Open search strategies and firm performance: The different moderating role of technological environmental dynamism

Mainly driven by the rapid progress of the ‘open innovation’ paradigm, previous research has devoted considerable efforts in investigating how the degree of openness to external knowledge influences firms׳ innovation performance. However, much less is known about its impact on performance at the firm level. Moreover, the question of which open search strategy is more suitable depending on environmental features is unresolved. We focus on breadth and depth as two distinct open search strategies and claim that, besides their different benefits in terms of learning and innovation, it is also necessary to consider their costs. Based on survey data of 248 high-technology manufacturing Spanish firms, this study extends recent research about the context dependency of openness effectiveness by showing that the effect of these two open search strategies on perceived firm performance is contingent with technological environmental dynamism in a reverse fashion. While search breadth is found to be positively associated with performance in less technologically dynamic environments, it seems to hurt performance in more dynamic contexts. On the contrary, while search depth is found to have a positive effect on performance in highly technologically dynamic environments, it appears to harm firm performance in more stable contexts.     

Successful eco‐innovators: Exploring the association between open inbound knowledge strategies and the performance of eco‐innovative firms

The main purpose of this paper is to analyse the association between open inbound knowledge strategies and the performance of eco‐innovative firms in the food and beverage industry. We propose a mixed framework based on the eco‐innovation literature and the open innovation approach. We consider the characteristics in a traditional sector based upon a resource‐based perspective. Three types of firms are distinguished in terms of their sales growth in the Spanish food industry from the least to the most successful eco‐innovators. Using multinomial logistic regression models, it is shown that the diversity of collaborators (breadth of external sources of knowledge) and joint adoption of product and process eco‐innovations are positively associated with the probability of achieving high sales growth. Moreover, we find an inverted U‐shaped relationship between the breadth of the external search and firm performance, but only for the group of the most successful firms. Moreover, operational flexibility, knowledge‐based capabilities and company size are also positively related to the group of successful eco‐innovators.     

Local institutions,external finance and investment decisions of small businesses in Vietnam

This study investigates the impacts of local institutions, external finance, and their joint effects on firm investment in Vietnam. Investment decisions are classified into two categories: fixed asset investment and non-fixed asset investment. Analysing a set of 1.3 million firm-year observations of businesses in Vietnam (2006–2016), we find evidence that local institutions (both formal and informal) positively influence fixed asset investment but negatively affect non-fixed asset investment. Also, we find that informal loans are positively associated with both types of firm investment while bank loans are negatively associated with both types of firm investment. More importantly, we find that the quality of local institutions is able to moderate firms’ external financing behaviour, leading to increased investment values.     

The Dynamics of Labour Flexibility: Relationships between Employment Type and Innovativeness

This paper investigates the relationship between flexible human resource (HR) practices and innovativeness. Testing the research model in a sample of first‐tier automotive suppliers indicates that internal flexibility practices are positively related to innovativeness. Regarding external flexibility, the association depends on the type of contingent employee: negative association for ‘short‐term hires’ and positive association for ‘consulting/contracting firms’. The relationships to innovativeness for practices associated with knowledge transfer are moderated by environmental dynamism, but the non‐knowledge related practices are not. Firms in highly dynamic environments can benefit more from flexible HR practices than firms in less dynamic environments.     

The relationship between knowledge search strategies and absorptive capacity: A deeper look

The present study analyzes how the breadth and depth of search strategies affect the dimensions of a firm's absorptive capacity: exploration, transformation and exploitation. Results of an analysis of a sample of 467 Spanish manufacturing firms reveal that openness of external knowledge search contributes to firms' exploratory, transformative and exploitative learning processes in different ways. In particular, a strong curvilinear effect of external knowledge search breadth on exploratory and exploitative learning was found. It is also important to establish deep relationships with external agents to achieve transformative and exploitative learning up to a certain point after which relationships become negative. Interestingly, for a firm to develop explorative learning, it is not important to establish deep relationships. And for a firm to develop transformative learning it is not important to establish broad relationships. Some suggestions for managers and future lines of research are provided.     

Human resource control in MNCs: a study of the factors influencing the use of formal and informal control mechanisms

This study tests the effects of different internal and external factors on Multinational Corporations' (MNCs) use of formal versus informal mechanisms to control their human resources. Responses to a survey of 74 General Managers (GMs) of US subsidiaries in Mexico were used to test the hypotheses. The use of formal and informal mechanisms of control was associated with the extent to which the MNC had a global strategy as well as with the strength of localization forces such as local dependence and local regulations. Level of employee education, a subsidiary characteristic, also predicted the extent to which MNCs used informal control mechanisms. Most importantly, the results suggest that, even though they share some antecedents, each type of control mechanism, namely formal and informal, has a different set of internal and external antecedents. Indeed, our data hint that informal and formal control mechanisms are not mutually exclusive and that, on the contrary, they can fruitfully co-exist because they satisfy different internal and external demands.     

The influence of scope, depth, and orientation of external technology sources on the innovative performance of Chinese firms

It is commonly accepted nowadays that external knowledge sources are important for firms' innovative performance. However, it is still not clear, what dimensions of firms' external knowledge search strategy are crucial in determining their innovation success and whether these search strategies are contingent on different innovation modes. In this study, we analyse how the innovative performance is affected by the scope, depth, and orientation of firms' external search strategies. We apply this analysis to firms using STI (science, technology and innovation) and DUI (doing, using and interacting) innovation modes. Based on a survey among firms in China, we find that greater scope and depth of openness for both innovation modes improves innovative performance indicating that open innovation is also relevant beyond science and technology based innovation. Furthermore, we find that decreasing returns in external search strategies, suggested by Laursen and Salter (2006), are not always present and are contingent on the innovation modes. Next, we find that the type of external partners (we label it “orientation of openness”) is crucial in explaining innovative performance and that firms using DUI or STI innovation modes have different sets of relevant innovation partners. This shows that the orientation of openness is an important dimension—in addition to the scope and depth of openness. As respondents are located in China, this study provides evidence that open innovation is also relevant in developing countries.     

Relationships among open innovation,innovative performance,government support and firm size: Comparing Brazilian firms embracing different levels of radicalism in innovation

This work extends knowledge concerning the relationships among open innovation, innovative performance and government support for innovation within Brazilian firms. Data were obtained from two different firm samples (Sample A, on incremental innovation, and Sample B, on radical innovation). The main research results are as follows. First, in considering government support for innovation, Sample B, based on radical innovation, played a superior and stronger role than Sample A. Secondly, for both samples, the cooperation of external firms has a positive effect on firms’ innovative performance, which was positively controlled by the size of the firms. Thirdly, in general, radical innovation requires synergy and a more intense focus regarding the constructs considered therein. This work also adds value in methodological terms, as this is the first research to have tested different models of samples with different levels of radicalism in innovation.     

The more funding the better? The moderating role of knowledge stock on the effects of different government-funded research projects on firm innovation in Chinese cultural and creative industries

Based on prior research, this study attempts to examine how effectively government-funded research projects (GFPs) can facilitate firm innovation in the cultural and creative industry (CCI), as well as the internal organizational contingency associated with the effects of GFPs. Specifically, this paper differentiates two types of GFP -- central-government-funded projects (CGFPs) and local-government-funded research projects (LGFPs) -- and explore how effectively the two types of GFP affect two types of firm innovation, i.e., radical innovation and incremental innovation. Based on an empirical study of the panel data of Chinese innovative firms related to the CCI, this paper finds that CGFPs have an inverted U-shaped effect on both firms’ radical innovation and incremental innovation in the CCI, while LGFPs have an inverted U-shaped effect on firms’ incremental innovation, but they have no significant effects on firms’ radical innovation. The effects of both CGFPs and LGFPs are moderated by firms’ knowledge stock.     

Making sense of innovation by R&D and non-R&D innovators in low technology contexts: A forgotten lesson for policymakers

This paper attempts to use an integrated theory based on the framework of a firm's internal and external sources of knowledge to analyze how R&D activities differ in innovation from non-R&D activities, especially in the context of low and medium-low tech (LMT) sectors where most of the firms are SMEs. Simultaneously, the paper also explores the key differences between R&D and non-R&D innovators. The empirical analysis is based on a representative panel of 2023 Spanish manufacturing firms from the Spanish Ministry of Industry for 2005 and 2006. Innovation in product and process is explained using non-R&D variables such as marketing, design or the hiring of tertiary degree employees. Only innovation in product is explained by R&D expenditures. Regarding innovation in process, the R&D variables work in a few specific cases. Therefore, innovation can be explained using non-R&D variables. The firms with more internal resources, those which conduct R&D activities, present a better absorptive capacity (AC) and this leads them to engage in cooperation agreements and to access external flows of knowledge. The paper has important implications for policymakers due to the fact that most policies for R&D are based just on R&D programmes.     

跨界搜寻策略、知识异质度与企业技术创新绩效

以我国106家高科技企业为研究样本,探讨跨界搜寻广度、深度与平衡对企业技术创新绩效的影响,以及内外部知识异质度在其中起到的中介作用。结果表明：跨界搜寻广度、深度与企业技术创新绩效之间存在倒U形关系,而跨界搜寻平衡正向影响企业技术创新绩效,内外部知识异质度在跨界搜寻策略与企业技术创新绩效关系中起到中介作用。     

The effects of formal and informal CEO power on debt policy persistence

We explore the general trends of debt policy persistence and how formal and informal CEO power may influence the persistence based on four dimensions of debt policy. Using a sample of Chinese listed firms during 2008–2018, we clearly identify, for the first time, that the general trends of debt policy persistence include an initial downward trend phase (of 4–5 years) and a subsequent stable trend phase. We divide CEO power into formal and informal CEO power and find that CEOs’ formal power can help to increase debt policy persistence, while the role of informal power is the opposite, providing evidence that CEO power has a double-edged effect on debt policy persistence. Further, our results show that the most important dimensions through which formal and informal CEO power have their respective effects are ownership power and financial expert power. Lastly, it is CEOs’ formal power rather than their informal power that plays a dominant role in promoting the persistence of debt policy.     

The effect of R&D novelty and openness decision on firms' catch-up performance: Empirical evidence from China

This paper explores the strategic dimensions of R&D decisions toward novelty and openness in explaining the performance of latecomer firms in a developing economy. A structural equation model of R&D decision-making is formulated using survey data from 279 Chinese firms. The dimension of R&D novelty is defined as the degree of technological newness found in firms' R&D projects, while R&D openness describes the degree to which technologies are acquired from external sources. Our results indicate that firms' R&D decisions regarding novelty and openness are associated with demand opportunities, market competition, technological capability, and external networks. Greater R&D novelty contributes positively to innovative output but does not affect sales growth. Greater R&D openness contributes positively to sales growth but negatively to innovative output.     

Linking intrapreneurship activities to multidimensional firm performance in Turkish manufacturing firms: an empirical study

This study investigates the relationships among the external environment, intrapreneurship and performance of Turkish manufacturing firms. As a multidimensional construct, intrapreneurship is examined in terms of innovativeness, new business venturing, self-renewal, risk taking, and proactiveness. The environmental munificence and hostility are examined as the external determinants of intrapreneurship activities. Firm performance is considered as a multifaceted structure that covers financial and non-financial measures. Based on the data from 331 Turkish manufacturing firms, empirical results showed that environmental factors have statistically significant impact on the intrapreneurship activities of these firms. Profitability is negatively and significantly associated with self-renewal, while it is positively and significantly related with dimensions of innovation and risk taking. Growth is found to be significantly and positively correlated with only new business venturing. Finally, innovation is the only dimension that is positively and significantly associated with both customer and employee satisfaction, which are the main non-financial firm performance measures.     

IMPACT ON FIRMS OF THE USE OF KNOWLEDGE EXTERNAL SOURCES: A SYSTEMATIC REVIEW OF THE LITERATURE

This study summarizes the main conclusions from a systematic review of the empirical literature regarding the impact on firms of the use of knowledge external sources (universities, research institutes and knowledge intensive business services). With the aim to organize the literature, we classify the different works according to the research question addressed: (i) which firms use knowledge external sources?; (ii) Do firms using knowledge external sources achieve better results?; And (iii) which firms benefit the most from using knowledge external sources? Stylized facts are that larger, more R&D intensive and high tech firms are more likely to use knowledge external sources and that use of knowledge external sources is associated to firms higher technical results. Less attention has been paid to the third question and evidence is not conclusive. Several recommendations for future research emerge. First, to take in greater consideration methodological issues so that potential biases in the results caused by sample selection and endogeneity are handled properly. Second, to pay more attention to heterogeneous outcomes. Third, to use continuous indicators of depth and breadth of links allowing for non‐linear relationships and fourth, to extend evidence for developing countries and service industries.     

Power shifts in organizations: the role of high-performance work systems

This paper analyses the effects of high-performance work systems (HPWS) on the rent appropriation of employees and shareholders in firms from the viewpoint of appropriation theory. Applying a meta-analytical approach I test the hypothesis that HPWS shift the balance of power between stakeholder groups in an organization, favouring employees over other stakeholders. This hypothesis is confirmed. However, the overall results of HPWS are positive for both stakeholder groups, as HPWS also increase firm value creation. My study also emphasizes the need to decompose the construct ‘firm performance’ into value creation and value distribution among stakeholder groups. Directions for future research and recommendations for management practice conclude the paper.     

Boundary‐spanning search and firms' green innovation: The moderating role of resource orchestration capability

Building on resource‐based theory and resource orchestration theory, we investigate the impact of two characteristics of boundary‐spanning search, search breadth and search depth, on firms' exploitative and exploratory green innovations. We also examine the moderating role of resource orchestration capability. The results of data analysis from 186 manufacturing firms in China show that both search breadth and search depth have inverted U‐shaped relationships with exploitative and exploratory green innovations. Furthermore, resource orchestration capability is found to moderate the inverted U‐shaped relationship between boundary‐spanning search and green innovation. Specifically, with high resource orchestration capability, the inverted U‐shaped relationships of search breadth with exploitative and exploratory green innovations are flattened, whereas the relationships of search depth with exploitative and exploratory green innovations are almost linear. Our research contributes to the literature on green innovation by uncovering the complex effects of boundary‐spanning search on exploitative and exploratory green innovations.     

Listen to the market: Do its complexity and signals make companies more innovative?

This paper analyzes four modes of innovation that differ in their scope of newness (innovation generation and adoption) and in their degree of change (radical and incremental). Building a theoretical model based on the market orientation (MO) and contingency theory literature and using a sample of innovative firms, we find that MO positively influences the numbers of incremental generation and adoption of innovations. We also find that environmental complexity moderates the relationship between MO and radical and incremental innovation generation and the number of incremental innovation adoption. That is, we have found that highly complex environments enhance the introduction of radical and incremental internally generated innovations and harm the adoption of incremental innovation for market-oriented firms. These findings add to the innovation and MO literatures. Our results also have important implications for both the commercial activities and R&D policies of firms.     

Trade unions,collective bargaining and macroeconomic performance: a review

Coordination through collective bargaining is recognised as an influential determinant of labour market outcomes and macroeconomic performance. This article provides a systematic review of the empirical literature on the subject. What emerges from the review is that it is different types and coverage of bargaining coordination, rather than cross‐country variation in trade union density, that matter for economic performance. High levels of bargaining coverage tend to be associated with relatively poor economic performance, but this adverse relationship can be at least mitigated by high levels of bargaining coordination. In the absence of formal bargaining arrangements, economies often develop informal bargaining mechanisms whose effects are similar to those arising from formal bargaining provided they both operate at similar levels of coordination. The consequences of labour market coordination or absence thereof depend on the monetary policy regime as non‐accommodating monetary policy can eliminate some of the adverse unemployment consequences otherwise associated with industry‐level collective bargaining. Finally, bargaining coordination seems to matter most in times of rapid economic change rather than under more stable conditions. Overall, we conclude that it is the total ‘package’ of (formal and informal) labour market institutions that matters for the performance of the economy rather than unionisation as such or individual aspects of unionism.     

Employment and wage practices of Japanese firms in the Philippines: convergence with Filipino-Chinese and Western-owned firms

In foreign-owned Philippine firms, human resource approaches and practices tend to converge. Japanese-owned firms localize their human resource practices by emphasizing local standards and practices in compensation, hiring, recruitment, job assignments and the like. On the other hand, Western-owned firms tend to adopt well-known Japanese style practices. Filipino-Chinese-owned firms tend to be traditional, emphasizing both informal and hierarchical control mechanisms which put a premium upon loyalty and trust, through familistic, informal but hierarchical control mechanisms. As the owners of these firms pass on control to the next generation, they tend to hire professional managers. These managers include younger generation Filipino-Chinese educated abroad. They are torn between the rational, and traditional norms and practices insisted upon by their Confucian-oriented elders, and the demands of a competitive and ever-changing technology and economy.

It is quite meaningless to attach adjectives like ‘Japanese’, ‘Filipino-Chinese’ or ‘Western’ to universal concepts like industrial relations and human resource approaches - the search for the best approach in work relations is beyond the issue of convergence or divergence.