Knowledge management and innovation strategy in the Asia Pacific: Toward an institution-based view

The emergence of knowledge-intensive society has changed the nature of business competition. Knowledge management becomes an important managerial task and formulating a sound innovation strategy is an integral part of strategic management. Adopting an institution-based view, this article argues that the institutional environment in the Asia Pacific region plays a multi-faceted role behind firms’ knowledge management and innovation strategy. Specifically, institutions impose rules for legitimacy, serve as a source of knowledge, and allocate incentives and resources for innovation. We believe that future research drawing on the institution-based view has significant potential to advance our understanding of knowledge management and innovation strategy in Asia Pacific firms.

Venture capital in China: Past,present, and future

This article reviews the literature on venture capital in China and examines where China’s venture capital industry has been and where it is likely to go in the future. Since the 1980s, venture capital in China has grown steadily alongside the robust national economy. The future is likely to offer even greater opportunities, as entrepreneurs are encouraged and property rights improve. However, there will also be a period of transition as the market continues to mature and as new legal structures and commercial arrangements emerge. Venture capital in China has many interesting differences from that in Western countries. The venture capital industry is shaped by the institutional context and China is no exception to this. This article also examines some specific differences between the system in China and that of the United States. Future prospects for venture capital are also appraised as China continues its transition to a market economy.

Real options and MNE strategies in Asia Pacific

Asia Pacific offers a lot of promising growth opportunities, but it also presents high levels of uncertainty for multinational enterprises (MNEs). In this paper, we introduce real options theory as a theory of investment under uncertainty, and we discuss its implications for MNEs and their strategies with a focus on the emerging economies in Asia Pacific. We suggest that MNEs must recognize the various sources of uncertainty, as well as the various options embedded in their investments, and real options theory can help them structure and design their investments to benefit from uncertainty. In particular, MNEs need to develop the dynamic capabilities of managing real options in their investments to respond to the evolving economic and institutional environment in the region. This paper also provides several implications for policy makers in Asia Pacific to stimulate investment activities in the region and to help their firms venture successfully in the international market place.

Change and continuity in Japanese corporate governance

Previous studies on Japanese corporate governance were largely based on the agency theory framework, and can be seen as attempts to understand the unique monitoring mechanisms in the Japanese context. This paper briefly reviews prior research and then discusses the recent changes in the environment that have been affecting Japanese corporate governance. Our central argument is that there is both change and continuity in Japanese Corporate Governance. We also present emerging research from an institutional theory perspective. In this line of research, corporate governance is treated as part of a nation’s institutional framework and hence, researchers need to understand unique institutional arrangements that affect corporate governance practices and their change or continuity.

Japanese horizontal keiretsu and the performance implications of membership

Our study investigates the effect of Japanese horizontal keiretsu group membership on firm risk and return. Like prior studies, our results show that horizontal keiretsu membership has a negative effect on firm profitability. However, we find that horizontal keiretsu networks are likely to increase the gap between targeted and realized returns, which we call the outcome–aspiration gap. Moreover, in contrast to prior studies, our results indicate that keiretsu membership does not enable member firms to reduce risks by smoothing profitability. Instead, our findings provide evidence that is counter to the conventional notion that Japanese horizontal keiretsu allows their member firms to trade off profits for reduced risk.

The impact of state shares on corporate innovation strategy and performance in China

This paper examines the impact of state shares on corporate innovation strategy and performance in the People’s Republic of China (PRC). Through an investigation of 541 publicly traded companies in five high-tech industries during the period between 2000 and 2005, we find that the presence of state shares have a positive effect on the corporate choice of a process innovation strategy over a product innovation one. However, this relationship is moderated by the overall ownership concentration ratio. Moreover, our findings suggest that companies with large state shares prefer to conduct innovations independently rather than collaboratively with others, and they usually achieve better innovation performance. These findings indicate that the government play a role as both an investor and a resource allocation coordinator and therefore complicate the relationship between ownership structure and corporate innovation activities.

Venture capital in China: A view from Europe

This article provides commentary on the analysis of venture capital in China by Ahlstrom, Bruton, and Yeh (Venture capital in China: Past, present, and future. Asia Pacific Journal of Management, 2007). The article considers issues relating to the scope of venture capital and private equity, the nature of venture capital and private equity organizations, the life-cycle process of VC investing, internationalization, and foreign venture capital firms. The paper identifies areas for future research and compares the Chinese VC context with those in Western Europe and Central and Eastern Europe.

Does Asian management research need more self-confidence? Reflections from Russia

This commentary on Klaus Meyer’s article, “Asian Management Research Needs More Self-confidence,” in the Asia Pacific Journal of Management (2006), discusses the need for Asian management research to look beyond the pressures for publication in top-tier, Western scholarly academic journals. We reflect on our nearly two decades of research on Russian management to illustrate many of Meyer’s ideas and insights in a different transition economy. We support his call for more context-specific research that can also offer contributions to global management knowledge as well as indigenous management practice.

Adoption of professional management in Chinese family business: A multilevel analysis of impetuses and impediments

Building upon the market, institutional, and cultural perspectives, this paper identifies the major impetuses and impediments that affect the professionalization of Chinese family business at the environment, firm, and owner levels. Our integrative framework projects that whether a family business owner will adopt professional managers is largely determined by the relative strength of impetus factors and impediment factors. We then discuss the possible governance choices under different configuration of impetuses and impediments. This theoretical framework is expected to help set the momentum for further conceptual exploration and empirical study in this area.

Extending the “P” perspective: An institutional account of management research in Australia

In commenting Meyer’s article “Asian management research needs more self-confidence” in APJM (2006), Yang and Terjesen (Asia Pacific Journal of Management, 24(4):497–507, 2007) described ground realities in Australia that may have inhibited the development of a robust management research community. As an Australia-trained and Australia-based Asian management scholar, I extend the “P” perspective by exploring how the formal and informal institutions interact in shaping Australia-based scholars’ publication strategies and research performance. Reflecting on my experience in Australia, I argue that like in any other businesses, institutions matter in our business of research and publication. They matter because they can shape the local “rule of the game” within which a country’s or a region’s scholars conduct and publish their research. A full institutional account of the current state of management research in the Asia Pacific region requires a deeper understanding of both formal and informal local institutions. From such an institutional perspective, this commentary concentrates on why Australian management research lags behind that in the US and Europe and yet leads the Asia Pacific region.

Asia’s national innovation systems: Institutional adaptability and rigidity in the face of global innovation challenges

This paper explores several features of, and changes in, innovation capacity in Asia. The growth of technology-based industries has been a critically important element of Asian industrial development and has required extensive institutional support for the diffusion of innovation and technological learning. As a number of Asian countries reach the global technological frontier they need to develop new capabilities for creating “radical” innovations in order to sustain their international competitiveness. Using the analytical frameworks of national innovation systems and varieties of capitalism, the paper reviews some systemic and environmental factors encouraging and constraining these developments. By referring to illustrative case studies of institutional evolution within Taiwan’s national innovation system and technological entrepreneurship in Korea, the paper argues that whilst there are major developments in models of innovation support, emulating those found in liberal market economies, enduring cultural legacies can remain influential. It highlights the central importance of social as well as economic institutional adaptation. Some management and policy implications of this attribute are considered, and a future research agenda is proposed.

The adolescence of Asia management research: <Emphasis Type="Italic">APJM</Emphasis>, 1997–2006

In this article we reflect on the adolescent years of Asia management research published in the Asia Pacific Journal of Management (APJM) by reviewing work published in the past 10 years (1997–2006). We report that during the last decade, APJM has published 223 research articles, written by 373 different authors, who are affiliated with 203 different institutions. Our discussion of the future of Asia management research is guided by Kuhn’s (Kuhn, T. S. The structure of scientific revolutions. Chicago: University of Chicago Press, 1962) perspective on the nonlinear progression of science. We argue that as a growing community, Asia management research is finding its “identity” and establishing its presence in the larger worldwide management research community. Following our analysis, we conclude that the growth of Asia management research—as captured by APJM publications—throughout its “adolescent” years has set forth a challenging and exciting path for the future. All authors contributed equally. We thank Mike Peng (Editor-in-Chief) for his encouragement and advice. This work was completed when Yu-Shan Su was a Fulbright visiting scholar at the University of Texas at Dallas (UTD). She thanks the Fulbright Association and the Taiwanese Ministry of Education for partially funding this work.

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Research rankings of Asia Pacific business schools: Global versus local knowledge strategies

Despite the increasing recognition of the importance of the research mission of universities, no previous work has investigated the research productivity and research strategies of Asia Pacific business schools. This article fills this important gap by conducting the first study to rank the publication productivity of 130 Asia Pacific business schools. Drawing on data from the UTD Top 100 Business School Research Rankings™ and several additional sources, we rank Asia Pacific business schools’ research productivity in three areas: (1) twenty-four leading business journals, (2) seven top management journals, and (3) five Asia Pacific management journals. We also extend this analysis by documenting the distinct publishing strategies of various Asia Pacific business schools—global, local, or both.

China’s business network structure during institutional transitions

This study adopted a structural approach to examine the formation and characteristics of Chinese business networks via interlocking directorates during a stage in China’s institutional transitions. Analyses of the network structures of 949 listed companies revealed that: (1) Chinese business networks were smaller in scale and lower in density than their Western counterparts; (2) no nationwide network with a dominant center existed; (3) interlock occurred mainly in the form of smaller business groups which tended to be regionally fragmented; (4) ties were more prevalent among industrial peers than with financial institutions; and (5) government ownership was predominant. These findings therefore deepen our understanding about the pattern and extent of business interlock in China. Not only do these findings provide substantive implications to the notion and dimensionality of guanxi, but they also offer inspiration to managers and policy makers by illuminating key characteristics of network structure. Laying these foundations shall pave the way for future research in the structure of Chinese business networks.

Economic upgrading in a state-coordinated,liberal market economy

Well-established research into different models of capitalism has not been applied well to developing countries. Changing global conditions, institutional differences, and path-dependent histories have forced late developing countries to create models of their own. By and large, however, these models have been less than successful in fostering economic development through technological upgrading. A comparison of skills upgrading in several fast-growing economies in Southeast Asia suggests that perhaps there is a new “State Coordinated, Liberal Market Economy” developmental model that can successfully lead to upgrading-driven economic development. This model combines elements from the Developmental State, Coordinated Market, and Liberal Market Economy models while differing significantly from each.

The regional character of Asian multinational enterprises

In recent issues of this Journal a debate has raged concerning the appropriate nature of academic research in the Asia Pacific region. While we support the desire for both rigor and regional relevance in this research, we wish to demonstrate a strong commonality between the performance of large Asian firms and others from Europe and North America. This prompts us to question the need for a new theory of the MNE based on the experience of Asian firms. Like their counterparts elsewhere, the large Asian firms mostly operate on an intra-regional basis. While in the literature it has been assumed that the path to success for Asian firms is globalization, we show that the data supporting this is confined to a handful of unrepresentative case studies. We also present a bibliometric analysis which shows an overwhelming case study sample selection bias in academic studies towards this small number of unrepresentative cases.

Opportunities and challenges for academic returnees in China

A growing number of Western-educated management PhD graduates are starting their academic career in Chinese business schools. While opportunities are abundant for these returnees, they also face the choice between developing internationally transferable assets and building locally embedded competences. Some possible solutions are discussed, at both personal and institutional levels.

Indian business groups: Evolution and transformation

Business groups are an important constituent of many emerging economies. In this paper, we focus on the evolution and transformation of Indian business groups (IBGs) over two economic eras — pre-reform era (pre 1991) and reform era (post 1991). To this end, we analyze IBG behavior during these periods, and explain the implications of such behavior on IBG value creation. Our conceptualization of IBG dynamics utilizes the perspectives of product relatedness and institutional relatedness, and undertakes a broad review of the extant literature.

Arbitrary decisions in ranking studies: A commentary on Xu, Yalcinkaya, and Seggie (2008)

This commentary evaluates the problems associated with creating rankings of individuals and institutions in International Business. It argues that the many—potentially arbitrary—decisions involved make the creation of rankings a hazardous affair. I would like to thank the APJM Editor-in-Chief Mike Peng for inviting me to write this commentary, Shichun Xu, Goksel Yalcinkaya and Steven Seggie for providing me with the impetus to articulate some concerns that have been growing in my mind in the past years, and David Griffith for kindly responding to my email when I raised some of the concerns in this commentary. For a full discussion of the broader issue of academics rankings and evaluation, see “Everyone can be a winner: The sense and nonsense of academic rankings” [pending publication].

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Competitive dynamics research: An insider’s odyssey

This paper introduces competitive dynamics research, a body of work that has emerged in the strategic management field over the last two decades. I will focus on my scholarly pursuit—both the substance and the process—during the early years of my faculty career. I will use my twelve core publications written during this period to outline the entire research program, highlight the makeup of each of the four sub-streams of the program, and show how these streams are linked. I will also share my personal learning in the process of building this research program. The paper aims to convey some firsthand experience for researchers and scholars, especially those starting in their careers and international scholars who are interested in publishing in major U.S.-based journals, so they can construct their own research programs and cope with the manifold process challenges in research and publishing.