Manufacturing Firms Research Articles

Unleashing Industry 4.0: Empowering corporate trade credit

Utilizing panel data from publicly listed Chinese manufacturing firms spanning 2013 to 2022, our research demonstrates a direct correlation between the adoption of Industry 4.0 technology and improvements in trade credit. Industry 4.0 also bolsters firms' total factor productivity and internal controls, thereby catalyzing the expansion of trade credit. Notably, this positive effect is accentuated in environments with favorable commercial credit conditions and a lower prevalence of alcohol consumption, particularly within firms guided by top management teams with a strong technological background and a commitment to social responsibility. Through these findings, our study illuminates the pivotal role of Industry 4.0 technology in shaping corporate trade credit dynamics.

Why do some African firms export? The role of regional economic communities?

AbstractThis article examines whether African manufacturing firms are strategically located for regional market access. The study uses a large dataset from the World Bank Enterprise Surveys and is based on 6800 firms from 26 African countries. The study findings show that firms located in countries with dual membership to Regional Economic Communities (RECs) exhibit a significantly higher propensity to export than firms in countries affiliated with a single REC. Additionally, our findings suggest that RECs enhance export participation by mitigating customs delays. However, constraints in the business environment can hinder the propensity of firms to export. In particular, the study identifies informal competition and power outages as substantial barriers that increase the cost of doing business and diminish the potential benefits of REC membership. These results underscore the importance of advancing economic integration across Africa to bolster export participation. Additional improvements in the domestic business environments should address the constraints that hinder firms' international competitiveness.

Corporate Environmental Ethics: Catalyst for Green Innovation and Business Performance in Pakistan's Healthcare Manufacturing Sector

This empirical study investigates the intricate relationships between corporate environmental ethics, green innovation, and business performance within Pakistan's healthcare manufacturing sector. Utilizing survey data from 30 manufacturing firms, the research examines how green innovation impacts financial and environmental performance, with a specific focus on the mediating role of corporate environmental ethics. Furthermore, the study explores the moderating influence of environmental uncertainty on the relationship between green innovation and success in economic and environmental domains. Results indicate that robust corporate environmental ethics significantly enhance environmental performance, while green innovation coupled with such ethics contributes positively to economic performance. Moreover, environmental uncertainty moderates the effects of green innovation on both economic and environmental performance outcomes. These findings offer valuable insights for decision-makers aiming to navigate the complexities of sustainable business practices, particularly within the context of Pakistan's healthcare manufacturing sector.

Efficiency-centered vs novelty-centered: unpacking the impact of business model design on services in manufacturing firms

Purpose How does business model design play a role in enabling manufacturing firms’ services? This study aims to investigate the impact of two distinct types of business model design, namely, efficiency-centered business model design (EBMD) and novelty-centered business model design (NBMD), and their effects in balanced and imbalanced configurations, on two types of services: product- and customer-oriented services. Design/methodology/approach Using matched survey data of 390 top managers and objective performance data of 195 Chinese manufacturing firms, this study uses hierarchical regression, polynomial regression and response surface analysis to test the hypotheses. Findings The results show that while EBMD positively affects product-oriented services, NBMD positively affects customer-oriented services. Both types of services exert a significant influence on firm performance. Furthermore, the degree of product- and customer-oriented services increases with an increasing effort level with a balance between EBMD and NBMD. Asymmetrical, imbalanced configuration effects reveal that the degree of product-oriented services is higher when the EBMD effort exceeds the NBMD effort, and the degree of customer-oriented services is higher when the NBMD effort exceeds the EBMD effort. Originality/value This study enriches the understanding of designing business models to facilitate service growth in manufacturing firms, ultimately benefiting firm performance. In addition, exploring balanced and imbalanced configurations of EBMD and NBMD offers new insights into business model dual design research.

Strategic Drivers for Sustainable Competitiveness in the Alcohol Manufacturing Firms in Kenya: A Case of East African Breweries Limited

Strategic Drivers for Sustainable Competitiveness in the Alcohol Manufacturing Firms in Kenya: A Case of East African Breweries Limited

Can big data analytics capability promote firm innovation? A moderated mediation model of organizational learning and market orientation

PurposeThe empirical results of the pivotal relationship between big data analytics capability (BDAC) and firm innovation remain inconclusive, necessitating a comprehensive understanding of the mediator and moderator through which firms can realize the potential innovation benefits of BDAC. Invoking the indirect perspective of dynamic capability theory, we constructed a moderated mediation model in which organizational learning mediates the impact of BDAC on firm innovation; the mediation effect of organizational learning is contingent upon market orientation.Design/methodology/approachOur hypotheses were tested using hierarchical regression and bootstrapping methods with a sample of 227 large- and medium-sized manufacturing firms in China.FindingsThe results reveal that both exploratory and exploitative learning fully mediate the link between BDAC and firm innovation. The mediation effect of exploitative learning is positively contingent upon market orientation; however, market orientation does not positively moderate the mediation effect of exploratory learning.Originality/valueOur moderated mediation model is one of the first to provide a fine-grained understanding of the process through which BDAC is transformed into firm innovation as well as the conditions under which this mediating mechanism may work effectively, thereby further elucidating the theoretical black box regarding the BDAC-firm innovation link and resolving existing debates in the literature regarding why BDAC does not always yield positive outcomes.

The Relationship between IT Integration, Organizational Culture, and Supply Chain Performance

IT integration plays an important role in boosting supply chain performance (SCP) in today’s dynamic organizational environment. It becomes easier for real-time data sharing, collaboration, and communication among supply chain participants. However, the prevailing organizational culture has a considerable impact on how effective IT integration exists, as it can either help or hinder the adoption and exploitation of IT integration. The relationship between SCP, organizational culture, and IT integration is examined in this study. Measurement model assurance and research hypothesis examination are accomplished through the use of structural equation modeling (SEM). 90 manufacturing firms are surveyed for this research online. This analysis employs regression analysis and an ANOVA test that confirms the significant correlation between IT integration, organizational culture, and SCP. The results and findings show that supply chain performance and IT integration are positively correlated, highlighting the fact that the impact of IT integration is increased by an encouraging organizational culture that values adaptability, teamwork, and continuous learning. (β=0.50,0.45,0.35,and 0.30,p<0.001) provide strong evidence in favor of hypotheses 1–4. The study finds that SCP is greatly improved by successful IT integration, but the effectiveness of the integration is heavily dependent on an organizational culture that encourages flexibility and teamwork.

Impact of productivity drivers on the performance of manufacturing firms

A considerable number of research indicates that a nation's industrial sector plays a crucial role in its economic growth. Therefore, it is crucial to research the productivity drivers among businesses engaged in the manufacturing sector to create a sound, inclusive, long-lasting, and innovative industry. Thus, as a micro-perspective of industrialization, this study looks into the main productivity drivers of manufacturing firms in Nigeria. The study analyses an imbalanced panel firm-level dataset from 2007 to 2019 using the simultaneous approach of the stochastic frontier to achieve its goal. Our research shows that Nigerian manufacturing firms deal with growing returns to scale and a high labour intensity. For policy actions, it was recommended that a realistic industrialization strategy has to be micro-founded. This strategy should prioritise large-scale industrial companies, promote exports, and provide a steady supply of electricity. The findings also show that small and micro firms in Nigeria are more productive than large manufacturing firms, even though the frequency of power outages and average labour costs impede the productivity of these firms.

Does smart transformation in manufacturing promote enterprise value chain upgrades?

Intellectualization of manufacturing firms is crucial for facilitating the seamless integration of China's digital and real economies while achieving high-quality growth in the manufacturing industry. This study found that smart transformation significantly improved manufacturing firms’ value chain upgrades based on a sample of Chinese A-share listed companies from 2011 to 2022. This impact operates primarily by optimizing human resources and improving total factor productivity effects.

AI-enabled smart manufacturing boosts ecosystem value capture: The importance of servitization pathways within digital-intensive industries

Understanding successful pathways for manufacturers to capture value within the service ecosystem framework is a recent and still nascent area of research that requires further investigation and growth. Within industrial settings, artificial intelligence (AI) constitutes an enabling technology that can be integrated across a network of products and systems, driving the transformation of these service ecosystems. From this perspective, this study proposes that the symbiotic convergence between AI-enabled smart manufacturing, which facilitates process and product enhancements, and servitization, which enables product availability and customization, contributes to a higher level of ecosystem value capture. To address this issue, a research model employing Smart Partial Least Squares was developed to examine the interplay between these constructs. By using survey data from a purposively selected sample of servitized manufacturing firms, the findings reveal the synergistic effects of integrating AI-enabled smart manufacturing and servitization. Furthermore, the results indicate variances across industrial sectors, and highlight that in digitally-intensive industries, service business models have undergone more substantial transformations, fostering accelerated ecosystem development streamlined by customization. Conversely, in digitally-augmented industries, where inputs are digital but products are predominantly analog, digital capabilities are primarily confined to production processes.

Linking manufacturing firms with environment: role of green manufacturing and environmental management on firm’s environmental performance with moderating effect of external environmental regulations

Linking manufacturing firms with environment: role of green manufacturing and environmental management on firm’s environmental performance with moderating effect of external environmental regulations

Generative AI usage and sustainable supply chain performance: A practice-based view

The emergence of generative AI presents numerous potential solutions to address challenges in sustainable supply chain management (SCM). However, not all firms can effectively master the methods of using generative AI and realize potential benefits. To address this dilemma, we adopt a practice-based view (PBV) to examine generative AI usage’s effect on sustainable supply chain performance (SSCP). Analyzing survey data from 213 Chinese manufacturing firms, we identify a positive relationship between generative AI usage and SSCP. Moreover, two types of sustainable supply chain practices—green supply chain collaboration (GSCC) and circular economy implementation (CEI)——emerge as serial mediators connecting this relationship. We contribute to existing AI-enabled SCM research by elucidating the potential mediation mechanisms underlying the link between generative AI usage and SSCP. We also offer insightful implications for firms adapting to new norms in global SCM.

The Impact of Trade Credit on Global Value Chain Position: Evidence from Chinese Manufacturing Firms

ABSTRACT Conventional wisdom argues that a well functioning financial system is essential to foster economic growth and development. While its financial market is still underdeveloped, China has not only achieved great economic growth and speedy export growth, but also elevated its position as an exporter in the global value chain (GVC). This paper examines the impact of trade credit on the GVC positions of Chinese manufacturing enterprises. The empirical study finds that trade credit has a significant promotional effect on enterprises’ GVC positions, and the effect is more pronounced for private firms, firms with high market position, and firms in high-technology industries. The mechanism analysis shows that trade credit heightens the export quality of products and alleviates the financing constraints of enterprises, thus promoting their GVC positions. The findings have implications for Chinese manufacturing firms to exploit the role of trade credit in promoting their GVC positions and fostering new advantages in international competition.

How industrial robots affect employment: firm-level evidence from China

Using China’s Annual Survey of Industrial Firms (ASIF) and the China Customs Database (CCD) from 2000 to 2013, this study explores the impact of adopting industrial robots on the employment in Chinese manufacturing firms. We find a positive association between the adoption of industrial robots and the employment scale of China’s manufacturing enterprises. We also find evidence that the positive association is more pronounced in capital-intensive industries, non-state-owned firms, and firms in coastal areas. Mechanism test indicates that ‘scale expansion effects’ and ‘productivity effects’ are the main channels through which industrial robots promote employment growth. Further analysis indicates that the adoption of industrial robots did not have obvious industry spillover effects. Additionally, other labor market results demonstrate that the adoption of industrial robots significantly increases the average wage level of enterprises while decreasing their labor share. This study provides micro-level evidence revealing the impact of adopting industrial robots on employment in developing countries. It also provides important policy implications for countries worldwide seeking to promote automated production.

How does data-driven supply chain analytics capability enhance supply chain agility in the digital era?

Supply chain analytics capability has recently gained more attention from both scholars and practitioners. Through the lens of information processing theory, this study examined how supply chain analytics capability impacts supply chain agility in the digital era with the associated adoption of digital technologies and platforms by companies. To obtain relevant data, a large-scale survey of Chinese manufacturing firms was conducted. Supply chain integration capability was evaluated as mediator and digital platform was evaluated as moderator. The results show that supply chain integration capability can mediate the effect of supply chain analytics capability on supply chain agility; moreover, supply chain analytics capability has a stronger impact on supply chain agility under a high level of digital platform adoption. These findings deepen the understanding of the role of supply chain analytics capability in supply chain management. This paper also provides managerial implications for enhancing supply chain agility in the digital era.

Stakeholders’ Perceptions on Influence of Energy Efficiency Practices Adopted on Economic Performance of Selected Small and Medium Sized Manufacturing Enterprises in Nakuru County, Kenya

The adoption of environmental policy among large manufacturing firms has been recognized for enhancing their economic performance. This is crucial for achieving Kenya's Vision 2030, the fourth medium term plan (2023-2027) and the Bottom-Up Economic Transformation Agenda (BETA) for Inclusive Growth. Despite the slow pace, small and medium-sized enterprises (SMEs) are now adopting these policies to reduce their environmental footprint. However, there is limited documentation on how these practices affect their economic performance. Hence, this study aimed at examining stakeholders' perceptions on the influence of adopting energy efficiency practices on the economic performance of selected manufacturing SMEs in Nakuru County. The study was guided by the ecological modernization theory (Win-Win principle). An explanatory sequential mixed-method research design was employed, targeting SME proprietors in the manufacturing sector with a sample size of 76 respondents. Descriptive and inferential statistics (linear regression) was used to analyze quantitative data, while content analysis was used to analyze qualitative data. The study found out that SMEs largely adopted the use of energy-efficient bulbs and turned off lights when not in use. However, they used solar lighting as an energy efficiency practice to a lesser extent because they consider this practice expensive. The study also found that stakeholders perceived that energy efficiency practices adopted had a significant influence on the economic performance of selected manufacturing SMEs. This finding implied that energy efficiency practices adopted by manufacturing SMEs would have an influence on SMEs economic performance. This study recommends that the government, both national and county should sensitize the SMEs as well as allocate financial and technical resources to support SMEs implement and upscale their energy efficiency practices within their operations. The focus of energy efficiency practices should be on those that reduce production costs and enhance competitiveness such as those that improve SMEs customer base

Bootstrap variable selection for corporate distress prediction: evidence from the Chinese manufacturing industry

ABSTRACT This study explores the corporate distress prediction of Chinese manufacturing firms over 2013–2018 by using a large number of financial predictors. We extend the bootstrap resampling procedure into corporate distress prediction, combining with the existing selection techniques such as best subset selection, forward stepwise selection, backward stepwise selection, and least absolute shrinkage and selection operator (LASSO). We provide empirical evidence of the advantage of LASSO in selecting key predictors. The models constructed by these four techniques all outperform the prominent two models in the literature. This study proves the effectiveness of combining the bootstrap resampling method with variable selection techniques to predict corporate distress.

Customer-driven innovation: examining the nexus of trust, IT, knowledge absorption, and involvement in NPD success

This paper explores the interplay among trust, IT utilization, knowledge absorption, and customer involvement in new product development and their impact on new product development performance. Based on an empirical analysis of 283 survey responses from global manufacturing firms, the study reveals key insights: (1) Trust and IT utilization positively influence knowledge absorption, with trust having a stronger impact; (2) Knowledge absorption directly enhances new product development performance; and (3) Customer involvement positively moderates the relationship between knowledge absorption and product new product development performance. This study enhances our understanding of new product development dynamics, illustrating how these factors collectively shape successful product development outcomes in the rapidly evolving business landscape.

Lights dim, exports down: Examining the trade effects of power shortages on Chinese manufacturing firms

While existing research extensively investigates the repercussions of demand shocks on export performance, limited attention has been given to understanding the trade implications of supply-side input shocks. Utilizing a city-level power shortage index and firm-level data from 2006 to 2014 for the Chinese manufacturing sector, we provide novel evidence of a significant negative impact of power shortages on export performance. This finding remains robust across alternative measurements and in addressing endogeneity concerns. Furthermore, we find that power shortages curtail firms' inventory and innovation activities, which are linked to export performance. Heterogeneity tests reveal insignificant impacts on state-owned firms, those in inland areas and high-energy-consuming industries as well. Additionally, our findings indicate that power shortages exclusively affect the intensive margins of exports rather than the extensive margins. This research offers valuable insights for policymakers and managers in devising strategies to mitigate the adverse effects of power shortages.

RELATIONSHIP BETWEEN SUSTAINABLE DEVELOPMENT AND MANUFACTURING FIRMS PERFORMANCE IN EDO STATE, NIGERIA

This study examines sustainable development in manufacturing firms’ performance in Edo State, Nigeria. The purpose was to establish the association among social, economic and environmental developments on manufacturing firms in Edo State. The methodology utilized was the survey research proportions. The population comprised of top level employees of ten selected manufacturing firms registered with the Manufacturers Association of Nigeria (MAN) in Edo state, with international affiliation. A total of one hundred (100) employees of the ten selected manufacturing firms in the state, constituted the sample size. The purposive sampling technique was made use to choose ten (10) employees each from the designated manufacturing firms. Data analysis engaged was the descriptive and inferential statistics. The outcomes discovered that manufacturing firm’s social and economic developments were significant predictors of sustainable development among the manufacturing firms, in the State, while environmental development was insignificant. The study recommended that manufacturing firms should exemplify social development program as core values, it is also recommended, that they formulate and implement economic development policies that will foster the growth of their firms, the study concluded that firms should take proactive measures to minimize their environmental approach by adopting eco-friendly initiatives.