The Impact of Foreign Technology and Embodied R&D on Productivity in Internationally Oriented and High-Technology Industries in Egypt, 2006–2009

This paper investigates the domestic productivity and spillover effects of foreign technology and embodied R&D on Egyptian manufacturing industries, 2006 to 2009. It also analyses the heterogeneous sectoral effects of technology transfer by focusing specifically on the productivity effects on highly internationalized and technology-intensive industries. These are expected to have greater absorptive capacity with respect to foreign technology and therefore larger productivity effects because of their greater exposure to foreign competition and greater technological capacity respectively. This study is the first to analyse the efficiency effects of foreign technology by classifying industries in this manner. It finds that foreign technology and embodied R&D have positive and significant industry-specific effects on domestic productivity and TFP in technology-intensive industries but that these are weaker in internationally oriented industries. The study suggests that only technological-intensive industries in Egypt have sufficient absorptive capacity to assimilate foreign technology effectively. The paper’s findings highlight the key role of foreign technology in domestic productivity growth, subject to the absorptive capacity of the domestic labour force, and the need for improved policies to promote the domestic benefits of technology transfer through the accumulation of local technological competences.

     

Do Domestic Firms Benefit from Foreign Presence and Import Competition in Irish Services Sectors?

This paper examines whether domestic firms benefit from the pro‐competitive effects of imports from abroad and from the presence of foreign‐owned firms in the host country in three Irish market‐services sectors between 2001 and 2007. Grouping the three sectors together masks opposing effects in individual sectors. Where significant, the effect of foreign presence on domestic firms tends to be negative, this is mainly the case in wholesale and retail trade. Despite it being of lesser importance than foreign presence in these sectors, import competition from abroad is negatively associated with domestic firms' productivity in wholesale and retail trade, but positively in transport, storage and communication. There is no significant effect of foreign presence or import competition in real estate, rental and business activities. Using capital‐labour ratios as an input‐based indicator related to productivity suggests that domestic firms adapt to increased foreign competition by adjusting their inputs.     

Does easy start-up formation hamper incumbents’ R&D investment?

This paper investigates the implications that complementary assets needed for the formation of start-ups have on the innovative efforts of incumbent firms. In particular, we highlight a strategic incentive effect by which the innovative efforts of incumbents are decreasing in the availability of the complementary assets needed for the creation of a start-up. Furthermore, we argue that the R&D investments of incumbents are positively related to the presence of policy support to innovation, and to the firm’s endowment of human capital. The empirical relevance of our theoretical hypotheses is investigated—and supported—by using firm level data.     

Does Economic Diplomacy Work? A Meta‐analysis of Its Impact on Trade and Investment

We review the literature on economic diplomacy and provide a meta‐analysis of 32 empirical studies published in 1986–2011 that deal with the trade and investment impact of economic diplomacy (embassies, consulates, other diplomatic facilities, investment and export promotion offices, trade and state visits). Controlling for differences in research design, methodology, time frame and manner of data, we find a positive and significant effect of economic diplomacy on international economic flows with the exception of state visits and that this is true in a sample of 627 t‐statistics analysed with OLS and for a larger sample of 963 reported significance levels analysed with logit thus illustrating robustness with respect to sample and estimation technique. Our analyses show that reported effects of economic diplomacy on trade and investment in individual studies are sensitive to model specification. The primary studies that investigate only one source country are less likely to report significant positive effects. Compared to other sciences, economic studies are less likely to report significantly positive effects of economic diplomacy. Primary studies lump embassies and consulates (general) into one indicator miss that these instruments differ significantly. Embassies, consulates and agencies should thus be included as separate instruments in future research.     

When do firms benefit from university–industry R&D collaborations? The implications of firm R&D focus on scientific research and technological recombination

Firms' access to academic discoveries through R&D collaborations has been shown to enhance their patent performance. However, increasing both internal and external R&D activities can lead to high knowledge redundancy and coordination costs. This paper examines what kind of R&D focus inside the firm will improve or reduce the benefits of R&D collaborations with universities. Our results show that technological recombination focus strengthens the relationship between university collaborations and patent performance, whereas scientific research focus weakens the relationship. These results also differ between young and old firms, implying that firms may shift their R&D focus according to their collaborative objectives.     

Market-oriented institutional change and R&D investments: Do business groups enhance advantage?

Emerging market firms (EMFs) are increasingly relying on innovation to find their competitive advantage, but our understanding of how institutional change affects firm innovation has been limited. We analyzed Korean manufacturing firms from 1994 to 2006 to test the proposition that market-oriented institutional change in an emerging economy alleviates firms’ financing constraints and monitoring problems and improves the effectiveness of their innovation activities. Institutional evolution in the economy was found to affect Korean business groups and independent firms differently. Institutional change reduced the financing constraints on independent firms more than for business group affiliates in R&D investment. Independent firms, however, appeared less capable than group affiliates of translating the benefits of improved institutional environments into efficient R&D investment. This asymmetry may lead to a wider gap in the efficiency of R&D investment between business group affiliates and independent firms.     

Is it U.S. GAAP or IFRS? Understanding how R&D costs affect ratio analysis

While financial reporting standards under U.S. GAAP and IFRS are fundamentally similar, differences do exist that may affect our analysis of company financial statements. This is particularly true when comparing a U.S. company following U.S. GAAP to a firm that uses IFRS. To illustrate, we compare research and development (R&D) accounting methods under both sets of standards and illustrate how they affect the analysis of financial results of firms in a specific industry—automotive manufacturers. Our results provide insight into settings in which differences in R&D accounting may have the greatest impact on financial analysis.     

Transformational leadership and R&D workers' multiple commitments: Do justice and span of control matter?

This study examines how transformational leaders influence research and development (R&D) workers' commitment to their organizations and leaders. The study investigates the mediating role of organizational justice (i.e., procedural and interactional) based on social exchange theory and the moderating role of span of control in this relationship. In a sample of 445 Turkish R&D personnel, the study finds that transformational leadership significantly influences followers' organizational commitment partially through procedural justice and their supervisory commitment partially through interactional justice. Second, the findings reveal that transformational leaders boost perceptions of procedural justice and organizational commitment when the span of control is relatively narrow. Interestingly, when the span of control is large, transformational leadership has significant positive effects on supervisory commitment, but no significant effects on organizational commitment among R&D workers.     

How Does the Franchisor's Choice of Different Control Mechanisms Affect Franchisees’ and Employee-Managers’ Satisfaction?

Satisfaction of franchisees and employee-managers affects the overall performance of a franchise system. We argue that different actors in the same franchise system need to be treated in different ways. The franchisor's choice of control mechanisms affects the satisfaction of franchisees and employee-managers differently. To our knowledge this is the first study that gathers primary data from franchisees and employee-managers in the same franchise system at the store level with almost identical questionnaires. We show based on data from the largest German franchise system that outcome control leads to higher satisfaction among franchisees and employee-managers, while behavior control enhances employee-managers’ satisfaction. Thereby, outcome control leads to higher satisfaction among more experienced franchisees, while behavior control enhances both highly and lowly experienced employee-managers’ satisfaction. Our results suggest that franchisors face a dilemma: On the one hand, behavior control is associated with high costs and has no impact on franchisees’ satisfaction at all. On the other hand, it might still be necessary to prevent franchisees from behaving opportunistically.     

Chinese Private Firms’ Outward Foreign Direct Investment: Does Firm Ownership and Size Matter?

This article investigates and explains the behaviors, motives, and characteristics of Chinese privately owned enterprises’ (POEs’) outward foreign direct investment (OFDI), and compares this with the behaviors, motives, and characteristics of Chinese state‐owned enterprises (SOEs), using the institutional perspective and resources‐based view. Through in‐depth interviews with senior managers and an extensive secondary data analysis of Chinese POEs’ OFDI, we found that Chinese POEs are increasingly active in committing both market‐ and strategic asset–seeking OFDI due to the unfavorable institutional environment they face in China and the different types of resources possessed. POEs cluster with their business partners or domestic peers for international market expansion and adopt several approaches to acquire strategic assets. © 2014 Wiley Periodicals, Inc.     

Separate or Integrate? Assessing the Impact of Separation Between Product and Service Business on Service Performance in Product Manufacturing Firms

Purpose: Investigating how the separation of the product and service business mediates the effect of management's commitment to the service strategy on service performance in product manufacturing firms.

Methodology: The authors surveyed 216 European manufacturers in the high-value durable equipment industry moving into the service business. After assessing adequacy of measurement scales, the authors tested statistically for mediation. Their results hold when replicating the study using a structural equation modeling approach and while testing for common method biases.

Findings: The authors find evidence that the creation of a separate service organization, organized as a profit center, has a significant positive mediating effect between managerial commitment and the services' financial performance. Although separation also has a positive mediating effect between commitment and non-financial performance, organizing services as a profit center had a negative effect on the service's non-financial indicators.

Research Limitations: Research limitations include (a) a sample limited to German-speaking firms in the high-value durable equipment industry, (b) measurements based on self-reported managerial perceptions of service performance, and (c) conceptualization of service as a single strategic response.

Practical Implications: Although the complementarity between products and services is high in the market, the authors' research suggests few synergies to leverage their integration inside the organization. Accordingly, management should, at least in transition efforts similar to the ones included in this sample, look into creating a separate and distinct service organization.

Value/Contribution: This research was driven by practical concern on how to organize service operations in a manufacturing firm. Initial framing of the research through the creation of the construct of separation of product and service business was used.     

How Does Corporate Governance Affect Loan Collateral? Evidence from Chinese SOEs and Non‐SOEs

We examine the effect of corporate governance on the collateral requirements for firms' bank loans in China. We find that firms with lower excess control rights and other large shareholders face lower collateral requirements, which is more pronounced in non‐state‐owned enterprises (SOEs) than in SOEs. Regarding board characteristics, we find that smaller board size, more independent directors, separation of the positions of CEO and chairman, and larger supervisory board size can reduce a firm's use of collateral; the effect of all the preceding characteristics is more pronounced in SOEs. Overall, our research suggests that, in China, corporate governance structures are able to affect bank‐lending decisions in respect of collateral requirements and that the influence depends on the controlling shareholder type and associated agency problems.     

Does Psychological Contract Violation Moderate the Impact of Severity and Recovery Satisfaction on Boycott? An Analysis of Halal Violation

Halal violation is a critical issue in the Islamic market, but little is known on its impact on the Muslim consumer. Thus, this study investigates the effect of psychological contract violation (PCV), recovery satisfaction, and severity of halal violation on product boycott. The moderating role of PCV in the relationship between recovery satisfaction and seriousness of a violation on the product boycott is also examined. Data collected from a sample of 360 customers were analyzed using PLS-SEM. The results show that recovery satisfaction, severity, and PCV significantly influence product boycott and PCV significantly moderates the relationship between recovery satisfaction and product boycott. This study provides new insights into the relationships among recovery satisfaction, the severity of the halal violation, psychological contract violation, and product boycott and helps the managers to design recovery action toward halal violation.     

How does R&D internationalization in multinational firms affect their innovative performance? The moderating role of international collaboration in the energy industry

This paper examines the effects of the degree and geographic diversification of a firm’s R&D internationalization on its innovative performance. We use an unbalanced panel dataset of 401 observations from 110 multinational firms operating in the energy industry over a period of six years to support the argument that both the degree and the geographic diversification of a firm’s R&D internationalization have an inverted U-shaped relationship with a firm’s innovative performance. Our results also show that collaboration among R&D units located in different countries moderates this relationship by reducing both the positive effects and the challenges of the degree of R&D internationalization. This paper extends the emerging innovation focus in the headquarters–subsidiary literature by contributing to our understanding of the implications of the international R&D activities of firms and supports the utilization of social exchange theory in order to identify the moderating influence of the collaboration among a firm’s R&D units located in different countries.     

Does Loyalty Make Customers Blind? The Impact of Relationship Quality on Channel Members' Attributions and Behaviors Following Negative Critical Incidents

Purpose: Although the consequences of attributions triggered by negative critical incidents (NCI) are well documented, determinants of the attribution process itself received considerably less attention. The purpose of this article is to yield further insights regarding attribution processes by investigating the potential buffering effect of relationship quality on the attributions made by channel members following NCI and on their subsequent behaviors.

Methodology/Approach: Data used to assess the proposed model was collected from 171 independent retailers and analyzed through PLS path modeling procedures.

Findings: Results demonstrate that relationship quality bias channel members' appraisals following NCI by motivating attributions, and ultimately behaviors, which promote relationship preservation.

Research Implications: Results confirm the validity of the reverse attributional hypothesis holding that the quality of a relationship shape the attributions made by its participants following NCI in a way that is beneficial to relationship preservation.

Practical Implications: The present study advocates that suppliers should nurture relationship quality, categorize their customer portfolio based on the nature of exchange relationships, and implement strategies aiming at influencing attribution processes.

Originality/Value/Contribution: This article fills a gap in the marketing literature by investigating not only the consequences but also the antecedents of attributions made by channel members following NCI. Its main contribution lies in the examination and validation of a buffering effect of relationship quality on channel members' attributions regarding NCI.     

How Does Legitimacy Operate in Emerging Capital Markets? Investigating the Moderating Effects of Premium Listings and Firm Size on Risk

Drawing on an institutional theoretical perspective, we investigate the impact of the origins of organizational legitimacy on systematic risk using a sample of 358 Brazilian companies between the years 2002 and 2007. We regard three origins of legitimacy—formal–regulatory (presence in premium listings), cultural–cognitive (board of directors), and normative legitimacy (reputation)—to empirically investigate how a company's size and adherence to premium lists moderate other sources of legitimacy. Our results indicate that only under apparently better quality corporate governance conditions—presence in premium listings—do corporate reputation and the board of directors reduce systematic risk. In addition, we show that the effect of reputation on risk is positively moderated by firm size. Copyright © 2018 ASAC. Published by John Wiley & Sons, Ltd.     

How to improve the performance of R&;D alliance? An empirical analysis based on China’s pharmaceutical industry

The separation of science resources and the manufacturing industry in China has given rise to R&;D alliances between R&;D institutes and sponsoring enterprises. As a result, R&;D alliance of various types has become a main route of technology innovation in China. Drawing upon relevant literature on R&;D alliance management, this research empirically explores the impacts of relationship pattern, control strategy chosen by sponsoring enterprises, and alliance members’ continuity expectation on alliance performance. Results show that motivation-based alliance control approaches, including proper allocation of alliance control rights, sustained strengthening of alliance members’ continuity expectation, and enhancement of mutual relationship and friendship among alliance members, are more effective than process or outcome control approaches for improving alliance performance.