The emergence of sustainable industries: building on natural capital

This paper focuses on the emergence and growth of sustainable industries, specifically analyzing the rise of the wind energy industry in California. Based on a favorable institutional environment and the presence of abundant natural capital, the wind energy industry took root and flourished in California during the last two decades. This paper analyzes this phenomenon by exploring the determinants of where and when wind energy projects would be established. Findings suggest that in locations where natural, social, and economic influences converged, greater wind energy activity followed. The paper advances a simple framework that uses natural capital, site specificity, and institutional environments to predict which sustainable industries will enjoy growth in coming decades. Copyright © 2002 John Wiley & Sons, Ltd.     

The effects of board human and social capital on investor reactions to new CEO selection

This study extends work on independent directors to examine the influence of their human capital and social capital on investor reactions to the board's CEO selection decision. We predict that human capital, as represented by the board's CEO experience and industry experience, and social capital, as represented by directors' co‐working experience on the board and external directorship ties to other corporate boards, will influence the stock market reactions to new CEO appointments. In a sample of 208 new CEO appointment events in U.S. manufacturing firms between 1999 and 2003, we found that the stock market reacted favorably to the appointments made by boards with higher levels of human and social capital. We also found that the effect of internal social capital was stronger when the new CEO was an insider rather than an outsider. The implications of the results for director selection and CEO succession are discussed. Copyright © 2010 John Wiley & Sons, Ltd.     

The direct and indirect effects of core and peripheral social capital on organizational performance

Research summary : In this paper we adopt a core‐periphery approach to specify the direct and indirect effects of social capital on organizational performance. We suggest that social capital deriving from stable task relationships between organizational members has a direct positive effect on organizational performance. Said effect depends, in both strength and functional form, on whether actors involved in stable dyads are located at the core or at the periphery of the organization. We also argue that core and peripheral social capital affect performance indirectly by moderating the organization's ability to leverage its human capital to improve performance. Results from a 48‐year study of the National Basketball Association support our arguments and bear important implications for strategic human resource practices and organizational performance in competitive settings. Managerial summary : Stable work relationships among employees generate trust, more efficient work routines, common understanding and thus higher organizational performance. These benefits depend on the location of such stable relationships in the organization. Relational stability among core organizational members has an immediate, strong impact on performance, an effect that plateaus as stability grows. Stable relationships between core and peripheral members have instead a weaker, yet linear effect on performance. The location of stable relationships is also critical to leverage the talent of core employees, whose contribution to performance is stronger when relational stability is high in the organizational core, yet hindered by stable relations between core and periphery. Such findings provide relevant implications for strategic human resource management, in particular for choices regarding team composition and managing stars. Copyright © 2015 John Wiley & Sons, Ltd.     

Pioneering advantages in manufacturing and service industries: empirical evidence from nine countries

Although one might expect differences between manufacturing and service firms in pioneering advantages, the extent of these differences has not yet been investigated. This is the first cross‐national study that compares such differences in nine countries/regions: the United States, the United Kingdom, Germany, Japan, China, Taiwan, Hong Kong, South Korea, and Singapore. We develop several hypotheses concerning the perceptions of managers of manufacturing firms and service firms regarding the benefits and post‐entry risks of pioneering, and the cost and differentiation advantages accruing to the pioneering firm. We test the hypotheses with data from 2,419 firms representing all nine countries and both industrial sectors. We find that: (1) managers from all countries perceive pioneering to be associated with higher market share and/or profitability; (2) manufacturing firm managers perceive pioneering risks to be significantly more important than do service firm managers; (3) cost and differentiation advantages of pioneering are, for the most part, more significant to manufacturing than to service firm managers; (4) Western manufacturing firm managers perceive the cost advantages to be more important than Asian Pacific manufacturing firm managers. We conclude by presenting the managerial implications of our findings. Copyright © 1999 John Wiley & Sons, Ltd.     

Net entry behaviour in Greek manufacturing: consumer, intermediate and capital goods industries

This research explores the nature and causes of net entry of firms in three groups of Greek manufacturing industries–consumer, intermediate and capital goods. The research questions whether or not the determinants of net entry rates across sectors are different. Econometric analyses reveal that, indeed, there are significant differences in the determinants of net entry rates across industry groups, but also there is strong within-group correlation across sectors.     

Knowledge capital and the private rate of return to R&D in Japanese manufacturing industries

This paper examines the relationship between R&D investment and the rate of increase of labor productivity in Japanese manufacturing industries, and derives the rate of return to such investment through a Cobb-Douglas production function which explicitly includes knowledge capital stock. It is argued that the rate of return to R&D investment has been much higher than those of alternative investments but has declined in recent years as the dependence on imported technologies has been diminishing after the last half of the 1970's.     

Building social capital and human capital for internationalization: The role of network ties and knowledge resources

This study examines the inter-relationships between network ties as social capital and knowledge resources as human capital, in the internationalization of law firms. Using a qualitative case study methodology, this study is based on primary data collected from Australian law firms and corporate client organizations, and compares and contrasts the views of lawyers and clients on building social and human capital. Our study finds that the relative importance of strong ties diminishes as professional services globalize and weak ties become viewed as more prominent for successful internationalization. The main findings indicate three different sets of inter-relationships between social and human capital: complementary, supplementary and compensatory. We discuss the complementary and supplementary effects of strong and weak ties and three different types of knowledge resources (technical, market and client-specific knowledge). We also argue that knowledge resources of technical and market knowledge can compensate network ties in the internationalization of firms. Examining social and human capital between law firms and clients provides important theoretical and practical insights into understanding the internationalization of professional service firms.     

Technological and non-technological innovations,performance and propensity to innovate across industries: The case of an emerging economy

Innovation in a firm may be non-technological, such as organizational and marketing innovation, and technological, such as product and process innovation. The aim of this article is to explore how different types of innovation affect the innovation development of the firm across industries. We chose Chile as an emerging market context. Our results show that only product innovations affect significantly innovation performance across industries. However, different types of propensities to innovate are affected differently by technological and non-technological innovations. We discuss implications for managers and policy makers in emerging economies, in which data tends to be scarce to develop new policy models and increase the effect of non-technological innovation on innovative performance.     

Structural vs. relational embeddedness: social capital and managerial performance

This paper examines the impact of managers' social capital on managerial performance. Two dimensions of social capital are compared—the structural embeddedness (i.e., configuration) of a manager's network of work relations and the relational embeddedness (i.e., quality) of those relations. Based on a sample of 120 product and sales managers in a Fortune 100 pharmaceutical firm, this paper presents evidence indicating that both elements of social capital influence managerial performance, although in distinct ways: structural embeddedness plays a stronger role in explaining more routine, execution‐oriented tasks (managerial sales performance), whereas relational embeddedness plays a stronger role in explaining new, innovation‐oriented tasks (managerial performance in product and process innovation). This research considers resource exchanges within firms as key to value creating behaviors and contributes a deeper understanding of how social capital influences productive resource exchanges. Copyright © 2005 John Wiley & Sons, Ltd.     

ICT capital and labour productivity growth: A non-parametric analysis of 14 OECD countries

This paper uses a new set of country data for 14 countries, members of the OECD, and a non-parametric approach to provide new evidence on the impact of Information and Communication Technology (ICT) on labour productivity growth between 1995 and 2005. For the first time, in the present paper a bootstrap approach for the decomposition of labour productivity change, proposed by Kumar and Russell (2002), is employed. This approach permits to conduct statistical inference on the parameters of interest, and to analyse the effects of ICT technologies on capital accumulation. The results confirm the role of ICT as a general purpose technology that needs organisational and business process changes to fully exploit its growth opportunities. The paper also finds out, by applying a non-parametric test, that ICT technologies positively contribute to the generation of convergence clubs in the evolution of labour productivity. Finally, the empirical evidence offers some basic guidance for future policy intervention in supporting ICT capital investments.     

Social tie, social capital, and social behavior: Toward an integrative model of informal exchange

What is the unique nature of social capital that differentiates itself from other forms of capital? How should we conceptualize and operationalize social capital? What are the major drivers and outcomes of social capital? To address the three questions, I apply the duality lens—the perspective of regarding each entity as a paradox consisting of two contrasting yet interdependent components—to social capital for an integrative model of informal exchange. The focus of this paper is on the duality relationship between the content variables (social tie, social capital, social behavior along two basic dimensions: trust for tie strength and option for network structure) and the process variables (antecedent, content, process, and consequence) toward a geocentric framework of formal–informal exchange. I intend to make two contributions. First, the conceptualization and operationalization of social capital is developed from the duality lens of formal–informal exchange so as to identify the unique nature of social capital as an informal entity. Second, a holistic, dynamic, and dialectic model of social capital is provided to explore the causal links between various elements related to social capital.     

Governance and social media in African countries: An empirical investigation

This study assesses linkages between social media and governance dynamics in 49 African countries for the year 2012. The empirical evidence is based on ordinary least squares and quantile regressions. Ten bundled and unbundled governance dynamics are used, notably: (i) political governance (entailing “voice & accountability” and political stability/no violence); (ii) economic governance (involving regulation quality and government effectiveness); (iii) institutional governance (comprising the rule of law and corruption-control) and (iv) general governance (entailing political, economic and institutional governance). Social media is measured with Facebook penetration. The findings show that Facebook penetration is positively associated with governance dynamics and these positive nexuses differ in terms of significance and magnitude of significance throughout the conditional distribution of the governance dynamics.     

Executive succession: The importance of social capital in CEO appointments

Research Summary: Firm performance and corporate governance have been shown to influence CEO selection, but our understanding of the role of social capital is more limited. In this study, we seek to provide further insight into the role of social capital by examining the influence of both “bonding” and “bridging” forms of social capital on CEO appointments. We find that candidates who have relational social capital, in terms of overlap with the CEO in organizational tenure, board tenure, and CEO tenure are more likely to be appointed as CEO. We also find that candidates who have external linkages to the CEO in the form of geographic, prestigious university, and prior employment affiliations are more likely to be appointed CEO. Managerial Summary: The appointment of a new CEO has significant and widespread implications for the firm’s future strategic direction and performance, the relationship between the board and CEO, and perceptions by investors, employees, and other key stakeholders. Our study finds that candidates who have shared connections and experiences with the CEO in terms of geographic, prestigious university, or prior employment affiliations as well as overlap in terms of organizational tenure, board tenure, and CEO tenure are more likely to be appointed CEO. Given the enormous impact that executive appointments have on the strategic direction and performance of the company, it is important to recognize that social factors such as shared experiences and connections influence how candidates are perceived, and thus, may affect appointment decisions.     

Promoting innovation through the accumulation of intellectual capital, social capital, and entrepreneurial orientation

This study attempts to explore how a firm's operational mode can reinforce the advantages of intellectual capital on innovation. Specifically, the main purpose of this study is to develop a comprehensive research model to integrate the interrelationships among social capital, entrepreneurial orientation, intellectual capital, and innovation. In addition to identifying the influences of intellectual capital on innovation, this study focuses in particular on the mediating effect of intellectual capital and the moderating effects of social capital and entrepreneurial orientation on innovation, which have largely been neglected in previous literature. The results support the mediating role of intellectual capital and the moderating roles of entrepreneurial orientation and social capital on innovation. Specifically, firms that have higher levels of social capital and entrepreneurial orientation tend to amplify the effects of intellectual capital on innovation.     

Stepping across for social approval: Ties to independent foundations' boards after financial restatement

Research Summary: Integrating research on independent philanthropy and organizational misconduct, we argue that affiliations with independent foundations provide social approval benefits for firms that restate their financials. We use a panel of S&P 500 companies from 2004 to 2011 to investigate the addition of foundation board ties by restating firms. CEOs of restating firms add more new foundation board ties than CEOs of non‐restating firms, while existing corporate philanthropy and greater corporate reputation diminish this effect. We also find that new ties to foundations boards influences media tenor for restating firms more than it does for non‐restating peers. Our study offers a nuanced analysis of the post‐crisis actions of restating firms relative to non‐restating peers and highlights the relevance of ties to nonprofit boards for corporate governance. Managerial Summary: Firms oftentimes fire their top executives in the aftermath of misconduct, but such response is itself disruptive for the firm's operations. Instead, we suggest that forging ties to independent foundations can help firms in such contexts without unsettling effects. Our results show that, after a restatement event, CEOs of misconduct firms are especially likely to join new foundation boards as trustees and thus seem to be aware of the benefits of these associations. CEOs from firms with existing in‐house philanthropy or a high reputation do not join as many new foundations' boards of trustees. We also find that new firm‐foundation links are promptly and positively evaluated by the media, thus helping misconduct firms regain social approval.     

Management and ownership effects: evidence from five countries

Despite the growing recognition in the corporate governance literature that the relationship between ownership concentration and profitability is context dependent, this issue has not yet been subjected to direct empirical investigation using a single cross-national sample. This study empirically examines the ownership concentration–performance relationship across the nations of Canada, France, Germany, the United Kingdom, and the United States. Essentially, we argue that the correlation (if any) between ownership concentration and firm profitability differs across countries in a systematic way determined by the national system of corporate governance. Results indicate that important and statistically significant differences do in fact exist across the countries studied. © 1998 John Wiley & Sons, Ltd.     

Dynamic capabilities,social capital,and rent appropriation: ties that split pies

Who reaps the fruits of a dynamic capability? We argue that while social capital is essential for the acquisition, integration, and release of resources at the core of a dynamic capability, actors can also use social capital for personal gain. Thus, social capital may be a key to understanding both rent generation and rent appropriation. Even when causal ambiguity obscures individual contributions, they may use their social capital to establish credible claims on the rent. Specifically, employees who occupy structural holes, span organizational boundaries, or who are highly central may be most able to appropriate rent because their social capital grants credibility to their claims. Rent that is appropriated in this way may be unobservable in performance measures that fail to distinguish normal compensation from rent. We contribute by identifying the specific role of social capital in a dynamic capability and linking social capital to rent appropriation patterns. Copyright © 2003 John Wiley & Sons, Ltd.