Strategic groups: A cognitive perspective

The strategic group concept provides an attractive middle ground between firm and industry for both theory development and empirical analysis. To date, this concept has been defined by researchers in terms of secondary accounting and financial data, and a number of critics have questioned the validity of this work. Our research shows that industry participants share perceptions about strategic commonalities among firms, and that participants cluster competitors in subtle ways not reflected in extant academic research on strategic groups. Decision makers' perceptions and cognitions are phenomena that can be expected to influence industry evolution. They are of research interest as an additional source of data on firm commonalities which helps address concerns about previous strategic group research.     

Effects of R&D policy choice on accounting performance and market value

Using primary data that was gathered from the annual reports of companies listed in the Chinese Stock Exchanges, this study analyzes and compares the different effects of R&D policy choice on their accounting performances and market values. For the period 2007 through 2014, the results show that different R&D policy choices provided different implications in firm value and firm strategy to the market. Specifically, the firms choosing to capitalize their R&D investments have higher market value, implying that the strategy was focused on sustaining their long-term development. On the contrary, the companies selecting to expense their R&D expenditure have higher accounting performance and the focus was on improving short-term gains. The results of this study suggest that the policy choice on R&D capitalization and expensing is a trade-off result between the accounting performance and the market value of a firm.     

Matching method to paradigm in strategy research: limitations of cross‐sectional analysis and some methodological alternatives

A central focus of empirical research in strategic management has been to understand the relationships associated with the structure–strategy–performance paradigm. To examine these relationships, investigators have relied extensively on cross‐sectional methods that embody the implicit assumption that model parameters are stable across firms and over time. Yet, many of the theoretical constructs used in strategic management have clear firm‐ and time‐specific components. Hence, it might be expected that the parameters of the relationships investigated empirically will vary across firms and over time. Whereas recent research has raised concerns about the use of cross‐sectional analysis when parameters vary over time, little attention has been given to the issue of parameter variability across firms. Given the focus of strategy researchers on firm‐level effects and the predominant reliance on cross‐sectional analysis, accounting for across‐firm variability is a significant methodological issue. Failure to account for such variability can lead to biased parameter estimates and incorrect inferences. This paper argues for the adoption of alternative methods that can overcome the limitations of a cross‐sectional analysis and it offers guidance on how researchers can proceed to use these alternative methods to explicitly incorporate or test for variation in model parameters across firms or over time. Copyright © 1999 John Wiley & Sons, Ltd.     

Innovation and new product introductions in emerging markets: Strategic recommendations for the Indian market

While radical innovations and growth strategies supporting such innovations may provide the firm with very high returns, there are also considerable risks in devising and implementing such innovations. Apart from the business risks of venturing into new territories and new markets, radical innovations also carry with them the burden of accounting for market and environmental factors that are often not under the control of the firm. The opportunities presented by the emergence of several Asian markets, such as India and China, are particularly appealing for Western countries willing to expand into these markets. However, market characteristics, institutional development, and customer behaviors bring into sharp focus the choice of a specific innovation and new product development strategy for such markets. This paper examines these various strategic issues in the context of India. The paper concludes with strategic recommendations for managers and some propositions for future academic research.     

Networking capability in business relationships — Concept and scale development

In previous research on inter-organizational marketing and supply chain management the processes through which a focal company deals with the dynamic nature of its business relationships is not fully addressed or understood. To address this gap in the literature, this study proposes the concept of networking capability (NC) as the complex organizational capability oriented towards managing business relationships along all their main development stages. The main proposition is that such a NC capability exists and can be measured, for various types of business partners (especially customers and suppliers), and that NC represents an important aspect that influences firm performance significantly. In order to define the NC concept and develop as test a measurement model, this study uses empirical research and integrates it with the existing literature on business networking-related capabilities. This study distinguishes itself from previous research on networking-related capabilities which not only utilize activities and routines at the company level to measure relational capabilities, but incorporate instead emotions and attitudes of managers towards their exchange partners. Our study, on the other hand, develops and tests a measurement model of NC that is consistent with a grounding in the resource-based view of the firm, specifically the dynamic capability view of the firm. It thereby contributes to the theory and practice of relationship management by proposing a conceptualization and measurement model of NC with regard to all main relationship stages and main types of business partners. Our study adopts a three-stage process of scale development, including qualitative and quantitative research. In summary, our empirical research suggests our NC measurement model as reliable and valid with regard to two main exchange partners: suppliers and business customers. Nomological validity of NC construct is also supported through regression model with company performance as the dependent variable.     

International experience in the executive suite: the path to prosperity?

Attention is increasingly focused on the potential individual career and firm‐level benefits of international experience for upper level executives. This research examines the relationships between CEO international experience, CEO tenure, firm internationalization, succession events, and corporate financial performance. Results indicate a significant interactive effect between CEO tenure and outside succession on CEO international experience. In addition to a relationship with CEO international experience, there are two additional interactive effects in the examination of corporate financial performance: (1) CEO international experience and the degree of firm internationalization, and (2) CEO international experience and CEO succession. These interactive effects are evident in accounting and market indicators of corporate financial performance. Copyright © 2000 John Wiley & Sons, Ltd.     

全球价值链中价值增值测算的研究综述

随着经济全球化的深入，产品国际分工形式的转变导致传统贸易总值统计方法无法反应各国在国际贸易中的真实获利。以价值增值的贸易统计方法为研究新型贸易体系提供了新视角。本文首先介绍了3类全球价值链中价值增值的测算方法，分别是基于WIOD数据库的里昂惕夫经典方法、基于I-O投入产出表的总出口分解法、基于微观数据的企业出口分解法。在此基础上总结了基于价值增值的GVC收入、GVC就业、显示性比较优势（RCA）、资源消耗与排放等的应用研究。最后对测算方法的关键方程、使用数据、应用研究和代表论文进行了比较和总结，并提出了未来研究方向。     

Coevolutionary Dynamics of Automotive Competition: Product Innovation,Change, and Marketplace Survival

Innovation and new model development have been paramount in the U.S. automotive industry. The industry has invested around $16–18 billion annually to launch new models and improve existing ones in response to incessant evolution of consumer preferences, competitive pressures, and changes in safety and emission regulations. Although these investments have significantly reduced cycle time and increased efficiency (e.g., through platform communization), it still costs around $1 billion to develop and launch a new model from scratch. Therefore, the strategic focus in the U.S. automotive industry is rapidly shifting away from manufacturing efficiency to product development and innovation as firms engage in an “arms race” to develop innovative new products ahead of the competition. The outcome of this new focus manifests itself in the total development time for a new platform vehicle, which is expected to drop from roughly four years in 1998 to two years in 2014. As development cycles continue to shorten, competition in the industry intensifies, and a new insight is needed to better understand how increased competition can affect the gains from innovations. The need for research to fill this gap is especially critical as executives continue to grow more cynical about returns offered by increases in research and development (R&D) expenditures and see no statistically significant relationship between R&D expenditures and firm performance. This study attempts to address this gap by adopting a coevolutionary perspective that analyzes the relationship between innovations and firm performance by accounting for the impact of competitive forces in the industry. First, this study explicitly models competitive interactions between firms, known in the ecology literature as the Red Queen competition, in which gains from innovations are relative and impermanent. Second, hypotheses are tested using a comprehensive data set comprising all automobile manufacturers ever known to compete in the U.S. automobile market at any time between 1891 and 2000. Complete coverage of 110 years enables precise analysis of the link between innovations and firm performance as well as the coevolution in the U.S. automobile industry. The results suggest that although extensiveness of an innovation is relevant, a firm's ability to keep up with the competition in the innovation arms race is a more significant driver of survival in the market. Thus, firms cannot simply evaluate their innovation efforts in a silo but must constantly assess their efforts versus the innovation launches of their key competitors. Based on the findings, automotive manufacturers must develop a structured product development program that allows for continual and steady new product introductions; otherwise, even momentary setbacks can have a damaging impact on a firm's ability to survive in the automotive marketplace.     

Market Vision and the Front End of NPD for Radical Innovation: The Impact of Moderating Effects

“Market vision” is a mental model that helps focus the organization on a new market application for an advanced technology during the fuzzy front end of the new product development process. Previous research demonstrates that firms involved in the development of radically new, high‐tech products need to develop a market visioning competence (MVC) in order to develop an effective market vision (MV), and these capabilities, in turn, have been found to have a positive effect on key aspects of the early performance (EP) of these firms—specifically, the ability to attract capital and early success with customers. Based on a major empirical study of the nanotechnology sector, the research described in this paper takes an important step forward by focusing on factors in both the external and internal environment of the firm, and their moderating impact on the paths that link MVC, MV, and EP. External structural factors relevant to the firm's competitive environment as well as internal factors, including firm resources, size, incumbency, and technology, are shown to have significant moderating effects both on the way in which MV unfolds and on its capacity for affecting positive returns for the firm when undertaking radical innovation. Five of seven hypotheses were supported by the research. Both level of incumbency (the extent to which the firm has taken part in previous generations of a given technology) and resource availability are shown to positively impact the link between MVC and MV. Also, appropriability (i.e., protection for innovations) and reputation of the firm were found to positively impact the path to EP. Finally, a low level of industry concentration—that is, a large number of small firms—were found to have a positive effect on the path to EP. In sum, the findings support the structure of the model and the majority of the hypothesized moderating relationships, suggesting important implications for management.     

Chinese firms’ sustainable development—The role of future orientation,environmental commitment,and employee training

In this research, we study the issues of corporate sustainable development in China. Based on relevant research, we propose a theoretical model showing the relationship among business environmental commitment, cultural value, employee training, and firm performance of sustainable development. It is argued that a cultural value (i.e., organizational future orientation) should be a key antecedent predicting business environmental commitment. On the other hand, a firm’s sustainable performance, such as performance in environmental protection, should be a major consequence of its business environmental commitment. Moreover, the relationship between business environmental commitment and sustainable performance can be moderated positively by the level of employee training. Other conditions being equal, the better the employee training is, the stronger the relationship between business environmental commitment and sustainable development performance. Testing the relevant hypotheses in China, we find evidence supporting our model proposed in this paper. We conclude with a discussion on the implications of our findings for academic researchers and practitioners.     

A dynamic capability view of marketing analytics: Evidence from UK firms

While marketing analytics plays an important role in generating insights from big data to improve marketing decision-making and firm competitiveness, few academic studies have investigated the mechanisms through which it can be used to achieve sustained competitive advantage. To close this gap, this study draws on the dynamic capability view to posit that a firm can attain sustained competitive advantage from its sensing, seizing and reconfiguring capabilities, which are manifested by the use of marketing analytics, marketing decision-making, and product development management. This study also examines the impact of the antecedents of marketing analytics use on marketing related processes. The analysis of a survey of 221 UK firm managers demonstrates: (a) the positive impact of marketing analytics use on both marketing decision-making and product development management; (b) the effect of the latter two on sustained competitive advantage; (c) the indirect effect of data availability on both marketing decision-making and production development management; and (d) the indirect effect of managerial support on marketing decision-making. The research model proposed in this study provides insights into how marketing analytics can be used to achieve sustained competitive advantage.     

Is performance driven by industry‐or firm‐specific factors? A new look at the evidence

In this study we revisit the question of whether firms' performance is driven primarily by industry or firm factors, extending past studies in two major ways. Firstly, in a departure from past research, we use value‐based measures of performance (economic profit or residual income and market‐to‐book value) instead of accounting ratios (such as return on assets). We also use a new data set and a different statistical approach for testing the significance of the independent effects. Secondly, we examine whether the findings of past research can be generalized across all firms in an industry or whether they apply to a particular class of firms within the same industry. We find that a significant proportion of the absolute estimates of the variance of firm factors is due to the presence of a few exceptional firms in any given industry. In other words, only for a few dominant value creators (leaders) and destroyers (losers) do firm‐specific assets seem to matter significantly more than industry factors. For most other firms, i.e., for those that are not notable leaders or losers in their industry, however, the industry effect turns out to be more important for performance than firm‐specific factors. Copyright © 2002 John Wiley & Sons, Ltd.     

The Cash Recovery Method of Calculating Profitability: An Application to Pharmaceutical Firms

The problems with commonly used accounting profit rates are well documented. In this paper an alternative to accounting profit rates, the cash recovery method is investigated and improved. This improved method is used as a means to estimate profitability in the pharmaceutical industry on a firm level. The profitability estimates give a similar rank order to the accounting profitability rates, but have different magnitudes.     

Is R&D risky?

Research summary : Many studies use research and development (R&D) intensity or R&D spending as a proxy for risk taking, but we have little evidence that either associates positively with firm risk. We analyze the relations between R&D intensity (R&D spending to sales) and R&D spending on the one hand and 11 different indicators of firm risk on the other, using data from 1,907 to 3,908 firms in various industries over 13 years. The analysis finds a general lack of consistent positive association between R&D and firm risk, making the use of R&D as an indicator of risk taking questionable. Furthermore, R&D intensity and spending do not correlate positively, suggesting they measure different constructs. We discuss potential reasons for these nonsignificant results. Our study demonstrates that researchers should avoid casual use of R&D as a proxy for risk taking without explicitly providing a clear definition and measurement model for risk. Managerial summary : Risk is a key construct in strategic management research. Many studies in this area measure risk taking by research and development (R&D) intensity (the ratio of R&D spending to sales) or R&D spending. However, since R&D intensity and spending have also been used to measure various other things such as information processing demands, this raises the question of whether R&D intensity and spending are valid indicators of firm risk. We examine this issue by considering the associations of R&D intensity and R&D spending with conventional measures of firm risk. We find a general lack of consistent positive association between R&D and firm risk, making the use of R&D as an indicator of risk taking questionable. Furthermore, R&D intensity and spending do not correlate positively, suggesting they measure different things. Copyright © 2016 John Wiley & Sons, Ltd.     

Managerial Strategies, Labour and Employment Relations and the State: the Canadian Case and Beyond

This paper addresses: (1) the extent to which changes appear to have occurred in managerial strategies and labour and employment relations in Canadian firms, and (2) the role of the state relative to anonymous economic forces in accounting for Canadian developments. The general findings are that, while there have been a number of significant changes, these have been more moderate than expected by 'transformation' theory; furthermore, the Canadian case is consistent with the argument that state actions play a major role relative to more anonymous economic 'forces' in accounting for developments in labour and employment relations. It also suggests an alternative model to that typically assumed by transformation theory, one in which state policies and economic conditions are considered to be important not only for their direct effects on employer policies, but also for their indirect effects, through their implications for worker expectations and union militancy. Although these conclusions are tentative and call for more systematic, comparative research, they are consistent with arguments by Burawoy and others that state actions can serve as an important source of labour regulation at the level of the firm.     

财务危机发生概率的Logit模型置信区间

介绍了利用Logit模型度量单个公司发生财务危机概率的方法,提出了可以控制Logit模型定义的点估计的置信区间。通过选择财务会计变量的独立向量X,譬如流动比率和资产负责率等确定置信区间,以了解预测公司发生财务危机概率的统计量,得出了在财务危机发生前1至3年模型的预测结果。     

Employment Effects of Acquisitions: Evidence from Acquired European Firms

This paper examines the employment effects of acquisitions for acquired European firms, taking non-random selection of acquisition targets explicitly into account. Following the empirical firm growth literature and theories put forward in the mergers and acquisition (M&A) literature, we control for convergence dynamics in firm size and distinguish between different types of acquisitions. Empirically, we estimate an endogenous treatment model using accounting data for a newly created sample of acquired and non-acquired European firms. Our results reveal positive employment effects for different types of acquisitions indicating that M&As likely induce efficiency gains.     

A Longitudinal Study of the Impact of R&D,Patents, and Product Innovation on Firm Performance

Because of increasing levels of competition and decreasing product life cycles, a firm's ability to generate a continuous stream of innovations may be more important than ever in allowing a firm to improve profitability and maintain competitive advantage This paper investigates several issues that are central to an examination of the innovation productivity in a firm. First, the relationship between a firm's commitment to research and development and its innovative outcomes is examined. Two innovative outcomes are analyzed: (1) invention, which focuses on the development of new ideas; and (2) innovation, the development of commercially viable products or services from creative ideas. Invention is measured by the number of patents granted, and innovation is assessed by the number of new product announcements. Second, because many inventions ultimately result in marketable innovations and because patents may provide protection for new products, the relationship between patents and product announcements is also investigated. Finally, the ability of a firm to benefit from its inventions and innovations is studied by examining their separate effects on firm performance, measured as return on assets (ROA) and sales growth. Drawing from a sample of 272 firms in 35 industries over 19 years, the results from a model of simultaneous equations provided support for some of the hypotheses, but several other surprising findings were found. As expected, R&D spending was positively related to patents. This finding is consistent with others who argue that internal research capabilities, particularly those with a strong basic research component, is key to enabling a firm to generate creative outputs. More surprising was the finding of increasing returns to scale to R&D spending. While this contradicts much of the existing research, it is consistent with economic arguments for the advantages of scale in innovation. Also interesting is the finding that, while a significant curvilinear relationship exists between R&D spending and product announcements, it is not the predicted inverse‐U but instead a U‐shaped relationship. Consistent with previous work, product announcements were found to be positively related to both performance measures. A negative relationship was found between patents and both ROA and sales growth. While these findings were unexpected, they are intriguing and call into question the value of patents as protection mechanisms. In addition, these results may be resulting from the rise of strategic patenting, where an increasing number of firms are using patents as strategic weapons. As expected, a positive relationship was found between patents and new product announcements.     

Broadening the scope of the resource-based view in marketing: The contingency role of institutional factors

Drawing on the resource-based view (RBV) of the firm and institutional theory, the authors propose and test an integrated model in an industrial marketing context that expands the boundaries of the RBV to incorporate institutional factors pertaining to societal and political issues. The rationale for taking such an integrated approach stems from the knowledge that firm performance can be explained better by incorporating not only the inability of managers to take particular actions but also their reluctance or unwillingness to pursue those behaviors. The authors develop an integrated model that tests (1) the direct effect of marketing institutional factors on the development of marketing RBV factors and (2) the moderating role of marketing institutional factors on the performance effect of marketing RBV factors. The empirical results indicate general support for the hypotheses, and this research provides several implications for broadening the scope of the RBV in marketing by underscoring how fit between marketing resources and the context in which those resources are deployed affects firm performance.     

The role of market and entrepreneurship orientation and internal control in the new product development activities of Chinese firms

In this study, we build a systemic conceptual model to describe the relationship among firm orientation, internal control systems and new product development, and to test empirically how market and entrepreneurship orientations affect the degree of improvement in new product development through personal control and/or output control in the Chinese transitional economy. Our research findings provide some valuable insights into new product development. Entrepreneurship orientation not only has a direct positive effect on the degree of improvement in new product development, but also indirectly has a positive effect on it through personal control. At the same time, market orientation, through output control, has a negative indirect influence.