Technology and Export Decision

Taiwan has played an important role in international trade in the world and its manufacturing industries are dominantly composed of SMEs, yet little is known about the export decision of Taiwanese SMEs, especially the role of technology. This paper aims to explore the role of technology on the export decision of Taiwanese SMEs. In addition, whether there are differences in the determinants of the export decision for different groups of SMEs classified by size is also discussed. The empirical results show that the technological capability embodied in firms, measured by R&D, technology import, and training investment, do increase the probability of exporting. There does exist some variations in the determinants of exports between SMEs of different sizes. The impact of R&D is significantly positive on export propensity in all SMEs, while the role of technology imports and training investment are evidenced for only small firms, implying that external technological sources and other R&D-related activities are particularly important on the formation of technological capability for small firms.     

The Two Faces of R&D: Does Firm Absorptive Capacity Matter?

This paper examines the dual effect of firm R&D efforts on productivity growth for Swedish manufacturing firms. The R&D efforts do not only stimulate innovation but also enhance firms?? ability to identify, assimilate and exploit new knowledge from the environment (Cohen and Levinthal. Economics Journal 99:569?C596, 1989). In this paper, we assume that the principal channel of transmission of new knowledge is through I/O linkages. Our econometric evidence suggests that in addition to the firm??s own R&D activities, R&D spillovers embodied in traded goods within the industry, others imported from abroad, and technology spillovers transferred from the technological frontier within an industry are important determinants of firms?? productivity growth. Results suggest that domestic R&D spillovers following the I/O links between industries are of minor importance in this respect. We also analyze whether firms?? absorptive capacity matters for productivity growth. Analyzing absorptive capacity is particularly important for assessing the effective contribution of spillovers from other firms. The effect of a firm??s absorptive capacity is found to interact positively with imported R&D spillovers, whereas domestic rents spillovers seem to play a minor role for productivity growth.     

The Effect of R&;D Intensity on Corporate Social Responsibility

This study examines the impact that research and development (R&D) intensity has on corporate social responsibility (CSR). We base our research on the resource-based view (RBV) theory, which contributes to our analysis of R&D intensity and CSR because this perspective explicitly recognizes the importance of intangible resources. Both R&D and CSR activities can create assets that provide firms with competitive advantage. Furthermore, the employment of such activities can improve the welfare of the community and satisfy stakeholder expectations, which might vary according to their prevailing environment. As expressions of CSR and R&D vary throughout industries, we extend our research by analysing the impact that R&D intensity has on CSR across both manufacturing and non-manufacturing industries. Our results show that R&D intensity positively affects CSR and that this relationship is significant in manufacturing industries, while a non-significant result was obtained in non-manufacturing industries.     

Internal Versus External R&D: A Study of R&D Choice with Sample Selection

This paper extends previous analyses of the choice between internal and external R&D to consider the costs of internal R&D. The Heckman two-stage estimator is used to estimate the determinants of internal R&D unit cost (i.e. cost per product innovation) allowing for sample selection effects. Theory indicates that R&D unit cost will be influenced by scale issues and by the technological opportunities faced by the firm. Transaction costs encountered in research activities are allowed for and, in addition, consideration is given to issues of market structure which influence the choice of R&D mode without affecting the unit cost of internal or external R&D. The model is tested on data from a sample of over 500 UK manufacturing plants which have engaged in product innovation. The key determinants of R&D mode are the scale of plant and R&D input, and market structure conditions. In terms of the R&D cost equation, scale factors are again important and have a non-linear relationship with R&D unit cost. Specificities in physical and human capital also affect unit cost, but have no clear impact on the choice of R&D mode. There is no evidence of technological opportunity affecting either R&D cost or the internal/external decision.     

External technology acquisition and firm performance: A longitudinal study

External technology acquisition has been viewed as an important method used by firms to achieve higher economic returns. However, only a few studies have evaluated the contribution of external technology acquisition to firm performance. This lack of research is surprising because the benefits of external technology acquisition to innovation output have been emphasized extensively in the literature. This study therefore investigates the extent to which external technology acquisition effects a firm's performance, and how this effect is moderated by internal R&D efforts. This analysis concentrates on the electronics-manufacturing industry, taking advantage of the relative abundance of data on longitudinal investigation variables. A longitudinal sample allows this examination to control extraneous effects and to provide more convincing evidence for the relationship between external technology acquisition and firm performance. The analytical sample comprises a total of 341 Taiwanese electronics-manufacturing firms over the period from 1998 to 2002. The least square dummy variable analysis method reveals that external technology acquisition does not provide a significant contribution to firm performance per se; however, the positive impact of external technology acquisition on firm performance increases with the level of internal R&D efforts. Verifications for robustness and the split-sample analyses both validate the results in the setting of larger firms.     

Overcoming the double hurdles to investing in technology

Technological activities of small and medium-sized enterprises (SMEs) have received considerable attention from researchers and policy makers since the mid-1980s. Small firms could nurture entrepreneurship and facilitate the creation and application of new ideas. In spite of their potential in generating innovations, it is also observed that SMEs shy away from formal R&D activities, and the firm size itself seems to be a barrier for R&D activities. SMEs operating in developing countries face extra hurdles to investing in R&D. Given the massive share of SMEs, it becomes crucial to realize their developmental potential in developing countries. In this paper, we study the drivers of R&D activities in SMEs in Turkish manufacturing industries by using panel data at the establishment level for the 1993–2001 period. Our findings suggest that SMEs are less likely to conduct R&D, but if they overcome the first obstacle of conducting R&D, they spend proportionally more on R&D than the LSEs do. R&D intensity is higher in small than in large firms. Moreover, public R&D encourages firms to intensify their R&D efforts. The impact of R&D support is stronger for small firms.     

Determinants of R&D collaboration of service firms

This article examines the determinants of R&D collaboration of service firms. Different from manufacturing firms, we expect that types of innovation, public financing, innovation protection, purchase of external R&D, firm’s absorptive capacity, spillovers, and certain innovation barriers determine the firm’s decision to collaborate in R&D. Results indicate that firms that undertake R&D collaboration tend to undertake process innovation, receive public funding, can protect their innovations, and typically subcontract the development of their technologies. The article provides implications for theory and practice.     

Determinants of R&D cooperation in small and medium-sized enterprises

We investigate the determinants of research and development (R&D) cooperation in small and medium-sized enterprises (SMEs). Using firm-level data from the 2002 Korean Innovation Survey and applying a probit model with sample selection, we find that incoming spillovers of knowledge have a significant and positive impact on SMEs?? decisions to engage in R&D cooperation. In particular, the effect of knowledge spillovers on R&D cooperation is much larger for smaller firms. Despite the importance of external knowledge for SMEs, the estimation results suggest that SMEs may be at a disadvantage in establishing external R&D linkages because of their absolute size limitations.     

Path dependence and resource availability: Process of innovation activities in Chinese family and non-family firms

Employing a process-based perspective and using a generalized method of moments (GMM) procedure, this paper examines the difference in innovation activities between family firms and non-family firms in China. We find that the level of research and development (R&D) by family firms is dependent on prior R&D spending and more so relative to non-family firms. Next, we find that R&D investment by family firms is more likely to be motivated by the availability of both internal and external cash flows relative to non-family firms. Further analysis suggests that these findings are unlikely to be driven by firm maturity.     

Innovations in service business. An introduction to the special issue from the Global Entrepreneurship and Services Conference, Taiwan, 2011

Services tend to be intangible and not visible (Cherubini 2001), which make them very different from production-oriented industries. Hence, we need different approaches to solving problems in services. This special issue invites five papers from the 2011 Global Entrepreneurship and Services Conference held in Taichung, Taiwan, from August 29 to 31, 2011. These papers cover various industries including finance, manufacturing, and Internet. Meanwhile, these papers cover many CSFs for services including brand equity for financial services, customer satisfaction on an auction website, the effects of social networking, the servitization for manufacturers via R&D, and the comparisons of the internal service quality for three Chinese subcultures including Taiwan, China, and Singapore. All these papers contribute to innovations in service business from different perspectives.     

R&D Policy Involving Consumer-Friendly Strategy: Cooperative and Non-Cooperative R&D

In a highly globalized economy, foreign exporting firms have initiatives to be consumer friendly for many reasons. The aim of the present paper is to endogenize consumer-friendly actions by the exporting firms, and explore how government’s industrial policy and firm’s R&D investment are affected by the strategy of foreign exporting firms under cooperative and non-cooperative R&D commitments in an international rivalry market. It finds that consumer-friendly action is a dominant strategy equilibrium, and no matter whether under cooperative or non-cooperative R&D, a consumer-friendly firm tends to invest less than does the purely profit-maximizing firm on R&D under symmetrical decisions. In the case of firms cooperating in R&D and involving consumer-friendliness in action, their governments need not intervene. On the other hand, governments always subsidize non-cooperative R&D activities, or cooperative but unfriendly firms. Furthermore, the consumer-friendly action will result in more (less) R&D subsidies by the exporting government when both firms non-cooperate (cooperate) in R&D. Finally, it is robust to indicate that the government of an importing country prefers friendly foreign firms in any circumstances. Above all, the equilibrium outcomes explain the crucial role of consumer-friendly strategy for industrial policies and R&D activities.     

Determinants of Innovation

The study examines how firm size, market structure, profitability and growth influence innovative activity in small to medium sized Australian manufacturing businesses, using the recently released Confidentialised Unit Record File drawn from the Business Longitudinal Survey of the Australian Bureau of Statistics. Regression analysis is conducted to determine the factors that effect subsequent innovative activity for the full sample of businesses, as well as for sub-samples of firms from high and low-technological opportunity industries. Most variables, including size, R&D intensity, market structure and trade shares are found to be conducive to further innovative activity for the full sample and for high-tech firms. For low-tech industries, fewer variables are significant.     

Internal vs External Financing of R&D

The empirical evidence suggests that while small firms in United States, United Kingdom and Canada rely on internal funds for financing R&D, similar firms in Japan, Germany and France have access to bank loans. In this paper, we analyze the financial decisions of small firms willing to invest in R&D. We find that their high ratio of intangible assets, along with the high risk nature of their investments, can explain their inability to raise debt in external capital markets. We also show that financing R&D with bank loans might be feasible, especially, if banks are willing to monitor the investment activities of their clients.     

R&D spending,strategic position and firm performance

Based on R&D investment data from Chinese listed manufacturing firms, this paper examines the effect of R&D spending on firms’ future performance conditional on their strategic positions. We find that firms pursing a product differentiation strategy have more R&D spending than those with a cost leadership strategy. In addition, we document a positive effect of R&D spending on firms’ future performance if they adopt a product differentiation strategy. Meanwhile, for the firms that adopt a cost leadership strategy, the relationship between R&D spending and firm performance resembles an inversed U-shape. Furthermore, we find this inversed U-shape relationship only exists for non-state-owned firms. Overall, this paper provides guidance and useful suggestions on the efficient allocation of R&D resources for Chinese manufacturing firms.     

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.     

R&;D,Size and Firm Growth in Taiwan‘s Electronics Industry

This paper documents the relationship between R&D, firm size, and growth rate for a panel data of Taiwanese electronics firms. Using GMM method to control for endogeneity of R&D, the main finding is that an increase in R&D induces a higher growth rate and this impact is particularly higher for small firms. Testing Gibrat’s law shows that small firms indeed have a higher growth rate than their larger counterparts, while size is independent with firm growth in the group of large-sized firms, supporting the weak form of Gibrat’s law.     

Economic returns to industrial research

This paper investigates the relationship between R&D and corporate performance. The study extends previous research by examining the conditions under which firms benefit from R&D; by incorporating in the analysis the varying costs of R&D inputs; and by employing an opportunity-cost approach that estimates the monetary returns to R&D. The findings indicate that industrial research generates revenues that are significantly higher than the returns that other investments yield. The study also resolves previously conflicting results concerning firm size, and offers new insights on the role of technological opportunities that contradict past studies. Although the potential for innovation is greater in high-tech industries, intense R&D competition prevents technologically dynamic firms from enjoying high returns to R&D. By contrast, the results demonstrate that low-tech firms use R&D successfully as part of their strategies, implying that prior research underestimates the importance of R&D for these firms.     

Imported Intermediate Inputs,R&D,and Productivity at Firm Level: Evidence from Indian Manufacturing Industries

This article examines the effects of imported intermediary inputs and in-house research and development (R&D) on productivity growth, using firm-level data from Indian manufacturing industries for the period 2000–09. For this purpose, we adopted two empirical frameworks: production function and growth accounting method. The estimated results from the production function framework suggest that the impact of imported intermediary goods on output is reasonably sizable. The role of R&D activities under this framework is found to be insignificant. The analysis based on the growth accounting suggests that total factor productivity of firms is linked with import and R&D activities.     

R&D policies, trade and process innovation

We set up a simple trade model with two countries hosting one firm each. The firms invest in cost-reducing R&D, and each government may grant R&D subsidies to the domestic firm. We show that it is optimal for a government to provide higher R&D subsidies the lower the level of trade costs, even if the firms are independent monopolies. If firms produce imperfect substitutes, policy competition may become so fierce that only one of the firms survives. International policy harmonization eliminates policy competition and ensures a symmetric outcome. However, it is shown that harmonization is not necessarily welfare maximizing. The optimal coordinated policies may imply an asymmetric outcome with R&D subsidies to only one of the firms.     

Do Mature Firms Gain Higher Economic Value from R&D Investment?

Despite the significance of economic value indicators in the measurement of firm value, not much attention has been dedicated to how research and development (R&D) influences firms’ economic value. This study examines the relationship between R&D investments and firms’ economic value and considers the moderating role of age in the relationship using a dataset from manufacturing and information and technology firms in China. The results show that R&D investments impact firms’ economic value positively. This suggests that firms that invest in R&D are rewarded with a monopoly, which increases their market shares, thereby increasing economic value. Again, we find that older firms increase their economic value more than younger ones when they both invest in R&D. Thus, younger firms in China suffer from the liability of newness when they invest in R&D. It is recommended that these younger firms should strive to shorten the time to reap the returns from R&D investments.