Low-technology Firms Research Articles

The Nonlinear Value Relevance of Advertising Expenditure in Listed Korean Stock Markets

This paper investigates the nonlinear value relevance of advertising expenses in firms listed on Korean stock markets from 2003 to 2011. This study also categorizes the sampled data into several groups to examine the value relevance function of advertising expenses. The empirical findings of this paper show that advertising expenses has an inverted U-shaped relationship with enterprise value in various subgroups belonging to KOSPI markets, big firms, small and medium firms, and low technology firms classified by Himmelberg and Petersen (1994). The empirical results also provide the evidence that advertising expenses is nonlinearly associated with enterprise value with a U-shaped function in total sample firms, KOSDAQ firms, high technology firms classified by Himmelberg and Petersen (1994), and the high and low technology firm groups divided by R&D intensity.These results support the hypothesis of this study (H: Advertising expenses has nonlinear value relevance in Korean stock markets). The empirical findings of this study reveals that the value relevance shape of advertising expenses differ in accordance with the characteristics of individual firms.

Knowledge- Intensive Entrepreneurship in Low- Tech industries

Knowledge- Intensive Entrepreneurship in Low- Tech industries Edited by Hartmut Hirsch-Kreinsen and Isabel Schwinge. Edward Elgar Cheltenham, UK. Northampton, MA, USA. (2014) 249 pages, hardback, $120.00Despite their minimal application of research and development, industries such as manufacturing, food, and publishing occupy an important role in production expansion and employment opportunities. The editors of Knowledge-Intensive Entrepreneurship (KIE) in Low- Tech Industries point out the alarming gap that characterizes today's research in regard to industrial innovation and transformation. They purport that KIE activities are essential in the comprehensive understanding of the variable factors that may lead to innovations and changes in the industrial sectors, which would ultimately guide policy formation.The book emphasizes on KIE role in exploring innovations and opportunities that ultimately will be appreciated by consumers and would lead to resource mobilization to capitalize on the economic benefit. KIE activities can provide a science based and organized framework to produce variety of innovations that are necessary for today's "knowledge economy." The book points out the roots of limited role of KIE activities in low tech-industries. It clarifies that industries such as clothing and food production have standardized processes that are based on rooted knowledge which accumulate incrementally through generational evolution. The slow but progressive process leads to mature industries characterized by guaranteed efficiency, and subsequently promises good returns on the capital investment in these traditional sectors. Recently, as a result of a globalized economy, these traditional sectors are faced by fierce competition from markets that enjoy cheap labor; subsequently, they refine their strategies around professional managers who can optimize, rationalize and streamline production line instead of investing resources in research and development to explore new potentials and opportunities.Many KIE proponents perceive low-tech industries as stagnant sectors, which have limited "valuable opportunities." The editors of this book reject the stagnant characterization that casted low tech industries and suggest a larger role of KIE activities in response to the mounting international market pressure. They argue that low-tech industries' traditional responses to competition by adopting managerial strategies geared toward cost reduction and to the optimization of routine practices, although necessary, are insufficient to compensate for a shrinking operational return. Subsequently, they advocate that low-tech industries are in need for a reflective evaluation that penetrates through established industries' practices. Such a process will produce the necessary innovative breakthroughs that can direct stagnant industries away from old traditional designs that failed in the new challenging global market.To advance their stance the editors incorporate variable quantitative and qualitative methods in order to explain the role of KIE activities in low and moderately low technology (LMT) sectors and/or firms. For example, in chapter two, a quantitative analysis of a large scale survey points out the different distinctive KIE characteristics as they were applied on LMT sectors; subsequently, the study illustrates how KIE can be of benefit for managers, policy makers and scholars as they explore the "high potential "of this form of entrepreneurship. In the third chapter, the editors present a case study that demonstrates a detailed KIE process in LMT sectors in different European countries. The study focuses on the similarities and differences of these patterns and how they affect firm choices and directions in order to point out the existing opportunities for KIE in LMT. In the following chapter, the editors demonstrate how KIE process enhances many European traditional industries competitiveness and promotes their growth despite the rising competition as a result of the growing low- wage economies. …

Embeddedness and innovation in low and medium technology rural enterprises

There has been a resurgence of interest in the relationship between location and the innovativeness of firms. The research question addressed in this paper is the role that location plays in the innovation processes of low and medium technology firms. The literature on innovation and geographic proximity, combined with a reconceptualisation of the Granovetterian concept of embeddedness, provide the theoretical context. Case studies of four Irish low and medium technology firms, two in the furniture industry and two in the metal products industry, provide the empirical setting. Among the issues addressed are whether or not deep, local embeddedness is essential for innovativeness and if there is a pattern of change over time in the nature of the relationship between embeddedness and innovation. The relevance of the research to rural industrial development is also assessed.

A Study on the Value-Relevance of Intangible Expenditure : compare high-technology firms to low-technology firms

A Study on the Value-Relevance of Intangible Expenditure : compare high-technology firms to low-technology firms

Conditional Conservatism in U.S. High- and Low- Technology Firms

In this study, we investigate whether U.S. high-technology firms are more or less conditionally conservative relative to low-technology firms. If U.S. high-tech firms are required to expense immediately all R&D costs according to the accounting standard SFAS 2, which reflects unconditional conservatism, then in case of bad news (conditional conservatism), these firms cannot write-off their R&D costs. We expect that high-tech firms are less conditionally conservative since unconditional conservatism dampens the timeliness of accounting income. Our findings are consistent with the prediction that high-technology firms are less conditionally conservative than low-technology firms. The level of conditional conservatism increases with the level of leverage regardless of the technology level of the firm. Only low-technology firms are more conditionally conservative when they face higher auditor litigation risk. We find that neither in high-technology firms nor in low-technology firms, taxation affects conditional conservatism.

Analysing Energy and Material Saving Technologies’ Adoption and Adopters

The main objective of this paper is to map the adoption of technologies for energy reduction and resources consumption in production. The aim is also to contribute to the identification and understanding of the characteristics of the manufacturing firms that use these kinds of energy and material saving technologies. Our research is based on data from the largest European manufacturing survey to date and it includes data from Spain and Slovenia. The results show that the use of specific energy saving technologies and material saving technologies in manufacturing firms is still modest. Dividing manufacturing firms based on technology intensity sectors and based on their relative energy efficiency we have concluded that firms in high technology industries focus less on energy efficiency than low technology firms. Some other specific relationships between the use of energy efficient technologies and adopters’ characteristics (e. g. use of environmental management systems) are presented in this paper.

An integrated approach for developing a technology strategy framework for small- to medium-sized furniture manufacturers to improve competitiveness

Low-technology firms, such as those found within the furniture manufacturing industry, have no framework or methodology to guide them successfully to acquire and integrate technology that enables them to operate more competitively. The aim of this article is to illustrate the development of a technology strategy framework for small- to medium-sized furniture manufacturers to assist them to improve their competitiveness. More specifically, this article presents an integrated technology strategy framework that enables management to integrate their business strategy with their technology requirements successfully, thus improving competitiveness.

Are there regional spillovers from FDI in the Swiss manufacturing industry?

This paper examines whether there are signs of regional spillovers from FDI, although evidence is still very scarce. It hypothesizes that (a) the assessment of regional spillovers relies on a detailed analysis of these effects, according to the channels by which they occur (namely, increasing competition, worker mobility, and demonstration effects); (b) the size and the extent of these effects depend on the interaction between their channels and the levels of existing technological capacity of local firms; and (c) spillover benefits tend to occur in regions where local firms largely invest in absorbing the best foreign knowledge. Using detailed firm-level manufacturing data from Switzerland, we have found that local firms gain from the presence of foreign firms in their region, but lose out if the firms are located elsewhere. Competition-related spillovers appear to be fully absorbed by local firms, with high technological capacities; worker-mobility-related spillovers are fully absorbed by low technology firms; while demonstration-related spillovers are absorbed by all groups of firms with mid technology firms experiencing the larger benefit. In addition, our results demonstrate that only local firms which have invested largely in the absorptive capacity benefit from spillovers, stemming mainly from technology transfer. This benefit seems to occur at both regional level and outside.

Impact of Voluntary Disclosure on the Relevance of Accounting Information

Information disclosure by firms has grown considerably. The increased level of firms’ disclosure has been accompanied by the loss of relevance of accounting information over time (Lev, 1989, Ramech and Thiagarajan, 1995, Lev and Zarowin, 1999, Brown and al, 1999, Chang, 1999 and Chalmers and al, 2011). Our objective is to determine whether the voluntary disclosure explains the low relevance of accounting information. We find that medium-technology companies have the highest level of relevance of accounting information. However, the relevance of the accounting model is low for lowtechnology firms and high technology firms. The introduction of the overall disclosure index and subindexes of disclosure has an effect on the relevance of the accounting model (this effect is significant only in some cases for low-tech firms). Furthermore, the addition of variables of disclosure to the accounting model makes the accounting variables relevant to investors for low-tech firms. For medium-tech firms, book values and earnings are relevant. While, for high technology firms, only the earnings are relevant. We also show that the introduction of intangible expenses, the weight of intangibles and the index of disclosure on intangibles is growing, but not significantly the relevance of the accounting model.

The role of corporate technology strategy and patent portfolios in low-, medium- and high-technology firms

Previous research into technology strategies and patent portfolios has focused on high-technology firms, whereas low- and medium-technology companies have been relatively neglected. Therefore, we analyze how corporate technology strategy and the size and composition of patent portfolios affect the performance of low-, medium- and high-technology firms. Data from 136 European companies are used to examine four hypotheses relating financial performance to technological diversification, technological aggressiveness, patent portfolio size, and patent portfolio quality. The cross-industry sample allows analyzing the different consequences of these strategic parameters in low-, medium- and high-technology firms by considering technological intensity as a moderator. Our first finding is that the positive impact of technological aggressiveness is limited in low- and medium-technology companies. Secondly, technological diversification has a positive effect in high-technology firms and a negative effect in low-technology firms. Thirdly, patent portfolio size has a positive effect only in high-technology firms. Finally, patent portfolio quality has an equally positive influence on all firms' performance. In part, these results conflict with the findings of previous research into high-technology companies, and they call for rethinking the role of technology strategies and intellectual property portfolios in firms across industries.

The valuation implications of human capital in transactions on and outside the exchange

Abstract We examine the valuation implications of human capital both for a broad sample of firms and for subsamples of high-technology firms and low-technology firms. Our results suggest that the market appears to value compensation expenses not as expenses but as if they serve as a proxy for a human asset that is omitted from the balance sheets. The findings are consistent with human capital comprising a more sizable portion of the value of high-technology firms than of low-technology firms. The findings also indicate that compensation expenses are valued differently from other expense components of income. Markedly, despite critical differences between investors on the exchange and those buying shares in transactions outside the exchange (controlling interests, information asymmetry, etc.), their assessment of the enhanced value of a firm attributable to human capital is shown to be relatively similar. The results in this study are consistent with compensation expenses creating a valuable intangible asset, hence suggesting that reform in the accounting treatment of these expenses is of critical importance.

RETRACTED: The role of corporate technology strategy and patent portfolios in low-, medium- and high-technology firms

Previous research into technology strategies and patent portfolios has focused on high-technology firms, whereas low- and medium-technology companies have been relatively neglected. Therefore, we analyze how corporate technology strategy and the size and composition of patent portfolios affect the performance of low-, medium- and high-technology firms. Data from 136 European companies are used to examine four hypotheses relating financial performance to technological diversification, technological aggressiveness, patent portfolio size, and patent portfolio quality. The cross-industry sample allows analyzing the different consequences of these strategic parameters in low-, medium- and high-technology firms by considering technological intensity as a moderator. Our first finding is that the positive impact of technological aggressiveness is limited in low- and medium-technology companies. Secondly, technological diversification has a positive effect in high-technology firms and a negative effect in low-technology firms. Thirdly, patent portfolio size has a positive effect only in high-technology firms. Finally, patent portfolio quality has an equally positive influence on all firms' performance. In part, these results conflict with the findings of previous research into high-technology companies, and they call for rethinking the role of technology strategies and intellectual property portfolios in firms across industries.

Innovation paths and the innovation performance of low-technology firms—An empirical analysis of German industry

This paper analyses innovation paths and the innovation performance of low-technology firms in comparison to medium- and high-technology firms. Firstly, it shows that low-, medium- and high-technology sectors consist of a considerable mix of low-, medium- and high-technology firms. Thus, it is necessary to look at the firm level when analysing how innovation patterns differ depending on the level of R&D intensity. Secondly, the product and process innovation performance of low-technology firms in German industry is analysed based on data from 1663 firms in the German Manufacturing Survey 2006, applying a set of both product and process related innovation output indicators. The empirical results show that low-technology manufacturing firms lag behind their medium- and high-tech counterparts regarding their product and service innovation performance, to a large degree on purely definitional grounds, but that they seem to perform equally well and in some respects even better at process innovation.

THE MARKET- AND STAGE-BOUND FIRM-SPECIFIC ADVANTAGES IN DIVERSIFICATION OF DEVELOPING COUNTRY MNCS.

Academy of Management Annual Meeting Proceedings includes abstracts of all papers and symposia presented at the annual conference, plus 6-page abridged versions of the “Best Papers” accepted for inclusion in the program (approximately 10%). Papers published in the Proceedings are abridged because presenting papers at their full length could preclude subsequent journal publication. Please contact the author(s) directly for the full papers. ArticlesTHE MARKET- AND STAGE-BOUND FIRM-SPECIFIC ADVANTAGES IN DIVERSIFICATION OF DEVELOPING COUNTRY MNCS.Published Online:30 Nov 2017https://doi.org/10.5465/ambpp.2008.33716864AboutSectionsPDF/EPUB ToolsDownload CitationsAdd to favoritesTrack Citations ShareShare onFacebookTwitterLinkedInRedditEmail AbstractIn this paper, I theoretically identified two kinds of firm-specific advantages: the market-bound firm-specific advantages and stage-bound firm-specific advantages. Based on an analysis of 154 listed firms over the time period 1996 to 2002, I examined the simultaneous impact of product and geographic diversification on the performance. I found that diversification have different impact on performance between firms in high-technology industries and in low-technology industries. It is fruitful for high technology firms to undertake product diversification but low technology firms are better off diversifying geographically.FiguresReferencesRelatedDetails Vol. 2008, No. 1 Permissions Metrics in the past 12 months History Published online 30 November 2017 Published in print 1 August 2008 InformationCopyright of Academy of Management Journal is the property of Academy of Management and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder’s express written permission. However, users may print, download, or email articles for individual use.KeywordsINTERNATIONAL business enterprisesDIVERSIFICATION in industryECONOMIC developmentHIGH technologyBUSINESS planningDEVELOPING countriesDownload PDF

Does Innovation Cause Stock Market Runups? Evidence from the Great Crash

This article examines the stock market's changing valuation of corporate patentable assets between 1910 and 1939. It shows that the value of knowledge capital increased significantly during the 1920s compared to the 1910s as investors responded to the quality of technological inventions. Innovation was an important driver of the late 1920s stock market runup, and the Great Crash did not reflect a significant revaluation of knowledge capital relative to physical capital. Although substantial quantities of influential patents were accumulated during the post-crash recovery, high technology firms did not earn significant excess returns over low technology firms for most of the 1930s. (JEL G14, N12, N22, O30)

Identifying high technology small firms: A sectoral analysis

This study explores the use of existing categorizations in classifying high and low technology firms such as the standard industrial classification (SIC). Such classifications tend to be applied to firms in a blanket fashion rather than on a systematic basis. This study uses both input and output approaches to identify high technology firms. The results indicate that electronics and IT/software firms meet the criteria for classification as high technology firms using both input and output criteria. The findings also indicate that distribution firms can also be categorized as high technology firms using the output approach only. Based on the analysis, we derived objective criteria for the classification of high technology firms.

Embeddedness and innovation in low and medium technology rural enterprises

There has been a resurgence of interest in the relationship between location and the innovativeness of firms. The research question addressed in this paper is the role that location plays in the innovation processes of low and medium technology firms. The literature on innovation and geographic proximity, combined with a reconceptualisation of the Granovetterian concept of embeddedness, provide the theoretical context. Case studies of four Irish low and medium technology firms, two in the furniture industry and two in the metal products industry, provide the empirical setting. Among the issues addressed are whether or not deep, local embeddedness is essential for innovativeness and if there is a pattern of change over time in the nature of the relationship between embeddedness and innovation. The relevance of the research to rural industrial development is also assessed.

Innovation and performance in Spanish manufacturing SMEs

Innovation facilitates how SMEs respond to market changes and maintain their competitive advantage. This paper analyses the relationship between the degree of innovation (measured as innovation in products, processes and administration systems) and performance among 1,091 Spanish manufacturing SMEs. The results show that innovation positively impacts SMEs performance in low and high technology industries. Innovation was more important to achieving a competitive advantage to high technology firms than low technology firms. These results support innovation as being important to a firm's sustainable competitive advantage.

Do Location Characteristics Have Different Survival Values for High and Low-Technology De Novo Enterprises?

The importance of sectors characterized by high knowledge and technological intensity is growing in the new economy. The creation and maintenance of competitive advantage in high-technology sectors depend to a large degree on innovation. Since diffusion of innovation tends to be local, location characteristics matter. We argue that new high-technology firms can improve their survival probabilities by entering locations that stimulate and support innovation. These characteristics include urban diversity, competitive industrial structure, and clustering. In contrast, clustering, competition and diversity have lower survival value for low-technology firms, as the benefits accruing from higher innovation levels are less valuable. Indeed, the costs of urban congestion, and the pressure of competition on prices may result in negative impacts on survival. We test our hypotheses using an extensive longitudinal data base which covers all de novo entrants into the Canadian manufacturing sectors. The results indicate that clustering has a higher survival value for high-technology firms. Urban diversity and competition have positive effect on the survival of high-technology firms and negative effect on low-technology firms.

Pay Disparities Within Top Management Groups: Evidence of Harmful Effects on Performance of High-Technology Firms

This study examines the interactive effect of technological intensiveness and top management group (TMG) pay disparity on firm performance. Drawing on two literatures—task interdependence and group rewards—we argue that: (a) technological intensiveness imposes a considerable requirement for multiway information processing and collaboration among senior executives of a firm, and (b) collaboration is diminished when large pay disparities exist. Hence, TMG pay disparity should be more detrimental to subsequent performance of high-technology firms than low-technology firms. We construct seven different measures of executive pay disparity based on three major types of pay disparity (vertical, horizontal, and overall) and use a proprietary data set to test our hypotheses. The results provide consistent support for our hypotheses, thereby suggesting important implications for scholars and designers of executive compensation.