The impact of knowledge spillovers and innovation on firm-performance: findings from the Balkans countries

This paper investigates factors affecting firm performance. Using data from Business Environment and Enterprise Performance Surveys (BEEPS 2013–2014), findings indicate that the following have a positive effect on firm performance: (i) innovative activities; (ii) knowledge spillovers; (iii) foreign ownership; and (iv) the proportion of skilled workers in the workforce. The paper therefore argues that innovation activities are endogenously related to firm performance, and that the performance of firms is influenced by knowledge spillovers and innovation activities, among other firm characteristics. The paper contributes to the literature by identifying spillovers and innovation activities as causal variables of firm performance—a novel approach to investigating knowledge spillovers and innovation activities.     

Firm performance and knowledge spillovers from academic, industrial and foreign linkages: the case of China

Firm performance may be enhanced by linkages with academic institutions, other firms, and foreign markets that confer knowledge spillovers as well as internal R&D that creates firm-specific knowledge. In particular, firm productivity and innovation may be enhanced by positive externalities from knowledge and technology produced by universities and research institutions (URIs) and diffused to the domestic economy. Productive contributions from such linkages might be particularly expected in China, where policy measures have explicitly supported and facilitated connections between URIs and firms to stimulate economic development and competitiveness. In this paper, we measure the performance impact of such knowledge spillovers in Chinese firms by using a variety of specifications, estimators, and robustness checks, including an ??instrumental variable?? specification that controls for endogeneity. We find more patent activity in Chinese firms with URI connections and enhanced firm productivity particularly from linkages with research institutions (RIs). Introduction of new products, processes, and new businesses is also positively associated with linkages with research institutions, as well as with linkages with other firms.     

Do Spillovers Stimulate Incremental or Drastic Product Innovations? Evidence from German Establishment Data*

Despite the generally recognized importance of knowledge spillovers, the empirical literature is essentially silent on the type of innovation stimulated by spillovers. We estimate the determinants of product innovations differing in their degree of newness to the adopting firm. Knowledge spillovers from rivals have a positive impact on incremental innovations. This impact is largely independent of participation in R&D cooperation. Spillovers exert no such independent influence on drastic innovation activities. The results support the hypothesis that establishments face difficulties in using knowledge that comes from areas they are not familiar with. Establishments exploit spillovers for incremental innovations rather than for drastic innovations. To some degree R&D cooperation can help to overcome the difficulties in using spillovers for drastic innovations. Furthermore, our estimates provide evidence that the firm's own R&D effort and the use of outside information are substitutes.     

Knowledge Spillovers,Competition and Innovation Success

We study the relationship between a patent-based measure of knowledge spillovers that calculates technological proximity based on technologically relevant firms and innovation success. We find – for a representative sample of Swiss firms – that knowledge spillovers have a positive and significant association with the commercial success of innovative products. The paper shows the importance of market conditions for the relationship of spillovers with innovation performance: It is only positive and significant in markets with a medium number of competitors in the main product market, but not in monopolistic or polypolistic market structures.     

Knowledge spillovers in US patents: A dynamic patent intensity model with secret common innovation factors

During the past two decades, innovations protected by patents have played a key role in business strategies. This fact enhanced studies of the determinants of patents and the impact of patents on innovation and competitive advantage. Sustaining competitive advantages is as important as creating them. Patents help sustaining competitive advantages by increasing the production cost of competitors, by signaling a better quality of products and by serving as barriers to entry. If patents are rewards for innovation, more R&D should be reflected in more patent applications but this is not the end of the story. There is empirical evidence showing that patents through time are becoming easier to get and more valuable to the firm due to increasing damage awards from infringers. These facts question the constant and static nature of the relationship between R&D and patents. Furthermore, innovation creates important knowledge spillovers due to its imperfect appropriability. Our paper investigates these dynamic effects using US patent data from 1979 to 2000 with alternative model specifications for patent counts. We introduce a general dynamic count panel data model with dynamic observable and unobservable spillovers, which encompasses previous models, is able to control for the endogeneity of R&D and therefore can be consistently estimated by maximum likelihood. Apart from allowing for firm specific fixed and random effects, we introduce a common unobserved component, or secret stock of knowledge, that affects differently the propensity to patent of each firm across sectors due to their different absorptive capacity.     

Strategic R&D Location by Multinational Firms: Spillovers, Technology Sourcing, and Competition

This paper develops a model of strategic interaction in R&D internationalization decisions between two multinational firms, competing both abroad and in their home markets. It examines different incentives for foreign R&D faced by a technology leader and a technology laggard. The model takes into account the impact of local inter firm R&D spillovers, (noncostless) international intra firm transfer of knowledge, and the notion that internal R&D increases the effectiveness of incoming spillovers. Analytical results suggest that greater efficiency of intra firm transfers and greater R&D spillovers increase the attractiveness of domestic R&D for the technology leader if the technology gap with the laggard is large. The lagging firm, in contrast, increases the share of foreign R&D as foreign technology sourcing becomes more effective. Competition encourages the leading firm to engage in foreign R&D to capture a larger share of profits on the foreign market, whereas the laggard concentrates more R&D at home to defend its home market position.     

产业集群创新网络特征与知识创新绩效关系研究

文章从集群网络的视角分析企业知识创新绩效的影响因素,并将集群企业知识创新绩效形成的过程机制可以分解为三个关键问题:集群创新网络特征分析,集群企业创新网络特征对企业从创新网络获取知识的影响分析,以及集群企业创新网络特征、知识获取和知识创新绩效间的作用机理分析。最后,通过构建集群创新网络—知识获取—知识创新绩效的综合概念模型,揭示产业集群创新网络特征与企业知识创新绩效之间的关系。     

Interrelationships between human capital,HRM and innovation in Belgian start-ups aiming at an innovation strategy

Research on the impact of human resource management (HRM) on firm performance has increased since the end of the nineties. Despite the pile of studies and results, critical assessments of this literature stream point to several empirical and theoretical gaps. We focus on two empirical gaps. First, there is a lack of attention to innovation as a measure of firm performance outcome. Most articles use financial (e.g., return on assets (ROA)), organisational (e.g., productivity) and employee related (e.g., commitment) performance measures. Yet, Western knowledge economies consider innovation to be a driving force of economic growth, and international competitive advantage. Moreover, innovation is a function of a firm's ability to create, manage and maintain knowledge. Because knowledge is created by and stored within individuals, human resources as well as HRM may play an important role as drivers of innovation. Second, HRM is considered to be a large company phenomenon. Yet, small businesses provide a great environment to study the HRM-performance relationship because of their transparent nature and the small distance between an individual's and a company's performance. Next, human resources and HRM are crucial to small businesses because they have less tolerance for inefficiency. We examine a sample of small start-ups that aim for an innovation strategy, but are not necessarily successful in terms of innovative output. We expect start-ups with superior human resources and HRM to produce more innovative output. The results show that both human capital (of owners/managers and employees) and HRM are important determinants of innovation in start-ups.     

Determining paths of innovation: The role of culture on the adoption on organic farming management

The aim of this paper is to understand whether national culture is linked with operative performance of organic agriculture. The ultimate goal is, indeed, to measure the impact of social change on technical innovation and sustainability issues. We built an econometric model where the impact of some of the six dimensions of national culture by Geert Hofstede is tested on inputs and outputs of organic production, on a country-based scale. We collected data about the evolution of organic agriculture through the last two decades, extracting data about 27 countries of the European Union from 2000 to 2017. We tested the dataset into two passages: we first employed a DEA model to assess efficiency of organic farming, and then we correlated results to Hofstede 6-D model of national culture. We observed the existence of a relationship between culture and innovation, explaining the importance of determined values in people's management within the firm. The operative performance of organic agriculture is linked to determined culturally influenced business values. We used efficiency results as variables for measuring innovation approach based on cultural models. It has been enhanced the relevance to the nexus innovation-culture approaching to one of the most innovation-resistant industrial sectors.     

Strategic entrepreneurship and knowledge spillovers: spatial and aspatial perspectives

The literature in the Strategic Entrepreneurship (SE) is increasingly embracing the concept and implications of knowledge spillovers. In this paper, we add to the theoretical repertoire on SE and knowledge spillovers by investigating the types of knowledge spillovers and what they imply for various dimensions of SE. On the one hand, we distinguish between spatial and aspatial knowledge spillovers. On the other hand, we distinguish between three dimensions of SE, i.e. inputs, resource orchestration, and output. Finally, we conceptually link the various types of knowledge spillovers and dimensions of SE and discuss the implications. Doing so, we argue that spatial knowledge spillovers (inter-firm) has received the major attention in previous research in increasing the amount of ‘inputs’ dimension of SE, while the aspatial knowledge (either inter-regional or intra-firm) has been relatively neglected not only for ‘inputs’, but also for ‘resource orchestration’ dimension. At the end, the paper provides suggestions for future research.     

Radical innovations in new product development and their financial performance implications: An event study of US manufacturing firms

At the dawn of the 21st century, global competition continues to increase at an accelerating rate and radical innovation is recognized as a potent weapon for firms to achieve sustainable competitive advantages. Academics, practitioners and consultants share the view that radical innovation is important to the long-term financial success of firms. Nevertheless, empirical studies on the relationship between radical innovation and firm performance have been dominated by survey research, which provided little concrete evidence on the financial impact of radical innovation. In this study we traced the financial performance of publicly traded manufacturing firms in the United States that introduced radical innovations over the period 1986-2000 and examined whether radical innovation could lead to superior financial performance in these firms. We employed the event-study method, matching each sample firm with a control group of firms in the same industry with similar pre-event performance and firm size. Our results show that while radical innovation helps firms maintain sales growth and return on sales (ROS), firm profitability in terms of return on assets (ROA) is not significantly improved. In fact, manufacturers suffer from a decline in profitability upon the introduction of radical innovations in new product development.     

Green Innovation,Managerial Concern and Firm Performance: An Empirical Study

Extant literature, while often suggesting a positive link between green innovation and firm performance, is inconclusive. Moreover, the possibly moderating role of management has not been sufficiently considered. Using a unique dataset sampling 188 manufacturing firms in China, we examine how managerial concern (for green issues) moderates the relationship between green innovation and firm performance. We find that green process innovation and green product innovation both significantly (positively) predict firm performance, when not considering managerial concern for the environment. Once managerial concern is included, we observe that it compounds the positive effect of green process innovation on firm performance – but not product innovation, which no longer explains significant unique variance in firm performance. The findings hold various implications for future research and business policy. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

Industrial and Spatial Spillovers and Productivity Growth: Evidence from Taiwan High-Technology Plant Level Data

The purpose of this paper is to recognize the importance of innovation networks and incorporate various types of knowledge and spatial spillovers and their associated adjustments on productivity growth. We explore the temporal, spatial, and industrial/sectoral spillovers using a dynamic external spillover model that assumes each firm derives an optimal plan such that the expected present value of current and future cost streams is minimized. The goal is to measure and evaluate various types of spillover mechanisms, which allow us both to quantify their cost effects and evaluate the contribution of such inter-dependencies on productive performance.JEL Classification: D2, L6, O3     

The impact of open innovation on firm performance: The moderating effects of internal R&D and environmental turbulence

Researchers have identified open innovation as two dimensions, external technology acquisition and external technology exploitation. This study explores the direct and interactive effects of these two dimensions on firm performance and further examines the moderation effects of two factors (i.e., internal R&D and environmental turbulence) on the relationship between both types of open innovation and firm performance. Based on Chesbrough's open innovation model, multi-item scales were developed to measure two dimensions of firm-level open innovation. Survey results of 176 Taiwanese high tech manufacturing firms provide support for most hypotheses. The result shows that external technology acquisition positively affects firm performance, whereas external technology exploitation does not. This study also finds that external technology acquisition strengthens the relationship between external technology exploitation and firm performance. Both external technology acquisition and external technology exploitation are positively related to firm performance under high internal R&D investment and a turbulent market environment. However, technological turbulence only positively affects the relationship between external technological acquisition, but not external technology exploitation, and firm performance. The findings contribute to enhanced understanding of how the degree of leveraging open innovation dimensions depends on their complementarity, internal R&D, and environmental turbulence.     

Demographic Diversity in the Boardroom: Mediators of the Board Diversity–Firm Performance Relationship

Whereas the majority of research on board diversity explores the direct relationship between racial and gender diversity and firm performance, this paper investigates mediators that explain how board diversity is related to firm performance. Grounded in signalling theory and the behavioural theory of the firm, we suggest that this relationship operates through two mediators: firm reputation and innovation. In a sample of Fortune 500 firms, we find a positive relationship between board racial diversity and both firm reputation and innovation. We find that reputation and innovation both partially mediate the relationship between board racial diversity and firm performance. In addition, we find a positive relationship between board gender diversity and innovation.     

Related variety and firm heterogeneity. What really matters for short-run firm growth?

ABSTRACT

In recent years, two concepts have become key elements in economic geography: related variety and firm heterogeneity. The first one predicts that knowledge spillovers within a region/local system occur among firms operating in ‘different but related’ sectors. The second one assumes that knowledge spillovers can occur among ‘different’ firms belonging to the same localised sector/industrial cluster. Using a sample of 27,817 Italian manufacturing firms observed during the period 2010–2013, this paper analyses the role played by related variety and within-sector firm heterogeneity on short-run employment growth. The results suggest that both related variety and within-sector firm heterogeneity have a positive effect, although the latter has a higher impact than the former. These results confirm the role played by related variety, but identify firm heterogeneity as a potential additional source of local knowledge spillovers.     

A micro-econometric analysis of the role of R&D spillovers using a nonlinear translog specification

This paper assesses the impact of Research and Development (R&D) spillovers on production for a panel of 1,203 Italian manufacturing firms over the period 1998–2003.The estimations are based on a nonlinear translog production function augmented by a measure of R&D spillovers which combines the geographical distance between firms, the technological similarity within each pair of firms and the technical efficiency of each firm. The estimation method takes into account the endogeneity of regressors and the potential sample selection issue regarding the decision by firms to invest in R&D. Results show that the translog production function is more suitable than the Cobb-Douglas for modelling firm behaviour and that returns to scale are increasing. Moreover, the internal and external stocks of technology exert a significant impact on firms’ production. Finally, it emerges that, for Italian manufacturing firms, R&D capital and R&D spillovers are highly substitutes.     

Are innovation and R&D the only sources of firms’ knowledge that increase productivity? An empirical investigation of French manufacturing firms

The economic literature presents knowledge accumulation as one of the most important characteristics of innovation. The accumulation of knowledge arises from complex and dynamic interactions between a firm??s own internal capacity and external expertise. Research and development (R&D) remains important in the innovation process, but it must be integrated with knowledge from other sources, such as training and knowledge capitalization. This paper investigates the relationship between such knowledge sources and the productivity of French firms. Using asymptotic least squares, a Cobb-Douglas function including R&D, innovation, training expenditure and ISO 9000 certification is estimated for 1,213 French manufacturing firms. Our results show that innovation, training and ISO 9000 certification have a positive and significant impact on firms?? productivity.     

WHY IS THERE A LACK OF EVIDENCE ON KNOWLEDGE SPILLOVERS FROM FOREIGN DIRECT INVESTMENT?

Empirical analyses of knowledge spillovers from foreign direct investment (FDI) offer mixed results; they find positive, neutral and negative FDI spillover effects. This lack of evidence mainly comes from the results of firm‐level panel data analysis. This is important since this approach seems to be the most appropriate for estimating FDI spillovers. The paper takes a look at recent substantive and methodological developments in FDI spillover analysis, which have brought some more optimistic results with regard to FDI spillovers, and can help in further development in this field. The main substantive development relates to the introduction of a broad variety of sources of firm heterogeneity (foreign affiliates as well as local firms) in the analysis. Others include differentiation between vertical (inter‐industry) and horizontal (intra‐industry) spillovers, and host country absorptive capacity for knowledge spillovers. Methodological developments relate to distinguishing between technological/knowledge and productivity spillovers, improvement of modelling and estimation methods, and an increased amount and quality of data.     

Exploitation- and exploration-based innovations: The role of knowledge in inter-firm relationships with distributors

Learning capacity is a critical factor for a firm’s innovation and competitiveness. This study explores the issue of how knowledge in inter-firm relationships with distributors influences manufacturers’ exploitation- and exploration-based innovations and performance. The empirical model examines the effect of three different types of knowledge-related issues in inter-firm relationships: (i) the acquisition of substantial knowledge (about products, technology, or markets) from distributors; (ii) the learning about collaborating with each distributor as the relationship evolves; and (iii) the general firm’s knowledge about managing distributors. A model of learning—innovation—performance is developed and tested in a sample of 201 firms in the food and beverages sector. The results reveal that: (i) knowledge about managing distributors promotes continuous learning from them; (ii) learning to collaborate is critical, as it favours knowledge acquisition and both types of innovations (exploitation- and exploration-based); (iii) learning from distributors weakens firms’ tendency to stress one type of innovation strategy over another; and (iv) knowledge in inter-firm relationships with distributors affects performance in a completely mediated way, that is, through innovation. Theoretical and managerial implications of these findings are discussed in the conclusion of the paper.