Firm Innovation Research Articles

Long-Term-Oriented Values, Governance Model Preferences, and Dual Innovation in Family Firms

A total of 217 questionnaires were used to empirically test the mechanism and effect of long-term orientation and governance mode preference on dual innovation in family firms. The data analysis shows that family firms' long-term orientation values have a positive effect on both contractual and relational governance modes, long-term orientation values have a significant positive effect on dual innovation, family firms' contractual and relational governance have an inverted U-shaped effect on dual innovation, and slack resources have a positive moderating effect on the relationship between family firms' long-term orientation values and exploratory innovation.

Does government transparency promote firm innovation? Evidence from China

ABSTRACT This study investigates the relationship between government transparency and firm innovation, exploring the mechanisms through which government transparency influences firm innovation using Chinese provincial-level and firm-level data from 2013 to 2020. The findings reveal a significant positive association between government transparency and both firm innovation input and output. Mechanism analysis suggests that government transparency enhances firm innovation by fostering improvements in the regional institutional environment. Furthermore, the study identifies heterogeneity in the effects, indicating that state-owned enterprises (SOEs) and high-tech firms derive greater benefits from government transparency. This research contributes to the existing literature by addressing the role of government transparency in promoting firm innovation and offers valuable insights for practical applications.

How and Why Top Executives Influence Innovation: A Review of Mechanisms and a Research Agenda

Scholars have shown increasing interest in the relationship between top executives and firm innovation. However, no systematic effort has been made to integrate or synthesize the theoretical mechanisms in this literature. Without such an integrative framework, this field remains fragmented, offering limited guidance for future research. In this study, we integrate and synthesize findings from over 100 articles on the effects of top executives on innovation. Our review identifies four major categories of theoretical mechanisms (Motivations, Cognitions, Leadership Behaviors, and Influences), eleven sub-categories of mechanisms, and three prominent causal chains in the literature. Our review also examines how these mechanisms align with those in the broader innovation literature, highlighting numerous opportunities for future research. These include deeper integration within and across four categories of mechanisms in strategic leadership literature, drawing insights from strategic leadership research to better inform future research on organizational motivations for innovation, examining top executives’ economic motivations for innovation, and elucidating how strategic leaders shape absorptive and economic capacities to innovate.

Digitalisation and sustainability: their role in corporate social responsibility through innovation

PurposeDespite the evident link between digitalisation and sustainability, many organisations have these two strategies operating on a parallel basis and not in a coordinated manner. Hence the objective of this work, which consists of proposing a model to analyse the connection existing between both strategies within the business environment, additionally relating them to innovation and Corporate Social Responsibility (CSR).Design/methodology/approachWith that aim, the results of a survey answered by 98 managers of Spanish enterprises are examined using the PLS software, especially suited for the study of structural equations like the one put forward in this paper.FindingsThe conclusions drawn suggest that the most innovative firms are indeed the ones that invest to a greater extent in digitalisation and sustainability. It was also possible for us to verify that digitalisation exerts a positive influence on sustainability and that both the latter and digitalisation directly relate to CSR strategies. However, innovation as such does not constitute a requirement for CSR; instead, these Social Responsibility actions will take place when innovations rely on digitalisation and sustainability strategies.Originality/valueUntil now, most studies have addressed digitalisation and sustainability independently, with contradictory theoretical approaches in the literature about these two topics and a paucity of empirical results about the link between digitalisation and sustainability. The present study clarifies the relationships between sustainability and digitalisation, also relating them to innovation and CSR in the business environment.

Digitization and Green Technology Innovation of Chinese Firms Under Government Subsidy Policies

In the context of the digital economy, digital technology is an important driving force to promote green development and achieve the “dual-carbon goal”. Taking 1746 Shanghai and Shenzhen A-share enterprises from 2015 to 2022 as research objects, we empirically examine the relationship between government subsidies, digital transformation, and corporate green technology innovation. The study shows that (1) there is an inverted “U”-shaped relationship between government subsidies and corporate green technological innovation, while digital transformation plays a mediating role, and there is a difference between the quality and quantity of digital transformation in promoting green technological innovation. (2) Through the analysis of the moderating effect, it is found that market concentration has an obvious inhibitory effect between enterprise digital transformation and green technology innovation. (3) The study, by classifying the nature of enterprises, shows that the promotion effect of digital transformation on green technology innovation is weaker under heavily polluted enterprises than under non-heavily polluted enterprises, but the promotion interval of the relationship between government subsidies and green technology innovation is larger. Therefore, enterprises should make full use of digital technology to inject new impetus into their innovation activities, and the government should fully consider the appropriate space for enterprises to receive subsidies, make reasonable use of the incentive effect of government subsidies, and smooth the information docking channels for government and enterprise subsidies.

Use of Renewable Energy to Enhance Firm Performance: A Systematic Review

This study employs a Systematic Literature Review (SLR) combined with bibliometric and Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) methodologies to investigate the factors influencing the use of renewable energy in enhancing firm performance. An analysis of 27 selected articles reveals three key factors: firm innovation, governance, and regulation. The study further emphasizes the benefits of renewable energy adoption across various business performance metrics, including firm profit, financial, logistics, and sustainable performance. The novelty of this paper lies in its comprehensive integration of bibliometrics analysis with PRISMA to bridge gaps in existing literature. It contributes to the field by offering insights into the complex relationship between renewable energy use and firm performance, underscoring the significance of continued investigation to resolve inconsistencies and deepen understanding.

Epistemic tensions in R&D alliances and the role of inter-organizational management controls

Abstract Access to heterogeneous knowledge resources is suggested in the literature as an important explanation of firm innovation and performance. The exchange of knowledge, however, can be a complex managerial challenge, especially between different epistemic communities. Our research focuses on the concept of epistemic communities to illuminate the complexity of tensions that arise in heterogeneous knowledge exchange in alliances, thus filling a gap in the literature. Using the Straussian grounded theory case study approach, our research investigates the emergence of horizontal, vertical, and inter-organizational epistemic tensions and explores management controls as instruments to guide the knowledge exchange in intermediary-driven research and development alliances. We find that the source of multiple epistemic tensions is rooted in the natural social behaviors of epistemic community members and further shows how these behaviors influence the effective use of inter-organizational management controls in facilitating heterogeneous knowledge exchange.

Does money buy innovation? The effect of the “Innovative City” pilot on firm innovation in China

This study investigates the “Innovative City” pilot in China and its impact on fostering firm innovation by alleviating financial constraints. Employing difference-in-differences-in-differences approach, we provide strong evidence that the policy significantly boosted firm innovation capabilities, measured by increased patenting. A key mechanism is the program's expansion of bank credit access for firms, particularly benefiting financially constrained firms. Furthermore, the positive impact is amplified in regions with more developed banking sectors and for firms with pre-existing bank relationships, highlighting the role of market frictions. These findings highlight the pivotal role of a competitive and transparent credit market.

Grabbing or helping hand? The impact of government subsidies on innovation and performance for firms in cultural and creative industries

Grabbing or helping hand? The impact of government subsidies on innovation and performance for firms in cultural and creative industries

Information Disclosure and Competitive Dynamics: Evidence from the Pharmaceutical Industry

This paper studies how competitive dynamics shape innovative firms’ voluntary disclosure of product quality information. Our empirical context is the pharmaceutical industry, where firms must decide whether to disclose private drug quality information acquired in clinical trials. Using a difference-in-difference strategy, we show that the approval of a competitor’s drug lowers the likelihood of a firm reporting its clinical trial results by 13%. We explore how these effects vary based on the project quality, competitor type, and firm experience. These findings suggest that strategic considerations play a role in firms’ disclosure decisions; in response to a competitor’s drug approval, firms may selectively withhold information to maintain and improve their competitive position. This paper was accepted by Joshua Gans, business strategy. Funding: This work was funded by the National Institute on Aging [Grant T32-AG000186] and the UCLA Society of Hellman Fellows Program. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2022.01161 .

Integration of Indian inventor networks in global value chains in pharmaceuticals industry

ABSTRACT The network approach of value chain analysis examines the role and centrality of various actors and their interrelationships with other actors, besides establishing the role of external linkages in this process. This paper tries to combine the effect of research networks on the geographic dispersion of innovative activity in the Indian pharmaceutical industry. We use activity-wise data from USPTO's patents to establish the level of integration of Indian innovative firms in the pharmaceutical global value chain. Using Tobit analysis, we examine the nature of the collaborative pattern of firms and establish whether this pattern of the inventor network level translates to integration into global networks in terms of geographic dispersion. We analyse the geographic dispersion of inventor networks as a function of the characteristics of the innovative actors that coordinate their inventive work. We show the level of integration of Indian innovative firms in the pharmaceuticals global value chain and assess the structure of these research networks. This helped contextualize firms' roles by contrasting them with other institutional types. The level of integration of Indian firms is low in terms of the geographic dispersal of innovation networks, while the private universities and public research centres are more geographically dispersed.

Innovation Eco-Embeddedness, Breakthrough Innovation, and Performance of Non-Core Firms: A Mediation Moderation Study

Innovation Eco-Embeddedness, Breakthrough Innovation, and Performance of Non-Core Firms: A Mediation Moderation Study

The impact of executive team competency-sharing degree on firm innovation performance

In China’s high-quality development context, the key role of executive teams in corporate innovation is increasingly prominent. However, effectively utilizing the synergistic effect of competencies within these teams to boost innovation performance remains a crucial research issue. A sample of 2,350 companies in Shanghai and Shenzhen A-shares from 2010 to 2022 was used to examine the impact of the executive team’s capability-sharing degree on firm innovation performance. The study indicates that the degree of managerial competence sharing, entrepreneurial competence sharing, and technological competence sharing within the executive team positively impacts firm innovation performance. These findings remain robust in the face of variations in dependent variable measures, lagged independent variables, and the propensity score matching method. Environmental dynamism is identified as playing a positive moderating role in the relationship between the influence of managerial, entrepreneurial, and technological capability-sharing degrees and firm innovation performance. Further analysis of heterogeneity reveals that the impact of the executive team’s capability-sharing degree on firms’ innovation performance varies based on the nature of property rights, firm size, and industry competitiveness. This study, grounded in top-level ladder theory, offers a framework for enhancing team capabilities and overcoming growth obstacles through executive team competence sharing.

Why high-speed rail causes heterogeneous spatial patterns in firm innovation: Perspectives from intensive and extensive margins.

This study examines the impact of high-speed rail (HSR) on corporate innovation in China, analyzing county-level patent applications. Utilizing difference-in-differences regression, we break down the overall impact of HSR connectivity on innovation into two categories: extensive margins, where a greater number of firms become innovative, and intensive margins, where individual firms increase their level of innovation. HSR access has increased patent applications, particularly in manufacturing and non-high-tech services, affecting both margins. However, in high-tech services, the impact is significant only on the extensive margin. Effects vary between urban areas and peripheral counties, with knowledge spillovers and brain drain as key predictors.

Adapting to Competition: Solar PV Innovation in Europe and the Impact of the ‘China Shock’

AbstractLow cost solar energy is key to enabling the transition away from fossil fuels. Despite this, the European Union followed the United States’ example in imposing anti-dumping tariffs on solar panel imports from China in 2013, arguing that Chinese panels were unfairly subsidised and harmed its domestic industry. This paper examines the effects of Chinese import competition on firm-level innovation in solar photovoltaic technology by European firms using a sample of 10,137 firms in 15 EU countries over the period 1999–2020. I show that firms which were exposed to higher import competition innovated more if they had a relatively small existing stock of innovation, but less if their historical knowledge stock fell within the top 10th percentile of firms in the sample. This suggests that newer firms were more able to respond to increased competition by innovating, while firms with a large historical stock of innovation may have been locked into old technological paradigms. As firms with a smaller knowledge stock tended to innovate more overall, trade with China appears to have been beneficial in encouraging innovation among the most innovative firms. However, I also find evidence that import competition increased the probability of exit among firms in the sample.

Haste Makes Waste: A Moderated Mediation Model of the Mechanisms Linking Artificial Intelligence Advancement to Film Firm Performance

Artificial intelligence (AI) has emerged as a transformative force in the modern film industry, revolutionizing production processes and redefining audience experiences. This study delves into the mechanisms through which AI advancement impacts film firm performance, with a focus on the mediating roles of innovation speed and quality, and the moderating effect of human-machine collaboration. Employing a resource-based view, we construct a moderated mediation model and analyze data from 355 global film firms. Our findings reveal that AI advancement positively influences film firm performance, with innovation quality serving as a significant mediator. However, the mediating role of innovation speed is not pronounced. Moreover, the degree of human-machine collaboration positively moderates the relationships between AI advancement and both innovation speed and quality. However, its moderating role between AI advancement and firm performance is not significant. The study underscores the theoretical and practical implications of utilizing advanced AI to foster innovation and competitive advantage in film firms.

Bonding versus bridging: disentangling effects of CEO social capital on firm exploratory innovation

CEOs and the influence of their social networks have been considered as important drivers for firm innovation. Yet, both theories and empirical evidence are lacking. To advance this stream of research, our paper fills the gap by exploring how bonding and bridging social capital influence exploratory innovation in firms. Through an examination of executive social ties and patent‐based technology indicators, our findings reveal nuanced relationships: Excessive bonding social capital exponentially hampers exploratory innovation due to information overload, while bridging social capital enhances exploratory innovation and mitigates over‐bonding effects (inverted U‐shape). We test our hypotheses with a sample of 7,540 firm‐year observations of public U.S. firms from 2000 to 2014. Our study not only contributes to research on strategic leadership, social capital, interfirm networks, and technological innovation but also offers important managerial implications. It suggests that CEOs and R&D directors foster balanced social networks in their pursuit of enhanced innovation management.

Absorptive capacity in a more (or less) absorptive environment: A meta‐analysis of contextual effects on firm innovation

Absorptive capacity in a more (or less) absorptive environment: A meta‐analysis of contextual effects on firm innovation

Does environmental cooperation with suppliers matter under environmental strategy focus and digital technology knowledge?

ABSTRACT Environmental cooperation with suppliers (ECS) helps firms to effectively manage dispersed suppliers, thereby addressing stakeholders’ environmental concerns. However, the literature is inconclusive regarding the relationship between ECS and financial performance (FP). Unlike previous research on ECS, this study uses the motivation-opportunity-ability (MOA) theory to analyze the relationship between ECS and FP, with firm innovativeness as a mediator. Furthermore, environmental strategy focus and digital technology knowledge are considered contingent factors in the link between ECS and FP. The SPSS version of PROCESS was employed to test the hypotheses, using ordinary least squares regression with survey data collected from 136 Chinese firms. The results reveal that firm innovativeness positively mediates the relationship between ECS and FP. Moreover, environmental strategy focus and digital technology knowledge strengthen the indirect impact of ECS on FP via firm innovativeness. Finally, this study provides theoretical and practical implications for firms when implementing ECS and firm innovativeness.

Financial geographic structure and innovation quality: Evidence from Chinese firms amid economic policy uncertainty

In countries where indirect financing dominates, the geographic distribution of financial resources to firms is crucial in enhancing credit availability and improving innovation quality. This study examines the impact and heterogeneity of financial geographic structure on firm innovation quality. Using the number of bank branches surrounding Chinese listed companies as a proxy for financial geographic structure, we employ a multidimensional fixed effects model and Heckman's two-stage method, finding that a higher density of bank branches significantly enhances firms’ access to credit. This fosters innovation by increasing invention patent applications in high-tech non-state-owned enterprises and green patent applications in non-high-tech state-owned enterprises. However, as economic policy uncertainty increases, the positive effect of financial geographic structure on firm innovation diminishes. Hence, countries facing substantial policy uncertainty and relying on indirect financing must strengthen multilevel financial markets and encourage commercial banks to provide greater support for firms pursuing higher levels of innovation.