The influence of firms' technological capabilities on export performance in supplier-dominated industries: the case of ceramic tiles firms

In this paper, we study the effects that firms' technological capabilities, as an expression of their technological innovation strategy, have on their international competitiveness. In doing so, we draw on export and international trade literature to justify the influence that the firms' technological activity has on their export performance. In addition, we use concepts derived from the literature on technological innovation to identify different capabilities that the firms may develop to manage their innovation process, i.e., those related to investment, production and co-operation. These constitute the basis of our hypothesis, in which the technological innovation capabilities identified are related to firms' export performance. Empirical work is carried out on a sample of 88 Spanish exporting firms belonging to the ceramic tiles industry, which is characterized as being a supplier-dominated industry. Data were mainly gathered through a postal survey directed at firm managers. Our findings show that technological innovation capabilities have a positive impact on export performance. Specifically, results show that investment in internal non-R&D innovative activities, such as engineering design and pre-production, exerts a positive influence on export performance. However, neither investment in R&D nor investment in external acquisition of technology exerts any influence on export performance. In addition, our findings show that production capabilities have a positive effect linked to both improvement and imitation of products and processes. Regarding co-operation, export performance is related to capabilities that derive from co-operation with universities and research institutes rather than co-operation with other companies.     

R&D spending,domestic competition,and export performance of Japanese manufacturing firms

This paper examines three factors influencing the export performances of Japanese manufacturing firms: R&D spending, domestic competitive position, and firm size. Export sales are positively associated with (1) R&D expenditures, (2) size of a firm, and (3) average R&D intensity of an industry. A firm's export ratio is related to the size of the firm, but not to the firm's and the industry's R&D intensities. Follower firms are characterized by higher export ratios than market leaders. The results indicate a relationship between the patterns of domestic competition and the international competitiveness of Japanese firms.     

The effect of export marketing capabilities on export performance: Moderating role of dysfunctional competition

This study utilizes multiple-informant and time-lagged primary data from 162 industrial exporting firms in Sub-Saharan Africa to contribute to an understanding of when export marketing capabilities can be deployed to drive export performance. The study finds that market responsiveness capability drives export performance when it is deployed together with a product innovation capability. The joint effect of both capabilities on export performance is weakened at high levels of dysfunctional competition in export market environment. The findings suggest that a stronger capability to respond to export market needs and a greater competence in introducing new products in export markets are not always beneficial in Sub-Saharan African markets as the resulting export performance outcome is dependent upon degrees of dysfunctional competition.     

PROJECT CHOICE AND RISK IN R&D*

We introduce stochastic R&D in the Hotelling model and show that if the technical risk is sufficiently high, all firms focus on the most valuable market segment. We then endogenize technical risk by allowing firms to choose between a safe and a risky R&D technology. Firms either both target the most attractive market with at least one firm using the risky technology or they choose different niche projects and both apply the safe technology. R&D spillovers lead to more differentiated R&D projects and patent protection to less. Project coordination within an RJV implies more differentiation, and may be welfare‐improving.     

The effects of funding source and management ownership on the productivity of R&D

This study investigates the influence of the source of R&D funds and management ownership on R&D productivity. The lagged effect of the source of R&D funds on R&D output is investigated for a sample of US manufacturing firms in five industries over the 1996–99 period. Estimates based on 779 firm-years show that R&D productivity increases with the proportion of stock held by managers and directors of firms primarily in the Other Electronics industry. The estimates also show that recipients of government-sponsored R&D funds in the Chemicals industry have lower levels of output (sales) for each dollar committed to R&D. In addition, output for firms in the Chemicals industry worsens as management stockholding increases, implying an agency cost rationale for the observed difference in output. The implication is that firms with high manager-owner content are less productive with government-sponsored R&D than with company-financed R&D. The reported results suggest that potential agency costs should be incorporated in government-sponsored R&D contracts. It also suggests that the source of R&D funds should be disclosed and incorporated into the valuation of intangible assets attributable to research and development.     

Export attitudes of industrial manufacturers

Small and medium-sized firms in three “high-tech” manufacturing industries were analyzed, in terms of their export attitudes and behavior, in order to provide beginning exporters and export promotion agencies with guidance to avenues of export success. Based on industry differences investigated, the study finds that managers in firms involved in exporting in each industry have similar attitudes toward international marketing opportunities, but that each industry exhibits different characteristics and strategies for exporting. Help is mainly needed in the areas of international communications and service delivery. The authors propose fewer government subsidies for export financing and more emphasis on encouraging joint ventures for service delivery purposes.     

Partner technological heterogeneity and innovation performance of R&D alliances

This study investigates the impacts of partner technology heterogeneity on innovation performance of alliance firms both in terms of R&D output and the enhancement of partners’ innovation capability. We apply a generalized semi-parametric model on a questionnaire survey result of 413 High and New Technology Enterprises in China. In order to ensure the robustness and practicability of our result, PCA is applied to extract comprehensive information and SiZer analysis is employed to test the linearity and significance of the nonparametric functions in the model. Our results indicate that collaborations between partners with different industry technologies exert inversed U-shaped R&D output pattern and affect very little the innovation ability of focal firms. The impact of industry domain divergence is no longer significant when partner technology heterogeneity is added in the model of analysis. Partner technology heterogeneity leads to an ascending S-shaped R&D output pattern and contributes positively to innovation capabilities. One of the implications of our findings is that when choosing R&D alliance partners, firms are better off avoiding candidates from a different industry domain but opt for potential collaborators who are in the same industry but in the different technical domain, which may facilitate more effective organizational learning. Further, we argue that the reasons behind the S-shaped R&D output pattern led by technology heterogeneity being the co-existence of competition and cooperation between partners where firms collaborate in value-creation by combining diverse resources and compete for acquiring partner’s distinct technology and resources. Therefore, we suggest that, for the sustainability of collaborative innovation outcome, both cooperation and competition amongst alliance partners should be encouraged and well balanced at different stages of joint R&D projects.     

Allocation of inventive effort in complex product systems

This paper examines the allocation of inventive effort in complex product systems. I argue that complex product systems, e.g., personal computers (PCs), are distinguished by functional interaction among several components, each guided by a relatively autonomous bundle of technical and economic characteristics. I try to explore whether the dynamics of such interactions between components of complex product systems can help us understand changes in the relative allocation of inventive effort. I advance and empirically test three hypotheses: (1) emergence of component constraints (bottlenecks) in product systems will trigger research and development (R&D) investment to resolve the constraints; (2) slack component firms have a strong incentive to invest in resolving component constraints; and (3) the incentive of slack component firms to invest in resolving component constraints is increasing in their prior sunk R&D investments in slack components. In sum, I argue that interactions between components in a product system conditions the R&D incentives of firms and also that the incentives are increasing in their prior investments or capabilities. Using product reviews from technical journals, I trace the constraint components in the PC from 1981 to 1998 and attempt to predict shifts in the allocation of inventive effort in the subsequent period. The empirical results strongly support all three hypotheses. This study highlights the paradoxical effect of modularity in complex product systems. Modular design architectures, while contributing to accelerating the pace of technical change, also tend to limit the economic benefits of firms' component R&D efforts, especially when different components technologies are progressing at different rates. This often creates an impetus to enlarge the scope of firm R&D activities beyond the component product markets that firms operate in. Other implications for R&D decision making are discussed. Copyright © 2007 John Wiley & Sons, Ltd.     

The growth and management of R&D outsourcing: evidence from UK pharmaceuticals

Outsourcing of research and development (R&D) activities has become a major management issue for R&D and technical managers within firms. It has also been of growing concern to academics who are trying to chart the implications of the increasingly distributed nature of research and innovative activities in advanced economies. This study is based on a survey of research-based pharmaceutical companies operating in the United Kingdom conducted in 2004–2006. The aim of this paper is to outline the main reasons for pharmaceutical firms to outsource R&D and the management practices followed by such companies in relation to outsourcing. The research results provide interesting findings in relation to, for example, the reasons behind outsourcing, the decision-making processes behind such practices and barriers to outsourcing arrangements. These issues are evaluated together with the characteristics of the firms and the specific project outsourced.     

International knowledge sourcing: evidence from U.S. firms expanding abroad

Recent research demonstrates that firms, motivated by national differences in technical activity, expand abroad to source unique knowledge. Extant research suggests that firms use a knowledge sourcing strategy to ‘catch up’ with competitors and to obtain ‘technical diversity.’ We widen the investigation by suggesting that firms also use knowledge sourcing as a springboard to reduce their next generation R&D costs–that firms would seek out similar R&D activity to combine with their own. Using unique data that encompasses the multitude of countries where U.S. firms invest, we test the importance of these explanations. Measuring knowledge via patent stocks, we find that country‐industries with larger stocks and greater technical similarity to the United States are more attractive. These findings suggest that an important explanation for firms investing abroad is not catching up or technologically diversifying, but is using similar R&D efforts of others to overcome fixed R&D cost hurdles. Copyright © 2008 John Wiley & Sons, Ltd.     

How to leverage the impact of R&D on product innovation? The moderating effect of management innovation

Although research and development (R&D) is a key indicator of (technological) innovation, scholars have found mixed results regarding its effect on product innovation and firm performance. In this paper, we claim that variations in R&D effectiveness can be explained by changes in a firm’s social system, in particular in its management innovation. It is still unclear how management innovation influences R&D effectiveness in terms of product innovation. In this study, we address this theoretical and empirical gap in the innovation literature. Our theoretical arguments and findings from a large-scale survey among Dutch firms show that R&D has a decreasingly positive relationship with product innovation, particularly for firms with low levels of management innovation. However, in firms with high levels of management innovation, this relationship becomes more J-shaped, especially in small and medium-sized firms. Our findings also appear to indicate that management innovation may be more important for competitive advantage than just R&D. Overall, our insights reveal that management innovation is a key moderator in explaining firms’ effectiveness in transforming R&D into successful product innovation.     

企业R＆D商业化能力研究

知识经济的飞速发展凸显出技术创新的重要性，企业R＆D商业化能力作为企业技术创新能力的重要组成部分越来越被人们所重视。本文认为，企业R＆D商业化能力的强弱在很大程度上影响着R＆D投入的收益多少．企业可以从多个层次来改善其R＆D商业化的水平．不同的商业化途径对R＆D的盈利水平亦有着显著影响。企业应该重视其R＆D商业化能力的改善．因为．它为企业在技术创新活动中实现真正意义上的自主提供了必要的资源支持．是企业实现自主创新战略的必然选择。     

Those Who Know,Do. Those Who Understand,Teach. Disseminative Capability and Knowledge Transfer in the Automotive Industry

Innovations in the automotive industry are increasingly building on contributions from different technological fields. Correspondingly, firms in this industry more than ever tend to form research and development (R&D) alliances that aim at innovating new products through integrating separate fields and transferring knowledge. While, in symmetrical R&D alliances, each partner intends to ultimately maintain their distinctive and specialized knowledge base, overlapping knowledge facilitates cooperation and ultimately alliance success. Thus, the capability for knowledge transfer between partners is crucial in such R&D alliances. The literature provides ample evidence that such knowledge transfer is more likely to succeed if the recipient firm has absorptive capability. However, whereas the characteristics of the knowledge transfer process and the recipient firm are well understood, limited attention has so far been given to the issue of the knowledge source firm's ability to transfer knowledge to R&D alliance partners. This study focuses on the impact of source firm capability on successful knowledge transfer in R&D alliances. The study develops a theoretical framework of disseminative capability consisting of five dimensions and tests it on a sample of 59 projects in R&D alliances in the automotive industry. To ensure content validity and avoid common source bias, data were collected from both alliance partners. To test the hypotheses, multiple regression analyses were performed. The results reveal that the source firm's disseminative capability including the attainment of expert knowledge, assessing the recipient firm's knowledge base, and encoding knowledge are positively related to knowledge transfer success, while, surprisingly, detaching knowledge and support of knowledge application in the recipient firm are negatively related. Intentionally or unintentionally, disseminating knowledge across firm boundaries is widely perceived as detrimental to a firm's competitive advantage. Accordingly, the literature tends to downplay disseminative capability as an important means of exploiting external knowledge in collaborative settings. By demonstrating potential benefits for the source firm to transfer knowledge to the allying R&D partner firm, this paper reinvigorates the collaborative dimension in knowledge transfer. Further, the paper is the first of this kind to theoretically explain and empirically show that dimensions of disseminative capability of collaborators in R&D alliances are important for knowledge transfer, whereas disseminative capability is the complementary inverse of an organization's absorptive capacity.     

Leaders,laggards, and the pursuit of foreign knowledge

This paper analyzes how firms in different technological and market share positions use foreign R&D to augment their technological capabilities. Technology transfer issues and absorptive capacity arguments are examined to analyze the different technological capabilities of leading and lagging firms. In addition, a new strategic rationale (in terms of non‐dominant market share firms) that has not been considered in prior studies analyzing knowledge‐seeking FDI is offered. From a panel dataset which includes information on all foreign R&D investments made by publicly traded Japanese manufacturing firms (from 1974 to 1994), I show that Japanese firms investing in foreign R&D tend to be the non‐dominant market share firms, but also the technologically leading firms across fairly diverse industries. By considering both the technological and market share positions of firms, this study reveals important characteristics that influence when firms use foreign R&D as part of a strategy to augment their technological capabilities. Copyright © 2005 John Wiley & Sons, Ltd.     

Does board social capital influence chief executive officers' investment decisions in research and development?

The findings of the chief executive officer (CEO) characteristics–research and development (R&D) investment relationship remain incomplete if previous unexamined contingencies are not considered. Very few studies in this area have invariably focused on the constraints from the external environment and overlooked the important influence of board social capital on such relationship. This study uses insights from resource dependence theory to examine how the effects of CEO characteristics on R&D investment are contingent on board social capital. The results show that board social capital mitigates/enhances the negative/positive effect of CEO tenure/CEO educational level on R&D investment, supporting the view that board social capital, as an important conduit to link firms to critical information and essential resources in the environment, may offer better counsel to CEOs and enhance their decision‐making capabilities in moving toward R&D. One important implication is that firms wishing to encourage innovation through R&D spending should consider nominating directors with rich social capital to the board because they may assist CEOs in coping with R&D complexities and acquiring requisite resources, leading to a better planning of R&D.     

Conceptualizing and measuring capabilities: methodology and empirical application

This paper attempts to operationalize and measure firm‐specific capabilities using an extant conceptualization in the resource‐based view (RBV) literature. Capabilities are conceived as the efficiency with which a firm employs a given set of resources (inputs) at its disposal to achieve certain objectives (outputs). We expand on extant theoretical literature on relative capabilities, by delineating the conditions that have to be met for relative capabilities to be measured non‐tautologically. We then proceed to suggest an estimation methodology, stochastic frontier estimation (SFE), that allows us to infer firm capabilities. We illustrate this technique with a sample of firms in the semiconductor industry. Our findings underscore the heterogeneity in R& D capability across firms in this industry, as well as the persistence in these capabilities over time. We also find that the market rewards high R& D capability firms, in that they show the highest average values of Tobin's q. Copyright © 2004 John Wiley & Sons, Ltd.     

The role of taxes in corporate research and development spending

This study replicates prior research regarding research and development (R&D) spending by sampling R&D spending for a cross‐section of firms in non‐service related industries. Compustat data for 231 firms from 1992 to 1998 are used to test whether the US Federal tax credit for R&D meaningfully influenced R&D spending of the sampled firms. Firms' (1) effective rate of R&D tax credit, (2) rate of decay in R&D capital for firms' primary industry affiliation, (3) financial cost of capital, and (4) marginal tax rate are used to compute firms' user‐cost of capital for in‐house R&D. Results show that firms that were eligible for the tax credit spent more on R&D than non‐eligible firms as the user‐cost of in‐house R&D increased. These results add further evidence regarding the role of the tax credit in stimulating R&D activity and suggest that a tax credit for incremental research can be used to boost private‐sector R&D spending.     

Quadratic effects of dynamic decision-making capability on innovation orientation and performance: Evidence from Chinese exporters

This study examines quadratic effects of three export decision-making approaches (planning, creativity and spontaneity) on innovation orientation, and the direct effect of innovation orientation on export market performance. The model, anchored in decision theory and dynamic capabilities, is tested on a sample of Chinese exporting firms using structural equation modelling. Findings indicate that while a greater proclivity to innovate is beneficial for export market performance, a more complex web of relationships is revealed between the three export decision-making approaches and innovation orientation, providing insights on the operationalization of a dynamic decision-making capability. Specifically, while an increasing level of export planning reduces an exporter’s capacity to innovate, creativity has a positive direct effect on exporters’ innovation orientation, which also benefits from extreme spontaneity in export decision-making. We discuss theoretical contributions and export managerial implications of this dynamic decision-making capability for industrial marketing management.     

The Determinants of Survival of Spanish Manufacturing Firms

This paper analyses the factors determining Spanish manufacturing firms survival–and exit. The data are drawn from the survey Encuesta sobre Estrategias Empresariales for the period 1990–1999. The methodology includes both non-parametric techniques and the estimation of a Cox proportional hazards model (CPHM). Our results suggest that the probability of exit is higher for small firms and also for young and mature firms. Furthermore, exporting firms and firms performing R&D activities enjoy better survival prospects.     

Patent Protection and R&D with Endogenous Market Structure

In a model with endogenous number of innovating firms, we show that whether patent protection increases R&D investment is ambiguous, and depends on the market demand function and the cost of R&D. If the market size increases with number of firms, patent protection reduces R&D investment if the cost of R&D is sufficiently high, and higher product differentiation increases the possibility of lower R&D investment under patent protection. If the market size does not increase with number of firms, patent protection never reduces R&D investment. We find that welfare is lower under patent protection than under no patent protection.