Firm Knowledge Research Articles

THE SHAREHOLDER VALUE EFFECT OF SYSTEM OVERLOADS: AN ANALYSIS OF INVESTOR RESPONSES TO THE 2003 BLACKOUT IN THE US

This study investigates the stock price reaction of electric energy utility firms to the 2003 blackout in the Northeast of the USA and if the market was able to identify the responsible firm. Therefore, we employ event study methodology and select a sample of US-based electric energy utility firms. Although it took a commission almost eight months to name the firm responsible for the blackout, investors punished FirstEnergy only two trading days after the blackout - and were right, as it later turned out. This study demonstrates this based on the analysis of abnormal stock returns and abnormal trading volumes. Our findings suggest that investors have extensive knowledge of electric energy utility firms' responsibility as they were able to identify the culprit. This, in turn, demonstrates that electric power utility firms should ensure a high-quality grid infrastructure to avoid these negative outcomes.Keywords: Event study; Blackout; System overload; Market efficiencyJEL Classifications: G1, Q40 DOI: https://doi.org/10.32479/ijeep.11756

Can big data analytics help organisations achieve sustainable competitive advantage? A developmental enquiry

Society is changing radically and fast, triggered by the digital revolution. Firms are thus looking for newer ways to attract, satisfy and retain those customers as their needs and aspirations change. Such newer ways constitute the firms’ quest to achieve competitive advantage. However, in this current digital era almost all the traditional “Porterian” competitive advantage barriers are difficult to sustain. Further, COVID has led to a rapid acceleration in the pace of digitalisation. Can the huge data generated in every digitally enabled entity of today be judiciously combined with other firm resources? Can this big data be transformed into meaningful knowledge which organisations can leverage to sustain and grow? Can big data provide a sustainable competitive advantage?In this conceptual paper, I use a knowledge-based approach analysed through resource-based view from the strategic management domain to search for answers to these questions. I introduce a holistic framework that integrates the following: (i) firm knowledge, (ii) managerial capabilities and decision-making, (iii) sustainable competitive advantage, (iv) big data analytics. I call this framework the “The Perpetual Model of BDA as a Sustainable Competitive Advantage”. I also propose a unique Analytic Maturity Model, which I call the SAMDDC-DAMPPC Model, which can help identify and classify firms based on their analytic maturity.

Measurement errors and estimation biases with incomplete social networks: replication studies on intra-firm inventor network analysis

The number of studies exploring the role of intra-organizational inventor networks in firm knowledge recombination and diffusion processes has surged in recent years. The typical approach of these studies–to construct intra-firm inventor networks based on archival patent grant data–suffers from a major issue: incomplete data. This incomplete data may have implications for network measures and regression estimates based on these measures. To shed light on these implications, this study explores the consequences of missing data for inventor network studies in the field of technology invention. We do so by comparing networks based on granted patent data–the incomplete data–with networks based on patent application data that also include failed patent applications–the more complete data. The findings from replications of two prior studies–one firm-level study and one inventor-level study–indicate that intra-firm network measures are systematically biased for both network-level and inventor-level measures and cause bias in regression estimates. We further find that these systematic measurement errors are also statistically significantly related to the outcomes in the studies, thereby implying omitted variable biases in the effect estimates in prior studies. These findings have implications for research on networks of scientific collaborations specifically, and networks based on incomplete archival data more generally.

Which collaborations allow firms to become gatekeepers? A longitudinal analysis of a large-scale collaboration network

Having a gatekeeper position in a collaborative network offers firms great potential to gain competitive advantages. However, it is not well understood what kind of collaborations are associated with such a position. Conceptually grounded in social network theory, this study draws on the resource-based view and the relational factors view to investigate which types of collaboration characterize firms that are in a gatekeeper position, which ultimately could improve firm performance in subsequent periods. The empirical analysis utilizes a unique longitudinal data set to examine dynamic network formation. We used a data crawling approach to reconstruct collaboration networks among the 500 largest companies in Germany over nine years and matched these networks with performance data. The results indicate that firms in gatekeeper positions often engage in medium-intensity collaborations and less likely weak-intensity collaborations. Strong-intensity collaborations are not related to the likelihood of being a gatekeeper. Our study further reveals that a firm's knowledge base is an important moderator and that this knowledge base can increase the benefits of having a gatekeeper position in terms of firm performance.

The neuroscience of advanced scientific concepts

Cognitive neuroscience methods can identify the fMRI-measured neural representation of familiar individual concepts, such as apple, and decompose them into meaningful neural and semantic components. This approach was applied here to determine the neural representations and underlying dimensions of representation of far more abstract physics concepts related to matter and energy, such as fermion and dark matter, in the brains of 10 Carnegie Mellon physics faculty members who thought about the main properties of each of the concepts. One novel dimension coded the measurability vs. immeasurability of a concept. Another novel dimension of representation evoked particularly by post-classical concepts was associated with four types of cognitive processes, each linked to particular brain regions: (1) Reasoning about intangibles, taking into account their separation from direct experience and observability; (2) Assessing consilience with other, firmer knowledge; (3) Causal reasoning about relations that are not apparent or observable; and (4) Knowledge management of a large knowledge organization consisting of a multi-level structure of other concepts. Two other underlying dimensions, previously found in physics students, periodicity, and mathematical formulation, were also present in this faculty sample. The data were analyzed using factor analysis of stably responding voxels, a Gaussian-naïve Bayes machine-learning classification of the activation patterns associated with each concept, and a regression model that predicted activation patterns associated with each concept based on independent ratings of the dimensions of the concepts. The findings indicate that the human brain systematically organizes novel scientific concepts in terms of new dimensions of neural representation.

Influence of Knowledge Management Capabilities on the Performance of Mobile Telephone Firms in Kenya

With intensifying rivalry in the mobile telephone industry, mobile telephone firms are finding knowledge management capabilities as vital resource for ensuring their performance. However, there is scanty empirical literature to help these firm associate knowledge management capabilities to their performance, hence this study which sought to ascertain the inspiration of knowledge management capabilities on the performance of mobile telephone firms in Kenya. it objectives were to; establish the influence of knowledge acquisition, find out the influence of knowledge application, determine the role of knowledge transfer, ascertain how knowledge protection influence, and stablish the joint effect of knowledge management capabilities (knowledge acquisition, knowledge application, knowledge transfer and knowledge protection) on the performance of the mobile telephone firms in Kenya. This study adopted descriptive survey design where it used a target population of the 63 heads of human resources, information marketing and finance from the 21 telephone firms operating in Kenya. Since the target population was easily manageable and readily accessible, census was used. The data which was collected data from primary sources using questionnaires was analysed using quantitative approach to produce descriptive and inferential statistics. In addition, the study tested for its hypothesis testing using; t-test,. F test and Analysis of Variance. The study found that each of; knowledge acquisition, knowledge application, knowledge transfer and knowledge protection have a positive significant effect of performance. The study concluded that on embracing knowledge management capabilities; knowledge acquisition; knowledge application; knowledge transfer; and knowledge protection, mobile telephone firms in Kenya experienced significant improved in performance and as they also gained competitive advantage over their competitors.

Adopting industrial designs: further IP protection for US start-ups?

ABSTRACT This article examines the determinants of adoption of industrial designs, for intellectual property (IP) protection, in a large sample of US start-ups. While patents and copyrights are widely analysed as ways of protecting proprietary knowledge in large firms, they are expensive forms of IP protection, both to create and to protect. For start-ups, cheaper and simpler methods have greater attraction, of which industrial design protection is an example. The article builds and tests an applied econometric model of industrial design adoption, using the longitudinal Kauffman Firm Survey, 2008–2012. The model is based on a microeconomic managerial utility theory of the firm, implemented within a random utility framework, leading to an estimable econometric model which takes the form of a binary probit with random effects. This model is run on an unbalanced panel sample of nearly nine thousand observations. It finds that expenditure on R&D plays a powerful role in the design adoption process. Incorporation and owner-managers’ injection of equity also play a positive and significant part in design adoption. These three influences are all part of the commitment that owner-managers bring to their start-ups. Sales directed to products rather than services also have positive effects on industrial design adoption.

Cause and Effect Relationships of Internal and External Technological Learning Mechanisms in the Iranian Renewable Energy Firms

In developing countries, firms usually have limited capital, infrastructure, and institutions for technological learning. Hence, knowledge of firms about external and internal learning mechanisms as well as using other firm’s experiences lead to reduced cost and time of technological learning. Present paper contributes to renewable energy firm’s knowledge by analyzing cause and effect relationships of internal and external technological learning mechanisms. For this purpose, internal and external technological learning mechanisms were extracted by literature review. Then, cause and effect relationships of learning mechanisms in Iranian renewable energy firms were investigated by the DEMATEL method. The results indicate that firms should use a combination of internal and external learning mechanisms to enhance their technological capability. Moreover, intramural research and development, trial and error, reverse engineering of competitor’s products, imitation of competitors, and licensing agreement have been the most frequent technological learning mechanisms used by Iranian renewable energy firms. These are the issues that need to be addressed by renewable energy firms and policymakers in developing countries.

Optimal degree of openness in open innovation: A perspective from knowledge acquisition & knowledge leakage

Open innovation has become an important mode for firms to improve innovation performance. If the openness is too low, it will reduce the opportunity to acquire external knowledge, while too open will increase the risk of internal knowledge leakage. Therefore, the degree of openness plays a key role in the use of open innovation to improve innovation performance. We use the openness breadth and openness depth to describe the openness of innovation. We conduct an agent-based simulation methodology to study the optimal degree of openness. Our findings show that there are great differences in the optimal degree of openness under different situations. Moreover, as the situation changes, the optimal degree of openness changes regularly. More specifically, the more a firm's knowledge network structure holes, the smaller the optimal openness breadth and the greater the optimal openness depth. The higher a firm's knowledge network centrality, the greater the optimal openness breadth and the smaller the optimal openness depth. The worse the institutional environment, the smaller the optimal openness breadth and openness depth. The fiercer the market competition, the greater the optimal openness breadth and the smaller the optimal openness depth.

How firms use coordination activities in university–industry collaboration: adjusting to or steering a research center?

University–industry collaboration (UIC) is an important source of knowledge and innovation for firms but is often challenging due to the partners’ different goals. Thus, formal research centers have become a key policy instrument to foster stronger UIC whereby strong mutual relationships are created. This study investigates the establishment of a university–industry research center to gain insights into the coordination activities the focal firms used to achieve their goals with UIC. We find that the firms with goals related to specific innovations and technology development took a more active role by using structured coordination activities in the preformation phase of the research center, whereas the firms with goals related to general knowledge development mainly coordinated through unstructured activities when the center began operations. We map the specific coordination activities used in UIC and theorize on how the partners’ different organizational goals influenced their use of these activities. Our findings have important implications for how activities in UIC, particularly in research centers, can be designed to strengthen the collaboration between universities and their firm partners to enhance knowledge development and innovation.

Building skill-sets, confidence, and interest for diverse scientific careers in the biological and biomedical sciences.

Many biological science PhD graduates are increasingly pursuing careers outside of academia. Subsequently, PhD training programs are increasing their efforts to broaden their awareness of diverse career opportunities, with a firm knowledge of the skills necessary for success. At Yale University, for two semesters we have offered a new course for graduate students in the biological sciences titled “Skills Development for Diverse Scientific Careers” (BBS 550b). This course addressed career‐related topics not covered in any curriculum at Yale such as how to run clinical trials, the business side of biotech, how to convert CVs into resumes, and resilience for early career scientists. We sought to better equip students to think broadly about their career options by exposing them to non‐academic biomedical career avenues. Furthermore, the course fulfilled a gap in current curricular offerings to prepare students for multiple science career trajectories. Results on a pre‐post course survey demonstrated increases in students’ interest for, knowledge of, and confidence in securing a position in multiple nontraditional career sectors. Intentional course design can provide an adequate foundation to broaden awareness of myriad career options available to bioscientists. Broadening student knowledge and interest levels will contribute substantially to developing a robust scientific workforce.

The Impact of Alliances on Knowledge Growth Within Firms

How do alliances lead to knowledge growth and learning for parent firms? Prior research focuses on knowledge inflows from a partner when a firm enters into an alliance. In this paper, we examine factors that enable firms to make better use of their own knowledge and capabilities as a consequence of alliances. To demonstrate the latter dimension of knowledge growth, we depart from prior research that has focused on cross citations of patents between partners, and instead a study self-citation activity. We examine the effect of four factors on self-citations, each of which reflects distinct learning mechanisms and cooperative dynamics, namely knowledge inflows from the alliance partner, knowledge outflows to the alliance partner, partner characteristics, and alliance governance. Results suggest that knowledge inflows from the partner were positively associated with changes in self-citations in alliance domains, whereas knowledge outflows to the partner had a positive impact on changes in self-citations for the smaller firm in the alliance. In contrast, firm specific knowledge possessed by the partner and equity governance had a negative impact on changes in self-citations in alliance domains. This paper develops a fuller understanding of the learning effects of alliances by highlighting that apart from better utilization of the partner's capabilities, alliances also lead to enhanced utilization of the firm's own knowledge and capabilities in further innovative activity.

Opening Up the Innovation Process in Construction Firms: External Knowledge Sources and Dual Innovation

AbstractEmpirical evidence on the relative significance of various sources of knowledge for different construction firms’ innovation activities and processes is limited. This study examines the rel...

What do you know and how much does it matter? A QCA/NCA study of knowledge and supplier performance

While interorganizational research has emphasized the role of governance mechanisms in managing the performance of suppliers that provide critical input components, scholarship consistently assumes that these governance mechanisms work independent of how much the supplier knows or how much the buyer knows. Contributing to this body of work, we explore two important boundary conditions to the association between governance mechanisms and supplier performance: the buyer’s knowledge of the outsourced component and the supplier’s technical expertise. In doing so, our theory integrates recent insights from the literature on concurrent sourcing, which acknowledges that firms often make and buy the same input. Methodologically, we draw on configurational methods of fuzzy set Qualitative Comparative Analysis (fsQCA) and Necessary Conditional Analysis (NCA), given that conventional regression techniques fall short in analyzing the complex interrelationships predicted by our theory. Our analysis provides interesting and novel insights. Broadly, we find that deploying concurrent sourcing in conjunction with formal and relational governance mechanisms leads to high supplier performance, even when the supplier himself is less technical capable. However, concurrent sourcing is no guarantee for high performance, as a concurrent sourcing firm who deals with a non-expert supplier is doomed to low performance when relational governance mechanisms are absent. Overall, our analysis of firm and supplier knowledge in orchestration with established governance mechanisms underscores the value of configurational approaches to management research.

Knowledge Asset Outsourcing Decision

When making decisions on whether to outsource managers are expected to consider theoretical variables like asset specificity from transaction cost economics (TCE) and core-competence from resource based theory (RBT). While these expectation have been found consistently valid for physical assets, they have been inconsistent for knowledge assets. We use a vignette based experiment to test if the lack of consistency is due to the limitation in the theoretical prescriptions or a result of peculiarities of knowledge assets. We use rigorous implementation of weighted least square estimator with mean and variance (WLSMV) based structural equation modeling to arrive at the results. We show that, for knowledge assets, while the TCE and RBT are valid, the operationalization of the idea of asset specificity and core-competence is heterogeneous. For RBT, the heterogeneity is caused by the involvement of decision maker with the knowledge asset. We resolve the lack of clarity of TCE and RBT in knowledge asset outsourcing decisions by showing that, possibly because of intangibility and peculiarities of knowledge assets, the operationalization of theoretical variables is systematically biased. Additionally, we show that decision makers can intentionally subvert knowledge asset outsourcing decisions towards self-interest. This finding questions the implicit assumption of TCE and RBT that decision makers are altruistic stewards and not self-interested agents. Our findings suggest a detailed analysis of individual decision making for knowledge asset outsourcing and more interestingly create an intrigue about how the biased and self-interested decision makers would interact to arrive at a firm level knowledge outsourcing decision.

Knowledge Management in Family Firms- A Literature Review

The paper provides a systematic understanding of research that has taken place in the knowledge management domain of family firms. No prior work has carried out a systematic review of family businesses' knowledge management to the best of the author’s knowledge. It uses a three-stage process for literature review analysis which involves collection of papers, classification and synthesis, and finally, evaluation. The classification of the papers' methodologies has been adapted from Palvia et al. 2015. The research carried out in family firm's knowledge management practices is few and scattered. Topics like succession, innovation, and entrepreneurial orientation have been touched upon. There is a high number of conceptual work. Further research should test the proposed frameworks and seek for generalizability of the same by replicating models in different settings. Given the influence of cultural practices in family firms' functioning, research work should be representative of various economies and different cultures to enrich the knowledge space as well as increase the applicability of frameworks in family firms.

Building Distant Search Routines and Capabilities in Venture Capital-Invested Ventures

This study examines how international venture capitalists (IVCs) alter the search routines of their portfolio firms, which allows them to build a new capability in knowledge generation. My theoretical framework suggests that portfolio firm knowledge generation is enhanced as a result of their association with IVCs and the resultant transition towards more global search routines. I construct a novel dataset comprised of 2,327 new ventures across five industries during the period 2004-2014 that were granted 20,985 patents and received 254,616 backward citations. Using a difference-in-differences (DID) approach, I find that following IVC investment, portfolio firms search more distant technological domains, broaden their search scope, and couple local search with distant search more frequently. These effects are moderated by the IVC’s network.

Medical Oncology Care Plan: a tool for improving the provision of clinical information to patients.

Improving clinical communication between patient and clinician through the provision of written information empowers patients to make informed decisions, underpinning patient-centred care and leading to greater health outcomes. The Townsville Cancer Centre has formulated a holistic care plan template for each patient as a tool to enhance this communication. Using questionnaire-based and qualitative surveys, understanding of the patient's cancer and perspectives of clinicians were examined. The results demonstrate that patients generally have a firm knowledge base of their disease with the predominant finding being that patients wish to be more informed with written information about their diagnosis and alternatives for treatment. While initially time consuming, completion of care plans had many benefits for clinicians; they prompted them to collect holistic information, engage in discussions to capture patient goals and document details about prognosis, treatment options and management of side-effects. Medical oncology care plans provide a sustainable method to provide clinicians a practical template to gather vital information and encourage patients to participate in the decision-making process for healthcare.

Navigating the New Normal: Which firms have adapted better to the COVID-19 disruption?

The COVID-19 pandemic has significantly impacted businesses worldwide by lowering demand, impeding operations, stressing supply chains, and limiting access to finance. Yet we still lack an understanding of how firms can successfully adapt to this disruption. I examine this issue theoretically by combining arguments around dynamic capabilities and managerial cognition and developing several hypotheses concerning firm innovation, knowledge sources, management practices, and gender issues in relation to firms’ adaptation to this crisis. I test these assertions using data from two rounds of surveys involving more than 11,000 firms from 28 countries both before and after COVID-19 was officially declared a global crisis. The empirical results provide prima facie evidence that innovators, in particular those who are younger (i.e. start-ups) and those who rely on internal sources of knowledge, are more likely to adapt to COVID-19 than non-innovators. Moreover, firms with better management practices exhibit also greater ability to adapt to the crisis. I did not find systematic gender differences upon examining firms managed by women versus men. Following these findings, I set out several implications for research and policy.

The disruption of the international supply chain: Firm resilience and knowledge preparedness to tackle the COVID-19 outbreak

The lockdowns of several countries due to COVID-19 outbreak resulted in severe economic consequences, among which was the immediate general disruption of the international supply chain, with few exceptions. This article aims to investigate whether some supply chains were resilient or not and why, using a knowledge-based approach and specifically focusing on the role played by supply chain innovation in building resilience to disruptions, thanks to knowledge preparedness. The study is motivated by two main rationales: the unique situation of a global pandemic and the absence of studies providing grounded evidences of supply chain resilience in a worst-case scenario.The research is based on the assumption that knowledge preparedness introduces logistics/supply chain innovations and enables companies to prevent, detect, and respond to unpredictable negative events.By using a large-scale sample of European firms' data from the Eurostat and a multivariate regression analysis, the authors cross-study the effects of supply chain knowledge preparedness – based on innovation type and expenditures – on the international trade of goods from January to June 2020. The results confirm that the most resilient supply chains were those that had previously introduced innovations, a factor that strengthens the knowledge preparedness of firms when faced with unforeseeable supply chain disruptions.