Resource Dependence Perspective Research Articles

Penalties imposed on board chairs and corporate innovation: evidence from China

ABSTRACT While previous literature has explored the role of board chairs in firm performance, little is known about how penalties imposed on board chairs shape firms’ strategic decisions and their risk attitude. This study investigates the impact of penalties imposed on board chairs on corporate innovation. Drawing upon the reputation repair and resource dependence perspectives, we present two competing hypotheses that provide distinct insights into how penalties imposed on board chairs influence corporate innovation. Employing a comprehensive dataset of Chinese listed firms, we find that penalties imposed on board chairs lead to a decline in corporate innovation, supporting the resource dependence hypothesis. Further analysis find that this effect is more pronounced in firms with low redundant resources, high media attention, high industry competition, and those are non-state-owned. Our findings contribute to the growing body of the literature on board chairs, innovation and regulatory penalties by exploring the impact of penalties against board chairs on corporate innovation.

Innovation strategies and financial performance: a resource dependence perspective for Fintech management decision-making

Innovation strategies and financial performance: a resource dependence perspective for Fintech management decision-making

EXPRESS: Untangling the Duality of Emerging Market Firms’ Response to OFDI Policies on Their Innovation Performance: A Resource Dependence Perspective

Firms’ international expansion, affected by outward foreign direct investment (OFDI) policies of home countries, can greatly shape their innovation performance. Yet, existing literature lacks sufficient investigation toward the nexus between corporate response to policies in OFDI activities and subsequent innovation performance. Thus, the authors designed this study to examine how a firm’s response to OFDI policies affects its innovation performance. Drawing upon the resource dependence theory, the authors theorize corporate response to OFDI policies as firm dependence on home government. By arguing that such dependence differentially affects firm innovation through support and control mechanisms, they elucidate the inverted U-shaped relationship between corporate response to OFDI policies (measured by the percentage of a firm’s OFDI projects in policy-favored markets) and innovation performance (measured as patent counts). Furthermore, this curvilinear relationship, they posit, is moderated and strengthened by home-government subsidies the firm receives (calculated as the ratio of annual subsidies received to yearly sales). With archival data of 2,050 Chinese listed manufacturing firms responding to specific OFDI policies during 2013–2021, their predictions are corroborated. Overall, by illuminating the innovation implications of OFDI as corporate response to policies, this study contributes to the international marketing literature in the context of emerging markets.

Board gender diversity in municipally owned corporations: A resource dependence perspective

The increasing use of municipally owned corporations (MOCs) to provide vital public services has drawn attention to the representation of women on MOC boards of directors. Resource dependency theory suggests that board composition is likely to be shaped by linkages to critical resources within an organization's environment. This paper presents an analysis of the organizational determinants of board gender diversity in 802 MOCs in England and Wales for the period 2009–2019. The findings suggest that public ownership, nonprofit legal form, board size and a human services focus are positively related to board gender diversity, but that inter-municipal ownership and a technical services focus are all negatively related to such diversity. The findings highlight the impact that organizational characteristics associated with critical resource dependencies can have on gender equality (GE) in corporatized public services. Points for practitioners Evidence on the determinants of gender board diversity in MOCs can help policy-makers to understand the role that organizational characteristics play in shaping GE within corporatized public services. This paper highlights that the ownership structure, board size and legal form of MOCs all affect the prevalence of women directors on MOC boards. It is also important to recognize how service area can influence GE on MOC boards.

A resource dependence perspective on the business group effect in developed markets: Evidence from Western European firms

AbstractRecent research shows that business groups matter in developed institutional settings. However, little is known about why business groups influence affiliate performance in such environments. Using a resource dependence lens, we explain how the business group effect may be contingent on a firm's industry environment. Consistent with a resource dependence perspective, our variance decomposition analysis of 3,733 firms in Western Europe (2006–2021) shows that the business group effect is significantly larger in less munificent and more complex industry environments. However, contrary to this perspective, our results also reveal that business groups matter more in less dynamic industry environments. Overall, by examining the importance of the industry environment in explaining how much business groups matter, this paper contributes to a more nuanced understanding of the business group effect in developed markets and provides several directions for future research in this domain.

How green entrepreneurial orientation leads to business success? A resource base and resource dependency perspectives

AbstractThis study investigates the impact of green entrepreneurial orientation (GEO) on firm performance through green innovation and green entrepreneurship image with the moderating influence of green value co‐creation. In recent years, the incorporation of sustainability and entrepreneurship into company plans has gained significance, and understanding the processes through which these aspects effect firm outcomes is critical. This study employed survey methodology to collect data from the Chinese manufacturing firms. The analysis was done on 383 finalized responses through SPSS and AMOS. The findings show that GEO has a positive impact on firm performance through green innovation and green entrepreneurship image. Furthermore, green value co‐creation moderates the relationship between GEO and green innovation, suggesting the importance of external stakeholders in facilitating the firm GEO. This study emphasizes the multidimensional nature of the link between GEO and firm performance, emphasizing the significance of taking both mediating and moderating factors into account. It adds to the growing body of knowledge on sustainability, entrepreneurship, and corporate success by offering a comprehensive framework that captures the subtle interplay of these elements. The findings have implications for firms looking to capitalize on the benefits of GEO and green innovation while also acknowledging the need of collaborative value co‐creation in gaining long‐term competitive advantage.

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.

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.

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

In 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.

Does board’s green theme training promote green innovation? A view from resource dependence perspective: Indonesian evidence

PurposeThe study has practical implications for decision-makers in that increasing board competence and expertise through training on environmental issues will promote green policy-making.Design/methodology/approachThis study included 655 firm-year observations from companies listed on the Indonesia Stock Exchange between 2017 and 2021. Panel data regression analysis is used to investigate the hypotheses. Additionally, a robustness test is conducted to validate the consistency of the primary test results.FindingsThe results demonstrate that green theme training from the board of directors, board of commissioners and independent commissioners has a positive and significant impact on the implementation of green innovation at each level of the board. This result is aligned with the robustness test performed.Research limitations/implicationsThis study is restricted by the fact that the only data sources used to examine the board’s green training are publication reports and other reports that disclose the board’s training activities. Therefore, future research can be done by considering other methods, such as surveys to trace green training followed by the board. Additional research may also examine green theme training in the corporate governance structure from a different theoretical angle, such as agency theory and human capital theory.Practical implicationsIn practice, the study has implications for decision-makers in that increasing board competence and expertise through training on environmental issues will be able to promote green policy-making.Originality/valueThis study concentrates on Indonesia with two-board governance characteristics: the board of directors and the board of commissioners. Several scholars have examined the board of directors in light of resource dependence theory. To the best of the authors’ knowledge, no research has explained the supervisory board within the context of two-board governance. In addition, the authors have not found research that analyzes board training activities related to the environment.

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.