Spanish Firms Research Articles

Media Attention and Innovation

Research exploring how extra-legal institutional aspects might impact corporate investment policy in innovation is currently still in its early stages. This lack of research is even greater when it comes to studying the role of media attention in corporate innovation. Thus, this study extends prior literature by investigating the relationship between media visibility and corporate innovation. We examine a sample of Spanish firms over a wide period: 2004-2019. The results obtained indicate that media attention has a positive effect on the level of corporate innovation. This finding is robust to alternative measures of media visibility and innovation, and different econometric specifications. The result to emerge is consistent with the arguments that state that the media curb the opportunistic practices of directors and dominant owners, reduce information asymmetry, and thereby foster the use of external funding, as well as increase the pressure on firms to meet stakeholders’ demands for innovation.

Do financial constraints moderate the relationship between innovation subsidies and firms' R&D investment?

PurposeThe purpose of this paper is to analyse whether the effect of innovation subsidies on firms' R&D investment varies depending on whether the firm is suffering from financial constraints.Design/methodology/approachTo address this analysis, the authors provide a theoretical model and test their hypothesis using an econometric analysis of an unbalanced panel of 3,865 innovative Spanish firms during 2010–2017. They employ the SABI database to obtain firms' financial and economic data and incorporate firms' MORE financial rating. Specifically, the authors use the GMM-SYS technique to regress and measure the marginal effects of innovation subsidies size on firms' R&D investment and the influence of firms' financial constraints.FindingsThe results of this work indicate that financial constraints negatively moderate the effect of subsidies on R&D investment; that is, those firms that receive a subsidy and suffer financial constraints invest less in R&D projects than those which also receive the subsidy and do not suffer financial constraints. Besides, this work found that innovation subsidies alone do not significantly increase firms' R&D investment.Originality/valueFrom a neoclassical point of view, the existence of financial constraints is the justification of public innovation policies. However, due to the difficulty of measuring financial constraints, innovation literature has abandoned the analysis of this crucial variable. This work reintroduces this vital variable and analyses how it interacts with innovation subsidies on firms' R&D investment.

Does supply chain quality integration guarantee ambidexterity? Contingency and configuration perspectives on their relationships

While researchers have thoroughly investigated the impact of supply chain quality integration (SCQI) on competitive performance, they have paid less attention to its possible effects on a firm’s capabilities to reconfigure resources to adapt to environmental changes. Using data from 239 Spanish organic agro-food firms, we studied the relationships between SCQI dimensions and organisational ambidexterity from both contingency and configuration perspectives. In the contingency approach, a structural equation model was used to study the effect of individual SCQI dimensions on ambidexterity. In contrast, in the configuration perspective, cluster analysis and analysis of variance were used to investigate the relationship between SCQI patterns and ambidexterity. The contingency approach´s findings suggest that only internal quality integration has a positive direct impact on ambidexterity. The configuration approach complements such outcomes by revealing that only a high and balanced level of all the three SCQI dimensions (i.e. internal-, supplier- and customer-quality integration) guarantees significantly higher levels of ambidexterity. This paper provides a deeper understanding of the impact of SCQI on the firm's ambidexterity capability, and the findings offer managers of the organic agro-food industry some guidelines to develop an ambidexterity capability through SCQI to compete with the traditional agro-food players.

Do Boards of Directors Really Matter in the Cooperation Behavior of Firms? An Exploratory Analysis in Spain

This paper explores the relationship between one of the major aspects of the internal mechanism of corporate governance, i.e., the board of directors, and the corporate strategy of cooperation. The study was designed to investigate whether certain board of director characteristics have an influence on the propensity to cooperate in Spanish listed non-financial firms. Our findings reveal that the propensity to cooperate in Spanish firms is driven more by a tight “management effect” whereby the highest probability of occurrence is related to firms with duality on their boards and a lower proportion of nominee directors representing controlling shareholders. This paper adds evidence to the corporate governance-corporate strategy (alliance propensity) discussion in a continental country such as Spain.

Is Sustainable Performance Explained by Firm Effect in Small Business?

To what extent a firm’s resources (firm effect) and the structure of the sector (industry effect) are sources of a firm’s competitiveness has been debated for years in strategic management. Most of the empirical studies carried out have focused on large firms and have used static performance measures, and in them the firm effect generally outweighs the industry effect. This research contributes to this debate in trying to verify whether the competitive advantage that relies on the firm’s resources is sustainable, especially in small firms. We used a sample of almost 15,000 Spanish firms to test the impact that the firm and the industry effects have on sustainable performance, for both small and large firms, applying hierarchical linear modelling with a variable measured through time-varying parameters. Our results confirm the absolute importance of the firm effect on sustainable organizational performance, regardless the firm size, and show that, even though the industry effect has little weight in explaining sustainability, it is significantly higher in the case of small firms. This means that managers must concentrate efforts on providing their firm with the necessary resources to achieve a competitive advantage while choosing a good sector to position itself.

Innovation in the Agri‐Food sector: Exploiting opportunities for Industry 4.0

Agri‐Food producers have a responsibility to provide safe, secure and sustainable food in a world characterized by disruption and increasing intolerance of waste along supply chains. As such, it is critical that they adopt new technologies to ensure efficient and effective management of their responsibility. While Industry 4.0 (I4.0) technologies can underpin process innovation opportunities, there is a gap in research‐based understanding of how they influence innovation practice and outcomes in Agri‐Food. In this paper, we investigate how I4.0, as a set of enabling technologies, influences core process innovation practice and product innovation outcomes in Agri‐Food firms. We present case studies of two Spanish firms processing fresh food products, competing in two important subsectors of the industry, meat and fruit and vegetables. We used secondary material and semi‐structured interviews as data sources. The findings describe how, in the two cases, I4.0 has enabled responses to new customers requirements through process innovations resulting in enhanced functionality, aesthetics and meaning of the delivered products. Our paper contributes a framework identifying for researchers and managers how I4.0 technologies act as enablers of the core innovation processes and competitive outcomes.

Contrasting Incentives for Earnings Management: Board Activity and Board Remuneration in Spanish Firms

We analyze the effect board activity and board remuneration has on earnings management (EM). Our results show that more active boards are inefficient in preventing earnings manipulation. Regarding board compensation we find a U-shaped relation indicating that excessive remuneration will lead to more earnings management. Policy recommendations are derived from the findings.

Do family firms contribute to job stability? Evidence from the great recession

PurposeThe purpose of this paper is to analyze if choices made by family businesses (FBs) regarding job stability in economic recessions are different, on average, to those made by nonfamily firms. Moreover, the study tries to elucidate if this potential difference depends on the family generation that is in charge. The analysis relies upon a sample of 55,091 Spanish firms, as Spain is one of the countries that suffered the greatest impact of the 2008 Great Recession.Design/methodology/approachTo test the hypotheses, the authors built a database of 55,091 Spanish firms, 45,351 family firms and 9,740 nonfamily firms, for the period 2007–2015. Based on the socioemotional wealth (SEW) approach, this article sheds light on the question of whether family identification, binding social ties and long-term vision lead FB to behave differently from nonfamily businesses in human resource management.FindingsIn times of crisis, FBs do maintain jobs to a higher extent than nonfamily businesses, and this effect is especially intense when the first generation is in charge. According to the SEW approach, the emotional links between ownership and management make the firm more prudent when hiring during good times and when firing in times of crisis. This makes employment in FBs more stable than in private ones. This result has two positive effects. Higher job stability is an additional contribution of family firms to social welfare and happiness. Furthermore, a larger share of family firms involves stronger automatic macrostabilizers to deal with the business cycle, supplementing fiscal macrostabilizers, such as personal income tax (PIT) or unemployment insurance.Practical implicationsFamily firms maintained employment more than nonfamily firms did during the crisis. The emotional links between ownership and management and the long-term vision make the firm more prudent when hiring during good times and when firing in times of crisis. These features could make family firms more cautious in terms of hiring and firing and thus enable them to offer their employees implicit employment protection and stability. This positive effect decreases as firm age advances, due to the minor linkage between ownership and employees, in spite of maintaining identification and long-term vision.Social implicationsFrom a policy perspective, greater job stability is an additional contribution of family firms to social welfare and happiness. Hence, a larger share of family firms would involve stronger automatic macrostabilizers to deal with the business cycle, supplementing well-known fiscal macrostabilizers such as the PIT or unemployment insurance. The idea of family firms as countercyclical agents linking the micro dimension with the macro dimension becomes more interesting in the present context with the crisis generated by COVID-19.Originality/valueIn addition to contributing to the scarce literature on FB and employment in times of crisis, this paper also considers the generational effect on employment in the economic crisis context from the SEW approach. In addition, sound econometric methodology applied using an extremely large database grounded the results. In contrast with studies in the FB field that have typically focused on large listed firms (Mazzi, 2011), the study relies upon a database of privately held companies, which are more representative of FBs in civil law countries, such as Spain. The Spanish case is particularly interesting because it was one of the OECD countries shocked by the Great Recession. Finally, the authors propose family firms as countercyclical agents linking the micro dimension to the macro dimension.

Ownership structure and R&D investment: the role of identity and contestability in Spanish listed firms

ObjetivoEl objetivo del presente trabajo es analizar la relación existente entre la estructura de propiedad y la innovación corporativa para una muestra de empresas cotizadas españolas.Diseño/metodología/enfoqueUtilizando los planteamientos de la teoría de la agencia y de la perspectiva de la riqueza socioemocional proponemos que la I+D empresarial está relacionada con la estructura de propiedad, específicamente con la naturaleza del accionista de control (empresas familiares y empresas con un inversor institucional como principal accionista) y con el grado de contestabilidad por parte de otros accionistas significativos. A fin de testar nuestras hipótesis, construimos ad hoc una base de datos de propiedad original en la que identificamos, al umbral del 10% de propiedad, a los accionistas últimos de una muestra de 96 empresas cotizadas españolas para el periodo 2008–2018 (1.002 obs).ResultadosNuestros resultados muestran que no existe relación significativa entre la concentración de propiedad y la inversión en I + D. Solo cuando consideramos la naturaleza del principal accionista encontramos que en las empresas familiares la relación entre la propiedad de la familia y la innovación corporativa adopta una forma de U invertida, tal que a bajos niveles de propiedad la I + D crece, mientras que a altos niveles de propiedad (que computamos en torno al 54% de propiedad) la inversión en I + D decrece. Asimismo, en las empresas con un inversor institucional como principal accionista, cuanto mayor es la propiedad de este inversor institucional, mayor es la I + D de la empresa. Finalmente testamos que, en contra de la corriente dominante, en las empresas familiares la propiedad en manos de otras familias incrementa el grado de contestabilidad a la familia controladora respecto a su inversión en I + D.OriginalidadEl trabajo utiliza una base de datos de propiedad original para testar una relación no lineal entre concentración de propiedad e innovación corporativa en las empresas familiares. Asimismo, el estudio aborda un tema apenas analizado en la literatura de I + D como es el papel de la contestabilidad al accionista de control.

Saving for the bad times: slack resources during an economic downturn

PurposeThis paper aims to examine what firms in Spanish industrial sectors redeployed their resources, depending on their organisational slack (resource excess), when faced with the global economic crisis of 2008.Design/methodology/approachVarious financial measures for slack resources and performance have been analysed from more than 400 Spanish firms from 2006 (pre-crisis) to 2017 (recovery).FindingsThe first finding is that every slack is useful against an economic downturn. The results show how industrial companies use their slack resources when faced with a generalised crisis according to the level of slack possessed. The key role of the available slack against this environmental threatens is remarked.Research limitations/implicationsNot every resource is useful against an economic downturn. The results show how industrial companies use their slack resources when faced with a generalised crisis in accordance with the types and levels of slack. The key role of the liquid resources, in particular cash, against this environmental threat is discussed. However, we also observe the behaviour of firms with only a few excess resources and find very similar resource consumption patterns.Originality/valueAlthough organisational slack is a well-known concept in management, few studies deal with how companies consume or use other types of resources when confronting a crisis. This paper not only addresses this question but also offers insights for a detailed evaluation of various types of slack during and after a crisis.

Supporting organizations and leading firms: a transition towards social and environmental practices inside clusters

ABSTRACT The objective of this research is to understand how new social and environmental practices are introduced and developed in clusters. From an international perspective and based on cluster literature, we propose that leading firms and supporting organizations are the main drivers of these practices. In particular, we work on the hypothesis that firms with solid international experience, innovative capacity and resources, as well as having stable relationships with local organizations, positively affect social and environmental practices within clusters. Empirical evidence gathered on 175 Spanish footwear firms located in clusters obtained in 2018 reveals that firms are the conduit for incorporating new social and environmental practices in traditional clusters. This is particularly true of larger, highly internationalized firms or those of more recent creation. Contrary to our expectations, the role of innovation capacity and local supporting organizations has not been endorsed. Finally, policy and managerial implications for the local dissemination of social and environmental practices are presented.

Effects of the degree of financial constraint and excessive indebtedness on firms’ investment decisions

The aim of this paper is to provide empirical evidence of the importance of financial variables in explaining differences in investment rates among firms. The main contributions of the study are twofold: the use of a variable that approximates the degree of financial constraint, and the effect of indebtedness on investment is allowed to be non-linear. The empirical application to the case of Spain is of interest because of the large proportion of SMEs among Spanish firms (SMEs being highly dependent on bank financing) and the drastic tightening of credit conditions in Spain during the banking crisis. The results provide evidence of the impact of financial constraints on firms’ investment behavior—an impact distinct from, and far greater than, that of indebtedness. Overall, above a debt-to-asset ratio of 53%, the negative impact of indebtedness increases. The impact increased significantly after the financial crisis, suggesting that when dealing with highly indebted firms, banks became more risk averse, thus further constraining access to credit. Conversely, for large, most productive, and exporting companies, leverage has a positive effect, although this effect decreases with indebtedness. From an economic policy point of view, the results show the importance of banking regulation in preventing corporate indebtedness from reaching levels where it becomes a drag on investment.

German Capital and the development of the Spanish hotel industry (1950s-1990s): A tale of two strategic alliances

This article examines the long-term development of two strategic alliances between major Spanish (RUI and Iberostar) and German (TUI and Neckermann) tourist firms. Our research builds on the literature on foreign direct investment and institutionalism applied to cross-border cooperation, yet using business history research methods. The study aims to understand how the local Spanish context shaped the interaction between foreign and domestic firms and how this interaction influenced the development of the Spanish companies. Our cases suggest that the Spanish institutional framework affected the nature and strength of alliances. Foreign partners were crucial in providing financial and commercial support, brand consolidation, market knowledge and reputation. However, local actors also played an important role as proactive partners eager to develop their domestic business and upgrade their existing capabilities. Ultimately this strategy would contribute to the internationalisation of Spanish firms after 1990.

Firm and industry effects: the importance of sample design

PurposeThis paper aims to examine how sample design affects the relative importance of firm and industry factors in explaining performance variations.Design/methodology/approachUsing a sample of 14,204 Spanish firms over a 10-year time frame, this study uses partial sensitivity analysis to examine the biases in results as a consequence of three methodological relevant concerns: outliers, industry classification and period.FindingsResults indicate that the industry effect, supported by the industrial organization theory, has been underestimated in the empirical tests.Originality/valueThis study examines the biases in results as a consequence of three methodological relevant concerns (outliers, sector classification and period), which have not been sufficiently studied to date. Moreover, the study provides some new evidence favourable to the Industrial Organization (IO) perspective, which could have been biased and underestimated by the literature, as most of the analyses do not consider the methodological issues studied in this paper.

Automation, Trade and Multinational Activity: Micro Evidence from Spain

We use a rich data set of Spanish manufacturing firms from 1990 to 2016 to shed new light on how automation in a high-income country affects trade and multinational activity involving lower-income countries. By exploiting supply side improvements in the capabilities of robots over time, as described in patents, we show that contrary to the speculation that automation will cause 're-shoring', the use of robots in Spanish firms actually had a positive impact on their imports from, and number of affiliates in, lower-income countries. Robot use causes firms to expand production, increase productivity and increases the probability that they start importing from, or opening affiliates in, lower-income countries. The sequencing of automation and offshoring has important consequences for the impact of automation, however. For firms that were offshoring to lower-income countries before they starting to use robots, robot adoption had no effect on the value of imports from lower-income countries, but decreased the share of imports sourced from lower-income countries. By contrast, for firms that had not already off-shored to lower-income countries, robot adoption made them more likely to start doing so. We show that these findings can be explained in a framework that incorporates firm heterogeneity, the choice between automation, offshoring and performing tasks at home and where automation and offshoring both involve upfront fixed costs, such that their sequencing matters.

On the direct and indirect real effects of credit supply shocks

We explore the real effects of bank-lending shocks and how they permeate the economy through buyer-supplier linkages. We combine administrative data on all Spanish firms with a matched bank-firm-loan dataset of all corporate loans from 2003 to 2013 to estimate firm-specific credit supply shocks for each year. We compute firm-specific measures of exposure to bank lending shocks of customers (upstream propagation) and suppliers (downstream propagation). Our findings suggest that credit supply shocks have sizable direct and downstream propagation effects on employment, investment, and output, especially during the 2008–2009 crisis, but no significant impact on employment during the expansion. We provide evidence that both trade credit extended by suppliers and price adjustments in general equilibrium explain downstream propagation of credit shocks.

The effect of triple helix cooperation on business innovation: The case of Spain

The aim of this study is to describe and analyse the possible synergic effect of the cooperation of Triple Helix agents, university, industry and government, on business innovation. We use data available in the PITEC database (Technological Innovation Panel), taking a sample comprising 11,769 Spanish firms from different sectors for the 2007–2016 period. The binomial logistic model used reveals that the cooperation of firms with any Triple Helix agent increases the likelihood of innovation regardless of the type (product innovation, process innovation or a combination thereof). It also concludes that the greater the number of Triple Helix model agents who cooperate, the greater the chances of business innovation, confirming the synergic effect between different agents.

Making Room for the Needy: The Credit-Reallocation Effects of the ECB’s Corporate QE*

Abstract We analyze how the ECB’s purchases of corporate bonds under its Corporate Sector Purchase Programme (CSPP) affected the financing of Spanish firms. We first document that the announcement of the CSPP in March 2016 raised firms’ propensity to issue bonds. The flipside was a drop in the demand for bank loans by bond issuers. Around 75% of the drop in loans previously made to debt issuers was redirected to other, smaller nonbond issuing firms. This reallocation process was led by banks with weaker liquidity positions experiencing credit outflows, which extended credit to the same firms they were rationing prior to the CSPP. This positive credit supply shock raised the real investment of nonissuing firms. The concomitant ECB’s Targeted Longer-Term Refinancing Operations (TLTRO-II) is estimated to have contributed to amplifying the credit-reallocation effect triggered by the CSPP.

UNGC principles and SDGs: perception and business implementation

PurposeThe purpose of this study is to analyze the perception of CSR policies and the implementation of UNGC management model in firms operating at a national and an international level. Specifically, in the framework of stakeholder theory, this work explores the relation between internationalization and the usage of UNGC management model in the design and implementation of successful CSR strategies. By doing so, new insights on CSR management to gain competitive advantage are provided.Design/methodology/approachThe present study analyzes impact of internationalization in their sustainability performance, as well as the relationship between the usage of the UNGC management model and the firm's sustainability performance. To achieve this goal, the Spanish firms subscribing to the UNGC were evaluated following the tenth anniversary of the Spanish UNGC Chapter's inauguration. Both internationalized companies and companies only operating at a national level were evaluated, first through a survey, followed by a focus group and lastly a qualitative analysis of their CSR performance reports.FindingsFindings show that perception of CSR performance and relevance allocated to CSR matters is consistent with the firms' practices. However, internationalization does not hold a relation with the companies' performance in sustainability matters as expected due to a series of factors. Similarly, the implementation of the UNGC management model does not correlate to the firm's perception and performance. The virtuous cycle can be created by honoring the social contract, yet the tools and management models shall be further tailored to ensure an effective win-win situation.Originality/valueThis study evaluates a company's perception and strategic involvement in sustainability, considering the UNGC 10 principles and SDG. Specifically, the role of internationalization and usage of the UNGC management model are evaluated. Consequently, researchers studying business strategy can incorporate the findings in strategic planning. Practitioners can learn the implications of CSR strategic planning using the UNGC management model and the limitations of this tool, to ensure sustainable growth of their firms. Moreover, work illustrates corporate results in sustainability matters after the first decade of the UNGC management model implementation in a specific UNGC Chapter.

Benefit Communication and Its Effects on Employees’ Benefit Level Satisfaction: The Multiple Mediating Effects of POS and Benefit Comparison

Many firms offer employees a broad range of benefits as part of their compensation. However, little attention has been given to the extent to which firms communicate with their employees in relation to such benefits. This study proposes that benefit communication can have both direct and indirect positive effects on employees’ benefit level satisfaction. The effects of benefit communication were examined by means of a survey among 828 employees of different Spanish firms. This study hypothesized and found that benefit communication led to increased benefit level satisfaction. Similarly, this study found that benefit communication can influence benefit level satisfaction through the multiple intermediating effects of employees’ perceived organizational support and employees’ comparison of their benefits with those of referent others. These results imply that academics and practitioners must pay attention to providing adequate benefit communication in order to ensure the effectiveness of benefits.