Performance In Transition Economies Research Articles

Effect of board and ownership attributes on corporate performance in transition economy

Effect of board and ownership attributes on corporate performance in transition economy

CSR and new product development performance in transition economies: roles of internal capabilities, external networks, and dysfunctional competition

ABSTRACT Despite abundant research on corporate social responsibility (CSR) outcomes, few studies have examined whether CSR contributes to new product development (NPD) performance. Existing studies argue that CSR increases firms’ innovation activities and launches more new products, however, these arguments have yet to fully extend to the understanding of underlying mechanisms in the CSR-NPD relationship and how CSR fosters NPD performance in different scenarios, especially in transition economies. Building on the resource-based view, social capital theory, and structuration theory, this paper hypothesizes that the CSR influence on NPD performance is mediated by internal capabilities and external networks and moderated by dysfunctional competition. Using empirical data of 219 small and medium-sized firms in China, we find that CSR not only directly increases firms’ NPD performance but also has positive effects on internal capabilities and external networks, which in turn improve NPD performance. Moreover, as one of the most representative institutional environments in transition economies, dysfunctional competition strengthens the effects of CSR on internal capabilities and external networks. This research contributes to the CSR and NPD literature in transition economies and offers strategic guidance to innovating firms in transition economies on how to foster and benefit from CSR initiatives, NPD managers should comprehend the coevolution of CSR, innovation, and institutional environments in transition economies.

The Dark Side of Enterprise Performance in Transition Economies: Corruption an Obstacle or a Second Best Solution?

Cet article de recherche examine la relation entre la corruption, la privatisation, les coûts de sécurité et la performance des entreprises dans la région de l’Europe centrale, orientale et sud-orientale (CESEE). En utilisant des données de panel au niveau des entreprises issues de l’enquête sur l’environnement des affaires et la performance des entreprises (BEEPS) couvrant 19 économies en transition sur la période 2002-2019, cette étude analyse l’impact de la corruption sur la performance des entreprises en contrôlant les caractéristiques des entreprises et des pays. Les résultats révèlent une association négative entre la corruption et la performance des entreprises, indiquant que la corruption constitue un obstacle significatif à la croissance et à la rentabilité des entreprises. Les résultats montrent également que les entreprises étrangères et celles issues d’entreprises publiques affichent une meilleure performance économique par rapport aux entreprises nationales et non-privatisées. De plus, il existe une relation positive entre les coûts de sécurité payés par les entreprises et leur performance économique, suggérant que l’investissement dans des mesures de sécurité peut atténuer l’impact négatif de la corruption sur la performance commerciale. Ces résultats soulignent l’importance de lutter contre la corruption, de promouvoir des conditions équitables pour tous les types d’entreprises et de créer un environnement commercial transparent et sûr. Les décideurs politiques doivent se concentrer sur des mesures anti-corruption efficaces, sur l’application des lois et sur le développement d’institutions favorisant la transparence et la responsabilité. Ces efforts peuvent conduire à une amélioration de la performance des entreprises, à une croissance économique, à une réduction des inégalités de revenus et à un meilleur bien-être social.

Property ownership and firm performance: firm-level analysis of post-communist economies

ABSTRACT This study investigates the relationship between property ownership and firm performance in transition economies. The adoption of market-oriented institutions across transition economies after the collapse of the Berlin Wall was not uniform. Our empirical work confirms substantial differences in the propensity of property ownership and firm performance across transitional economies because of institutional heterogeneities. We identify two types of post-communist economies: the countries with solid market-based institutions (Eastern European economies) that were able to reap the benefits of property ownership leading to increased profitability and productivity and the nations with weak institutions (Commonwealth of Independent States) where the principal association of interest is not consistent with conceptual predictions. Our empirical analysis shows that institutional differences, specifically a higher risk of capital expropriation, may force firms in the CIS to avoid capital ownership, limiting firms’ ability to exploit the positive benefits of capital ownership on firm profitability and productivity.

Bribery, female-led start-ups and product innovation performance in transition economies: the moderating roles of institutional support and self-control

PurposeGiven that women around the world face more exclusion in terms of limited access to economic and innovation activities than men do, it is understandable that some female-led start-ups in weak institutional environments engage in bribery to help reduce the difficulties they encounter in the face of intense business competition. However, the link between bribery and product innovation performance is unclear. The purpose of this study is to investigate the relationship between bribery and product innovation performance for female-led start-ups, as well as the roles of institutional support and self-control in this link.Design/methodology/approachThis empirical study evaluates survey data from female-led manufacturing start-ups in China's Yangtze River Delta region to investigate the relationship between bribery and product innovation performance.FindingsThis research shows that bribery has an inverted U-shaped impact on product innovation performance in female-led manufacturing start-ups, meaning that the product innovation performance of these firms initially increases but then decreases as the bribery intensity (i.e. the frequency and amount of bribes) increases. The authors also focus on the roles of institutional support and self-control in this link, where the authors find that this relationship is steeper for firms with strong institutional support, as well as for individual female entrepreneurs who have high levels of self-control.Practical implicationsThe findings of this study indicate that policymakers should undertake efforts to improve institutional quality (e.g. increasing clarity around decisions, providing more institutional support, etc.) and to guide female entrepreneurs to cultivate higher levels of self-control, as such efforts would reduce the appeal of, and the opportunity for, bribery.Originality/valueTo date, very few studies focus specifically on female-led enterprises in the field of bribery research. The research findings presented here on the effect of bribery in female-led start-ups on firm product innovation performance are useful to researchers, policymakers and businesspeople, as they provide a better understanding of bribery in female-led start-ups in China, which can also be extrapolated to encompass other transition economy contexts.

Bribery and Firm Growth: Sensemaking in CEE and Post-Soviet Countries

How does bribery affect firm performance in transition economies? What would be the consequences of a discrepancy between a firm’s perception of the environment and its strategic choices? Using the Business Environment and Enterprise Performance Survey (BEEPS) data, we examine 1) the effect of bribery on firm performance and 2) the moderating role of the perceived degree of court fairness by a firm. We first find that bribery itself increased firms' sales growth in 27 transition economies in CEE and post-Soviet countries from 2002 to 2008. Second, our results reveal that the perceived degree of court fairness negatively moderates the positive relation between bribery and firm growth. We explain the findings with organizational failure in sensemaking.

Social capital and firm performance in transition economies

Social capital and firm performance in transition economies

Innovation performance: The effect of knowledge-based dynamic capabilities in cross-country innovation ecosystems

This study operationalizes the knowledge-based dynamic capabilities (KBDC) that act as drivers of innovation performance in innovation ecosystems, across different market economies. Innovation ecosystems facilitate the flow of resources to transform ideas into reality. In turn, KBDC provide a means to create and share expertise, which contributes to the diversification of the economy, and allow businesses to reach beyond their own boundaries to create value for customers in new ways. Employing partial least squares path analysis, four constructs, namely knowledge creation, knowledge diffusion, knowledge absorption and knowledge impact, are comparatively analyzed. Across all four constructs, knowledge creation is the biggest driver of innovation performance, and the strongest predictor of innovation performance in developed and developing market economies. Knowledge absorption is the strongest predictor of innovation performance in transition economies. A KBDC-centered innovation ecosystem framework is proposed to highlight the innovation performance and competitive advantage inherent in each knowledge-related capability.

Gendered regulations and SME performance in transition economies

This article explores the culture-regulations-gender triad in relation to small and medium enterprises’ (SMEs’) performance. Using a firm-level panel dataset drawn from 27 countries in Central and Eastern Europe and Central Asia between 2005 and 2014, we show that women and men experience and respond differently to regulations. Women take regulations very seriously and as a result, their SMEs see improved performance, whereas men discount the influence of regulations which then depresses the performance of their SMEs. However, when women respond to regulatory enforcers, it erodes the performance of their SMEs, whereas when men engage enforcers, the performance of their SMEs improves. The fact that women and men experience and respond to the same regulations differently—regardless of country effect and whether their SMEs are high- or low-performing businesses—suggests that regulations perpetuate gender biases, thus impacting not only individuals but even the organizations they lead. Our study expands gendered institutions theory by clarifying how regulations diffuse cultural values and influence women and men, as well as their SMEs, differently.

Managing employee performance in transition economies: A study of Vietnamese public organizations

SummaryEmployee performance management (PM) is a public sector reform that furthers development objectives by increasing employee performance, aligning employee efforts with organizational goals, and addressing poor performance. This study discusses employee PM in development contexts. Based on varied employee PM efforts in Vietnamese public organizations, it finds that (a) advanced employee PM practices significantly increase perceived organizational and employee outcomes compared with less advanced employee PM practices, and that (b) executive accountability, Human resource (HR) autonomy and entrepreneurial leadership are strongly associated with successful implementation of employee PM. This article provides detailed description of employee PM practices and suggests implications for implementing public sector reforms in transitional settings.

Innovation and the Export Performance of Firms in Transition Economies: the Relevance of the Business Environment and the Stage of Transition

This paper investigates the impact of product and process innovation on firms' export performance in transition economies (TEs) which embarked on a systemic change from a planned to a market economy in the early 1990s. The research builds on the technology gap theory and the analysis of the self-selection of firms into the export market. Unlike other studies that have focused on the export behaviour of firs in developed economies where business environment is generally stable and favourable, the paper controls for the relevance of business environment and the stage of transition on export performance of firms. The paper uses the firm-level Business Environment and Performance Survey data undertaken by the European Bank for Reconstuction and Development in 2002, 2005 and 2008 in 29 TEs. Findings show that the impact of innovation on export performance increases with the transition reforms. Macroeconomic instability acts as a moderating factor of export performance in countries at high transition stage, as it pushes firms to export more, as a risk shifting echanism. The main implication of the study is that the impact of some explanatory factors on export performance differs through the stages of transition.

Innovation and the export performance of firms in transition economies: the relevance of the business environment and the stage of transition

This paper investigates the impact of product and process innovation on firms' export performance in transition economies (TEs) which embarked on a systemic change from a planned to a market economy in the early 1990s. The research builds on the technology gap theory and the analysis of the self-selection of firms into the export market. Unlike other studies that have focused on the export behaviour of firs in developed economies where business environment is generally stable and favourable, the paper controls for the relevance of business environment and the stage of transition on export performance of firms. The paper uses the firm-level Business Environment and Performance Survey data undertaken by the European Bank for Reconstuction and Development in 2002, 2005 and 2008 in 29 TEs. Findings show that the impact of innovation on export performance increases with the transition reforms. Macroeconomic instability acts as a moderating factor of export performance in countries at high transition stage, as it pushes firms to export more, as a risk shifting echanism. The main implication of the study is that the impact of some explanatory factors on export performance differs through the stages of transition.

Product innovation and firm performance in transition economies: A multi-stage estimation approach

Using Business Environment Enterprise Performance Surveys (BEEPS), this paper provides a multistage empirical analysis of product innovation and firm performance in transition economies (TEs). The Crepon-Duguet-Mairesse (CDM) model, a four-stage approach, is used to investigate the innovation-performance relationship. The multistage model allows studying the innovation activities of firms through multi-interrelated factors while controlling the issue of simultaneity and causality. The paper contributes to the research in this area by estimating the effect of innovation on performance through multistage equation modeling. It fills the gap in providing an understanding of factors that influence on product innovation - firm performance relationship in transition economies. This research is among the first to use product-only innovation to measure the impact of innovation on firms' performance. Findings indicate that product innovation has a positive impact on firm performance in transition economies, complemented by significant impact of specific control variables such as size, total labor cost, capital of the firm. Whereas age and competition from the informal sector, have a negative and significant effect on performance.

Political networking strategy and firm performance: a moderated mediation model

Purpose By incorporating the resource-based view with the dynamic capability view, this study aims to examine the link between corporate political networking strategy and firm performance in transition economies by focusing on the mediating role of corporate entrepreneurship and the moderating role of dysfunctional competition.

New Venture Performance in Transition Economies from Different Institutional Perspectives*

Building on institutional theory, this study examines the effects of dysfunctional competition and government ties on new venture performance in transition economies. And, it goes deeper to investigate how these effects are contingent on a new venture's entrepreneurial orientation (EO). It finds that EO weakens the negative relationship between dysfunctional competition and new venture performance but exacerbates the negative linkage of government ties to new venture performance. The findings not only illustrate how government impacts new venture performance in transition economies, but also indicate that new ventures can leverage entrepreneurship to cope with the effects of government‐related factors.

Hybrid Strategies, Dysfunctional Competition, and New Venture Performance in Transition Economies

ABSTRACTConventional wisdom suggests that new ventures can employ a combination of two general strategies to confront the challenges of operating in transition economies or regions known for their weak institutional conditions: These ventures may succeed by enacting amarket-orientationstrategy, which focuses on providing value to customers and implementing rapid responses to competitive situations. They can also engage in a more traditionalpolitical-networkingstrategy that engages government officials, which may yield public resources and enhance their organizational legitimacy. However, research results are inconclusive regarding the effectiveness of these strategies when they are combined in a hybrid form. We argue that the advantages of a hybrid strategy are contingent on the perception of a specific condition:dysfunctional competition. In our analysis of new venture performance in China, we show that political networking indeed amplifies the positive influence of market-orientation strategies on performance, but only in contexts where dysfunctional competition is perceived to be low. When such competition is high, political networking becomes counterproductive, diverting attention away from swift responses to market demands. By addressing how multiple strategies work together, we offer insights into the extent to which the effectiveness of hybrid strategies – incorporating both market-orientation and political-networking – depend on the context in which they are implemented.

Risk Planning, Takeover, and Stabilizing Performance in Transition Economies

The tunneling effect of multicriteria analysis is highly significant for all shades of capital.

Predicting technology integration and performance in transition economies: insights from Russia

Purpose– The purpose of this paper is to examine a traditional information technology (IT) integration-performance framework in the transition economy of Russia, which has undergone significant and tumultuous institutional shifts. The research incorporates variables not previously utilized in the supply chain literature but underscore significant roles in the context of the Russian institutional environment to examine the drivers of IT integration.Design/methodology/approach– The Moscow-based, Public Opinion Research Center (VCIOM) was contracted to collect data from Russia manufacturing firms with 100 or more employees, and the effort resulted in 769 responses from Russian private sector firms. This primary survey data were combined with two secondary data sets to test the model using structural equation modeling.Findings– Overall, the results indicate that firms in developed economies must pay special attention to specific contextual nuances in transition economy firms that can affect their ability to successfully navigate this significantly different supply chain environment. Specifically, the results show that spatial distance from Moscow hampers a firm’s ability to integrate its logistics IT capabilities, suggesting that “modern” logistics IT (and possibly supply chain practice in general) initiate from the Moscow core and spread outward. Further, results find that growth in the number of foreign competitors in a firm’s primary industry over the prior five-year period associates with greater integrated logistics IT. It appears that increasing foreign competition creates a sense of urgency for managers within Russian firms to focus on cost reduction and improvements in logistics efficiencies by way of greater IT integration.Originality/value– A significant portion of research related to supply chain management and firm performance takes place in the economically developed West, but there are questions about whether these findings are applicable in transition economies that have a significantly different set of institutional dynamics. This research highlights how the unique contexts in transition economies such as Russia can present challenges for firms as they adapt to the realities of global market dynamics.

"Firm Ownership, Employee Education, and Firm Performance in Transition Economy"

This study examines how firm performance in transition economies can be impacted by firm ownership structure and education level of employees. Ownership structure is measured by three dummy variabl...

Ownership Concentration and Firm Performance in Transition Economies: Evidence from Montenegro

Abstract The relationship between ownership concentration and firm performance has been the focal point of corporate governance literature and the subject of rather rich empirical literature. However, the current literature lacks uniformity and consensus regarding the nature and direction of this relationship. This research aims to contribute to this literature by investigating the relationship in a small and open transition economy of Montenegro. We use primary data1 from the period 2004-2008 to analyse, for the first time, the impact of ownership concentration on firm performance in Montenegro. The results support the hypothesis that high ownership concentration enables effective monitoring by investors to protect their interests; i.e. in the specific circumstances of transition, ownership structure may be (temporarily) used as a viable substitute for the still underdeveloped corporate governance framework.