Knowledge sharing,knowledge leaking and relative innovation performance: An empirical study

External knowledge sharing and knowledge leakage often pose a strategic dilemma when firms conduct innovation activities. In this study, we focus on the positive and negative effects of this phenomenon. In particular, we empirically examine the effects of a firm׳s external knowledge sharing on its relative innovation performance under the contingencies of accidental and intentional leakage of business-critical knowledge. Results based on a survey of 150 Finnish technology-intensive firms show that external knowledge sharing has a positive effect on innovation performance, but high levels of accidental and intentional knowledge leakage by a firm׳s employees negatively moderate this relationship. These results contribute to the understanding of the potentially positive and negative issues related to external knowledge sharing and knowledge leakage, which have thus far remained empirically under-researched.     

Successful eco‐innovators: Exploring the association between open inbound knowledge strategies and the performance of eco‐innovative firms

The main purpose of this paper is to analyse the association between open inbound knowledge strategies and the performance of eco‐innovative firms in the food and beverage industry. We propose a mixed framework based on the eco‐innovation literature and the open innovation approach. We consider the characteristics in a traditional sector based upon a resource‐based perspective. Three types of firms are distinguished in terms of their sales growth in the Spanish food industry from the least to the most successful eco‐innovators. Using multinomial logistic regression models, it is shown that the diversity of collaborators (breadth of external sources of knowledge) and joint adoption of product and process eco‐innovations are positively associated with the probability of achieving high sales growth. Moreover, we find an inverted U‐shaped relationship between the breadth of the external search and firm performance, but only for the group of the most successful firms. Moreover, operational flexibility, knowledge‐based capabilities and company size are also positively related to the group of successful eco‐innovators.     

The moderating effects of knowledge characteristics of firms on the financial value of innovative technology products

The development of innovative technology products is both costly and risky, and their economic value is highly uncertain. Based on a sample of 312 innovative technology products introduced between 1987 and 2006 in the U.S. and a long-horizon event study with control firms, we study the impact of innovative technology products on the long-term financial performance of a firm. In particular, we examine how the knowledge characteristics of the firm, which embrace its knowledge absorptive capacity, knowledge impact, and knowledge diversity, moderate such an impact. We find that on average an innovative technology product increases the firm's return on assets (ROA) (relative to control firms) by 2.18% in the second year after product introduction. However, the value of an innovative technology product varies with the knowledge characteristics of the firm that invented it. We find that the financial impact of technology products is stronger when firms have higher knowledge absorptive capacity, and more impactful and less diversified knowledge (as measured by patents). We classify firms into three categories based on their knowledge characteristics. We find that firms with a high knowledge fit increase their ROA by 4.55% after product introduction, while those with a low knowledge fit receive no benefit from the innovative technology products at all.     

Green technology innovation: Anatomy of exploration processes from a learning perspective

This paper examines how established firms use their core competences to diversify their business by exploring and ultimately developing green technologies. In contrast to start‐ups dedicated to a green mission, diversifying into green markets by developing new products based on existing core competences has proven to be challenging. This is because the exploration processes to find a match between green technology opportunities and internal competences is complex and new to most established firms. This paper gains insights into exploration processes for green technologies and the learning modes and outcomes linked to these processes. We examined exploration processes at the microlevel in an embedded case study of an engineering firm using a combination of the “fireworks” innovation process model and organizational learning theory. First, we found that developing green technologies involves a long‐term exploratory process without guarantee of (quick) success and likely involves many exploration failures. Second, as exploration unfolds along multiple technology trajectories, learning occurs in individual exploration paths (on‐path), when new paths are pursued (path‐initiation), and when knowledge from one path is spilled over to subsequent paths (across‐paths). Third, to increase their chances for success, firms can increase the efficiency of exploration by fostering a failure‐friendly organizational culture, deliberately experimenting, and purposefully learning from failures.     

A tale of two clusters: knowledge and emergence

Cluster emergence is an important topic but weakly conceptualized in the literature. Focusing on the interaction of the local knowledge pool and firm growth, the paper develops a comprehensive framework to understand cluster emergence. In the framework, the cluster formation process starts with the collision of local and external knowledge which generates an innovation and stimulates the creation of local pioneering firms in a new field. To support the growth of follow-up entrants in the new industry, the local knowledge pool needs to be expanded and deepened through local knowledge sharing and external knowledge inflows. The enlarged local knowledge pool enables local firms to grow and explore other fields further. To promote cluster emergence, public policies need to facilitate the interaction of the local knowledge pool and firm growth. The paper illustrates the interactive framework with two aluminum extrusion clusters in China that emerged in different ways over different time periods.     

The relationship between knowledge search strategies and absorptive capacity: A deeper look

The present study analyzes how the breadth and depth of search strategies affect the dimensions of a firm's absorptive capacity: exploration, transformation and exploitation. Results of an analysis of a sample of 467 Spanish manufacturing firms reveal that openness of external knowledge search contributes to firms' exploratory, transformative and exploitative learning processes in different ways. In particular, a strong curvilinear effect of external knowledge search breadth on exploratory and exploitative learning was found. It is also important to establish deep relationships with external agents to achieve transformative and exploitative learning up to a certain point after which relationships become negative. Interestingly, for a firm to develop explorative learning, it is not important to establish deep relationships. And for a firm to develop transformative learning it is not important to establish broad relationships. Some suggestions for managers and future lines of research are provided.     

Green innovation and knowledge: The role of size

This paper reports research on relationship between firm's knowledge sourcing strategy and green innovation. The data are taken from Spanish Technological Innovation Panel survey during 2007–2011. The study contributed to the literature by focusing on the moderating role of firm size on the relationship between knowledge sources and green innovations. Results from over 5,000 firms indicate a shift in the focus from internal knowledge to external knowledge when developing green innovations as firms grow in size. Despite benefits from broad knowledge search on green innovations, the relationship has an inverted U shape. The diminishing returns of knowledge breadth on green innovations are present for smaller firms and disappearing as firms get larger. Government policies promoting more coordination and knowledge complementarity between private and public sector will help to influence more knowledge transfer, ensuring a more sustainable and green economy.     

The more funding the better? The moderating role of knowledge stock on the effects of different government-funded research projects on firm innovation in Chinese cultural and creative industries

Based on prior research, this study attempts to examine how effectively government-funded research projects (GFPs) can facilitate firm innovation in the cultural and creative industry (CCI), as well as the internal organizational contingency associated with the effects of GFPs. Specifically, this paper differentiates two types of GFP -- central-government-funded projects (CGFPs) and local-government-funded research projects (LGFPs) -- and explore how effectively the two types of GFP affect two types of firm innovation, i.e., radical innovation and incremental innovation. Based on an empirical study of the panel data of Chinese innovative firms related to the CCI, this paper finds that CGFPs have an inverted U-shaped effect on both firms’ radical innovation and incremental innovation in the CCI, while LGFPs have an inverted U-shaped effect on firms’ incremental innovation, but they have no significant effects on firms’ radical innovation. The effects of both CGFPs and LGFPs are moderated by firms’ knowledge stock.     

The innovation decision: An economic analysis

Studies of the determinants and effects of innovation commonly make an assumption about the way in which firms make the decision to innovate, but rarely test this assumption. Using a panel of Irish manufacturing firms we test the performance of two alternative models of the innovation decision, and find that a two-stage model (the firm decides whether to innovate, then whether to perform product only, process only or both) outperforms a one-stage, simultaneous model. We also find that external knowledge sourcing affects the innovation decision and the type of innovation undertaken in a way not previously recognised in the literature.     

How does knowledge depth moderate the performance of internal and external knowledge sourcing strategies?

Management literature has consistently shown that knowledge is the most important source of competitive advantage for a firm. However, it is still not clear how knowledge can lead to competitive advantage, and how firms can find strategies to leverage their knowledge bases. This study considers the strategic implications of knowledge depth and three knowledge-sourcing strategies: R&D, strategic alliances and acquisitions. The main and interaction effects of these factors were tested in the context of the US technology firms. The results confirmed the strategic role of knowledge and external leveraging strategies. We also found that technology firms with weak knowledge depth should focus on internal R&D to accumulate knowledge in core technology areas, while those with strong knowledge depth should lower internal R&D intensity and shift their strategic resources to inter-firm alliances and acquisitions.     

Vertical integration and innovative performance: The effects of external knowledge sourcing modes

We set out in this study to analyze the impact of vertical integration on the innovative performance of a firm and to explore the interaction between vertical integration and different modes of external knowledge sourcing. Our empirical results reveal an initial increase in the effect of vertical integration on innovative performance up to a certain level of integration, although this is subsequently followed by a decline; that is, the relationship is characterized by an inverted U-shape. The results further reveal that external knowledge sourcing is positively related to the innovative performance of a firm, albeit with a negative interaction with the level of vertical integration. In other words, firms with higher levels of vertical integration may be faced with barriers to the acquisition of external knowledge. Our findings suggest that firms should be cautious in their pursuit of a strategy of vertical integration, given the non-monotonic impact on innovative performance, whilst an increase in the level of vertical integration is also likely to diminish the effectiveness of the external knowledge sourcing.     

Agglomeration in an innovative and differentiated industry with heterogeneous knowledge spillovers

This paper introduces an agent-based simulation model to study the technological development, the economic performance of firms and the evolution of agglomerations in a differentiated industry. The analysis is based on the interaction and behavior of firms, which might share knowledge but at the same time are competitors on the goods markets. Firms do not only compete with quantities they can also introduce process and product innovations. The level of knowledge of a firm describes the capabilities to perform innovations. Knowledge can be accumulated by investing in R&D and by knowledge spillover, which depend on geographical and technological proximity. Simulation runs show that there is an incentive to agglomerate in young industries and that geographical proximity enhances innovation, especially the number of product innovations.      

Learning from the alien: knowledge relationships with temporary workers in network contexts

This paper contributes to our understanding of the role of temporary workers in learning for innovation in network contexts. The strategy literature advocates that the knowledge and talent of workers is vital to competitive success yet at the same time temporary workers are becoming more prevalent, making relationships with workers more ephemeral. These shifting competitive and employment contexts make insights into learning from, and with, contractual nomads paramount. The setting is the UK television industry, where such workers are dominant. Internationally, creative industries are a prime site of networks where temporary workers are brought together for specific projects. In the television industry, a range of knowledge attachment employee relationships have been developed by firms to ‘contain’ and sustain worker contributions in terms of knowledge and talent. These relationships are identified as freelance, regular contract, golden handcuffs and invest in knowledge firm. This paper highlights the learning implications both positive and negative arising from these different ways of relating to temporary workers thereby extending our understanding of employee relationships built on mutuality.     

Are Related‐Party Sales Value‐Adding or Value‐Destroying? Evidence from China

Prior literature provides mixed and relatively little evidence on the economic consequences of related‐party transactions. We examine a hitherto underexplored issue of whether transactions among firms within the same business group increase or reduce firm value. Using a large sample of Chinese listed firms, we find that related‐party sales increase firm value. However, this value enhancement disappears for firms with (i) large percentage of parent directors, (ii) high government ownership, or (iii) tax avoidance incentives that often couple with management's rent extraction activities. Although we find that intragroup sales improve firm value in general, we also find that corporate insiders use intragroup sales to deprive value from minority shareholders. Overall, our findings highlight the interplay between ownership structure and tax avoidance incentives in determining the economic consequences of related‐party transactions.     

Entrepreneurship and knowledge spillovers from the public sector

A compelling body of research has found that investments in knowledge from other firms and universities spill over to enhance the performance of entrepreneurial firms. This literature has shown that firm performance is positively related to investments in new knowledge by other firms and research universities. This paper addresses a gap in the literature by positing that public sector knowledge is also conducive to enhancing performance by knowledge intensive entrepreneurial (KIE) firms. Our findings suggest that the public sector provides a fertile source of knowledge for enhancing KIE firm performance.

     

When does inward technology licensing facilitate firms' NPD performance? A contingency perspective

Many firms find inward technology licensing (ITL), as a means to access external technological knowledge, an effective and relatively inexpensive way for new product development (NPD). However, although the literature has suggested some advantages and disadvantages of ITL with respect to NPD, the relationship between ITL and licensee firms' subsequent NPD performance has not yet been found convincingly evident. Sharing with many other likeminded scholars and practitioners, we believe that the dynamics between external knowledge, internal capability, external environment, and firm performance should be investigated through a contingency perspective. Thus, this study posits that a firm's propensity to develop new products through ITL is contingent upon two categories of contingency factors that are internal and external to firms. Using a dataset containing information about Chinese firms' licensing activities, we find support for our hypotheses: the positive relationship between ITL and NPD performance of a licensee firm is moderated by firms' absolute and relative absorptive capacity and the knowledge endowment in the region where the licensee firm operates.     

Enhancing green product and process innovation: Towards an integrative framework of knowledge acquisition and environmental investment

Despite the increasing interest in green innovation literature, little is known on how and under what conditions firms' knowledge transfer activities affect green innovation. There is lack of research that on how particular organizational capabilities are seen more useful and how it influences on green innovation performance. To address this research gap, we examine a mediation model in which we explore whether a firm's knowledge acquisition capability and investment in environmental management mediate the impact of buyer-driven knowledge transfer activities on green product innovation and green process innovation. On the basis of an analysis of a sample of 239 manufacturing firms, we find that buyer-driven knowledge activities have a greater positive impact on green product innovation than green process innovation. Investment in environmental management fully mediates the relationship between buyer-driven knowledge transfer activities and green process innovation, and knowledge acquisition capability partially mediates the relationship between buyer-driven knowledge transfer activities and green product innovation. The current study provides evidence that internal competencies and the role of buyers in knowledge transfer are critical for explaining the green product innovation and green process innovation. Our results suggest that buyer involvement pushes firms to develop resource acquisition capability to enhance green product innovation. Our results also highlight the importance of investment in environmental management for overcoming the environmental challenges in the manufacturing firms.     

Outbound open innovation in bio-pharmaceutical out-licensing

Our study investigates the outbound open innovation of firms engaged in technological venturing. Leveraging insights from the sociology theory and innovation literatures, we clarify whether social status helps entrepreneurial ventures overcome market imperfection and information asymmetry in out-licensing and illustrate the importance of specific aspects of social status building in this context. We also examine the effect of failure experiences on out-licensing. We take a dynamic view of desorptive capacity by studying an entrepreneurial venture’s learning process, both internally, in terms of its own technology trajectory, and externally, through inter-organizational alliances. We apply a negative binomial model to our novel panel of 180 firms studied over an 18-year period with controls for stocks of clinical development activities, patenting and prior licensing activities. Empirical analysis enables us to observe the impact which the firms’ technological and development status, reputation and desorptive capacity exert upon out-licensing volume. Prior outbound open innovation studies do not account for the heterogeneity of technology and R&D success and failure experiences observed in our study. We also demonstrate the contingency effect of external learning from alliances during the building-up of a firm’s desorptive capacity, or the way in which the number of co-authoring partners in scientific publications negatively moderates the positive effect of the number of commercial alliances on the volume of its out-licensing deals. Our findings contribute to the understanding of external knowledge exploitation and complement important aspects of the literatures on outbound open innovation and desorptive capacity, offering empirically rich insights for bio-pharmaceutical firms into the drivers behind volumes of out-licensing deals.     

Environmental and Firm Level Influences on Inter‐Organizational Trust and SME Performance

We investigate the effects of focal firm knowledge intensity and uncertainty on inter‐organizational trust and subsequent performance of small and medium size enterprises (SMEs). We integrate the trust literature with transaction cost literature as both of these offer partial explanations of the dynamics of inter‐organizational trust in the context of an SME. We propose that knowledge intensity of the focal firm will have a positive relationship while uncertainty will have a negative relationship with inter‐organizational trust in an exchange relationship. Further, we propose a positive relationship between trust and SME performance, which will be contingent on the level of external and internal uncertainty faced by the focal firm. Empirical evidence, based on the survey data of 565 German SMEs, mostly supports our arguments.     

Learning capabilities,human resource management innovation and competitive advantage

The growing literature on innovation pays limited attention to the role of human resource management (HRM) innovation in creating competitive advantage. This paper adopts a knowledge-based approach to examine how firms design and implement HRM innovations (HRMIs) and how such innovations support competitive advantage. Drawing from multiple streams of literature and qualitative evidence from Australian manufacturing and service firms, our findings reveal that human resource (HR) functional-level learning capabilities, through which HR professionals build and nurture new knowledge configurations, facilitate the design and implementation of HRMIs. The findings also reveal that HRMIs, when coupled with top management support, can play a vital role in firm competitive advantage. Addressing the limitations of the term radical innovations to fully capture HRMIs and based on our findings and extant literature we propose a new classification that will capture the unique nature of HRMIs. In addition to contributing to theory, our paper provides valuable insights to practitioners for building and nurturing learning capabilities for HRMI-related competitive advantage.