the integration of knowledge into the innovation process to assess the influence of strategic systems on innovation performance. The research hypotheses were evaluated using a quantitative research design involving 111 SMEs in China. The findings reveal a negative impact of both SIS and distinct competencies (DC) on firm innovation performance. Furthermore, SIS demonstrated a positive influence on product innovation. Additionally, the mediation analysis showed an indirect effect of SIS on firm innovation performance through product innovation. Moreover, DC and externalities displayed mediating effects. These findings contribute to the literature on strategic systems and innovation performance by providing practical recommendations for managers seeking to enhance innovation performance.

How does technology catch-up experience affect innovation performance of latecomer firms?: Evidence from the Korea pharmaceutical industry

ABSTRACT Drawing on the technological learning model of latecomer firms (LCFs) and the literature on catch-up, this paper examines how accumulated internal R&D investment, foreign technology in-licensing experience, and creative imitation experience independently and interactively affect innovation by LCFs. We showed that LCFs’ accumulated internal R&D investment and creative imitation experience have a positive impact on their innovation, respectively. However, LCFs’ creative imitation experience weakens the positive relationship between accumulated internal R&D investment and innovation, implying the paradoxical effect of LCFs’ creative imitation strategy on their innovation. Using the unique panel dataset on drugs developed by Korean pharmaceutical firms between 1999 and 2019, we find evidence that generally supports our hypotheses.

Digital transformation, supplier concentration, and CEO financial experience: Unveiling the dynamics of innovation performance in Chinese firms

In the dynamic landscape of rapid change and the pervasive influence of the digital revolution, the discussion surrounding the impact of digital transformation on the innovation performance of firms has become a focal point of intense debate. This paper aims to contribute to the evolution and advancement of traditional organizations toward high-quality development by addressing this issue through the integration of technology into the framework, leveraging the resource-based theory. The study seeks to explore the influence of digital transformation on innovation performance, specifically examining the role of supplier concentration in this relationship. Additionally, we investigate the moderating effect of CEO financial experience on the association between digital transformation and innovation performance. Utilizing multiple regression methodologies and analyzing data from Chinese listed firms spanning the period from 2007 to 2022, our empirical findings reveal a direct positive relationship between digital transformation and innovation performance. Furthermore, the study uncovers an indirect pathway through which digital transformation enhances innovation performance by mitigating supplier concentration. Notably, the positive impact of digital transformation is amplified by a CEO's background in finance. Finally, the effect of digital transformation on innovation performance is particularly pronounced in sectors such as state-owned entities, advanced technology companies, large-scale businesses, and those in their maturity phase. These insights provide valuable contributions to addressing concerns related to digital transformation, particularly in emerging economies like China. The findings offer essential lessons for navigating the transition to Industry 4.0 and fostering sustainable innovative practices. By emphasizing the role of supplier concentration and the moderating influence of CEO financial experience, this research contributes to a nuanced understanding of how digital transformation can positively impact innovation performance across diverse sectors.

The impact of green finance policy on green innovation performance: Evidence from Chinese heavily polluting enterprises

Green innovation (GI) is increasingly recognised as an effective strategy for tackling climate change, mitigating environmental issues, and promoting sustainable development. Using panel data of the Chinese listed firms from 2007 to 2019, this study adopts the difference-in-differences approach to assess the impact of the green finance policy (GFP) initiated by the Chinese government in 2012 on the green innovation performance of firms. The findings reveal that the GFP significantly boosts the green innovation performance of heavily polluting enterprises (HPEs). Notably, this effect is more pronounced in state-owned enterprises and firms with high dependence on external finance. Compared with penalty-based regulations, incentive-based and voluntary environmental regulations demonstrate more significant moderating effects on the relationship between the GFP and green innovation performance for HPEs. We also identify improved efficiency in the usage of green investments as a potential mechanism through which the GFP enhances the green innovation performance of HPEs. Further comparative analysis shows that green enterprises can achieve simultaneous improvement in both the quality and quantity of green innovation, whereas HPEs predominantly exhibit enhancements in innovation quantity. To maximise the GFP's positive effects, it is recommended to facilitate more targeted bank lending towards HPEs to support their structural transformation. Additionally, the coordinated deployment of diverse environmental policy instruments is advised to exploit their synergistic effects.

Are anti-dumping investigations against China ineffective in curbing innovation? Evidence from firms’ patent filings

ABSTRACT This paper empirically investigates the effect of anti-dumping investigations on export firm innovation performance using Chinese firm-level patent filings data and anti-dumping case from 2000 to 2013. By employing the staggered difference-in-differences strategy, our empirical evidence shows that anti-dumping investigations imposed on firms lead to an improvement in innovation rather than suppression. Further examination identifies that the trade diversion effect is a crucial mechanism through which anti-dumping investigations affect firm innovation. We find that firms are experiencing a significant increase in exports of investigated products to non-involved countries, while also expanding their export destinations and diversifying the range of exported products. Heterogeneity analysis indicates that anti-dumping charges significantly promote innovation in high-productivity firms and multi-product exporting enterprises, while financial constraints are identified as a crucial factor restricting innovation.

Impact of China’s free trade zones on the innovation performance of firms: evidence from a quasi-natural experiment

AbstractTo analyse the impact of the free trade zone (FTZ) policy on firms’ innovation performance, this study conducted a quasi-natural experiment involving FTZ promotion, matched information on the establishment of China’s FTZs with patent data for listed companies from 2012 to 2020, and applied identification, estimation and inference processes to identify the effects of FTZs using a time-varying difference-in-differences model. The validity of the findings was confirmed using the parallel trend test, the placebo test and a high-dimensional fixed effects estimation, and the mediating roles of financing constraints and industrial agglomeration on firms’ innovation performance were analysed. To address the endogeneity issue and eliminate regression bias resulting from non-random selection, an instrumental variable regression and propensity score matching were employed. In addition, the policy effects were further explored by analysing the moderating effects of contextual factors and firm heterogeneity. The results showed that the FTZ policy has considerably enhanced the innovation performance of enterprises in the pilot areas, increasing the innovation level of enterprises by alleviating financing constraints and enhancing industrial agglomeration. The level of economic development and the degree of government involvement have also influenced the effect of the FTZ policy on enterprises’ innovation performance. Firm heterogeneity, including factors such as size, ownership, industry affiliation and location, influences the policy effects. In an effort to accelerate the implementation of the policy, an in-depth analysis of the underlying mechanism of the FTZ policy and its effects on enterprise innovation performance was provided, thereby providing a realistic basis for the expansion of the FTZ policy.

Double-Edged Effects of Innovation Culture on Firm Innovation Performance: Evidence From Management Disclosures and Employee Reviews

Double-Edged Effects of Innovation Culture on Firm Innovation Performance: Evidence From Management Disclosures and Employee Reviews