High-growth firms and innovation: an empirical analysis for Spanish firms

This paper analyses the effect of R&D investment on firm growth. We use an extensive sample of Spanish manufacturing and service firms. The database comprises diverse waves of Spanish Community Innovation Survey and covers the period 2004–2008. First, a probit model corrected for sample selection analyses the role of innovation on the probability of being a high-growth firm (HGF). Second, a quantile regression technique is applied to explore the determinants of firm growth. Our database shows that a small number of firms experience fast growth rates in terms of sales or employees. Our results reveal that R&D investments positively affect the probability of becoming a HGF. However, differences appear between manufacturing and service firms. Finally, when we study the impact of R&D investment on firm growth, quantile estimations show that internal R&D presents a significant positive impact for the upper quantiles, while external R&D shows a significant positive impact up to the median.     

Charismatic leadership in IT firms in Taiwan: an empirical study

This study aims to look at charismatic leadership and management innovation in a sample of Information Technology firms in Taiwan. The literature on such leadership was examined because it reveals how leaders serve as key agents who stimulate others with their vision of the potential of an innovation. Theoretically, we suggest that charismatic leadership behaviour can help management innovation but only when certain conditions are met. Empirically, we find that charismatic leaders must create a higher level of trust in their subordinates at all levels of the organizational hierarchy, based on common perceptions of the firm as a trustworthy entity.     

Operations flexibility and outsourcing benefits: an empirical study in service firms

Outsourcing is a widely extended practice for many industries competing at the global level. Through outsourcing, firms are able to clearly define their core field of activities while transferring non-core activities to organizations enabled to perform them with higher degrees of efficiency. However, outsourcing is not exempted from some risks, especially those derived from process coordination, information sharing, or oportunistic behaviours. Operations flexibility can play a fundamental role in moderating these risks while increasing the benefits from outsourcing by decreasing the level of dependence on the outsourced activities. In this paper, a structural analysis is performed to analyse the relationship between operations flexibility and outsourcing benefits in service firms. Results show that higher levels of flexibility in the informations systems, markets, expansion, and personnel dimensions are directly related to higher outsourcing benefits.     

Bootstrapping in small firms: An empirical analysis of change over time

While bootstrapping is widely utilized as a strategic practice of small firms and has been regarded in the entrepreneurship literature as an important topic of study, little has been done to link bootstrapping to organizational theory. This paper presents hypotheses and an empirical study regarding bootstrapping and organizational development for small firms. The results of the study indicate that different types of bootstrapping are utilized at different periods in the life of a small firm, and that the methods utilized coincide to some extent with organizational theory predictions.     

Strategic alliances by venture capital backed firms: an empirical examination

A growing body of literature examines the formation of strategic alliances as an important value-added role provided by venture capital firms. This paper contributes to this literature by examining two related questions: whether venture capital firms use strategic alliances as a substitute or compliment to capital infusion, and how venture capital firms use alliances to mitigate different types of risk. Results from 2505 venture-backed startups reveal that venture capital firms treat alliance formation as a substitute for capital infusion and that the breadth of the network of syndication partners investing in the startup increases the number of its strategic alliances. We also find intentionality in alliance formation. Specifically, firms operating in industry environments characterized by technical risk are more likely to form alliances with partners capable of mitigating technical risks, and firms operating in environments characterized by market risk are more likely to form alliances with partners capable of mitigating market risk. Our findings lend additional support to the perspective that alliances represent an important mechanism through which venture capital firms add value to their portfolio companies.     

Survival of new firms in the Brazilian franchising segment: an empirical study

This paper investigates the survival patterns of Brazilian franchising firms for the period 1994–1999. First, we considered the (percentage) survival of newly created franchisors in the following years. Survival functions were obtained by means of the Kaplan–Meier estimator for the selected sectors and they indicated sharp declines in the survival rates over time but with differential patterns across sectors. Finally, an econometric analysis based on the Cox proportional hazard model considered the explanatory variables pertaining to size, age and support regarding the legal aspects, location choice and training. The evidence indicates that the supports provided by the franchisor have a positive impact on the probability of survival of new firms, whereas there is partial evidence favoring a positive effect of firm size on survival.     

Cash holdings and corporate governance in family-controlled firms

This study examines the association between corporate governance and cash policy within family-controlled firms. Family businesses are complex, because, in addition to dealing with common business requirements and opportunities, they must consider the needs and desires of the family owners. The results of this study show that the impact of corporate governance, with its separation of control rights and cash flow rights, director-ownership-in-pledge ratio and proportion of independent directors on cash policy, differs between family-controlled and nonfamily-controlled firms. Separation of seat control rights and cash flow rights, as well as chair duality, significantly affects the cash policy within different levels of cash holdings in firms.     

Cash management and revitalization of public medical centres in Nigeria: a strategic analysis

In times like this, when Nigeria (like many other developing countries) is bracing up to the contemporary challenges posed by adoption and advancement of globally driven millennium development goals (MDGs), public medical centers (PMCs) cannot afford to be reckoned with financial epilepsy, bankruptcy, and degeneracy. This concern informed the thrust of the study. In the process, pertinent research questions were posed which elicited corresponding hypothetical propositions. With primary data volunteered by 150 administrative officials drawn from PMCs across the country, analytical proceedings were facilitated by the application of chi-square (x2) technique. The findings brought to the fore, the general bad shape of cash management in PMCs in the country. The recommendations for urgent attention underscored the constitution of strategic budget communities (SBCs), revitalization of internal audit committees (IACs), and attraction of goodwill private-sector endowments through convincing justification of the utilization and optimization of current government logistic subventions.     

Ecological consumer behaviour: an empirical analysis

Increasingly, consumers choose ecological products when they do the shopping, not only because it is a healthier option but also because it helps to sustain the environment for future generations. They are prepared to switch products for ecological reasons and stop buying products from companies that cause pollution. Firms and other economic institutions are aware of the importance of reflecting these attitudes towards the environment in developing their products. This paper is focused on environmental attitudes as meaningful predictor of ecological behaviour. A three‐dimensional approach to this variable has been developed, which addresses its emotional, cognitive and conative components. A random sample survey of 573 individuals was used to verify the conceptual model and framework. This model was assessed initially by principal factor analysis and subsequently, by structural equation modelling. Findings of this study showed that environmental attitudes have a significant effect on ecological behaviour. This research improves our understanding of how consumers feel and what attitudes best define their way of behaving in relation to environmental problems.     

The role of the science park in innovation performance of start-up firms: an empirical analysis of Tsinghua Science Park in Beijing

This study empirically analyses the determinants of start-up firms in the Tsinghua Science Park in Beijing using survey data. More than 50% of firms are software and Internet related with CEOs has a strong technological background. It is found that firms that have their internal innovations grounded in their own competitive advantage show better innovation performance, while formal research and development collaboration with Tsinghua University plays only a marginal role. However, they benefit from informal connections with faculty members and access to students. Human resource management services by the Science Park management company are highly appreciated by tenant businesses. Finally, networking activities among tenants are found to be weak.     

The evolution of Italian subcontracting firms: empirical evidence

Using new empirical data, this paper analyses the degree of asymmetry in the relationships between 61 subcontractors and their first, second and third most important customers. The evolution of these firms' relationships with other subcontractors is also analysed. The need to meet increasingly demanding quality standards drives the customers to establish a selection/collaboration-based relationship with subcontractors. This results in a stratification of the subcontracting relationship and in more varied and closer customer-subcontractor relationships. This phenomenon is taking place at a faster rate in high-tech industries. Two examples are presented — the aircraft and the automobile industry — which show a correlation between the industry's structural characteristics and the evolution of subcontracting relationships.     

Culture,employee work outcomes and performance: An empirical analysis of Indian software firms

Through a survey of Indian software organizations, we test a model of work-oriented cognitions and performance measures using structural equation modeling. The developed framework presents satisfaction at work, productivity at work, and quality of work as consequences of organizational culture. Further, satisfaction and productivity at work and quality of work are hypothesized as leading to firm profitability and growth while quality of work is presented as a contributor to organizational innovation. The results of the study provide support for the developed model and lead to a number of conclusions and implications for theory and practice.     

Gender differences in entrepreneurship and intrapreneurship: an empirical analysis

This study examines the gender gap in start-up activities to determine whether it is family status or employment status that is responsible for the observed gender gap. We consider independent entrepreneurship and intrapreneurship as two different start-up modes: While intrapreneurship is conducted within an established organization, independent entrepreneurship is solely an independent activity. This study focuses on this fundamental distinction to identify the parameters of our empirical model. Using nationally representative US data, we find that the effects of being a part-time worker on the likelihood of becoming an independent entrepreneur differ across genders. The obtained results suggest similar findings for intrapreneurship, but in opposite directions. Furthermore, our decomposition results suggest that for both entrepreneurship and intrapreneurship, the gender differences in the employment-related variables are more significant than those in the family-related variables in affecting the observed gender gap negatively (for entrepreneurship) or positively (for intrapreneurship).     

Geography,knowledge spillovers and small firms’ exports: an empirical examination for The Netherlands

This study examines the impact of external and internal scale economies on the decision to start exporting and the level of exports of innovating firms. Based on new trade theory, increasing returns to scale—both internal and external scale economies—are considered an important source of comparative and competitive advantage. The empirical analysis of (small) innovating firms in The Netherlands leads to two main findings. First, firms that are located in technical Marshallian clusters seem less inclined to become exporters. Availability of technical knowledge alone does not help to reduce entry costs that come with the decision to export and/or marketing and sales costs in order to achieve a higher export performance. Second, firms that experience difficulties in appropriating innovation rents due to labour poaching also seem to be less inclined to become exporters. The explanation for this second finding is the importance of outgoing knowledge spillovers, which is particularly relevant for small, product innovating firms. This reduces their probability to export. However, if firms export, the knowledge leaking argument is not valid for the export performance of the firm.     

Dynamic capabilities and new product development in high technology ventures: An empirical analysis of new biotechnology firms

In industries populated by entrepreneurial high technology firms, the rapid development of new products is viewed as a key determinant of success. Developing a portfolio of new products is necessary to gain early cash flows, external visibility and legitimacy, early market share, and increase the likelihood of survival (Schoonhoven, Eisenhardt, and Lymman 1990). In addition, recent research has shown that new product development improves a firm's ability to raise money through an initial public offering (Deeds, DeCarolis, and Coombs 1997).This paper develops a model of new product development which is tested on a sample of 94 pharmaceutical biotechnology companies. We hypothesize that new product development capabilities are a function of a firm's scientific, technological, and managerial skills. To test this relationship, we develop several firm specific measures in an attempt to triangulate in on the core construct of firm specific new product development capabilities.Some important implications for entrepreneurs/managers of high technology firms flow from our results. First, entrepreneur/managers need to view the choice of geographic location as an important strategic decision which will impact their firm's access to the skilled technical personnel and the streams of knowledge. Our results indicate that a choice location has a significant concentration of similar firms, but the level has not yet reached a point where competition for resources in the local environment offsets any advantages of the location. In the case of biotechnology, this would seem to indicate that the prime locations would be expanding areas such as San Diego, Seattle, and Philadelphia rather then the established locations of Silicon Valley and Boston.Second, as scientific knowledge plays an ever more important role in a firm's success the quality of the firm's scientific team is a critical ingredient in a firm's new product development capability. But how do you evaluate the quality of scientific personnel? Our results indicate that there is a strong positive relationship between the impact—as measured by citations—of a team's prior research in the academic community and the productivity of that team in a commercial research laboratory. Therefore, the judgement of a scientific field, captured by citations or perhaps expert judgement, should prove to be a useful tool when evaluating personnel for a firm's research team.Third, the results from our measures of CEO experience and the percentage of the top management team with a Ph.D. are interesting. As expected the prior experience of CEO in managing a commercial research facility enhances a firm's new product development capabilities. However, results for our top management team variable appears to indicate that the over reliance on technical personnel in the management of the organization detracts from the product development process. Taken together these results seem to imply that it is important that the leadership of the organization have knowledge of and experience in managing the new product development process, but that diverting the firm's scientific personnel's energies away from the laboratory and into the management of the organization maybe counter-productive. Therefore, what a high technology venture appears to need is leadership that understands and has experience in the new product development process, but which is separate and distinct from the scientific team. This type of leadership keeps the scientific team focused on research and development, and out of the boardroom.     

Alignment of strategy and structure in international firms: An empirical examination

It is increasingly recognized that many multinationals face dual global and local pressures. Foreign subsidiaries are thus expected to exhibit different needs in terms of their internal integration or responsiveness to local needs. This study examines the internal alignment of strategy and structure in multinationals when such dual pressures are recognized. The findings show a lower than expected level of internal strategy–structure alignment. A number of post hoc interviews suggest that contrary to the discussion of differences across foreign subsidiaries’ external environments, dual global and local pressures are frequently experienced within the same foreign subsidiary. The balancing act of aligning strategy and structure in MNCs is thus more complex than existing theoretical frameworks predict. Multinationals may choose to prioritize selective structural characteristics to achieve sufficient levels of both integration and responsiveness.     

Regional public research, higher education, and innovative start-ups: an empirical investigation

Based on detailed information about the regional knowledge base, particularly about universities, we find that regional public research and education have a strong positive impact on new business formation in innovative industries but not in industries classified as non-innovative. Measures for the presence and size of public academic institutions have more of an effect on the formation of innovative new businesses than indicators that reflect the quality of these institutions. We find relatively weak evidence for interregional spillovers of these effects. Our results clearly demonstrate the importance of localized knowledge and, especially, of public research for the emergence of innovative new businesses.     

The role of entrepreneurial orientation in service firms: empirical evidence from Austria

Entrepreneurial behaviour is becoming increasingly important for all firms, regardless of size, age, or industry sector. It is increasingly seen as one of the most important drivers for economic growth and corporate success. Nevertheless, no empirical research has so far concentrated on the role of entrepreneurial behaviour in service firms, although the service sector has become the most important (and the only growing) industry sector. This article therefore investigates the relationship between entrepreneurial orientation (EO) and corporate performance on the basis of an empirical survey of 310 service firms in Austria. Here, a significant positive relationship between EO and corporate performance could be identified, with a clear emphasis on innovative behaviour as the most important sub-dimension.     

An empirical evaluation of conflict in MNC matrix structure firms

According to existing theory, MNCs with matrix structures are supposed to have more intra-organizational conflict than non-matrix firms. The present study uses a sample of 82 German MNCs to evaluate and reject this general hypothesis. Only MNCs with a product division by geographical region matrix structure support the hypothesis. Other types of matrix structure which contain a functional division dimension tend to have levels of intra-organizational conflict similar to elementary structures. The paper develops and proposes new logic and two propositions that explain which types of matrix structure lead to greater conflict and which do not. As more MNCs consider using matrix structures to implement increasingly complex strategies, a better understanding of conflict in matrix MNCs is important.     

Manual dishwashing habits: an empirical analysis of UK consumers

This study presents an overview of the washing up behaviour of consumers in the UK. Peoples' individual attitudes were observed as were the amount of water and energy used, the time taken and the cleaning performance. Additionally, manual dishwashing was compared with the use of automatic dishwashers. Participants were recruited to represent all geographic regions of the UK as well as forming a representative cross‐section of the population. Each of the 150 participants washed a full load of soiled tableware based on the standard EN 50242 ‘Electric Dishwashers for Household Use – Methods for Measuring the Performance’. For comparison, the best selling dishwasher in the UK in 2007 was tested under the same conditions as those in the consumer trial. Additionally, consumers who owned a full‐size dishwasher were asked to load it to the point when they decided that the dishwasher was full. The study shows that these consumers, on average, used 49 l of water and 1.7 kWh of energy, whereas the dishwasher used 13 l of water and 1.3 kWh of energy on average for the same amount of dishes under the conditions tested. Statistical analysis showed that these differences are significant. The dishes washed by hand were found to be slightly less clean than dishes washed in a dishwasher. For washing a full dishwasher load by hand, the participants needed, on average, 60 min, while they only took 9 min on average to load and unload the same amount of dishes in a dishwasher. The average participants were able to fill almost the full load into the dishwasher (96% of the items as used in a test following EN 50242).