Strategic intent and performance: The role of resource allocation decisions

The notion that a firm's strategic intent can affect its performance through managerial actions has become prominent in the organization literature. In this research, we propose that strategic aggressive firms will foster decisions that favor holding low levels of slack and low levels of R&D investments, resulting in increased firm ROI, and that a firm's risk preference will moderate the indirect effect of strategic intent on performance. Findings from moderated mediation analyses on data from 130 firms in manufacturing industries support our hypotheses. Specifically, the indirect effect of a firm's strategic intent on a firm's performance is moderated by its risk aversion, such that when risk aversion is high, the indirect effect of strategic intent on performance through slack is strengthened. Similarly, the indirect effect of strategic intent on firm performance through R&D investments is strengthened, when risk aversion is high.     

International technology spillovers and innovation: Evidence from Taiwanese high-tech firms

This paper uses Taiwanese high-tech firms’ data from 2003 to 2007 to investigate the impacts of international technology spillovers and firms’ R&D activities on firms’ innovation performance. We also consider absorptive capability and examine whether the technology spillovers have different effect on firms' innovation performance. We choose patent application counts to measure firms' innovation performance, and adopt panel Ordinary Least Squares (OLS) with fixed-effect and random-effect models as well as System Generalized Method of Moments (GMM) model to estimate. The empirical findings indicate the innovation performance of high-tech firms is positively affected by their R&D efforts, export performance, and the presences of multinational corporations. Furthermore, when absorptive capacity is taken into account, the technology spillovers by exporting and technology import would affect the innovation performance more.     

Non-R&D SMEs: external knowledge,absorptive capacity and product innovation

The relationship between external knowledge, absorptive capacity (AC) and innovative performance for small and medium-sized enterprises (SMEs) is investigated empirically. Using data from a survey on firms located in North Norway, we ask whether AC plays a mediating role between different external knowledge inflows and innovative performance. The results are consistent with AC as an important mediator for transforming external knowledge inflows into higher innovative performance if we include all SMEs in the sample. However, this result is not robust when considering the sub-sample of non-R&D SMEs only. External knowledge inflows have a much stronger direct effect on innovation performance for non-R&D firms and leave a weak mediating effect of AC. Our findings suggest that measures of AC should be developed further in order to make AC a more relevant concept for empirical studies of SMEs without in-house R&D.     

Determinants of R&D collaboration of service firms

This article examines the determinants of R&D collaboration of service firms. Different from manufacturing firms, we expect that types of innovation, public financing, innovation protection, purchase of external R&D, firm’s absorptive capacity, spillovers, and certain innovation barriers determine the firm’s decision to collaborate in R&D. Results indicate that firms that undertake R&D collaboration tend to undertake process innovation, receive public funding, can protect their innovations, and typically subcontract the development of their technologies. The article provides implications for theory and practice.     

The Two Faces of R&D: Does Firm Absorptive Capacity Matter?

This paper examines the dual effect of firm R&D efforts on productivity growth for Swedish manufacturing firms. The R&D efforts do not only stimulate innovation but also enhance firms?? ability to identify, assimilate and exploit new knowledge from the environment (Cohen and Levinthal. Economics Journal 99:569?C596, 1989). In this paper, we assume that the principal channel of transmission of new knowledge is through I/O linkages. Our econometric evidence suggests that in addition to the firm??s own R&D activities, R&D spillovers embodied in traded goods within the industry, others imported from abroad, and technology spillovers transferred from the technological frontier within an industry are important determinants of firms?? productivity growth. Results suggest that domestic R&D spillovers following the I/O links between industries are of minor importance in this respect. We also analyze whether firms?? absorptive capacity matters for productivity growth. Analyzing absorptive capacity is particularly important for assessing the effective contribution of spillovers from other firms. The effect of a firm??s absorptive capacity is found to interact positively with imported R&D spillovers, whereas domestic rents spillovers seem to play a minor role for productivity growth.     

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.     

Does rivals' innovation matter? A competitive dynamics perspective on firms' product strategy

We build on the awareness-motivation-capability (AMC) framework of competitive dynamics research to examine how a signal of a rival's innovation, in the form of research and development (R&D) intensity, may influence a focal firm's product actions. We argue that a rival's R&D intensity increases a focal firm's awareness of a competitive threat and thus its motivation to react by increasing its product actions. However, this competitive impact is conditional on the focal firm's size and performance relative to the rival, as well as the strategic homogeneity of the two. We use the AMC framework to analyze such moderating effects.     

The role of open innovation in emerging economies: Do companies profit from the scientific knowledge of others?

Our contribution lies in explaining why inter-firm variations in the strategic decision to actively seek and acquire external scientific knowledge impact not only financial performance but also the effects of firms’ own R&D. We further demonstrate that the performance implications of using external knowledge and technologies vary considerably depending on their source (domestic or foreign). Knowledge sourcing from domestic organizations has negligible consequences for financial performance and an adverse effect on firms’ own R&D. By contrast, knowledge acquisition from foreign countries results in superior performance and assists firms in unlocking their innovation potential.     

Export Market Participation,Investments in R&D and Worker Training,and the Evolution of Firm Productivity

This paper uses micro panel data for firms in the Taiwanese electronics industry in 1986, 1991 and 1996 to investigate a firm's decision to invest in two sources of knowledge – participation in the export market and investments in R&D and/or worker training – and assess their effect on the firm's future productivity. The firm's decisions to export and invest in R&D and/or worker training are modelled with a bivariate probit model that recognises the interdependence of the decisions. The effect of these investments on the firm's future productivity trajectory is then modelled while controlling for the selection bias introduced by endo‐genous firm exit. The findings indicate a significant interaction effect between exporting and R&D investments and future productivity, after controlling for size, age and current productivity. Firms that undertake both investment activities have significantly higher future productivity than firms that do one or neither. In addition, these firms are more likely to continue investing in these activities leading to further productivity gains. These findings are consistent with the hypothesis that export experience is an important source of productivity growth for Taiwanese firms and that firm investments in R&D and worker training facilitate their ability to benefit from their exposure to the export market.     

What determines performance of cross‐border M&As by Chinese companies? An absorptive capacity perspective

Chinese companies are increasingly using cross‐border merger and acquisitions (M&As) as a vehicle to source knowledge or strategic assets, so as to enhance their competitive advantage. However, a critical question is: Can strategic assets be effectively acquired by Chinese firms, thereby leading to superior firm performance? This article addresses this fundamental question from an absorptive capacity perspective. This approach concentrates on how an acquiring firm's absorptive capacity influences its ability to identify, assimilate, integrate, and apply external new knowledge into commercial use. By comparatively examining two high‐profile international M&A deals completed by leading Chinese firms Lenovo and TCL, we argue that the performance of Chinese companies' overseas acquisitions is substantially affected by the acquiring firm's absorptive capacity at multiple dimensions, thus drawing strategic implications for multinationals in other emerging markets. © 2010 Wiley Periodicals, Inc.     

Services vs. Manufacturing – How Does Foreign and Domestic Sales Impact on Their R&D?

While the distinction between manufacturing and services becomes increasingly blurred to some observers, we find, using a panel of Swedish firms, clear evidence that foreign sales (exports) are more important than domestic sales for stimulating R&D. This is particularly clear for manufacturing and this importance of foreign sales has increased over time, simultaneous to an opening up of the Swedish economy. Even though service industries have seen an increase in both R&D and trade over time, it is thus mainly manufacturing that has benefited from increased possibilities for absorptive capacity. This result suggests a clear dichotomy between manufacturing and services in terms of how they react to trade and how they turn towards the foreign market vs. the domestic market to find stimuli for innovation.     

Learning from exporting: The moderating effect of technological capabilities

There is evidence that exporters are more productive than non-exporters. Scholars argue that exporters may have access to knowledge spillovers in foreign markets and use this knowledge to become more efficient. However, we know little about whether learning from exporting is affected by firms’ heterogeneous resource endowments and, particularly, about the specific firm characteristics that matter the most in this respect. Utilizing a sample of 1534 Spanish manufacturing firms from 1990 to 2002, we empirically analyze whether a firm's technological capabilities (proxied by its relative R&D expenditures) affect its ability to learn from the interaction with foreign agents. We find that firm productivity increases after exporting for all firms. However, ex post productivity improvements are larger for the more technologically advanced firms than they are for their less technologically advanced counterparts. Our results show that some firms stand to benefit more from exporting than others and hint at the importance of absorptive capacity for knowledge acquisition overseas.     

Innovation success of non-R&;D-performers: substituting technology by management in SMEs

This paper investigates the impact of in-house R&D and innovation management practices on innovation success in small and medium-sized firms (SMEs). While there is little doubt about the significance of technology competence for generating successful innovations, in-house R&D activities may be a particular challenge for SMEs due to high risk exposure, high fixed costs, high minimum investment and severe financial constraints. SMEs may thus opt for refraining from R&D and relying more on innovation management tools in order to achieve innovation success. We analyse whether such a strategy can pay off. Based on data from the German CIS, we find that R&D activities are a main driver for innovation success if combined with external R&D, using external innovation sources or by entering into co-operation agreements. SMEs without in-house R&D can yield a similar innovation success if they effectively apply human resource management tools or team work to facilitate innovation processes.

The effects of absorptive capacity,knowledge sourcing strategy,and alliance forms on firm performance

This paper explores the relationship between absorptive capacity, knowledge sourcing strategy, alliance forms, and firm performance. Based on the literature, the concept of a knowledge sourcing strategy in alliance contexts is proposed, which can be categorised into two types: a knowledge internalisation strategy and a knowledge access strategy. From an organisational learning perspective, it is argued that a firm's absorptive capacity has a positive influence on a knowledge internalisation strategy, and accordingly a firm's choices of alliance forms are also influenced. R&D performance is also included in the theoretical model in order to generate further managerial implications. Instead of using conventional regression methods, structural equation modelling (SEM) is adopted to conduct path analysis, as SEM is well suited in verifying multiple-dependent models. The arguments advanced are supported by empirical analysis of a sample of 148 alliances.     

Innovation,formal vs. informal R&D,and firm size: Some evidence from Italian manufacturing firms

On the basis of data from two recent surveys on innovation diffusion in Italian manufacturing industry, this paper shows that informal R&D is an important part of the total R&D undertaken by small and medium sized firms. Nevertheless, when an output indicator such as the number and the nature of the innovations introduced by firms of different size is used, it emerges that small firms have introduced mainly incremental rather than major innovations. The paper therefore suggests that systematic R&D undertaken by large firms within structured laboratories is more effective (in terms of product innovations) than occasional R&D carried out by small firms.     

External technology acquisition and firm performance: A longitudinal study

External technology acquisition has been viewed as an important method used by firms to achieve higher economic returns. However, only a few studies have evaluated the contribution of external technology acquisition to firm performance. This lack of research is surprising because the benefits of external technology acquisition to innovation output have been emphasized extensively in the literature. This study therefore investigates the extent to which external technology acquisition effects a firm's performance, and how this effect is moderated by internal R&D efforts. This analysis concentrates on the electronics-manufacturing industry, taking advantage of the relative abundance of data on longitudinal investigation variables. A longitudinal sample allows this examination to control extraneous effects and to provide more convincing evidence for the relationship between external technology acquisition and firm performance. The analytical sample comprises a total of 341 Taiwanese electronics-manufacturing firms over the period from 1998 to 2002. The least square dummy variable analysis method reveals that external technology acquisition does not provide a significant contribution to firm performance per se; however, the positive impact of external technology acquisition on firm performance increases with the level of internal R&D efforts. Verifications for robustness and the split-sample analyses both validate the results in the setting of larger firms.     

Influence of innovation on performance: analysis of Spanish service firms

The main objective of this research was to analyse innovation in service firms. In strategic management, the methodology of fit allows us to study the adjustment between two dimensions by revealing the internal consistency between them and its influence on the efficiency of firms. This paper is focused on the analysis of fit between types of services (classified according to intensity of innovation) and the innovation decisions made by these firms. The fit has been contrasted through the methodology of adjustment as an approach to the ideal profile. An important question in this paper consists in revealing whether the fit between the type of services and innovative decisions influences a firm's performance.     

Absorptive capacity from foreign direct investment in Spanish manufacturing firms

This paper deals with the determinants of absorptive capacity from foreign direct investment (FDI) spillovers. We study how firm behavior, capabilities, and structure drive absorptive capacity such as research and development (R&D) activities and expenditures, R&D results, internal organization of innovation, external relationships of innovation, human-capital quality, family management, business complexity, and market concentration. Our results enhance and complement previous evidence of the determinants of absorptive capacity, particularly with different approaches to innovative activities as mediators of the capability.     

Technical performance and firm size: Analysis of patents and publications of U.S. firms

This study focuses on the scientific output of firms of different sizes in different industries in the U.S. Both patents, and papers and publications are used as measures of technical output. Data from two samples of firms, one consisting of 225 large firms (annual sales at least $250 million and minimum annual R&D budget of $1 million) and the other consisting of 248 small and medium sized firms (annual sales between $10 to $200 million and annual R&D budget at least $10 thousand) have been presented here. The study shows that determinants of R&D expenditure are different in firms of different sizes. For the large firms, R&D expenditure depends on net income as well as its size, measured in terms of annual sales. For small size firms, R&D expenditure is closely related with sales, rather than the net income. For large firms, R&D expenditure is related to both sales and income, the latter being more important than the former. The two output measures, patents and papers are correlated, but the correlation is not a very strong one for small firms. Patent and papers are correlated significantly with both R&D expenditure as well as annual sales. The firm's growth is not linked with patents. On the contrary, there is a negative relationship between patent and R&D growth and patent and income growth in the case of small firms. Papers are not linked with growth variables for small firms. Finally, this study confirms the hypothesis that small firms are more productive in innovation than the large firms. Small firms are more efficient than their larger competitors in terms of patents and papers per million dollars of R&D expenditure.     

Determinants of R&D cooperation in small and medium-sized enterprises

We investigate the determinants of research and development (R&D) cooperation in small and medium-sized enterprises (SMEs). Using firm-level data from the 2002 Korean Innovation Survey and applying a probit model with sample selection, we find that incoming spillovers of knowledge have a significant and positive impact on SMEs?? decisions to engage in R&D cooperation. In particular, the effect of knowledge spillovers on R&D cooperation is much larger for smaller firms. Despite the importance of external knowledge for SMEs, the estimation results suggest that SMEs may be at a disadvantage in establishing external R&D linkages because of their absolute size limitations.