Heterogeneous Firm‐Level Effects of Knowledge Exchanges on Product Innovation: Differences between Dynamic and Lagging Product Innovators*

Product innovation is the result of a constant interaction between the in‐house research and development (R&D) department and knowledge exchanges with the firm's environment. Knowledge exchanges come in different forms. They break down into information gathering applied in new product development, research cooperation on particular innovation projects, and managing information outflows allowing the consequent appropriation of the results of product innovation through specific methods. The way firms handle knowledge exchanges affects their performance. This paper looks at three related indicators of performance: (1) research intensity (a measure of innovative input); (2) the share of revenue realized through innovative product sales (a measure of innovative output); and (3) their impact on the growth in total revenue. The bulk of the econometric literature looking into these matters only allows general statistical statements on the behavior of an “average” firm. This paper takes on another view by using the quantile regression method to stress the heterogeneity of innovative firms in their dealing with knowledge exchange and the effect this has on their performance. A first key finding is that research intensity is positively influenced by knowledge externalities, research cooperation, and appropriability, and it is through this that these variables affect innovative revenue and also the growth in total revenue. By using quantile regression these relationships are further refined to screen for differences in behavior between dynamic and lagging innovators. This refinement indicates that, in the case of research intensity, the knowledge externalities gain in importance in the higher quantiles and are insignificant in the lower ones. Next, research cooperation remains important in all quantiles, but a higher significance is observed in the higher quantiles as well. Finally, appropriability is extremely important for the lower quantiles, but it becomes insignificant in the highest. These findings corroborate the assumptions made in the literature on open innovation: knowledge externalities and research collaboration are vital for those opening up their firm for new ideas and who are, at the same time, reluctant to protect their findings through specific appropriation measures. In the case of innovative revenue all variables on knowledge exchange operate through the research intensity irrespective of the quantile, although the impact of research intensity on this type of revenue is higher in the upper quantiles. As for the growth in revenue, the effect of the innovative revenue is, again, higher in the higher quantiles. This suggests that dynamic product innovators have the most efficient R&D process and the strongest growers are so, especially, because they are successful product innovators.     

Determinants of technological innovation in the small firms of Korea

This study identifies the factors determining technological innovations in the small firms in Korea. Two groups of 24 innovative and 25 noninnovative small firms are compared on four categories of variables: environmental, strategic, structural, and top management characteristics, which were found to be important determinants of technological innovation in prior research in developed countries. A multiple discriminant analysis reveals that two top managerial characteristics (risk-taking propensity and tolerance for ambiguity), environmental heterogeneity, environmental scanning strategy, and professionalization of organizational structure are the most significant factors discriminating innovative from noninnovative small firms in Korea. The findings suggest that predominant determinants of technological innovation vary according to the types of organization and, in the case of small firms, managerial attitudes toward innovation is the most critical factor. Other strategic and policy implications for the management of innovation in the small firm context are discussed.     

The influence of market structure on technological performance in the food-manufacturing industries

This paper tests the effect of firm and market structure variables on the rate of R&D investment by food processing firms. While the estimated relationship is consistent with the hypotheses of Schumpeter and Galbraith at small firm sizes and small-to-moderale concentration levels, above these critical values expected firm R&D increases at a decreasing rate with firm size and decreases with market concentration. The second part of this paper examines the origins of process patents closely related to six food industries. On average U.S. firms outside the industry, foreign firms, and individuals were each assigned more food-industry patents than were U.S. food processing firm. These findings place the public policy interpretation of observed relationships between market power and firm technological performance into a broader perspective. Even if a reduction in market concentrationn reduced R&D originating within a food industry, this decrease might bede minimus relative to technological changes, originating outside the industry.     

Determinants of Alliance Portfolio Complexity and Its Effect on Innovative Performance of Companies*

Alliance formation is often described as a mechanism used by firms to increase voluntary knowledge transfers. Access to external knowledge has been increasingly recognized as a main source of a firm's innovativeness. A phenomenon that has recently emerged is alliance portfolio complexity. In line with recent studies this article develops a measure of portfolio complexity in technology partnerships in terms of diversity of elements of the alliance portfolio with which a firm must interact. The analysis considers an alliance portfolio that includes different partnership types (competitor, customer, supplier, and university and research center). So far factors that determine portfolio complexity and its impact on technological performance of firms have remained largely unexplored. This article examines firms' decisions to form alliance portfolios of foreign and domestic partners by two groups of firms: innovators (firms that are successful in introducing new products to the market), and imitators (firms that are successful at introducing products which are not new to the market). This study also assesses a nonlinear impact of the portfolio complexity measure on firms' innovative performance. The empirical models are estimated using data on more than 1800 firms from two consecutive Community Innovation Surveys conducted in 1998 and 2000 in the Netherlands. The results suggest that alliance portfolios of innovators are broader in terms of the different types of alliance partners as compared to those of imitators. This finding underlines the importance of establishing a “radar function” of links to various different partners in accessing novel information. Specifically, the results indicate that foremost innovators have a strong propensity to form portfolios consisting of international alliances. This underlines the importance of this type of partnership in the face of the growing internationalization of R&D and global technology sourcing. Being an innovator or imitator also increases the propensity to form a portfolio of domestic alliances, relative to non‐innovators; but this propensity is not stronger for innovators. Innovators appear to derive benefit from both intensive (exploitative) and broad (explorative) use of external information sources. The former type of sourcing is more important for innovators, while the latter is more important for imitators. Finally, alliance complexity is found to have an inverse U‐shape relationship to innovative performance. On the one hand, complexity facilitates learning and innovativeness; on the other hand, each organization has a certain management capacity to deal with complexity which sets limits on the amount of alliance portfolio complexity that can be managed within the firm. This clearly suggests that firms face a certain cognitive limit in terms of the degree of complexity they can handle. Despite the noted advantages of an increasing level of alliance portfolio complexity firms will at a certain stage reach a specific inflection point after which marginal costs of managing complexity are higher than the expected benefits from this increased complexity.     

The moderating role of competence specialization in the effect of external R&D on innovative performance

This paper studies the functional specialization of SMEs’ technological competence and its moderating role in the effect of external R&D on their innovative performance. Technological competence consists of many functional dimensions such as basic research, product architecture, process construction, testing, and evaluation, which constitute a sequence of innovation tasks. The specialization of technological competence allows SMEs to utilize economies of specialization in R&D, enhance their bargaining power and appropriability conditions in the process of external R&D, and attract promising R&D partners. However, competence specialization may hamper SMEs’ capabilities to coordinate and integrate diverse external R&D projects. Using a sample of SMEs in Korean manufacturing industries, we find the following results. First, competence specialization positively moderates the effect of external R&D on SMEs’ innovative performance. Second, the positive moderating effect of competence specialization diminishes as the share of external R&D increases. Third, the moderating effect of competence specialization differs across industries depending on the degree of market dominance by a few large firms (i.e., market concentration) and the novelty of technologies pursued by SMEs in each industry.     

The ambidextrous patterns for managing technological and marketing innovation

Built upon organizational ambidexterity theory, this study provides a new perspective in managing technological and marketing innovation. It distinguishes between simultaneous and sequential patterns of innovation within a firm and takes a longitudinal approach in examining the differential effects of these two ambidextrous patterns of innovation on firm performance. Further, this study investigates the contingent roles of internal product scope and external market dynamism on the above relationships. Using panel data from 158 U.S. firms over 26 years, we find that both simultaneous and sequential patterns are positively associated with firm performance. Further, our findings indicate that a broader product scope strengthens the effect of the simultaneous pattern on firm performance, while weakening that of the sequential pattern on firm performance. When market dynamism increases, the effect of the simultaneous pattern on firm performance is strengthened, while that of the sequential pattern is weakened. Our findings offer managers guidance on the choice of innovation patterns under certain contingencies and how to better manage technological and marketing innovation over time.     

Technological collaboration in the korean electronic parts industry: patterns and key success factors

This study empirically examines different patterns of collaborative technological development projects and the key success factors (KSFs), using data from 82 projects in the Korean electronic parts industry. The patterns of technological collaboration were categorized into 4 types by two contingency variables: development motive (technology–push or market–pull) and source of initiation (focal firm– or partner–initiated). The bivariate relationships revealed that project characteristics (technological complexity, demand certainty, and financial support of the government), partner characteristics (the level of trust with partners), and collaborative management practices (commitment of the focal firm, and information sharing in the collaboration process) appear to be different depending on the two contingency variables. Each type of collaborative R&D project also had different KSFs. While diverse characteristics like strategic importance, goal compatibility and information sharing with partners are critical for the success of technology–push projects, just only specificity of collaboration process and outcome appears important to the success of demand–pull projects. For focal firm–initiated projects, project characteristics are KSFs, whilst partner characteristics and collaboration management practice are found to be more critical for the success of partner–initiated projects. The findings suggest that the different contingencies such as development motive and source of initiation bring about different patterns of collaborative technology development projects, which in turn lead to a different set of KSFs, since different information, roles of partners and the focal firms, and collaboration management practices are needed to successfully implement the different types of projects. Based on empirical results, this study discusses managerial, policy, and theoretical implications for the collaborative R&D activities taking place in the Korean electronic parts industry.     

International experience in the executive suite: the path to prosperity?

Attention is increasingly focused on the potential individual career and firm‐level benefits of international experience for upper level executives. This research examines the relationships between CEO international experience, CEO tenure, firm internationalization, succession events, and corporate financial performance. Results indicate a significant interactive effect between CEO tenure and outside succession on CEO international experience. In addition to a relationship with CEO international experience, there are two additional interactive effects in the examination of corporate financial performance: (1) CEO international experience and the degree of firm internationalization, and (2) CEO international experience and CEO succession. These interactive effects are evident in accounting and market indicators of corporate financial performance. Copyright © 2000 John Wiley & Sons, Ltd.     

Strategic Mutual Learning Between Producing and Buying Firms During Product Innovation

The product innovation activities and strategies employed by successful innovators often differ from those used by firms having more mature products. Marketing strategies for innovating firms can vary along two dimensions of knowledge: technological development (stable and evolving) and market needs (known and emerging). In addition, producers often commit to forms of strategic relationships with their buyers because of the difficulties encountered when buying firms adopt and implement technological innovations. Starting with these two orienting constructs from the literature, Patricia Meyers and Gerard Athaide describe the kinds of learning that develop between producers and buyers when markets for a technological innovation are forming.     

Strategies of Innovation and Imitation of Product Languages*

Nowadays, design is recognized as a strategic resource. Customers are increasingly paying attention to the aesthetic, symbolic, and emotional value of products, a value that is conveyed by the design language—that is, the combination of signs (e.g., form, colors, materials) that gives meaning to a product. As a consequence firms are devoting increasing efforts to define a proper strategy for the design language of their products. An empirical analysis was conducted on the product language strategies in the Italian furniture industry; in particular, the present article explores the relationship between innovation and variety of product languages. Companies are usually faced by two major strategic decisions. The first one concerns the innovation of product languages: To what extent should a firm proactively propose new design languages or, rather, should adopt a reactive strategy by rapidly adopting new languages as they emerge in the market? The second decision concerns the variety and heterogeneity of languages in their product range. Should a firm propose a single product language to communicate a precise identity, or should it explore different product languages? Of course, the two strategic decisions—innovativeness and variety of product languages—are closed connected. Analyzing more than 2.000 products launched by 210 firms, the present article explores how the variety of product languages is approached in the strategy of innovators and imitators. The empirical results illustrate an inverse relationship between innovativeness and heterogeneity of product signs and languages. Contrary to what is expected, innovators have lower heterogeneity of product languages. They tend to be strongly proactive and limit experimentations of new languages in the market. Imitators, instead—which would be expected to have low variety since they can invest only in languages that have been proven successful in the market—tend on the contrary to have higher product variety. Eventually, by having lower investments in research on trends of sociocultural models, they miss the capability to interpret the complex evolution of products signs and languages in the market. Strategic decisions on innovativeness and variety of product languages are therefore interrelated; counterintuitively companies should carefully analyze these decisions jointly.     

Telecommunications productivity,catch-up and innovation

This study examines telecommunications productivity, technological catch-up and innovation in 74 countries for the period 1991–1995. A summary of partial productivity indicators is presented, and total factor productivity (TFP) growth is calculated using the Malmquist productivity change index. Decomposition of the Malmquist index provides preliminary evidence that developing countries can enhance productivity through catch-up. An econometric model is estimated that relates innovation to market size and two measures of market structure, viz., market concentration and private ownership. Model estimates support the Schumpeterian hypothesis that market size is conducive to innovation. However, the hypothesis that concentration (the dominant carrier’s share of international message telephone service (IMTS) traffic) is positively related to innovation is rejected. Finally, the model suggests that increased private ownership of the dominant local-exchange carrier can enhance innovation.     

Technological capability, social capital and the launch strategy for innovative products

The Launch strategy for innovative products is a crucial strategic typology adopted by many high tech firms, and which has been identified in prior research focusing on new product introduction to the market. However, the nexus between launch strategies and firm resources has gained little research attention. This article therefore aims to investigate the influence of technological capability and social capital, two key resources for innovation in high tech firms, on the adoption of a launch strategy for innovative products. Furthermore, prior research has revealed that market characteristics play a moderating role on the relationship between firm resources and company strategies; thus, this study also examines the moderating effect of market characteristics. This study takes Taiwan's integrated circuit design firms as the analytical sample. Based on a sample of ninety companies, two interesting findings have been found. First, both technological capability and social capital are associated positively with the launch strategy for innovative products. Second, while the market growth rates increase, the positive relationship between technological capability and the launch strategy for innovative products becomes weaker.     

Comparison of patterns of research effectiveness and output and their stability across six countries*

The focus of the study is an exploration of the stability of relationships between characteristics of research groups and various dimensions of the effectiveness of research activities across different national settings. The analysis is based on data collected by a Unesco coordinated international research team in six European countries. Data were collected by means of a survey of research groups engaged in research and experimental development activities in a variety of scientific disciplines, primarily in the natural and technological sciences. The total sample consists of 1,222 research groups. From a wide variety of data a set of indices describing the age, patterns of communication, management, diversity, morale and inter-personal relations in the unit, etc., were selected on the basis of observed correlations to measures of effectiveness in the samples of each of the six countries. By means of a residualization procedure the indices were adjusted for the effect of the type of institution end scientific field of research groups to eliminate differences with respect to these two structural dimensions in the samples of the different countries. Stepwise regression analyses were performed separately for each country to explore the relationships of the ‘adjusted’ indices to seven different measures of effectiveness. The common pattern of relationships of certain indices to give effectiveness measures is described and discussed. The recurrent relevance of certain variables in the individual countries across a variety of effectiveness measures is analysed. On the basis of these analyses a few ‘universal’ indices are isolated such as quality of research planning, communication with users of the research results, and the research morale as perceived by unit heads and scientists. These seem to have consistent, systematic and additive relationships across countries to most of the specific dimensions of research group effectiveness. In conclusion the theoretical and practical implications of the findings are discussed.     

基于CEO变动调节效应的高管团队特征对企业研发投资及技术创新绩效的影响研究

本文以信息技术业上市公司2011～2014年的数据为样本,运用逐步多元回归分析的方法,通过逐步引入高管团队特征变量、CEO变动变量、CEO变动变量与高管团队特征变量交互项对因变量研发投资及技术创新绩效影响进行了回归分析。结果表明：CEO变动对研发投资和技术创新绩效具有显著的正向相关关系;CEO变动可以部分调节高管团队特征对研发投资和技术创新绩效的影响;高管团队持股与年龄异质性与技术创新绩效显著正相关;两职合一与研发投资显著负相关;任期异质性和教育程度异质性与研发投资显著正相关。     

The Impact of Innovative Culture on Individual Employees: The Moderating Role of Market Information Sharing

Current innovation literature provides a very limited understanding of the potential impacts of innovative culture on employees. Building on resource‐based view theory, the authors investigate theoretically and empirically how a perceived innovative culture can be a building block for a firm's competitive resource and advantage by creating superior employee‐level outcomes and how a market information‐sharing process may moderate these effects. The authors identify three distinct types of individual‐level outcomes stemming from an innovative culture. The three outcome variables—job satisfaction, organizational dynamism perception, and firm performance perception—reflect employees’ psychological and cognitive reactions to the process of creating organizational innovation and innovative culture. The authors collect survey data from 3960 individual employees in China. Their findings first show that a perceived innovative culture significantly and positively affects employees’ job satisfaction and perceptions of organizational dynamism and firm performance. Moreover, organizational dynamism perception plays an important mediating role among three employee‐level outcomes by converting job satisfaction into firm performance perception. The authors also find support for the direct, positive effect of a perceived market information‐sharing process on job satisfaction but not on perceptions of organizational dynamism and firm performance. Most importantly, their findings on the significant moderating role of a market information‐sharing system contribute to innovation theory by emphasizing the importance of the innovation/marketing interface: bundling market information sharing and innovative culture together enhances employees’ positive attitudes and perceptions. This result also suggests that examining only the direct effects of innovative culture and market information sharing may lead to incorrect conclusions as to how to manage the cultural infusion process: the market information‐sharing process shows only a weak effect on job satisfaction and no effect on perceptions of organizational dynamism or firm performance. Organizational designs should ensure simultaneous consideration of both variables in the cultural transformation process to enhance employees’ derived benefits in the process of creating an innovative culture. We offer a new insight: a perceived market information‐sharing process may strengthen the effect of an innovative culture on employees’ job satisfaction and organizational dynamism perception, while it may weaken the effect of an innovative culture on firm performance perception. This more nuanced view of market information sharing in the cultural infusion process presents new wisdom and calls for further studies in entrepreneurial innovation.     

The Effect of Family Involvement on Innovation Outcomes: The Moderating Role of Board Social Capital

Innovation is an essential and yet puzzling part of family firms’ strategic focus. While family firms are generally characterized as conservative regarding their research and development (R&D) activities, researchers have recently argued that family firms can still achieve innovation-based competitive advantages. Seeking to understand the link between family influence and the outcomes of innovation, we suggest that it is necessary not only to observe the depth of family involvement, but also to differentiate between technological inventions and market innovations. We further posit that the board members’ social capital constitutes an important contingency for this link. We, therefore, investigate the relationship between family involvement and two different outcomes: the number of the firm’s inventions and the market relevance of innovations. Our analysis of S&P 500 firms comprises 1.85 million patents and manual evaluations of 1774 product announcements. The results of our estimations suggest that family involvement is negatively related to the number of inventions and positively related to the market relevance of innovations. They further show that internal and external board social capital moderate the relationship between family involvement and the number of inventions. This study adds to the discussion about family firm innovation by using socioemotional wealth to explain heterogeneity in innovation patterns and revealing that relational resources derived from board social capital are crucial boundary conditions for families’ influence on technological inventions. Taken together, it works toward a more holistic view of innovation in family-influenced firms.     

The learning subsystem interplay in service innovation in born global service firm internationalization

We examine the role of learning firm-specific advantages of small and medium size (SME) service firms in their internationalization. We focus on technical services that have received limited scholarly attention. We theorize that innovative born global firms build a set of capabilities in market, internal and relational learning that will provide new knowledge configurations to undertake technical and administrative innovations. Adopting an organizational sub-system view, we posit that market learning drives other learning capabilities in the firm to contribute collectively to innovation, and in turn, international market outcomes. The findings of our study of US born global SMEs support this theorization. Market-learning capability operates in a complex set of relationships with other learning capabilities in its contribution to innovation. Interestingly, relative to technical innovation, administrative innovation makes a prominent contribution to international market outcomes. We discuss implications of our findings for theory and practice and provide future research directions.     

Innovations,Prices and Employment: A Theoretical Model and an Empirical Application for West German Manufacturing Firms

In this paper a theoretical model of the impact of product and process innovations on output, capacity utilization, employment and prices is developed. The model is estimated with a unique set of micro-data from West German manufacturing firms. The empirical results reveal that innovative firms are more successful. They show a higher utilization and more output and employment growth than non-innovative firms. Innovations also change market behaviour. In sectors with a large share of product innovators, firms more often change employment and less often change prices, i.e. product innovations reduce price competition.     

Learning by supplying

Outsourcing in many industries has advanced beyond simple component supply to encompass manufacturing of entire products, often by suppliers in emerging economies. Understanding the evolving role and capabilities of suppliers in global supply chains is thus a pressing strategic issue for suppliers and customers alike. We analyze a novel panel dataset of supply relationships in the mobile telecommunications industry to answer the following questions: What factors contribute to a supplier's ability to build technological and market capabilities? Does it matter to whom the firm supplies? Is involvement in product design important, or is manufacturing the key to learning? Do the same types of relationships that support technological innovation also facilitate successful introduction of own‐brand products, or does this require a different “locus” of learning? Copyright © 2013 John Wiley & Sons, Ltd.     

Competing internationally through multiple innovative efforts

Increasingly, small firms will be required to compete on international markets in order to grow and survive. This paper reports on a study of 86 small manufacturing firms operating in the metal sector. All firms had adopted one or more advanced manufacturing technology and were considered by the Canadian Association of Manufacturers as process innovative. The basic premise of this research was that in order to compete internationally, a small firm had to develop certain innovative capabilities. These capabilities were not only associated to traditional innovative efforts in R&D and process innovation, but also in supportive organizational capabilities in the form of strategic orientation, technological policy, and technological scanning. Results show that, for these small firms, process innovativeness remains an important competitive factor for international competition and that it is often linked to an aggressive strategic orientation coupled to a short term emphasis on efficiency.