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

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

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

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

Collaborative modes with Cultural and Creative Industries and innovation performance: The moderating role of heterogeneous sources of knowledge and absorptive capacity

Organizations can no longer be isolated entities in the current dynamic competitive environment but tend to establish alliances and networks with external parties. Recently, research has suggested that organizations develop collaborative modes with Cultural and Creative Industries (CCIs) to acquire and combine Heterogeneous Sources of Knowledge (HSK) within their organizational environment. Innovation thus becomes increasingly generated by a cross-process involving a diverse set of industries. Nevertheless, few studies have assessed how knowledge from distant industries, such as CCIs, can affect firms’ innovation performance. Accordingly, this empirical research on a sample of 187 firms evaluates whether formal and informal collaboration modes with CCIs affect innovation performance. Moreover, it assesses the moderating role of both HSK and absorptive capacity. In particular, it aims to answer the following questions. What are the effects of collaboration modes with CCIs on firms’ innovation performance? What are the differences (in terms of effects) between Formal Collaboration Modes (FCMs) and Informal Collaboration Modes (ICMs) with CCIs on firms’ innovation performance? Do heterogeneity of knowledge sources and absorptive capacity increase the possibility of benefiting from FCMs and ICMs with CCIs in terms of innovation performance? The results contribute to the theory indicating that HSK are important to benefit from knowledge from CCIs, while absorptive capacity does not fulfil the same role.     

Servitization: Disentangling the impact of service business model innovation on manufacturing firm performance

As manufacturing businesses operate in an ever more competitive, global economy where products are easily commoditized, innovating by adding services to the core product offering has become a popular strategy. Contrary to the economic benefits expected, recent findings pinpoint implementation hurdles that lead to a potential performance decline, the so-called ‘servitization paradox’. In this paper, we analyze this paradox by disentangling the value creation and value appropriation processes of 44 national subsidiaries of a global manufacturing firm turned product-service provider, in the 2001–2007 period. Our findings show that the firm under study is able to successfully transcend the inherent substitution of products by services and to enact complementary sales dynamics between the two activities. Moreover, labor-intensive services such as maintenance, which imply higher levels of customer proximity, further enhance product sales. Empirical results also reveal a positive yet non-linear relationship between the scale of service activities and profitability: while initial levels of servicing result in a steep increase in profitability, a period of relative decline is observed before the positive relationship between the scale of services and profitability re-emerges. These findings suggest the presence of initial short-term gains but also indicate the existence of a ‘profitability’ hurdle; profitable growth seems feasible only to the extent that investments in service capability are translated into economies of scale. In helping to clarify the performance implications of service innovation, our findings suggest pathways to sustainable growth through servitization for manufacturing firms.     

CSR and the legitimacy of business in transition economies: The case of Russia

This study investigates the attitudes of Russian executives towards corporate social responsibility. The empirical study is based on an original survey of executive managers of 129 medium and large industrial enterprises in all regions of Russia. The questionnaire was designed using some important conclusions made by theorists who have analysed the development of CSR in mature capitalist economies. The objective was to probe whether the reaction by Russian managers would be in line with expectations grounded in western theoretical constructs, in particular the concept of business legitimacy. The study provides evidence of a discrepancy between anticipated outcomes based on the studies, reflecting western practice, and actual attitudes shown by Russian managers. A range of economic, social and political factors are considered in the discussion section in the search for an explanation of these results.     

Exchange rate, inflation and unemployment in East European economies: the case of Poland and Hungary*

The aim of the paper is to model the impact of exchange rate on both inflation and unemployment variables in economies which are characterized by important structural changes, i.e. a transition phase moving from centralized economies towards market economies. This phenomenon, which is common to the East European countries, stressed different effects both for what concerns the behaviour of economic agents and for what concerns fiscal and monetary measures adopted by governments and aiming to keep under control the inflation–unemployment trade off. Time series relationships between these variables are investigated within an econometric model. Economic theory and the available data on the hypothetically relevant variables, along with the consideration of the main facts occurred in the period under study, characterize our information set. It is found that single equation analysis yields inefficient inference relative to the whole system analysis, and important structural changes are detected which reflect possible breaks in the structure of the economic system along with a change in economic policy.     

Modelling the inflation process in transition economies: Empirical comparison of Poland, Hungary and Czech Republic

This paper starts from the observation that inflation in transition economies appears to be persistently high and volatile and attempts to provide some empirical characterisation of the inflation process in three such transition economies: Poland, Hungary and Czech Republic. We first consider the role of monetary growth as a major causal factor for inflation in these economies, and argue that the evidence provides rather weak support for the causal relationship. We then propose a transition economy cost-plus model and estimate this using the equilibrium-correction modelling (ECM) strategy augmented by introduction of a number of transitory factors and changes in the internal structure of the real economy which we believe may have had a significant impact on inflation in these economies. We show that this approach enables us to account for long-run inflation in these economies from the early 1980s to the present despite the turbulence of the latter part of the sample period. Our results support wage and exchange rate based inflation policies.     

The relationship between R&D,innovation and productivity in emerging economies: CDM model and alternatives

CDM (Crépon, Duguet and Mairesse, 1988) is a workhorse model in the economics of innovation, which explains productivity in a three-stage procedure driven initially by R&D and leads to patents and then to productivity improvements. Based on the logic of this model, an increasing number of papers applies it to emerging economies but modifies the original model without being explicit about the nature and implications of this modification. We argue in this paper that, in its original form, CDM does not capture stylized facts of the determinants of productivity in emerging economies and that we need alternative models. Accordingly, we are critical of papers that try to maintain the validity of the model but actually change it. For that purpose, we test the original CDM model and its two alternatives: investment and production capability–driven models. Our research is based on a large sample of firms in Central and Eastern Europe, former Soviet republics and Turkey, and we show that the alternative models are much closer to the stylized facts of innovation activities and technology upgrading in these and other emerging economies. Our conclusions have important policy implications, which we discuss.     

Mapping the benefits and costs associated with process innovation: The case of RFID adoption

The successful implementation of any innovation requires an understanding of its benefits and costs. This study examines the changes in the magnitude of costs and benefits associated with technology process innovation adoption as the innovation diffuses across different industries. Using RFID as an exemplar technology, the study shows that the magnitude of benefits and costs associated with technological process innovation adoption within different industries varies as technology diffuses beyond early adopters to the early majority. During the early stages of technology evolution, the development cost, the cost of capital, ethical costs and simple direct implementation costs (in the form of the cost of tags) predominate. As a dominant design emerges the profile of costs changes with the emphasis on initiation costs, more holistic direct implementation costs and indirect implementation costs. A similar change in the emphasis of benefits is observed, with a shift from direct to indirect benefits being noticeable as the technology moves from early adopters to early majority adopters. Our findings help to explain the difficulties in consistently measuring innovation outcomes observed in the innovation implementation literature, and emphasize the need to take into consideration the stage of technology development as a significant factor that influences the realised outcomes from innovation implementation.     

Knowledge sharing in supply chain networks: Effects of collaborative innovation activities and capability on innovation performance

Building on knowledge management and innovation capability theories, this paper aims to reveal the mechanisms of collaborative innovation processes by investigating the complex relationships among critical factors influencing firm's innovation performance in supply chain networks. Using hierarchical Multiple Regression (MR) and Moderated Multiple Regression (MMR) methods, results from a survey of 236 firms in China indicated that there are significant positive relationships between collaborative innovation activities, knowledge sharing, collaborative innovation capability, and firm's innovation performance. Moreover, it is expected that knowledge sharing plays a partial mediating role in the relationships between collaborative innovation activities and firm's innovation performance. Collaborative innovation capability exhibited a moderating effect on collaborative innovation activities - innovation performance relationship. These results contribute to collaborative innovation process management by offering a nuanced conceptualization of the collaborative innovation - performance relationship in supply chain networks.     

The interaction of multiple champions in orchestrating innovation networks: Conflicts and complementarities

In networked or open innovation processes, so-called innovation communities have been identified in the innovation champion literature, in which innovation champions from different levels in the innovation system supposedly act as a team. It has however not been studied in detail to what extent and how different champions in innovation communities complement each other and act as a team. Applying the concept of innovation network orchestration to analyze the role and position of different kinds of champions as brokers in innovation networks, the purpose of this paper is to unravel the interaction between champions and what this entails in terms of role complementarities and conflicts as regards innovation network orchestration. This is done by using an explorative multiple case study approach in which three innovation journeys are analyzed. The results indicate that a distinction can be made between primary innovation communities, who act as aggregated orchestrators of the overall innovation network, and who in turn orchestrate secondary innovation communities in certain sub-networks. Here different kinds of champions complement each other and act as a team, but these complementarities are not a given: they are negotiated over time in interaction, and lack of reflection on each other’s roles may result in role conflicts. The main conclusion is that an oversimplified notion of innovation communities as a unified team of champions should be avoided: innovation communities themselves need a form of orchestration.     

The influence of intelligent manufacturing on financial performance and innovation performance: the case of China

ABSTRACT

Artificial intelligence is increasingly used in advanced manufacturing systems to realise intelligent manufacturing. However, there is still a lack of empirical research on the impact of intelligent manufacturing on enterprise performances, especially for China. The author adopts the enterprise panel data of intelligent manufacturing implemented by China’s manufacturing industry in 2014 to 2019, and uses propensity score matching with difference in differences (PSM-DID) method to investigate the impact of intelligent manufacturing on financial performance and innovation performance. The research yields two main conclusions. First, the implementation of intelligent manufacturing has a significant role in promoting the financial performance and innovation performance of manufacturing enterprises. Second, technology-intensive industries improve the quantity of innovation by implementing intelligent manufacturing, thus promoting the improvement of short-term financial performance, but the improvement of innovation quality has a negative impact on short-term financial performance. In labour-intensive industries, the relationship between financial performance and innovation performance is not obvious.     

Green intellectual capital and ambidextrous green innovation: The impact on environmental performance

This study relies on a unique synthesis of ambidexterity theory and the natural resource orchestration approach to investigate how green intellectual capital elements, namely green human, structural, and relational capital, along with ambidextrous green innovation, trigger a synergy in favor of environmental performance. In particular, this paper primarily aims to test the mediating role of ambidextrous green innovation in the relationship between green intellectual capital and environmental performance. Based on a survey of 105 Iranian public listed companies, the results indicate that green intellectual capital elements are not directly associated with environmental performance. Instead, they influence environmental performance only through the channel of ambidextrous green innovation as a mediating variable. This is the first study to simultaneously embed the resource orchestration theory in the green intellectual capital and ambidexterity literature. The findings of the current study offer new insights into the issue of how organizations gain maximum benefit from the orchestration of their various green assets and capabilities, including green intellectual capital and ambidextrous green innovation.     

Efficiency in Third Sector Partnerships for Delivering Local Government Services: The role of economies of scale,scope and learning

Abstract

Third sector partnerships are under pressure to change in the light of the increasing cost pressures on local public services. The literature throws doubt on the level of economies of scale and suggests that more attention should be given to economies of scope and learning. The common conflation of economies of size with economies of scale has led policymakers to overemphasize larger scale providers and has distorted the strategies which third sector organizations have adopted, pushing them towards mergers and consortia based on scale.     

The impact of stakeholder heterogeneity on risk perceptions in technological innovation

Managing risk has been widely acknowledged as a crucial managerial task in the development of new technology. More recently, the acceptance of new technologies has increasingly been influenced by secondary stakeholders, some of which are difficult to identify, or whose concerns are not easily reconciled. This paper develops a conceptual framework based on the management of technology and research & development literature, stakeholder theory, risk and social judgment to describe how traditional approaches based on reducing uncertainties through estimating probabilities may not work for social uncertainties; different heuristics are needed to understand and resolve such heterogeneous stakeholder perspectives. We contribute to the discourse by describing how risk perceptions among stakeholders vary, and how this may change over time. The framework suggests that the perception of primary stakeholder towards a specific innovation is ‘Standard’ when information is well known, but becomes riskier when information is unclear. For secondary stakeholders, when there is a low degree of imperfect information, the stakeholder relationship is an ‘Irritant’ but becomes increasingly ‘Dangerous’ when information becomes ambiguous. We conclude with implications for management and future research.     

Putting policy into practice: an exploratory study of SME innovation support in a peripheral UK region

Abstract

Focussing on a regional Government sponsored support programme for technology-based small and medium-sized enterprises (SMEs), the aim of this paper is to conduct a multi-level exploration of the relationships between policy interpretation and support programme design and the development of innovation capability among participant SMEs within a U.K peripheral region. The Innovplus programme was designed and implemented in Northern Ireland to help nascent high technology companies become more competitive and to contribute to the goals of the Regional Innovation Strategy. A knowledge-based absorptive capacity framework is used as the theoretical lens to explore the relationships between policy interpretation and programme design and the development of innovation capability within participant SMEs. The findings show that the design of the Innovplus programme, while linked to a coherent Regional Innovation Strategy, lacks consistency in relation to the policy and practical interpretation of knowledge and innovation. This inconsistency is reflected in the practical design of the programme, limiting its effectiveness as a result. In terms of the development of innovation capability, it was found that recognition and development of nascent absorptive capacity drivers in potential form was essential before participant SMEs could transition to realised absorptive capacity.     

Fiscal impact of privatization revisited: The role of tax revenues in transition economies

In contrast to earlier literature, this paper finds empirical evidence that privatization has deteriorated fiscal balances in transition economies. The investigation focuses on the role of tax revenues in explaining the fiscal impact of privatization, as it appears that tax revenue in many transition countries remained lackluster even after the adoption of several tax reforms in the last two decades, and no formal econometric assessment has been conducted of the extent to which privatization has affected tax revenues. Using panel data for 29 Eastern European and former Soviet Union countries, the analysis finds robust signs of a strong negative impact of privatization on different tax revenue sources. The paper also provides some empirical evidence favoring the early adoption of value-added taxes that appear to have contributed to government revenue recovery.     

Impact of changes in regulatory performance standards on innovation: A case of energy performance standards for newly-built houses

This paper explores the impact of changes in prescribed performance standards on innovation in an industry characterised by loosely coupled systems. Using a case of energy performance standards for newly-built houses, it investigates how changes to these standards have affected the innovation of houses, combining qualitative and quantitative data from the Netherlands. The key finding is that standardisation does not only increase the amount of innovation conducted in an industry while achieving societal goals, such as improving energy efficiency. It also triggers different types of innovation. While innovators in the investigated field prefer incremental innovations which can be integrated easily into existing ways of building houses, tightened requirements require systemic innovations, meaning that processes and organisations need to be changed. Additionally, we find that ambitious performance standards can also impact the organisation of an entire sector: they can force integration, the tightening of couplings between firms, in order to achieve systemic innovation.     

The effect of economic growth on banking system performance: An interregional and comparative study of Sub-Saharan Africa and developed economies

As an important part of the financial sector, banking systems play a critical role in economic development as well as in improving the quality of life of the people of sub-Saharan Africa (SSA). However, little evidence exists in the literature about the performance of the banking systems in SSA compared with developed economies. This paper investigates the effects of economic development on banking performance across 23 SSA countries and 14 developed countries between 1981 and 2018. Using estimation models such as feasible general least squares, fixed-effects estimation with Driscoll-Kraay standard errors, and system and difference generalized method of moments, our findings show that in SSA as a whole, economic development has a positive impact on commercial bank lending, raises lending rates, increases the amount of domestic credit to the private sector (DCPS), and reduces the number of nonperforming loans (NPLs). In developed countries, economic development has a positive impact on lending rates, DCPS, and the number of NPLs. However, although economic development in developed economies has mostly positive effects on banking performance, SSA countries have more performance issues in banking as a whole and in regional pockets. A careful reassessment of SSA’s interregional banking system is therefore highly recommended. An increase in the number of NPLs in East and Southern Africa, a decline in deposit rates offered in Southern, West, and Central Africa, and increasing real interest rates in SSA despite economic growth are some of the concerns that require careful reassessment and policy adjustments.     

Organizational innovation: The challenge of measuring non-technical innovation in large-scale surveys

Although the implementation of innovative organizational concepts is considered to be highly important for a company's competitiveness, so far there has been little research on possible approaches to measure and monitor organizational innovations in large-scale surveys. Based on an item-oriented typology of organizational innovations which serves as the precondition for a common understanding, we describe and compare how organizational innovations have been measured through existing surveys in Europe. Using a large-scale survey comprising data of 1450 German manufacturing companies, we show how these different approaches lead to significantly different results regarding the organizational innovativeness of companies within one and the same sample. We derive four implications for the future measurement and monitoring of organizational innovations. Our findings contribute to the further development of an adequate methodology for an organizational innovation monitoring system.