Resource Dependence Perspective Research Articles

Boosting Firm Environmental Performance: The Roles of Top Management Team Functional Diversity, Environmental Disclosures, and Government Subsidy

Contemporary organizations are actively striving to achieve a higher level of environmental performance (the extent to which the organization reduces and minimizes its negative impact on the natural environment). This pursuit is not only driven by the need to comply with governmental climate change regulations but also by the desire to gain a competitive advantage. While a limited number of studies have acknowledged the importance of top executives’ strategy-making on firms’ environmental performance, questions still persist regarding how the role structure of the top management team (TMT) promotes the disclosure of environmental policies, and subsequently enhances firm environmental performance. Based on the attention-based view and resource-dependency perspective, this study aims to examine how TMT functional diversity is beneficial for formulating better environmental disclosures, which in turn, is expected to increase environmental performance. Additionally, we explore the extent to which external resources (i.e., government subsidies) can strengthen this relationship. We employed an archival dataset from 406 Chinese manufacturing firms over a ten-year period (2010–2019) and tested a moderated mediation model. Our findings suggest that greater functional diversity within TMTs positively influences firm environmental performance through the improved environmental disclosures, and this indirect effect is amplified when firms receive higher levels of government subsidies. Our study contributes to the existing literature on environmental governance by demonstrating that (1) functional diversity within the TMT can predict more favorable environmental performance metrics; and (2) government financial support can particularly be a booster for the relationship between TMT environmental disclosures and firm environmental performance.

Enhancing circular supply chains via ecological packaging: An empirical investigation of an extended producer responsibility network

Many industries have established producer responsibility networks, but the affiliated firms are not required to modify their packaging. This research examines conditions that influence the likelihood that firms will develop packaging with an ecological design. This study uses a resource dependency perspective to illustrate how facets of the perceived corporate environment influence packaging decisions. Data collected from 188 firms in a producer responsibility network indicate that financial resources, recycling resources, regulation, internal integration, and customer demand influence the ecological design of plastic packaging. Competitive intensity moderates the effects of customer demand on ecological packaging design. The study concludes by outlining its implications for sustainable packaging practice and research.

Does supplier concentration impede firms’ digital innovation? A resource dependence perspective

The advent of the digital economy has ushered in a new era of digital innovation. Given that dependence on key suppliers significantly affects focal firms' behavior and decision-making, it still remains unclear whether concentrated suppliers impede or facilitate focal firms' digital innovation. Drawing upon resource dependence theory, this study aims to explore how supplier concentration influences focal firms' digital innovation. Furthermore, since internal resources can alter the dependency between focal firms and suppliers, this study introduces the tangible resources represented by slack resource and intangible resources represented by human capital as mechanisms to mitigate firms’ dependence on key suppliers. Using a dataset of 2,347 unique Chinese listed manufacturing firms from 2008 to 2020, we empirically reveal a negative impact of supplier concentration on digital innovation. Further, we discover that operational slack, technical experience in top management teams (TMTs), and employee education background mitigate the negative influence of supplier concentration on digital innovation. Surprisingly, the direct moderating role of financial slack is not significant, but the additional analysis indicates that the moderating effect of operational slack is strengthened in firms with high financial slack. Robustness tests reaffirm these findings. This study extends the growing digital innovation literature and provides actionable insights for firms to effectively leverage their resources to pursue digital innovation in situations of high supplier concentration.

Avoiding relapses after crises: Exploring the influence of firm investors’ characteristics on organizational resilience

Many firms may successfully navigate an organizational crisis, but may find themselves entangled in another soon after. Building on a resource-dependence perspective, this study evaluates how certain investor characteristics foster organizational resilience during a crisis by preventing a relapse following recovery. Drawing on data from 2014 to 2019, we analyzed 359 firms that faced a crisis in 2015, as indicated by their Altman Z-score values. Our findings reveal that diversity and patience of investors prevent firms from relapsing into upcoming crises; however, the probability of relapse increases when concentrated investors boost the firm’s capital during the in-crisis period. We bridge the gap between the resource-dependence theory and literature on organizational resilience and contribute by extending previous analyses on the relevance of investors to recover from a crisis to identify how in-crisis investors’ features also state the foundations to avoid future relapses. JEL CLASSIFICATION: D74; D81; G01; G32; P45

R&D investments in emerging market firms: the role of institutional investors and board interlocks

Despite the increase in institutional investor shareholdings in emerging market firms, their impact on R&D investments has received scant attention in the literature. By integrating agency and resource dependence perspectives, we examine the role of different types of institutional investors and their interactions with board interlocks in shaping their preference for R&D investment in their portfolio firms. We test our hypotheses on a sample of 2,478 Indian firm‐year observations from 2005 to 2019, using various estimation techniques. Our results indicate that different categories of institutional investors have distinct preferences for R&D investment. Specifically, we find that ownership by both foreign institutional investors and mutual fund investors negatively impacts R&D investments in firms. While board interlocks positively moderate the impact of institutional investors such as banks and financial institutions and foreign institutional investors on R&D investments in firms, this moderation is negative in the case of mutual fund investors and R&D investments in firms. We contribute to the understanding of the determinants of R&D investments in emerging market firms, with a specific focus on institutional investor ownership and add to the nascent literature on the interaction between two forms of governance, i.e., ownership and board characteristics, in shaping this firm strategy.

Political embeddedness and corporate social responsibility (CSR) in a state-led developing country: evidence from China

AbstractIn many countries, the government plays a regulative role in corporate social responsibility (CSR) as an external overseer of economic and public market sectors. However, owing to the politically embedded nature of extensive corporations in China, the government's influence over CSR is not only exogenous but may even endogenously shape the general scope of CSR of companies in comparison to the West. To date, this has not been extensively examined. We explore this from the standpoint of the scope of beneficiaries and CSR domains, which accurately depict the welfare effects of business in developing countries. Based on a resource dependence perspective, we conduct a quantitative content analysis on a sample of 160 Chinese listed companies and developed a two-level model of political embeddedness. The results show a complex interaction between politics and business, revealing the opposing influence of political embeddedness at different levels.

Ushering in industrial forces for teaching-focused university-industry collaboration in China: a resource-dependence perspective

ABSTRACT This study explores the large-scale involvement of Chinese enterprises in teaching-focused university-industry collaboration (TFUIC), drawing upon the theoretical perspective of resource dependency. Based upon content analysis of Ministry of Education-selected exemplary cases and semi-structured interviews with corporate insiders, the study not only delineates multiple approaches companies take to boost higher education quality, but also unravel the role of economic resources, technological and professional resources in underpinning the implementation of TFUIC. Resources underpinning enterprises’ long-term incentives for participation and the primacy issue between the university sector and industry sector remain challenges to TFUIC.

Control Mechanisms and Senior Management Commitment in Shaping the Performance of Strategic Information Systems Projects: A Resource Dependence Perspective

Successfully controlling strategic information systems (IS) projects in realizing strategic goals is a primary concern for managers. However, the effectiveness of control may vary with the organizational resources, such as senior management commitment. Using a theoretical lens of resource dependence, this article investigates the mechanism of how senior management commitment, a critical organizational resource, changes the influences of four types of control on the performance of strategic IS projects. Based on a pairwise survey on user liaisons and project managers from 155 strategic IS projects, we discover that behavior control and self-control are effective in improving strategic performance contrary to outcome and clan control. However, such effects are differentially changed by senior management commitment, which increases the effectiveness of outcome and clan control but weakens that of self-control. Thus, senior management commitment has dual roles toward strategic performance in either facilitating or deteriorating control effectiveness. Our findings contribute to control-based theory, resource dependence theory, strategic IS project, and management commitment literature by identifying the interactive effect of senior management commitment and control. Our findings also provide practical insights into how managers substantially control and support strategic IS projects.

Research on the Influence Mechanism of Global Enterprises' Return Investment on Enterprise Performance

This study focuses on the mechanisms by which global firms' return investment affects performance, using resource dependence, opportunity cost and capital structure as the main theoretical perspectives. The resource dependence perspective suggests that return investment is a strategy for firms to acquire and protect resources, and to reduce their dependence on external markets by repatriating capital, technology, and brand resources. This process may be achieved through internal resource reallocation, organizational culture adjustment and strategic innovation, which profoundly affects firm performance. Opportunity cost theory emphasizes the choice and abandonment in the return investment decision, and firms need to weigh the substitutability and long-term competitiveness of different opportunities, revealing the mechanisms of strategic choices, cultural changes, and business model innovations that may be involved in return investment, thus affecting long-term performance. Capital structure theory provides a framework for understanding the internal and external impacts of return investment on firms. The choice of capital structure directly affects a firm's competitive position in the domestic market, financial flexibility, and long-term value creation. Repatriation investments may adjust the capital structure through debt and equity adjustments to fit the needs of the home market. The capital structure perspective provides insights into the mechanisms by which return investment affects firms' financing decisions, resource allocation efficiency, and financial flexibility. At the industry and market level, return investment may lead to intra-organizational changes and market-level effects. Capital repatriation may drive firms to engage in industry consolidation, reposition themselves competitively in the market, and restructure supply and value chains. Through these mechanisms, firms will reshape their competitive position in their home markets, generate market strategies and competitive advantages that differ from those in international markets, stimulate innovation and development in their home markets, and influence the evolution of the industry as a whole and changes in the market landscape.

How to drive sustainable entrepreneurial intentions: Unraveling the nexus of entrepreneurship education ecosystem, attitude and orientation

AbstractWhile the nexus of the entrepreneurial education (EE) framework shapes education policies and promotes entrepreneurial opportunities to achieve global sustainable development goals, studies on the potential mechanisms by which the ecosystem dimension of entrepreneurial education (EEE) influences entrepreneurial behavior are still scarce. To address these lacunae, this research study investigates the interaction between EEE elements (institutional environment, course curriculum, and academic incubators) and sustainable entrepreneurial intention (SEI) and in addition, examines the role of attitude towards sustainability (ATS) as a mediator from the resource dependence perspective, deploying the theories of planned behavior and social cognitive career. Furthermore, we examine the moderating role of sustainable entrepreneurial orientation (SEO) in the relationship between ATS and SEI. We developed and tested a model on a sample of 402 university and academic institution students with diverse academic backgrounds using partial least squares structural equation modeling. Results indicate that ecosystem elements of EE and attitudinal attributes are crucial factors in promoting SEI. The indirect impact of EEE involves fostering ATS, which in turn augment SEI. The results also reveal that SEO is a moderator that shapes attitudes and career intentions towards sustainable entrepreneurship. In sum, the present empirical study sheds light on the pathway to build sustainable entrepreneurial careers through analyzing the ecosystem framework of entrepreneurship education. Implications, limitations, and future research avenues are discussed in detail.

Chinese Multinationals’ Dynamic Integrations in the Developed Market: From a Resource Dependence Perspective

Integrating the developed-market resources after acquisitions is a crucial tool for Chinese multinational enterprises (CMNEs) to accelerate industrial high-quality development. However, existing theories have scarce thorough explanations of the dynamic mechanism of CMNEs’ post-merger integrating resources. Our research aims at disclosing CMNEs’ post-merger integration (PMI) long-term dynamics under resource relatedness changes. We applied a multiple-case study with four typical CMNEs’ German-market PMI cases and proposed a theoretical framework based on a coding analysis of 38 interviews. Our findings highlight that: CMNEs change initial gentle integrations (partnering/preservation) to balance dependence when pre-merger resources complementary decreases with similarity increasing, or to extreme dependence when pre-merger resources similarity continually increases to extremely high. Pre-merger resource relatedness basics and later changes and CMNEs’ dynamic capability (threat and development potentials’ perception capabilities and utilization capability) are crucial factors in promoting CMNEs’ PMI changes. Our originality lies in that we consider the interactions resource relatedness changes and CMNEs’ PMI dynamics, strongly replenishing the deficiency of current PMI dynamic studies that lack considerations of resource relatedness changing; also, we simultaneously consider the two facets of dependence asymmetry and joint dependence such that broadened the application of resource dependence theory (RDT) in PMI studies. Our study offers managerial insights into CMNEs’ development leapfrog through acquisitions in developed markets that CMNEs should focus on the vital role of inter-firm resource relatedness changing. Initial gentle integration can be deepened when original resource backgrounds become more similar but should be cautious of the effect of power imbalance and selfish actions.

The determinants of the use of process control mechanisms in FDI decisions in headquarters–subsidiary relationships

This study investigates the impact of foreign direct investment (FDI) motivations and technological resource commitment on headquarters’ employment of process control over subsidiaries, to better understand the process control mechanisms. Drawing on agency theory and the resource dependence perspective, a cross-sectional data model is developed among the 1541 Taiwanese manufacturing firms engaged in foreign investments, 1015 headquarters–subsidiary (HQ–Sub) relationships in China were selected from the database; in each of these relationships, the headquarters is located in Taiwan, while the subsidiary is located in China. Our findings reveal that the headquarters will use process control if the primary motivation for setting up a subsidiary in a host country is resource-seeking, but not use process control with market-seeking motivation. This control process relationship is enhanced/weakened/weakened by the headquarters’/subsidiaries’/partners’ technological resource commitment. Taiwanese multinational corporations (MNCs) from newly industrialized economies (NIEs) seeking to choose control mechanisms that fit their technological resources and FDI motivations in China are given guidelines. It adds to the use of control mechanisms with HQ-Sub literature. Both resource-seeking and market-seeking motivations shed light on technological resource commitment by various units of an MNC, to ward off information asymmetry.

Becoming a research university as a strategic choice in Bahir Dar university፡ A resource dependency perspective

This paper explored how the need for research universities in Ethiopia is justified, practiced, and could be improved using the strategic tactics of the resource dependency perspective. Bahir Dar University (hereafter referred to as BDU) was taken as a case to understand the need for a research university and its practices. Document analysis was used as a source of data. Consequently, an analysis of various institutional and national secondary sources revealed that the existing uncertainties related to critical resources motivated Bahir Dar University to devise a strategic choice of becoming a research university. The uncertainties are justified in terms of economic, political and institutional conditions. Although the university envisioned becoming a research university by 2025, the existing institutional and national conditions seem to be immature to sustain the necessary resources and conditions that a research university requires. As a result, following the higher education differentiation effort, BDU had to revise its vision and extend the possible time its vision could be realized to 2030. It is concluded that the need for BDU to become a research university seems to be challenging and needs much effort to be realized. Hence, institutional re-arrangements following the strategic tactics of the resource dependency perspective need to be devised to realize the strategic choice of becoming a research university.

Trade policy uncertainty and corporate innovation: evidence from resource dependence perspective

ABSTRACT Corporate innovation activities under uncertain environment have attracted growing academic attention, yet didn’t reach a consistent result, and the mechanism of firms’ interdependence with other organisations is not well explored. This paper is committed to uncover the latent mechanism from a resource-dependence perspective behind the environment–innovation relationship. Adopting an unbalanced dataset of Chinese public listed firms from 2006 to 2020, this study testifies the positive association between trade policy uncertainty (TPU) and corporate innovation, based on the two-way fixed empirical model. Furthermore, levels of buyer companies’ dependence on major suppliers and implicit government guarantee reinforce the strength of TPU’s prompting effect on innovation output. Our conclusions are robust to a series of sensitivity tests and two-stage least squares (2SLS) instrumental variable method. Heterogeneous analysis shows that the buyer dependence mechanism is exclusively prominent in high-technology firms, and the implicit government guarantee mechanism is more significant among non-high-tech firms.

Connecting the right knots: The impact of board committee interlocks on the performance of Indian firms

AbstractResearch Question/IssueInformation processing, agency, and resource dependence perspectives provide diverging predictions regarding the relationship between board interlocks and firm performance, which are rooted in different perspectives on the roles of boards of directors. This study argues that these various approaches are reconcilable when considering the nature of board committees to which the interlocked directors are assigned.Research Findings/InsightsWe test our hypotheses on a sample of 5133 firm‐year observations in India. Our analyses support our hypotheses. The results show that interlocks between audit committees, whose primary function relates to providing financial oversight and ensuring compliance, are negatively related to firm performance. In contrast, interlocks between nomination and remuneration committees of Indian firms, which provide them with access to resources such as human capital and information on appropriate incentive structures, are positively related to performance.Theoretical/Academic ImplicationsOur study clarifies the relationship between board committee interlocks and firm performance by taking a multi‐theoretical perspective. Our analysis suggests that information processing, agency, and resource dependence theories complement one another in explaining the effect of interlocks on firm performance.Practitioner/Policy ImplicationsOur results show that it is not board interlocks per se that are detrimental to firm performance; in fact, appointing well‐connected directors with experience in serving on other boards might be beneficial for firms. However, firms should not assign specific monitoring‐intensive tasks such as auditing to directors who also serve on other firms' audit committees. Our findings suggest that these directors should have greater independence and focus.

How does entrepreneurial orientation influence firm performance? The roles of corporate social responsibility and institutional environments

AbstractA growing number of firms are realizing that entrepreneurial orientation (EO) is an effective means to cope with competition and maintain sustainable growth. However, with the results of extant studies on EO‐performance relationship are not fully consistent, the potential mechanism about how EO influences firm performance needs to be further explored. Accordingly, this research investigates the mediating mechanism of EO‐performance by considering the role of corporate social responsibility (CSR) from the resource dependence perspective. In addition, we assess the relationship between EO and CSR by examining the moderating roles of institutional support and dysfunctional competition. Using the sample data of 214 Chinese firms to test the hypotheses, we find that CSR mediates the relationship between EO and firm performance. Moreover, institutional support negatively moderates the EO‐CSR relationship and dysfunctional competition positively moderates the relationship between EO and CSR. Based on the above results, our study provides practical implications for entrepreneurial firms striving to translate their EO into superior firm performance.

Good governance and professionalisation of non-profit sport clubs: a resource dependency perspective

Whereas literature on non-profit sport organisations highlights a trend towards increased professionalization due to systemic expectations and pressure (Klenk et al., 2017), non-profit sport clubs still struggle with peculiar challenges related to the development their activities. They exist and develop thanks to an important contribution of voluntary staff driven by intrinsic motivation factors. Compared to for-profit companies or national sport governing bodies (NSGBs), they hardly rely on a competitive budget and they face financial vulnerability (Cordery et al., 2018). For instance, the mean budget for non-profit sport clubs in Switzerland is approx. CHF 60’000 (Lamprecht et al., 2017) whereas the budget of the umbrella federation, Swiss Olympic is approx. CHF 70 million (Swiss Olympic, 2019) and the mean budget of the affiliated NSGBs is approx. CHF 10 million (Kempf et al., 2019). Their capacity to respond to systemic pressure by resource acquisition and retention is limited. The good governance narrative emerged in the late1980s with the reform of the corporate and public sectors as a cure for mismanagement and unethical behaviour. In the field of sport, the concept became popular in the aftermath of corruption scandals in large international sport organisations and has led the creation of complex and demanding standards (Chappelet & Mrkonjic, 2019). To date, non-profit sport clubs are rather immune to good governance expectations and only a handful of initiatives that focus on the preservation of their social and economic impact address the topic (see Kirkeby, 2016). A reflection on their capabilities to effectively implement standards such as democracy or accountability is missing. This contribution investigates good governance and professionalization of non-profit sport clubs from a theoretical perspective. Starting with the hypothesis that non-profit sport clubs struggle to respond to systemic pressure because they lack resources and that acquiring and maintaining new resources is costly, this contribution builds on strategic management and resource dependency theory to analyse the challenges related to the implementation of good governance standards and develops strategic responses.

Can sustainable development strategy reduce income inequality in resource-based regions? A natural resource dependence perspective

Promoting sustainable development in resource-based regions is an essential issue among policymakers. Yet little is known about the effect of sustainable development strategies on income inequality. Leveraging the implementation of the National Sustainable Development Plan for Resource-Based Cities (2013–2020) (SDP) as a quasi-natural experiment, we adopt a difference-in-differences (DID) approach to investigate the impact of a sustainable development policy on income inequality. This paper finds that the SDP can reduce income inequality by 8.3 percentage points in resource-based cities on average, which is statistically and economically significant. The mediation effect model shows that reducing natural resource dependence is one potential and vital mechanism. Also, we find that the reduction effect of the SDP on income inequality is more pronounced in central and western regions, in growing-type and mature-type resource-based cities, and in energy-based and mineral-based cities. This paper provides valuable policy implications for developing countries to reduce income inequality and promote sustainable development.

The effects of inward FDI communities on the research and development intensity of emerging market locally domiciled firms: Partial foreign ownership as a contingency

This study examined how inward foreign direct investment (IFDI) concentration affects the research and development (R&D) strategies of locally domiciled firms operating in emerging markets. From a resource dependence perspective, we argued that any community-specific interdependencies between local and foreign firms stimulate the former to engage in R&D activities. The findings of our analyses of panel data of 161,632 manufacturing firms across 525 four-digit-coded industries operating in China support our predictions that the R&D intensity of local firms responds positively to the presence of IFDI in competitive and symbiotic communities. In addition, the positive effects of IFDI on the level of R&D intensity of locally domiciled firms in competitive and symbiotic communities are enhanced by the foreign ownership of such firms. We conclude this paper by drawing the implications of our findings for theory and practice.

Corporate sustainability of Portuguese seaports

Responding to calls for studies examining corporate sustainability (CS) in a seaport setting, this study analyzes the Portuguese case since it is little known, despite some pioneering initiatives of Portuguese seaports as the development of the Logistic Single Window. Following a qualitative approach, information was collected through semi-structured interviews, publicly available news and videos, seaports' websites, and reports. Starting from Oliver's (1991) model, which combines institutional theory and resource dependence perspective, we extended the theory by adding the resource-based view to analyze the institutional factors that predict seaports' strategic responses to CS. Our findings suggest that, while CS interpretation by Portuguese seaports has an underlying acquiescence strategy, the way CS is put into practice reveals a compromise one. CS strategies are related to seaports' legitimacy and reveal great dependence on seaports from their external institutional context, resulting in a harmonious port-city relationship and promoting consistency between institutional pressures and organizational norms, voluntarily widespread in a context of great interconnectedness.