The performance effect of network and managerial capabilities of entrepreneurial firms

Building on the organizational capabilities view, this study explores the impact of network and managerial capabilities on the performance of entrepreneurial firms in the architecture and real estate sector. We apply an extended organizational capabilities model by integrating Porter’s value chain model and Grant’s hierarchy of organizational capabilities. Starting from differences in entrepreneurial orientation between architecture and real estate development firms, we argue that under higher environmental uncertainty, network capabilities are more important for the performance of architecture firms whereas managerial capabilities are more important for the performance of real estate development firms. Employing data from Austria, Germany, and Switzerland, the research results support the hypotheses. This study integrates Porter’s value chain concept and the organizational capabilities model and delivers a contribution to the organizational capability theory. In addition, it contributes to the entrepreneurship literature by showing that network capabilities are more important for creating competitive advantage in entrepreneurial firms than in other firms.     

The impact of organizational pressures on environmental performance of firms

The role of various organizational pressures in influencing performance of firms has been an interesting research topic in a variety of fields and has received the attention of researchers working in the field of environmental strategy. Although there are previous studies that have looked at the influence of various pressures in influencing firms’ environmental strategies, our study provides a more holistic analysis considering a variety of such pressures in a single framework. We discuss a research study to analyze how pressures from internal and external stakeholders of a firm, economic pressures, environmental regulations, and pressures of environmental compliance have affected environmental performance of firms using data collected from manufacturing firms in the United Kingdom. We have found that internal stakeholders provide the greatest impact in shaping environmental performance of firms, closely followed by economic pressures, environmental regulations, and external stakeholders in that order. Fears of penalties due to environmental compliance have the least impact, although this pressure also has a positive and significant impact on environmental performance.     

The influence of people on the performance of IPO firms

Until the mid-1990s, the study of initial public offerings (IPOs) fell mainly under the purview of the finance literature. Within the last 10 years, however, management and entrepreneurship scholars have delved more into this subject area, as well. This article summarizes research examining IPO firms that has appeared in management and entrepreneurship journals, highlighting in particular the influence of individuals (namely executives and boards of directors) on IPO firm outcomes.     

Export performance of emerging market firms

I investigate the export performance of firms from emerging economies based on resource based view (RBV) of a firm. Based on review of extant literature, I identify firm size, research and development expenditure, advertising expenditure and business group affiliation to be important antecedents of level of exporting activities of a firm. I utilize a two-stage least square estimation (G2SLS) on a sample of 47,140 firm-year observations over a period of sixteen years from 1990–2005. The findings suggest that export sales and domestic sales are interdependent and affect each other. R&D expenditure and business group affiliation positively affect export sales, however advertising expenditure negatively affects export sales.     

The impact of FDI on the performance and entrepreneurship of domestic firms

This paper examines how foreign direct investments influence the performance and entrepreneurship of domestic firms, a crucial question for economies driven by incursion of exogenous factors and especially transition economies. The intent is to investigate the way foreign direct investments shape the capabilities of domestic firms; hence, for this purpose, we take Macedonia, a Southeast European economy, as a case study. We find that (i) foreign ownership has helped restructure and enhance the productivity of domestic firms, (ii) FDI has positive influence in reinforcing the creation of new firms, and (iii) in line with the established literature, a foreign investment is likely to influence the job seeker to get employed rather to start their own business. Overall, the results confirm the influence of foreign firms in assisting entrepreneurial activity. The impact of foreign investment is, in general, positive and tends to influence the restructuring process of domestic enterprises.     

The effect of clusters on the survival and performance of new firms

This paper contributes to the literatures on entrepreneurship and economic geography by investigating the effects of clusters on the survival and performance of new entrepreneurial firms where clusters are defined as regional agglomerations of related industries. We analyze firm-level data for all 4,397 Swedish firms started in the telecom and consumer electronics, financial services, information technology, medical equipment, and pharmaceuticals and pharmaceutical sectors from 1993 to 2002. We find that that firms located in strong clusters create more jobs, higher tax payments, and higher wages to employees. These effects are consistent for absolute agglomeration measures (firm or employee counts), but weaker for relative agglomeration measures (location quotients). The strengths of the effects are found to vary depending on which geographical aggregation level is chosen for the agglomeration measure.     

Top management teams and the performance of entrepreneurial firms

This article examines why some entrepreneurial firms succeed while others do not. The focal explanation is top management teams, including several studies that address when and how top management teams are likely to influence entrepreneurial firm performance. There are several insights. First, large and diverse teams with a history of working together are more likely to succeed. This effect is particularly large when they launch in growth markets. Second, teams are effective in making strategic decisions when they are fast, highly conflictual, and still get along. Third, they are also effective when they rely on “simple rules” heuristics to perform significant activities like new product development and internationalization that nonetheless happens often. A further insight is that these “simple rules” can become the strategy of their firms. Fourth, more effective teams continuously organize the structures of their firms at the “edge of chaos”. Overall, top management teams emerge as central to the success (or lack thereof) of entrepreneurial firms.     

Analyzing determinants of value creation in domestic and cross border acquisitions in India

The present study seeks to assess the acquiring company announcement gains, and determinants thereof, in domestic and cross border acquisitions in India. For this purpose, 268 acquisitions comprising of 202 cross border acquisitions and 66 domestic acquisitions constitute the sample set. Standard event study methodology has been employed for computing the announcement returns. Further, regression analysis has been conducted to assess the sources of wealth gains in domestic and cross border acquisition. The results of event study indicate that cross border acquisitions have created significantly higher wealth gains than the domestic ones. Further, the results of regression analysis highlight that cross border acquisitions, pursued by the acquiring companies in technology intensive sector, for the target companies also in technology intensive sector, create superior wealth gains. The reason being, such cross border acquisitions provide an opportunity to the acquiring company to combine and judiciously utilize intangible resources of both the companies on a broader scale across new geographies. Thus, the study contributes to the existing literature on internalization theory by extending it to an emerging market like India.     

The overestimated role of strategic orientations for international performance in smaller firms

This article examines how market orientation (MO) and entrepreneurial orientation (EO) relate to international performance in small firms. Empirically, the article draws on survey data from 188 Swedish SMEs. Results show that strategic orientations have a very limited influence on international performance in these firms. Proactiveness and, to some extent, a market orientation proved positively associated with international performance, while innovativeness and risk taking show no such relationship. Our findings highlight the problems associated with using “traditional” MO and EO constructs in an SME setting and point to the need of developing more appropriate constructs tailored to this context. We also note that the MO construct was developed from a “causal view” of marketing, while successful small international firms rely more on effectuation logic. The article also contributes to the debate between the two dominant perspectives that address firms’ early internationalization processes: the process theory of internationalization and the international new venture perspective, where our results are in favor of the latter.

Factors affecting the performance of entrepreneurial service firms

In the current climate, the importance of the role played by entrepreneurship as a palpable reality that enables economic growth at a macroeconomic level, and as a factor that favours the progress of companies at a microeconomic level, has made it the subject of continual analyses from many different perspectives and in a variety of contexts by researchers from around the world. In this study, Spanish entrepreneurial firms in the service sector are analysed in order to determine the factors that influence their performance.     

The export performance of emerging economy firms: The influence of firm capabilities and institutional environments

We advance a two-stage theoretical model which contends that the export performance of emerging economy firms (EEFs) will depend both upon their firm-specific capabilities and their home institutional environments. Specifically, we argue that EEFs will be more likely to export when facing more uncertainty at home from greater political instability, substantial informal competition, and high corruption. Furthermore, we hypothesize that firms’ export intensities will be contingent upon specialized internal capabilities such as a skilled workforce, top managerial experience, and access to external technologies. We test these hypotheses using a dataset of more than 16,000 firms from the four BRIC economies (i.e., Brazil, Russia, China and India). Our results confirm that political instability and informal competition have robust effects on the export propensity of EEFs, whilst export intensity is contingent upon the availability of skilled workers and access to external technologies via licensing.     

Born global firms: The differences between their short- and long-term performance drivers

Globalization has triggered the emergence of a new breed of firms called “Born Globals” (BGs), firms that become international soon after inception. Unlike previous research, the present study distinguishes between BGs’ short- and long-term performance and argues that different drivers affect each type of performance. Data from 107 Israeli BGs shows that their short-term performance is impacted mostly by environmental (external) factors. In contrast, over the long run, internal factors become more crucial to BGs’ survival and success. These time-based differences have important theoretical and practical implications.     

Management factors affecting the performance of technology firms

This paper analyzes high-technology firms within the European Union to determine the factors that influence performance through business productivity. The study examines six different factors that are representative of entrepreneurial activity, firstly from a purely business standpoint, and subsequently from the areas of production and technology, human resources, strategy and marketing and, lastly, the economic-financial area. Results indicate a direct relation between productivity and factors such as private borrowing, dynamism or using price as a strategic factor, while the reverse is true for concepts such as family resources, level of investment in R&D or training programs.     

Internationalization and performance: A contextual analysis of Indian firms

This paper explores the nature of the relationship between a firm's internationalization and performance (I–P) and provides interesting evidence on the moderating role of the firm's characteristics on this relationship. First, the paper investigates two modes of internationalization by firms: exports and foreign direct investment (FDI). The study anticipates the I–P relationship to be different for these two modes owing to the differences associated with market-seeking and strategic asset/resource-seeking motivations among internationalizing Indian firms. Drawing on these differing motivations, the study theorizes a positive linear I–P relationship with export intensity and a negative linear I–P relationship with FDI activity and finds strong support for the latter. Second, the study argues for the contextual nature of the I–P relationship and attempts to integrate the role of organizational characteristics such as business group affiliation, firm size, and firm age in influencing the I–P relationship. The study finds that business group affiliation and firm age positively moderate the I–P relationships, which signifies deeper institutional, resource-based, and legitimizing effects. These results are indicative of the need for greater mid-range theorizing to forge a more robust understanding of the role various organizational characteristics play in influencing the I–P relationship.     

The impact of diversity of innovation channels on innovation performance in service firms

This study empirically analyzes the impact of the diversity of three channel types (the information search, technology acquisition, and collaboration channels) on four types of innovation (service, process, organization, and marketing) performance using data from a sample of service firms of the Korean innovation survey. The results of this study indicate that innovative service firms tend to rely heavily on the diversity of information search channels for all four types of innovation performance, while their reliance on the diversity of the technology acquisition channel and collaboration channel is considerably low. The results contribute to a deeper understanding of channel management strategies for better service performance.     

Innovation investment,competitiveness, and performance in industrial firms

Intangible assets and research and development (R&D) expenditure are essential instruments in a firm's competitive productivity and profitability strategy. The relationship between productivity, tangible and intangible investments, and R&D expenditure has given rise to much analysis concerning the importance of the role played by intangible investment in the achievement of higher competitiveness. Using the Spanish database of the Fundación Empresa Pública‐Ministerio Industria (FUNEP) for the period 1991–2001, with an average of 1,800 firms per year taken from 20 industries and classified in six sectoral groups, we compare the possible relationship of the former variables with firms' profitability and productivity. The empirical results obtained show the importance of tangible investments and unit labor costs for achieving high productivity levels. R&D expenditure and intangible capital are shown to be complementary variables of the aforementioned aspects that have a delayed effect on the productivity and profitability of Spanish industries. The relevance of the prior variables differs according to whether we are referring to industrial sectors characterized by important economies of scale, intensive in capital or labor. © 2006 Wiley Periodicals, Inc.     

Guanxi,political connections and resource acquisition in Chinese publicly listed private sector firms

In this study, we examined the role of guanxi as entrepreneurs’ resource-obtaining mechanism in private sector firms, using a data-set of 184 publicly listed firms in China. We found that guanxi indeed played a positive role that helped private sector firms gain easier access to resources. We also found that guanxi exerted even a greater positive effect on private sector firms’ resource obtaining compared to entrepreneurs’ political participation, due to being the lifeblood of business conduct and social interaction in Chinese culture.     

Export performance of small firms from small countries: The case of New Zealand

Drawing on traditional models of multinational expansion and organisational learning, Brouthers et al. (J Int Mark 17:21–38, 2009) prescribe that in some circumstances, small firms exporting from small countries should concentrate their exports into a single overseas market. These particular circumstances pertain to small Greek and Caribbean exporters in mature low-technology industries. This research extends this 2009 study to the same size group of small firms in another small country, New Zealand. Model estimation involved multiple regression methods on survey data from 249 small New Zealand exporters. Contrasting with Brouthers et al.’s advice, this study finds that small New Zealand exporters should not concentrate their exports into one or a few overseas markets. Success for these small firms stemmed from higher rates of R&D expenditure and multi-market exporting through company-owned channels in distant markets. These differences reflect the different environments and sample characteristics between the two studies. The paper contextualises further the evidence base on the strategies that small firm owner-managers should pursue and policy makers should promote.     

Alliances and the innovation performance of corporate and public research spin-off firms

We explore the innovation performance benefits of alliances for spin-off firms, in particular spin-offs either from other firms or from public research organizations. During the early years of the emerging combinatorial chemistry industry, the industry on which our empirical analysis focuses, spin-offs engaged in alliances with large and established partners, partners of similar type and size, and with public research organizations, often for different reasons. We seek to understand to what extent alliances of spin-offs with other firms (either large- or small- and medium-sized firms) affected their innovation performance and also how this performance may have been affected by their corporate or public research background. We find evidence that in general alliances of spin-offs with other firms, in particular alliances with large firms, increased their innovation performance. Corporate spin-offs that formed alliances with other firms outperformed public research spin-offs with such alliances. This suggests that, in terms of their innovation performance, corporate spin-offs that engaged in alliances with other firms seemed to have benefitted from their prior corporate background. Interestingly, it turns out that the negative impact of alliances on the innovation performance of public research spin-offs was largely affected by their alliances with small- and medium-sized firms.     

Nature of the relationship between international expansion and performance: The case of emerging market firms

Internationally expanding companies would like to see how they compare with rivals in terms of the effect of internationalization on financial performance (for their sector and their firm). Virtually all such studies have focused on advanced nations. This study, on internationalization of firms based in an emerging economy (India), provides a unique research setting and sheds additional light on this relationship. It tests for the shape of the internationalization–performance curve for emerging market firms, and investigates differences between service firms and manufacturers in the threshold effect between the initial and later stages of internationalization. We find a U-shaped curve depicting the internationalization–performance relationship of Indian firms. Service sector firms tend to gain the positive benefits of internationalization sooner than manufacturing companies.