Interfirm Communication Research Articles

Corporate political action and R&D investments: complementary effects and the role of communication in overcoming ex-post transaction costs

Purpose This study aims to investigate the role of interfirm communication on the complementary effect between corporate political action (CPA) and research and development (R&D) investments under transaction costs. Design/methodology/approach A quasi-experiment study design was used, combining business game simulation and a public goods experiment with communication as a controlled variable. A fixed-effect regression analysis was performed on panel data collected from 72 students. Findings The findings indicate that collective CPA is positively and significantly associated with R&D investments, particularly when interfirm communication is present. Conversely, for non-communicating firms, the effect is limited to the relationship between individual CPA and R&D investment. Research limitations/implications Despite advancing the research on political ties and innovation, the study acknowledges limitations related to framing effects and institutional variability. Practical implications The complementary effects indicate that institutional arrangements (i.e. business associations) may foster interfirm communication and cooperation in CPA efforts, mitigating opportunistic behaviours and legitimising CPA strategy towards innovation. Social implications This study contributes to understanding how firms’ political and R&D decisions can positively impact innovation, despite the challenges of ex post transaction costs. Originality/value The positive effect of communication on political action and cooperation on firms’ innovation, even in weak institutional environments, is highlighted. An innovative methodological approach combining business games and economic experiments was used to examine participants’ decisions under transaction costs.

Making of a social buyer: the role of knowledge capital authenticity and inter-firm communication in B2B sales situations

ABSTRACT This study explores the mediating role of knowledge capital repository and inter-firm communication on the relationship between social media adoption by business-to-business (B2B) seller firms and the purchase intention of B2B buying centers. Adopting a qualitative approach for exploring the various components that capture the effect of social media on B2B buying. Our findings illustrate that several factors affect B2B customers’ use of social media for procurement purposes, including factors from both the personal and organizational levels. Our study contributes to the understanding of the effects of social media adoption by seller firms on B2B buying, which has significant practical implications for marketing firms. Moreover, it is the first study to theorize the mediating impact of knowledge capital repository and inter-firm communication on the relationship between social media adoption by B2B firms and purchase intentions of B2B buying centers.

혁신 클러스터의 창업 지원 정책과 스타트업 성과와의 관계

This study is based on a regional innovation system theory based on Path Dependence Theory and Michael Porter's Cluster Space Theory. Path Dependence Theory explains that innovation clusters benefit from special access, relationships, better information, stronger incentives, and productivity gains that are difficult to connect at a distance (David, 1985; Arthur, 1989, Porter, 1998). Thus, the creation of clusters based on spatial concentration contributes to the creation of external economies through the specialisation of firms, the enhancement of inter-firm communication, and the 'sharing of factors of production' such as human resources and support institutions.
 In order to demonstrate this in a small-scale innovation cluster, this study uses a structural equation model to examine the effects of existing support policies and cluster agglomeration on business performance using 230 representatives of startups operating in the Songdo cluster in Incheon. The results show that the cluster's support system for investment, commercialisation and technology activation positively affects organisational member capabilities and technology development capabilities, but it fails to demonstrate the impact of public programme policies, funding and investment policies on firm profitability through organisational capabilities. This is because, due to the nature of start-ups, organisational capabilities do not immediately translate into firm profitability. Typical commercialisation support programmes often expect sales or hiring of employees in a short period of time, and the findings of this study suggest that this aspect needs to be further examined. On the other hand, the relationship between technology development capacity and profitability of public programme policies and technology development capacity and profitability of technology development policies was statistically significant, confirming their effectiveness. This suggests that there is a need for policy development that focuses on technology development capabilities rather than programmes that address the business pain points of entrepreneurs, such as training and mentoring. Therefore, innovation cluster policies should be conducted from a more long-term perspective, and only if policies for technology revitalisation are prepared in a timely manner will it be possible to achieve the goal of economic growth through startup revitalisation.

To Communicate or Not? Interfirm Communication in Collaborative Projects

Interfirm innovation projects often require tight collaboration among firms with complementary skills and resources. The success of such projects depends on all firms generating high-quality outputs, which can be difficult to attain for aspects of quality that are not easily observable or contractible. We consider a setting with a focal firm and its collaborating firm (henceforth, the collaborator) engaging in a joint project, in which they make their quality decisions over time, respectively, and study the firm’s decision to communicate its quality output progress to its collaborator voluntarily. We first develop normative predictions using game-theoretic models by analyzing a reporting (respectively, revealing) case, in which the firm can report a not necessarily truthful quality (the truthful quality) to the collaborator. We find that the firm should be indifferent between reporting and not reporting for all project values and should be indifferent between revealing and not revealing (prefer revealing) for high (low) project values. To test this prediction, we run an experiment following a 2 × 3 design, varying the project value (high and low) and the form of communication (no communication, reporting, and revealing). We find that the quality provision is significantly lower than the normative prediction in all treatments. When the project value is high, the decision to report is beneficial to the firm (regardless of the reported quality) because the decision signals the firm’s intention to contribute high quality. The decision to reveal is also beneficial for a firm; however, a different mechanism is at play in this case. The decision itself does not directly affect the quality provisions, but the revealed quality does as the collaborator waits to observe the truthful revealed quality and incorporates this information in choosing a quality later. By contrast, when the project value is low, neither reporting nor revealing are beneficial for a firm. In particular, the decision to report no longer acts as a positive signal as it is used by firms trying to deceive the collaborator and get an advantage. This paper was accepted by Vishal Gaur, operations management. Funding: The authors gratefully acknowledge financial support from Zicklin School of Business, Baruch College, the City University of New York and the University of Texas at Dallas. Support for this project was provided by a PSC-CUNY Award, jointly funded by the Professional Staff Congress and the City University of New York. Supplemental Material: The online appendix and data are available at https://doi.org/10.1287/mnsc.2022.03180 .

Information security risk management terminology and key concepts

Language is the foundation for any communication and the vocabulary used has a decisive influence on the ability of the communication partners to clearly understand each other. In Information Security Risk Management (ISRM), the terminology used is often dictated by industry standards and frameworks. However, there is no universally accepted terminology, which makes collaboration difficult for professionals and researchers alike. This publication compares the terminology defined by frequently used frameworks, such as ISO and NIST, in the field of ISRM. It examines the terms and inherent concepts of each terminology, compares the notion of risk and derives a concept diagram based on the most important key concepts. The result facilitates a common understanding of ISRM across frameworks and organisational boundaries, thus enables further research, discussion, intra- and inter-firm communication.

Maximizing customer adoption outcomes in emerging industrial markets via supplier innovativeness and relationship quality

PurposeThis paper aims to examine how suppliers doing business with customers in emerging industrial markets can leverage their innovativeness to foster trust and commitment toward maximizing customer adoption behaviors.Design/methodology/approachBased on commitment-trust theory, this research uses survey data collected from a large sample of Chinese business-to-business executives, which were then analyzed using three-stage least squares simultaneous estimation models and PROCESS.FindingsThe results show that supplier innovativeness can help customers build trust in a supplier. Consequently, a reciprocal commitment is forged among customers that manifest in favorable adoption decisions, including a higher willingness to pay premium prices. Notably, this approach is beneficial when robust interfirm communications are difficult to establish.Originality/valueInnovation decisions in interfirm relationships are important for suppliers doing business in emerging markets. This is because customer adoptions in such settings can foster enduring relational market-based assets and other competitive advantages that can improve supplier performance. Unfortunately, the understanding of how interfirm relationships influence innovation-adoption decisions in emerging markets is lacking. The findings of this research shed light on how suppliers interested in entering emerging markets can interact with customer firms in such settings to maximize favorable adoption outcomes.

Modeling enablers of supply chain quality risk management: a grey-DEMATEL approach

PurposeThe purpose of this paper is to recognize and model the enablers of supply chain quality risk management (SCQRM) through an empirical study in the Indian automotive companies.Design/methodology/approachA systematic literature review was conducted to extract the key enablers of quality management (QM) and risk management in the context of manufacturing supply chains. A grey-based DEMATEL method was employed to identify and model the key enablers of SCQRM.FindingsThe results of empirical study showed that the effectiveness of QM and risk management systems for automotive supply chain is driven by a set of common enablers that could be employed for developing dedicated SCQRM systems. The common causal factors in the model such as the involvement of top leaders, inter-firm communication and strategic-level alignment between supply chain members on both these issues clearly state that there is a need for a broader policy at an early stage.Practical implicationsIt is crucial for the automotive companies to develop and implement structured systems for SCQRM keeping in view the impact of any unaddressed quality risk on missed production targets, vehicle recalls and safety hazards.Originality/valueThis study ascertains the key enablers of SCQRM with emblematic focus on automotive industry and identifies if there are commonalities in these enablers.

ICT-based system for Malaysian residential maintenance projects – literature review

PurposeThis paper aims to identify the different system approach that is equipped with decision making processes. Presently, most maintenance organisations are still implementing conventional methods rather than fully integrated information and communication technology (ICT) to manage the information database on maintenance of residential building. The significant factor to select an ICT is much more advantageous than just a way to improve interfirm communication and cooperation on maintenance management processes and be able to perform the task needed without stressing the budget. ICT could be a pillar of fundamental importance for the implementation of an effective and efficient maintenance management on residential building and facility.Design/methodology/approachThis paper presents a review of recent publications on the topic regarding residential maintenance systems, which also takes into consideration the heritage structures, due to their same maintenance requirements and processes.FindingsThe findings reveal the need for ICT tools and techniques specific to the needs of reducing poor service delivery, inadequate financial support, poor maintenance plan and maintenance backlogs.Originality/valueThe paper concludes with a comprehensive research framework of ICT-based system as the basis for further progress in the development of the residential maintenance schemes of system.

Emotional practices: how masking negative emotions impacts the post‐acquisition integration process

Research Summary: We conducted a real‐time field study of a post‐acquisition integration process. We identified two practices that contributed to integration failure. First, the practice of masking negative emotions caused members of both firms to perceive that the partner firm's members were satisfied with the integration process, even though they were not. These false perceptions of satisfaction resulted in minimal corrective actions, the escalation of the situation, and ultimately, integration failure. Second, efficiency‐driven communication practices used in inter‐firm communication exacerbated the effect of masking negative emotions on false perceptions of satisfaction by shielding both firms’ members from the other firm's members’ spontaneous emotional reactions. Our research invites scholars to consider more deeply the emotional consequences of various common organizational practices.Managerial Summary: Do you disagree with your employee, manager, or business partner? Does this disagreement make you annoyed or even angry? Yet, you decide to mask your negative emotions and discuss the disagreement with a neutral or happy face. Wrong. We find that masking negative emotions in the work environment can prevent corrective actions, escalate disagreement, and make people to develop long‐lasting negative sentiments toward the counterpart that ultimately result in dysfunctional behaviors. Our findings further reveal that commonly used organizational practices such as communicating via email may contribute to the deliberate masking of negative emotions. We suggest that managers should carefully review if and how their organization's practices prevent or enable people to share their emotions authentically to ensure timely corrective actions and proactive development of business operations.

Communication in Inter-firm Network: Guest Engineers and Knowledge Transfer in the Japanese Automobile Industry after the Second World War

Abstract This study examines communication in a system of inter-firm networks and the dynamics of knowledge transfer within such networks. The guest engineer system that was widely adopted in the Japanese automotive industry following the Second World War is the focus of this study. Significant positive effects of common knowledge shared by the firms involved, a constructive role of individuals as conveyors of information, and increased productivity and human capital gains are found to result from inter-firm network communication in the context of the Japanese automotive industry.

FORMATION AND DEVELOPMENT AUTOMOBILE CLUSTERS IN RUSSIA

The article addressed the issue of cluster formation as the most competitive education in a dynamic environment. Shown in the examples of existing national automotive clusters that this process contributes to increasing the investment attractiveness of their member companies and create the conditions for a sustainable system of dissemination of new technologies, knowledge, production technological network, which is created due to the close inter-firm communications.

BRIDGING EU CONCERTED PRACTICES WITH U.S. CONCERTED ACTIONS

The recent analysis developed by William Page on the U.S. notion of concerted actions raised the idea to develop an article that parses in depth the EU meaning of concerted practices and that skein of U.S. doctrines that focuses on phenomena from invitations to collude to multilateral facilitating practices. According to Page, the current definition of concerted actions in the U.S. legal system misses the opportunity to use inter-firm communications to differentiate cases of collusive pricing practices and cases of interdependent parallel behavior that results in the same market price. On the contrary, the current EU definition of concerted practices accomplishes this purpose. By characterizing strategic inter-firm contacts as one of its building blocks, the EU definition supplies antitrust enforcers with a theoretical tool that distinguishes unlawful collusive conduct from oligopolistic non-coordinated behavior. Yet the current EU definition of concerted practices does something more. By encompassing a very strong presumption—that firms exchanging strategic information cannot do anything else but accordingly shape their internal pricing decisions—this notion catches cartels that emerge only from these strategic inter-firm contacts, regardless of firms' actual pricing conduct. The current EU notion of concerted practices is thus a powerful prosecuting tool that deserves to be compared with the U.S. case law about interdependence, parallelism, and exchanges of information.

Innovation capabilities in food and beverages and technology -based innovation projects

Purpose – The aim of this paper is to establish the differences between the food and beverages (F&B) and technology-based industries with regards to the relation between previously identified success factors and innovation project performance. Design/methodology/approach – These differences are established on the basis of logistic regression analysis, using 38 innovation projects (18 F&B and 20 technology-based). Findings – Newness of the innovation project to the company, communication capabilities and market potential have a more negative impact on innovation project performance in the F&B than the tech-based industry. Especially functional upstream capabilities increase the likelihood of success in F&B, when compared to tech-based innovation projects. Practical implications – While functional upstream capabilities are important for success of F&B innovation projects, there is still room for improvement in order to deal effectively with newness of the innovation project to the company. Internalization of resources from the network and a balanced radical/incremental innovation project portfolio contribute to additional enhancement of functional capabilities of the F&B companies, improving their capacity to deal with newness. Through a larger focus on co-innovation with retail, F&B companies can improve their intra- and inter-firm communication capabilities to attain more consumer-oriented integration of R&D and marketing activities, improving the market potential of their innovations. Originality/value – This paper demonstrates that the previously identified critical success factors for innovation projects differ in impact and importance for F&B innovation project performance when compared to innovation projects in the technology-based industry.

Competition policy and price fixing

Throughout the world, the rule against price fixing is competition law's most important and least controversial prohibition. Yet there is far less consensus than meets the eye on what constitutes price fixing, and prevalent understandings conflict with the teachings of oligopoly theory that supposedly underlie modern competition policy. Competition Policy and Price Fixing provides the needed analytical foundation. It offers a fresh, in-depth exploration of competition law's horizontal agreement requirement, presents a systematic analysis of how best to address the problem of coordinated oligopolistic price elevation, and compares the resulting direct approach to the orthodox prohibition. In doing so, Louis Kaplow elaborates the relevant benefits and costs of potential solutions, investigates how coordinated price elevation is best detected in light of the error costs associated with different types of proof, and examines appropriate sanctions. Existing literature devotes remarkably little attention to these key subjects and instead concerns itself with limiting penalties to certain sorts of interfirm communications. Challenging conventional wisdom, Kaplow shows how this circumscribed view is less well grounded in the statutes, principles, and precedents of competition law than is a more direct, functional proscription. More important, by comparison to the communications-based prohibition, he explains how the direct approach targets situations that involve both greater social harm and less risk of chilling desirable behavior--and is also easier to apply.

The economics of collusion: cartels and bidding rings

An examination of collusive behavior: what it is, why it is profitable, how it is implemented, and how it might be detected. Explicit collusion is an agreement among competitors to suppress rivalry that relies on interfirm communication and/or transfers. Rivalry between competitors erodes profits; the suppression of rivalry through collusion is one avenue by which firms can enhance profits. Many cartels and bidding rings function for years in a stable and peaceful manner despite the illegality of their agreements and incentives for deviation by their members. In The Economics of Collusion, Robert Marshall and Leslie Marx offer an examination of collusive behavior: what it is, why it is profitable, how it is implemented, and how it might be detected. Marshall and Marx, who have studied collusion extensively for two decades, begin with three narratives: the organization and implementation of a cartel, the organization and implementation of a bidding ring, and a parent company's efforts to detect collusion by its divisions. These accounts-fictitious, but rooted in the inner workings and details from actual cases-offer a novel and engaging way for the reader to understand the basics of collusive behavior. The narratives are followed by detailed economic analyses of cartels, bidding rings, and detection. The narratives offer an engaging entree to the more rigorous economic discussion that follows. The book is accessible to any reader who understands basic economic reasoning. Mathematical material is flagged with asterisks.

Firm orientation, community of practice, and Internet-enabled interfirm communication: Evidence from Chinese firms

What motivates firms to develop Internet-enabled interfirm communication? We draw upon the work of Alavi et al. (2005–2006) and propose that the use of the Internet in interfirm communication is influenced by a firm’s firm orientation and its internal communities of practice. Based on data collected from 307 international trade firms in the Beijing area, we find that Internet-enabled interfirm communication is directly driven by internal community of practices and customer orientation, and indirectly by competitor orientation and learning orientation. The internal community of practice is affected by learning orientation and competitor orientation, but not by customer orientation. The present study contributes to the literature by providing empirical investigation on firm’s strategic communications from the perspective of firm orientations, delineating how different firm orientations vary in impacting firm’s strategic communications, and exploring the bridging effect of communities of practices on the influences of firm orientations on knowledge management initiatives.

Interfirm IT Capability Profiles and Communications for Cocreating Relational Value: Evidence from the Logistics Industry

This study seeks to identify the means by which information technology helps cocreate relational value in the context of interfirm relationships in the logistics industry--a large and information-intensive industry. We identify a set of IT functionalities--single-location shipping, multilocation shipping, supply chain visibility, and financial settlement--that can be used to manage the flows of physical goods, information, and finances across locations in interfirm logistics processes. Progressively more advanced sets of IT functionalities, when implemented and used in the interfirm relationship to execute logistics processes, are proposed to form four distinct IT capability profiles of increased sophistication. Interfirm IT capability profiles of higher sophistication are proposed to help cocreate greater relational value by facilitating the flows of physical goods, information, and finances across locations in the interfirm logistics process. Besides their direct role in helping cocreate relational value, these interfirm IT capability profiles are proposed to further enhance relational value cocreation when complemented by interfirm communications for business development and IT development. Our empirical study was situated in one of the world's largest logistics suppliers and over 2,000 of its interfirm relationships with buyers across industries. Integrated data from four archival sources on the IT functionalities implemented and used in interfirm logistics relationships, interfirm communications, relational value (share of wallet and loyalty), and multiple control variables were collected. The results show that the proposed interfirm IT capability profiles and interfirm communications have both a direct and an interaction effect on relational value. Implications for cocreating relational value in interfirm relationships with the aid of IT are discussed.

東京城東地域におけるカバン・ハンドバッグ産業集積の存立基盤

東京城東地域におけるカバン・ハンドバッグ産業集積の存立基盤

Direct versus Communications-Based Prohibitions on Price Fixing

This article compares two policies toward coordinated oligopolistic price elevation. Most commentators endorse the view that the law should (and does) prohibit only those price elevations produced by certain sorts of interfirm communications, such as secret price negotiations. In contrast, little attention has been devoted to a more direct approach that encompasses all coordinated price elevations that can be detected and sanctioned effectively. It is demonstrated that the conventional formulation rests on numerous misconceptions, involves complex and costly detection if its logical implications are taken seriously, and tends to target cases with relatively low deterrence benefits and high chilling costs in contrast to those targeted under the direct approach.

Key Factors Affecting Positional Advantage of Export Partnerships

Abstract Current economic trends have provided incentives for firms to explore the global competitive landscape, and export-ventures are one of the strategies for developing successful international marketing networks, especially when a firm's resources are limited. Although research suggests that export-ventures are valuable tools for improving performance in the global marketplace, the establishment of such ventures does not automatically guarantee positive results. Export-venture long-term success depends on the development of close partnerships. Despite this importance, few studies have tried to explain export partnership success. This study represents an attempt to understand the key factors that influence export-venture success. The central thesis of this study is that both exporters and export intermediaries play important roles in developing positional advantages for export-ventures. Using resource-advantage theory of competition as an underlying framework, a model is developed that draws on the r...