Recipient Firms Research Articles

Measuring relative efficiency of government-sponsored R&D projects: A three-stage approach

Without considering differences in operating environment, traditional methods of efficiency evaluation are suffering from external environmental influences. This study presents an alternative approach for assessing the relative efficiency of government-sponsored research and development projects (GSP). A three-stage approach employing data envelopment analysis to evaluate efficiency and Tobit regression to control external variables was applied to 110 projects over 9 years. This study finds that firm size, industry, and ratio of public subsidy on research and development (R&D) budget of recipient firm significantly influences the technical efficiency of GSP in Taiwan. After controlling these external variables, the mean value of technical efficiency in the third stage increases and becomes significantly different to that in the first stage. Most GSPs increase their returns when their projects are scaled up. Furthermore, government policy makers must establish the upper-limit ratio of subsidies on R&D budgets of recipient firms to avoid inefficient use of public funds.

The effect of government-sponsored R&D programmes on additionality in recipient firms in Taiwan

The purpose of this study is to explore the additionality of government subsidies on strategic changes in the research and development (R&D) behaviour of recipient firms. Based on 127 government-sponsored R&D programmes over 9 years, input additionality, behavioural additionality, and output additionality were examined. The empirical investigation demonstrates that behavioural additionality of recipient firms could be classified into project enlargement, strategy formulation, cost-effectiveness, and commercialization behaviour. Firms in different industry sectors and innovation categories emphasize different additionality, respectively. Through cluster analysis three kinds of performance patterns in recipient firms are concluded: ideal, compliant, and marginal. The results show that the government must carefully develop evaluation criteria for sponsored programmes in order to direct the behaviour of recipient firms.

What determines the leverage decisions of Chinese firms?

We study the leverage decisions of listed Chinese manufacturing firms over the period 1995–2004. We show that some firm characteristics, such as profitability and size, affect the leverage decisions of these firms, while other characteristics such as collateral and growth opportunities do not. Additionally, we find no important differences in the financing of listed firms across eastern (coastal), central and western regions. We also find evidence that contrary to other firms, the leverage of firms located in high FDI recipient provinces and firms who receive more subsidies from the state is not influenced by their profitability. Finally, we consider whether WTO accession affects the leverage of firms but find no strong evidence to support this claim.

The effectiveness of learning from strategic alliances: a case study of the Taiwanese textile industry

Interfirm alliances provide a channel of communication between partnering firms. However, two notable communication barriers hinder the effectiveness of learning across firms. As the target knowledge is different from their existing knowledge base, the recipient firms' incumbent knowledge base may not be sufficient to identify target knowledge. In addition, inability to internalise and integrate acquired knowledge to the rest of organisation may handicap the effect of new knowledge. A growing number of recent studies have reported that the frequency of communication activities has positive contribution to the interaction quality between firms. However, we know relatively less about the role of transparency and receptivity in the relationships between communication activities and learning effectiveness. To address this issue, we designed a survey study based on the learning and knowledge transfer literature. The results of our analysis show that communication improves interfirm learning effectiveness, but such relationship is mediated by transparency and receptivity.

Optimising intellectual capital development: a case study of brokering in a science park

Recent research trends have focused on the value of intellectual capital and deployment of networks. This study positions science parks as a network structure that enables the study of individual components of intellectual capital and suggests how these components can be leveraged through the network, with implications for science parks and also for wider intellectual capital optimisation. It identifies the key sources of intellectual capital and where they are located through the case study of Innovation Waikato, a science park located in New Zealand. In particular it makes an argument for the important role of science park management and staff, who adopt the intermediary role between tenant and recipient firms, to assist in optimising the overall intellectual capital flow in this setting.

Intra-Industry Knowledge Spillovers from Foreign Direct Investment in R&D: Evidence from a Chinese Science Park

This study examines whether foreign direct investment generates intra-industry knowledge spillovers to domestically-owned firms, using firm-level panel data from a Chinese science park. Our analysis suggests that the R&D stock of foreign-owned firms has a positive effect on the productivity of domestic firms in the same industry, while the capital stock of foreign firms has no such effect. These results suggest that foreign firms' knowledge spills over within industries through their R&D activities, but not through their production activities. In addition, we find no evidence of spillovers from domestic firms or firms from Hong Kong, Macau, or Taiwan, suggesting that the size of knowledge spillovers is larger when the technology gap between source and recipient firms is larger.

A culturally aware model of inter-organizational knowledge transfer

In order to study the impact of culture on the inter-organizational knowledge transfer, the transfer is conceptualized as an unfolding process consisting of stages through which the involved parties proceed. Such conceptualization allows a closer examination of how the cultural traits of source and recipient firms at different levels affect each stage of the transfer process. The cultural impacts are categorized into two main categories, monadic and dyadic. The theoretical and practical implications of the proposed model are discussed.

Small and Medium-sized Enterprises Involved in Technology Transfer to China

Technology transfer is a frequent component of foreign direct investment and cross-border cooperative agreements. Little is known concerning the comparative effectiveness of technology transfer accomplished by small and medium-sized enterprises (SMEs) in developing countries. The goal of this study is to compare small and large organizations on measures of learning accomplished by their respective partners during technology transfer. Twenty-eight Canadian manufacturing firms involved in technology transfer to China were surveyed and seven case studies were conducted in China. Learning in recipient firms was not significantly associated with the size of their Canadian transferors. The case study results revealed other factors that seemed to influence learning.

Host-country Absorption of Technology: Evidence from Automotive Supply Networks in Eastern Europe

This paper provides an analysis of technology transfer in automotive supply networks in six EU candidate countries with important vehicle (component) industries. We survey more than 400 firms, representing roughly half of the automotive supply industry. In addition, we have in-depth information from 39 case studies. We address the generation, the origin, and the quality of technology transfer. In terms of generation, we look at the determinants of who receives technology along the value chain, and who passes it on. In terms of origin, we compare local and foreign-owned firms and those with mixed ownership. We also compare differences across the countries. In terms of quality, we discuss the change-inducing effects of technology as perceived by recipient firms. Our results confirm the salience of networks and the key role of MNCs for the generation and diffusion of technology. We also find that diffusion of technology happens within the countries so that host countries absorb more technology than is immediately apparent and commonly believed.

Product Technology Transfer in the Upstream Supply Chain

This article addresses the transfer of new product technologies from outside the firm for integration into a new product system as part of a product development effort. Product technology transfer is a key activity in the complex process of new product development and is the fundamental link in the technology supply chain. Product technology transfer too often is dealt with in an ad‐hoc fashion. Purposeful management of the product technology transfer process leads to more effective transfers in terms of timeliness, cost, functional performance, and competence building. Better management of product technology transfer gives firms access to a greater variety of new technology options, improves a firm's ability to offer significantly differentiated products, deepens the firm's competitive competencies, and positively influences sustained product development success. The central objective of this article is to gain insight into product technology transfer so that companies can manage this process more successfully and so that researchers can investigate this critical activity further.This article describes the technology supply chain as a unique form of a supply chain that poses a set of managerial challenges and requirements distinguishing it from the more traditional component supply chain. Because a single product technology transfer project is the fundamental piece in the technology supply chain, understanding this piece well is key to leveraging the extended technology supply chain and to improving overall product development performance. This article integrates literatures on new product development, supply chain management, and technology management and builds on organizational theory to present a conceptual model of determinants of product technology transfer success. The core proposition is that product technology transfer effectiveness is greatest when companies carefully match (or “fit”) the type of technology to be transferred (the “technology uncertainty”) with the type of relationship between the technology supplier and recipient (the “interorganizational interaction”).A quite detailed framework characterizing technology uncertainty along the dimensions of technology novelty, complexity, and tacitness is presented to help in assessing the challenges associated with transferring a particular product technology. This article also considers detailed elements characterizing the interorganizational interactions between the technology source and recipient firms. This helps firms consider the appropriate means to facilitate the interfirm process of technology transfer. Overall, this article provides practical insight into characterizing technologies and into improving the product technology transfer process. This article also provides a strong theoretical foundation to aid future research on product technology transfer in the technology supply chain.

Import-led technological capability: a comparative analysis of Indian and Indonesian manufacturing firms

This research investigates the critical elements that affect the ability of firms in developing countries to cultivate their technological capability through imported technology. Based on resource-based theory, we propose both internal and external factors contribute to technological capability of the recipient firms. Technology planning and control, market orientation, training and number of technical manpower were the internal factors considered in this study. Government support and national technology infrastructure are the external factors proposed to affect the technological capability of firm. Data collected from Indian and Indonesian manufacturing firms reveals that R&D investment, and availability of technical personnel; the transfer channels; government’s involvement; and the firm’s learning culture are significant contributors to the technology capability process. Also, the acquisition of mature technology just to boost production capacity or improve product quality contributes very little to the development of technological capability.

Reconsidering technology transfer

Technology transfer is a misnomer; this popular phrase and the studies from which it originates often suggest passivity and inertia on the part of developing country recipient firms. This paper, which uses the technological capability building system (TCB) approach as a conceptual framework, suggests that firms in developing countries exercise constrained agency in technological acquisition processes. The evidence discussed here is taken from a study of technological capability accumulation by twenty-six firms in the telecommunication sector of four developing countries: Uganda, Ghana, Tanzania and South Africa. Important insights into technological acquisition by firms in a service sector in developing countries emerged from that study, such as: the existence of specific boundary management capabilities for managing relationships with suppliers; confirmation that firms use different mechanisms for acquiring codified and tacit knowledge; and support for the view that technical change and industry features have significant effects on technology acquisition strategies and their effectiveness.

Technology Transfer to China The Issues of Knowledge and Learning

The aspect of effectiveness of technology transfer to developing countries still raises important questions from researchers and practitioners alike. Many of these questions pertain to the nature of knowledge and of the learning process. The first question for this paper is what forms of knowledge are transferred abroad by companies. The second question is what are the characteristics of the learning process in recipient firms during technology transfer. Twenty-eight Canadian manufacturing firms were interviewed. Seven case studies were also conducted in China.

Foreign Investment and Productivity Growth in Czech Enterprises

This article uses firm-level data for the Czech Republic to show that during 1992-96 foreign investment had the predicted positive impact on total factor productivity growth of recipient firms. This result is robust to corrections for the sample bias that arises because foreign companies tend to invest in firms whose initial productivity is above average. Together, joint ventures and foreign direct investment appear to have a negative spillover effect on firms that do not have foreign partnerships. However, with foreign direct investment alone, the magnitude of the spillover becomes much smaller and loses significance. This result, in conjunction with the fact that joint ventures and foreign direct investment account for a significant share of total output in many industries, suggests that further research is required to determine the extent of knowledge diffusion from firms that have foreign links to those that do not.

R & D Spillovers and Recipient Firm Size

The findings in this paper provide some insight into how small firms are able to innovate. Using a production function approach to relate knowledge generating inputs to innovative output, the empirical results suggest that small firms are the recipients of R&D spillovers from knowledge generated in the R&D centers of their larger counterparts and in universities. Such R&D spillovers are apparently more decisive in promoting the innovative activity of small firms than of large corporations. Copyright 1994 by MIT Press.

FOREIGN STRATEGIC EQUITY INVESTMENT FOR COUNTRY-SPECIFIC TECHNOLOGICAL ADVANTAGE.

While the prevailing theory of foreign direct investment (FDI) is premised upon firm-specific advantages, this paper investigates the proposition that foreign strategic equity investment (SEI) is motivated by country-specific advantages embedded in recipient firms. Data show that the hazard rate of a firm to become the target of foreign SEI is positively correlated with its technological advantages as measured by its patenting activities.

Technological capabilities as determinants of the success of technology transfer projects

This paper empirically examines the effect of indigenous technological capability (ITC) on the performance of technology transfer projects in recipient firms in a less developed country (LDC). The data were obtained from 116 transfer projects in China by means of questionnaires and site interviews. As predicted, the results indicated that ITC factors are determinants of the economic and technological success of the transfer projects. The findings suggest that LDC recipient firms should formulate a strategy for acquiring foreign technology to be consistent with their technological capability.

UDAG Grants to Rural Areas: A Program that Works

This article uses data from the U.S. Department of Housing and Urban Development's (HUD) Urban Development Action Grant (UDAG) grant agreement data base and a survey of 169 rural UDAG projects to evaluate the job-creation success of rural UDAG projects. The authors draw the following conclusions. First, the rural component of the UDAG program has created the number of jobs promised in the original grant agreements. Second, there is little evidence that UDAG projects have resulted in job creation outside of the UDAG recipient firms. Finally, the federal cost of creating a rural manufacturing job through the UDAG program is approximately $5,546. This cost represents the sum of the federal UDAG grants in a sample of 115 projects divided by the number of jobs created in the same projects.

The scale of informal capital markets

Informal capital markets are the leading source of external risk capital fueling entrepreneurial startup and small business growth. They are virtually the only practical source of risk or venture-type capital for most entrepreneurs once their capital needs surpass family resources. Informal risk capital is equity and near-equity dollars invested by private individuals directly (informally) in entrepreneurs without formal intermediation.1 The importance of understanding how and where small firms obtain their risk capital is reenforced by the growing recognition of the role of small business in U.S. economic performance.2 Continued and enhanced supply of informal capital requires rational public policy. Because of the lack of reliable empirical data, it has been difficult to formulate effective policies that would guide markets where necessary, leave them alone where desirable, and accelerate their growth where possible. Such policy is best built on an accurate appreciation of the scale of informal risk capital's contribution to U.S. economic growth and change. New microdata evidence just recently available contributes a wealth of empirical data about how informal investors and entrepreneurs interact.3 The object of this paper is to use the new data to reach preliminary estimates of recent aggregate flows of informal capital. To achieve this goal I also provide collateral estimates of the stock of informal investors, recipient firms and annual transactions volume.

The “Profitability” of Technology Licensing by U.S. Multinationals: A Framework for Analysis and an Empirical Study

The fees or compensation charged by technology licensing companies to recipient firms overseas have long been subject to debate. Opinion has ranged from a cost-related pricing to a monopolistic pricing model where the price or compensation is considerably higher than the variable costs of effecting a transfer. The empirical study covering 102 technology licenses shows that whereas compensation levels greatly exceed transfer costs, statistically they are strongly related. Compensation levels are influenced by the extent of services rendered to the licensee and by his scale of production. Important differences were manifest between industrialized nations and LDCs, between product types, and between patented and unpatented technologies.