The impact of firm strategy and foreign ownership on executive bonus compensation in Japanese firms

Building on information-processing perspectives and the Japanese contextual factors, this study investigates the relationships between firm strategy and executive bonus pay as well as the moderating role of foreign ownership on the strategy-compensation relationship in Japanese firms. We focus on R&D investment and product diversification as strategy variables and investigate their direct effects on executive bonus pay. Further, we examine the moderating effects of foreign ownership on the strategy-pay sensitivity. The results, based on a sample of the 148 largest industrial firms in Japan for the 1990-1997 period, show that both R&D investment and product diversification are positively related to executive bonus pay. Our findings also indicate that foreign ownership negatively moderates the relationships between the strategy variables and executive compensation, suggesting that foreign investors play an active monitoring role, reducing cash bonus payments when their invested firms choose to increase R&D or pursue diversification strategy.     

Product Differentiation,Industry Concentration and Market Share Turbulence

Building on the current theory of industrial concentration, we analyze the relation between market size and product differentiation, and show how product differentiation impacts market share turbulence. We first propose that in markets where vertical product differentiation dominates, firms will have an incentive to escalate investment in advertising and/or R&D as market size increases. Secondly, such (firm‐specific) investments will make competitive advantage more sustainable as the firm is less imitable. This will not be the case if the market is primarily characterized by homogeneous products or horizontal product differentiation. Our predictions are tested using an original EU dataset for 1987 and 1997. Our results strongly support our predictions – the degree of market share turbulence increases with market size. However, this relation is weakened by competitive investment in advertising and R&D.     

Lies,damned lies,and project plans: Recurring human errors that can ruin the project planning process

Project-based work has become a critical component of global industrial activity. Among other functions, projects are used to develop new products and services, improve operations flows, implement innovative information technologies, and conduct primary R&D. At the same time, project management is a core skill requirement for numerous corporations worldwide hoping to harness a means of improving both the efficiency and effectiveness of their operations. Unfortunately, the track record for project development has not been strong. Data suggest that within various industrial components, such as IT, failure rates for projects are high; even ‘successful’ examples typically run well over budget and behind schedule. This article addresses some of the reasons why projects and project management have failed to live up to lofty expectations, arguing that the seeds of failure are often sown from the outset through flawed project planning. Citing the more common errors in human judgment and drawing on numerous examples, we offer guidelines by which project planning can begin to work as it was intended: on behalf of the project rather than at cross-purposes with the project's goals.     

R&D Policy Involving Consumer-Friendly Strategy: Cooperative and Non-Cooperative R&D

In a highly globalized economy, foreign exporting firms have initiatives to be consumer friendly for many reasons. The aim of the present paper is to endogenize consumer-friendly actions by the exporting firms, and explore how government’s industrial policy and firm’s R&D investment are affected by the strategy of foreign exporting firms under cooperative and non-cooperative R&D commitments in an international rivalry market. It finds that consumer-friendly action is a dominant strategy equilibrium, and no matter whether under cooperative or non-cooperative R&D, a consumer-friendly firm tends to invest less than does the purely profit-maximizing firm on R&D under symmetrical decisions. In the case of firms cooperating in R&D and involving consumer-friendliness in action, their governments need not intervene. On the other hand, governments always subsidize non-cooperative R&D activities, or cooperative but unfriendly firms. Furthermore, the consumer-friendly action will result in more (less) R&D subsidies by the exporting government when both firms non-cooperate (cooperate) in R&D. Finally, it is robust to indicate that the government of an importing country prefers friendly foreign firms in any circumstances. Above all, the equilibrium outcomes explain the crucial role of consumer-friendly strategy for industrial policies and R&D activities.     

How incumbent firms foster consumer expectations, delay launch but still win the markets for next generation products

Consumers learn quality of many durable products through word-of-mouth information while firms launch new and improved products frequently in these markets. This paper examines firm incentives to invest in R&D to compete for patents in makets where consumers rely on word-of-mouth information and have expectations about the new products before launch. When its loss due to a possible entry is above a threshold, an incumbent has more incentives than a potential entrant to invest in R&D for patents. Moreover, if the current product is more profitable, its true quality is above consumer priors and the quality of the new product is below a threshold, it is optimal for the incumbent to launch the new product after a time lag. The later the optimal time of launch, the greater is the incumbent’s potential loss if entry occurs and greater its incentives is to invest in R&D versus that of the entrants. While potential entrants are generally thought to have more incentives to invest in a drastic innovation which results in a race to launch the new products, we show that the more drastic the innovation, the later the optimal time of launch and greater are the incumbent’s incentives to invest in R&D when the value added of the new product can be conveyed to all the consumers. Only when consumers are uncertain about the value added of the new product, the incumbent’s incentives are lower. We also demonstrate that by promoting consumer expectations about the new product before launch, an incumbent has more time to launch and higher probability of dominating its market.     

中国地区间研发资源错配测算与影响因素分析

随着中国的研发投入总量进入世界第一梯队,研发投入(资源)的配置状况成为决定研发产出效率的关键因素之一。本文基于一个包含研发资源价格扭曲的多部门竞争均衡模型,以2001—2016年各省份规模以上工业企业数据为样本,对中国地区间研发资源错配情况及其影响因素进行全面考察。研究发现:(1)各省份之间的研发劳动错配高于研发资本错配,多数省份倾向于过度配置研发资源,省份之间研发资源配置效率总体上呈逐步改善趋势,纠正错配可以使研发产出提升约16%;(2)东部各省份研发资源配置相对较为合理,但研发劳动配置略有不足,中部、西部和东北各省均存在不同程度的研发资源过度配置现象,东部和西部的研发资源配置效率一直在改善,东北和中部则没有表现出持续的改进态势;(3)市场发育程度、偏向性政策扶持、地区创新环境是研发资源错配的主要影响因素,在研发资源过度配置地区,这些因素的作用更为显著。本文的启示是,在当前全面实施创新驱动发展战略的大背景下,政府相关部门在积极引导全社会加大研发投入力度的同时,还应以市场为导向,进一步优化不同地区间的研发资源配置,实现研发效率的提升和经济的高质量发展。     

从美国专利看跨国公司研究开发国际网络化的本质

本文对取得美国专利权的19家电子行业的跨国公司研究开发的国际化程度和趋势进行了实证分析.论文确认了19家跨国公司研究开发国际网络化进程中的差异,同时对日本电子行业的跨国公司在基础研究层面的研究开发活动进行了分析.结论是:在"市场竞争的全球化"和"向IT时代转型"这样的外部竞争环境中,为了开发适合全球化市场的新产品,跨国公司必须要在企业内建立一个在世界范围内进行优秀研究开发人才最佳配置的全球网络体系.     

Economic returns to industrial research

This paper investigates the relationship between R&D and corporate performance. The study extends previous research by examining the conditions under which firms benefit from R&D; by incorporating in the analysis the varying costs of R&D inputs; and by employing an opportunity-cost approach that estimates the monetary returns to R&D. The findings indicate that industrial research generates revenues that are significantly higher than the returns that other investments yield. The study also resolves previously conflicting results concerning firm size, and offers new insights on the role of technological opportunities that contradict past studies. Although the potential for innovation is greater in high-tech industries, intense R&D competition prevents technologically dynamic firms from enjoying high returns to R&D. By contrast, the results demonstrate that low-tech firms use R&D successfully as part of their strategies, implying that prior research underestimates the importance of R&D for these firms.     

Technology strategy and new venture performance: A study of corporate-sponsored and independent biotechnology ventures

New ventures, companies eight years or younger, play a major role in the development of an emerging, high-technology industry. Corporate-sponsored new ventures (those supported by an established corporation) and independent ventures (those founded by independent entrepreneurs) frequently battle for industry leadership and financial success. Whereas both venture types use technology to achieve financial and market success, little is known about the differences in their technology strategies.Technology strategy is the plan that guides a new venture's decisions on the development and use of technological capabilities. This strategy covers six major areas. The first is selecting the pioneering posture, where a venture decides whether or not be among the industry's first companies to introduce new products (technologies) to the market. The second is determining the number of products to be introduced to the market. The third is choosing the extent of a venture's use of internal and external R&D sources. Internal sources usually refer to in-house R&D activities. External sources may include purchasing or licensing of technology from other companies, or joining strategic alliances to acquire that technology. The fourth is deciding the level of R&D spending. The fifth is selecting the combination (portfolio) of applied and basic research projects. Whereas basic R&D advances science, applied R&D leads to new products and technologies. The sixth, and final, dimension is the venture's use of patenting to protect any competitive advantages it might gain from its R&D activities.This article reports the results of a study that explored the differences in the technology strategies and performance of corporate and independent ventures. The biotechnology industry was chosen to test the study's hypotheses, using 112 ventures.Seven of the study's hypotheses focused on the potential variations in technology strategy between corporate and independent ventures. Independent ventures (IVs) were expected to surpass corporate ventures (CVs) in pioneering new products (technologies), using internal R&D, and emphasizing applied R&D. CVs were expected to surpass IVs in introducing new products, using external R&D sources, spending on R&D, and patenting. The study's remaining three hypotheses covered possible variations in new venture performance (NVP) and their sources.The results showed that IVs focused more on pioneering, pursued a more applied R&D portfolio, and emphasized internal R&D more than CVs. CVs utilized external technology sources, spent more heavily on R&D, stressed basic R&D, and used patenting more intensively than IVs. These results were consistent with the hypotheses. However, contrary to expectations, there were no significant differences between CVs and IVs in the frequency of new product introductions, probably because most ventures were at the invention, rather than the commercialization, stage.The results on the NVP of CVs and IVs were counter to expectations. IVs outperformed CVs, probably because of the high motivation of the IV owners who reaped the rewards of growth and profitability. Also, whereas CVs may have greater access to the resources of their sponsors, political conflicts and rigid corporate controls might have reduced their ability to achieve competitive advantages.The results also indicated that CVs and IVs appeared to gain competitive advantages from different technological choices. Pioneering, a focus on applied R&D, and extensive use of the internal R&D sources were also positively associated with the performance of IVs. Heavy R&D spending, the use of both internal and external R&D sources, frequent product introductions, and patenting were positively associated with the performance of CVs. Finding that technology strategies significantly impacted NVP should encourage executives to consider pursuing a formal technology strategy. Likewise, the finding that different dimensions of technology strategy influenced the performance of CVs and IVs in different ways has practical implications. CV managers can learn from their higher performing IV rivals. Also, because established companies frequently acquire IVs, information about their technology strategies can be valuable in assimilating the acquired ventures. Overall, the results show that technology strategy is an important factor in enhancing new venture performance.     

R&;D Subsidy and Self-Financed R&;D: The Case of Japanese High-Technology Start-Ups

This paper examines whether public R&D subsidies constitute a substitute or complement for private-financed R&D. The empirical analysis is based on a panel data of 223 Japanese high-technology start-ups. Our evidence is consistent with the complement hypothesis, i.e., that publicly-funded R&D does promote private R&D. The complement effects are stronger for more mature firms. This is because such firms, in the growth phase, might have greater demands for R&D funds.     

国内外水镁石阻燃剂的研发现状及前景

本文讲述了水镁石阻燃剂的研发现状和前景,简述了水镁石资源以及国内外研发与应用进展。重点介绍了日本公司如神岛、矢崎、味之素、大日本油墨等的研发活动。     

R&D investments in family and founder firms: An agency perspective

Investments in R&D can influence a firm's ability to develop new products and to create and adopt innovative technologies that may enhance productivity. However, due to uncertainty regarding the outcome, investments in R&D may lead to an agency problem between the owners and the managers of a firm. Family and founder firms are often considered to be different in their agency situation than other firms, which may have an influence on R&D investments. This paper analyzes R&D spending in family and founder firms versus other firms. The results show that while family ownership decreases the level of R&D intensity, ownership by lone founders has a positive effect not only on R&D intensity but also on the level of R&D productivity. The paper contributes to the understanding of the role of entrepreneurship in making high risk/high return R&D decisions.     

R&D investment of start-up firms: does founders’ human capital matter?

This article examines whether founders’ human capital affects not only actual investment but also required investment in research and development (R&D), using the original data of Japanese start-up firms. The estimation results indicate that higher levels of founders’ human capital, especially their education levels, increase both actual and required investment in R&D and thus do not necessarily contribute to reducing the funding gap for R&D.     

Enthusiasm Constrained? British Industrial R&D and the Transition from War to Peace, 1942–51

During the second half of World War II and in the years which immediately followed, British firms demonstrated a considerable enthusiasm for expanding their R&D activities. Severe restrictions on the availability of resources limited the extent to which this could be translated into practice, but many firms nonetheless managed to achieve rapid growth in the scale of their R&D facilities. Drawing on a range of archival sources generated by both government and industry, this article examines the nature of this enthusiasm and how it was shaped by the need to conform to controls on building, defence requirements, including the National Service ‘call up’, and the investment priorities determined in response to the export drive. These constriants not only underprinned the development of industrial R&D during the transition from war to peace, they also helped to ensure that British managers retained their belief that ever more R&D would ensure industrial success.     

Moving up or moving out? A unified theory of R&D, FDI, and trade

This paper introduces industrial heterogeneity in R&D productivity into the quality-ladder model of the North-South trade to study how firms' choices made between R&D and foreign direct investment (FDI) vary across industries, and how such choices consequently determine the evolution of comparative advantage and trade. It shows that trade reveals product-cycle dynamics in medium-tech industries but remains static in others. High-tech industries experience continued innovation in the North with no migration of product lines. Medium- and low-tech industries migrate South via FDI to exploit low production costs with the South then replacing the North as the dominant exporter. However, medium-tech industry production eventually shifts back to the North when superior products are marketed by Northern innovators, making the end of one complete product cycle and the start of the next. Because of marginal R&D productivity, the relocated low-tech industries are not presented with the option of moving up and thus stagnate.     

Different evolutionary paths: Technological development of laser diodes in the US and Japan, 1960–2000

Exploring the technological development of laser diodes from 1960 to 2000, this study examines how US and Japanese firms diverged from the same technological target to take separate evolutionary paths over time and came to be competitive in the different areas. Scrutinising the level of vertical integration, entrepreneurial start-ups, scientists' mobility and research networks, it shows that R&D efforts were scattered over different technological domains, giving US firms the chance to obtain technological advantages in customised and small markets. R&D efforts were concentrated in the same targeted markets in Japan, giving Japanese companies the opportunity to capture the markets offering the highest sales volumes.     

Signalling cost with investment in compatibility

When buyers value products in terms of the expected compatibility between the current and the new vintage, firms can invest strategically in R&D to control for the switching costs. Open announcements of R&D budgets transmit information. The announcements determine the buyers' beliefs of the compatibility. As only an efficient firm finds it optimal to have a large R&D-budget, a firm can signal its unit cost. The likely outcome is a unique separating equilibrium if the marginal cost of R&D is low but the uncertainty over the rival's unit cost large. With high R&D cost, the dominating motive is to affect the rival's cost belief.     

Domestic vs. International Spillovers: Evidence from Swedish Firm Level Data

This paper investigates the association between total factor productivity growth and the R&D expenditures of Swedish manufacturing firms in the presence of domestic- and international R&D spillovers. The paper assumes that the principal channel of transmission of new technology is through I/O relations. Econometric evidence suggests that international as well as domestic inter-industry R&D spillovers are important determinants of firms’ productivity growth in the long run. The R&D spillovers generated within the industry and following I/O links seem to be of minor importance in explaining productivity growth. It seems likely that within-industry productivity spillovers follow other channels than I/O flows, such as horizontal spillovers through copying of new products and processes, or labour turnover. The use of a convergence parameter is one way to check for such within-industry technology flows. Our results indicate that a catch-up process exists by which the non-frontier firms in the Swedish manufacturing sector absorb knowledge spillovers from the leading firms in the industry. Finally, a firm’s own R&D efforts are found to be more or less positively correlated with the TFP growth, maybe the contribution from R&D efforts in some sense are underestimated.     

政府研发补贴、融资约束与企业创新绩效——基于所有权性质视角

政府研发补贴是克服研发市场失灵，促进企业研发活动的重要手段之一。然而，目前鲜有关于考察政府研发补贴、融资约束以及所有权性质对企业创新绩效的复杂关系研究。基于2001-2018年间我国上市制造业企业数据分析，结果表明：首先，政府研发补贴和融资约束对企业创新绩效的影响取决于企业所有制性质，国有企业的创新绩效受其影响最为显著。其次，企业在接受政府研发补贴后，其融资约束的程度都会被减缓；与国有企业相比，政府研发补贴对民营企业融资约束的缓解更强。最后，对任何所有权性质的企业而言，政府研发补贴都会挤出企业的研发投资。     

R&D intensity and acquisition and divestiture of corporate assets: Evidence from Japan

This article provides evidence from Japanese acquisitions and divestitures after the late 1990s on the effect of corporate R&D to stimulate inter-firm asset trade. Consistent with the notion that R&D increases a firm's opportunities for and ability to profit from synergy with external assets, regressions performed on a sample of publicly traded manufacturers reveal that R&D intensity and the breadth of patented technologies positively and significantly correlate with a firm's probabilities to acquire and sell off assets. The link of R&D and divestiture is qualitatively homogeneous across industries and time but the positive and significant R&D-acquisition link concentrates in industries where the interdependence of firms’ innovative activities is relatively high and time when firms likely had large pent-up demand for asset trade.