What induces firms to license foreign technologies? International survey evidence

The paper provides insights into drivers of foreign technology licensing from the licensee's perspective, using data across 114 nations. Technology licensing enables licensees to access proven technologies without development delays, although licensors might deny licenses for strategic reasons. Results show that firms with own R&D are more likely to license foreign technologies, as are larger firms and firms in the nations' main business cities. However, the macroeconomic and institutional environment matters as well: domestic interest rates, informal sector competition, and the literacy of a country's labor force all impact foreign technology licensing. Some implications for technology policy are discussed.     

Technology exploitation in the context of open innovation: Finding the right ‘job’ for your technology

In light of the recent economic crisis, many industrial firms attempt to capture additional value from their technologies by means of open innovation strategies. Besides acquiring external technology, many firms therefore increasingly try to license their own technology to other firms either exclusively or in addition to its application in their own products. This article shows that technology licensing offers important strategic benefits beyond generating licensing revenues, which underscore the need for an integrated management of technology licensing activities. Therefore, this article extends the concept of job-related markets that was recently developed in the managerial literature. A ‘job’ is the fundamental problem that a customer needs to resolve in a particular situation. Managers may transfer this job-related understanding to technology licensing activities because the right ‘job’ for a technology may be outside a firm’s boundaries, and it may help firms to identify additional licensing opportunities. On this basis, the article presents the concept of an integrated technology exploitation roadmap, which allows firms to use the job-related markets to integrate technology licensing in their strategic planning processes. An example of a machinery firm shows how this roadmap may contribute to strengthening a firm’s licensing business.     

The digital transformation of business models in the creative industries: A holistic framework and emerging trends

This paper examines how digital technologies facilitate business model innovations in the creative industries. Through a systematic literature review, a holistic business model framework is developed, which is then used to analyse the empirical evidence from the creative industries. The research found that digital technologies have facilitated pervasive changes in business models, and some significant trends have emerged. However, the reconfigured business models are often not ‘new’ in the unprecedented sense. Business model innovations are primarily reflected in using digital technologies to enable the deployment of a wider range of business models than previously available to a firm. A significant emerging trend is the increasing adoption of multiple business models as a portfolio within one firm. This is happening in firms of all sizes, when one firm uses multiple business models to serve different markets segments, sell different products, or engage with multi-sided markets, or to use different business models over time. The holistic business model framework is refined and extended through a recursive learning process, which can serve both as a cognitive instrument for understanding business models and a planning tool for business model innovations. The paper contributes to our understanding of the theory of business models and how digital technologies facilitate business model innovations in the creative industries. Three new themes for future research are highlighted.     

Choosing the partners in the licensing alliance

I consider a situation in which the incumbent strategically adopts the licensing alliance, facing potential entrants. The queue of entrants consists of two firms, the ‘strong’ entrant and the ‘weak’ entrant, who differ in their productivities. The incumbent sets a licensing fee and offers it to the entrants. Each entrant decides whether or not to buy the licensing alliance. After the set of the licensing alliance is determined, they engage in the Cournot competition. I examine the optimal licensing fee, and show that the optimal licensing fee is to charge a discriminatory royalty to each licensee. I also examine the licensing policy on the partner(s): To whom should the licensor license its technology? By comparing the equilibrium expected payoffs for the licensor, I show that licensing to both entrants would be preferred to licensing to a single entrant. But, if the licensor faces the problem on choosing the partner, he prefers the licensing of the weak entrant to the strong entrant. Copyright © 2006 John Wiley & Sons, Ltd.     

The Pharmacia story of entrepreneurship and as a creative technical university1 – an experiment in innovation,organizational break up and industrial renaissance

While innovative technology supply has been the focus of much neo-Schumpeterian modelling, few have addressed the critical and more resource-demanding commercializing of the same technologies. The result may have been a growth policy focused on the wrong problem. Using Competence Bloc Theory and a firm-based macro to macro approach we abandon the assumed linear relation between technology change and economic growth of such models, and demonstrate that lack of local commercialization competences is likely to block growth even though innovative technology supplies are abundant.

The break up, reorganization and part withdrawal of Pharmacia from the local Uppsala (in Sweden) economy after a series of international mergers illustrate this. Pharmacia has ‘released’ a wealth of technologies in local markets. Local commercialization competence, notably industrially competent financing has, however, not been sufficient to fill in through indigenous entrepreneurship the vacuum left by Pharmacia. Only thanks to foreign investors, attracted by Pharmacia technologies that have opted to stay for the long term, the local Uppsala economy seems to be heading for a successful future.

The Pharmacia case also demonstrates the role of advanced firms as ‘technical universities’ and the nature of an experimentally organized economy (EOE) in which business mistakes are a natural learning cost for economic development.     

Managerial considerations in evaluating the role of licensing in technological development strategies

Increasing managerial efforts to minimize the heavy costs and risks of pioneering the development of major technological advances have increased interest in licensing foreign advances. After reviewing the commonly hoped-for benefits of such licensing, attention is given to some of the less widely recognized limitations of relying on such expedients as well as to some of the necessary foundations for achieving effective utilizations of such licensed innovations. Attention is also given to the likelihood that a variety of newly emerging major innovations in manufacturing technologies may be less amenable to effective transfer than has been true of many past advances, thereby counseling a reduced role for licensing in the technological development strategies of numerous industries and firms.     

The economic causes and consequences of corporate divestiture

This study investigates economic causes and consequences of large corporate divestitures between 1983 and 1987. Prior empirical evidence suggests that firms hold on to poorly performing operating units for many years before divestiture. An agency-cost explanation for ‘holding on to losers’ has been proposed in the literature, as managers may be unwilling to admit they invested in inappropriate asset choices in the first place. However, a puzzle still remains: why should such a manager ever sell off such a unit? We provide both a possible explanation and empirical evidence that suggests managers hold on to losers as long as they can ‘blur’ their poor performance under the cover of the remaining operating units of the firm. We find that firms do not sell off poorly performing business units until the firm's other units experience significant underperformance relative to their industry peers. Finally, although there is evidence that the stock market reacts favorably to divestitures, we find that beyond the initial improvement, the firm's performance reverts back to its mean pre-divestiture level.© 1997 John Wiley & Sons, Ltd.     

Determinants of licensing activities of local public technology centers in Japan

Local public technology centers are publicly managed institutions that facilitate technology transfer to small local firms. As well as providing small local firms with various technological services, local public technology centers conduct their own research and patent inventions. This study examines factors facilitating licensing activities and finds that the determinants vary according to the phase of technology transfer. Employing more Ph.D. scientists tends to promote the licensing of patents, while organizational efforts that encourage scientists to better understand the technological needs of small local firms tend to increase royalty revenue. The theoretical and practical implications of the results are discussed.     

The Role of Networks In the Diffusion of Technological Innovation*

This research considers the diffusion of computer-aided production management (CAPM) technology in the UK manufacturing sector during the mid to late 1980s, focusing on the role of inter-organizational networks in the diffusion process. Research on innovation diffusion has tended to adopt a ‘pro-innovation bias’ such that adoption of prescribed best practice technologies is always considered to be the best policy. In the UK, one particular form of CAPM (MRP/MRPII) has been heavily promoted by technology suppliers as best practice. However, the notion of ‘best practice’ de-emphasizes the importance of decisions about technology design when users attempt to develop firm-specific solutions. Crucial to these decisions are the inter-organizational networks through which potential adopters learn about relevant technologies. Using three case companies, where the introduction of CAPM occurred at approximately the same time, decisions regarding adoption, design and subsequent implementation, are explored in order to establish the influence of inter-organizational networks on the diffusion and subsequent appropriation of CAPM technologies. These cases revealed that potential adopters engaged in a range of inter-organizational networks through which they learned about new technologies. However, the knowledge diffused through many of these networks was shaped by technology suppliers who were promoting similar ideas about best practice. Thus, while involvement in inter-organizational networks gave potential adopters access to information about new technology, this information tended to reinforce supplier images of best practice and did not always lead these firms to develop appropriate technological solutions. Problematic relationships between the suppliers of the technology and the users was seen here to limit the redesign and further diffusion of CAPM.     

Maintaining Moral Legitimacy through Worlds and Words: An Explanation of Firms' Investment in Sustainability Certification

A prominent way for firms to manage their moral legitimacy is to invest in sustainability certifications. However, a significant subset of firms remain reluctant to invest in sustainability certifications even decades after the establishment of such certifications. Our paper seeks to elucidate this variance by exploring how firms in the coffee, tea, and chocolate industries legitimise themselves on moral grounds through external communication to stakeholders. Drawing on insights from French Pragmatist Sociology, we suggest that firms primarily rely on two distinct sets of legitimacy principles that reflect their identity orientation: the ‘civic and green’ world and the ‘domestic’ world. Specifically, our results show that reliance on the domestic world is negatively related to firms' investment in sustainability certifications. Our findings also suggest that the strength of the relationship between these distinct methods of moral legitimising and certification varies depending on whether firms are characterised by first‐ or multi‐generation family control.     

A TEST OF PERFORMANCE SIMILARITY AMONG STRATEGIC GROUP MEMBERS IN CONFORMING AND NON-CONFORMING INDUSTRY STRUCTURES

Empirical tests have produced mixed support for a membership-performance link in strategic groups, perhaps due to incomplete treatment of industry forces. We argue that strategic group concept is more useful for explaining performance differences among firms in some industries (where conditions favour conformity in firm conduct) than others. Using three industry structure constructs as criteria, 47 four-digit SIC industries are classified into ‘conforming’ or ‘non-conforming’ industry samples. Firms are then clustered into strategic groups in a separate treatment for each sample. Performance differences among groups are tested under conforming and non-conforming industry conditions. Tests confirm membership effects on ROA and ROE are significantly stronger in ‘conforming’ industries, where stronger regression relationships between conduct variables and performance also obtain.     

Global value chains,local collective action and corporate social responsibility: a review of empirical evidence

A key debate in the corporate social responsibility (CSR) literature is the tension between global pressures and local responses. Developing country suppliers often grumble that CSR compliance adds costs. Yet, local collective action, articulated through industry associations, can potentially reduce costs and promote local embeddedness of CSR initiatives. Through case study analysis, this paper considers how demands for CSR compliance prompted collective action responses in selected developing country export industries. We argue that differences in collective responses can be partially explained by how local export industries are inserted into global value chains. We distinguish between ‘highly visible’ value chains, led by internationally well known brands as lead firms, and relatively ‘less visible’ chains, where external CSR pressures come from a variety of sources, including less dominant lead firms, international/national regulatory frameworks and national media. This differentiation suggests a possible trade‐off between the independence and the embeddedness of collective CSR initiatives. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment.     

行业间生产率联动对中国工业生产率增长的影响——引入经济距离矩阵的空间GMM估计

本文把反映行业间生产率联动的购买距离矩阵和销售距离矩阵引入空间自回归模型,研究行业间生产率联动对我国工业生产率增长的影响。为了克服引入社会经济距离矩阵带来的异方差和矩阵的行标准化问题,本文采用空间GMM法进行模型的估计。结果表明,行业生产率联动对我国工业生产率增长具有显著的正影响,并且在资源密集型、劳动密集型和资本密集型工业行业中,行业间生产率联动对工业生产率增长的影响相对于其他因素的影响更为稳健。此外,由销售距离矩阵所体现的联动作用效果整体上大于购买距离矩阵体现的相关效果。     

Impact of Green Innovation on Labor Productivity and its Determinants: an Analysis of the Korean Manufacturing Industry

Due to worsening environmental conditions around the globe, firms have been investing a great deal of money in green technologies as a way of coping with the environmental crisis. This paper uses a unique data set based on the Korea Innovation Survey to examine the impact of green innovation on labor productivity, and the determinants of environmental activities in 2010. The empirical results show that green innovation intended for both firm and customer benefits has a positive effect on labor productivity. This finding means that firms need to implement firm‐oriented green innovation as well as customer‐oriented green innovation in order to increase their performance. Our findings also show that there are significant differences in aggregate green innovations depending on different firm sizes and industries. Specifically, large firms implement environmental activities more than small ones, and pollution‐intensive industries tend to invest more in activities related to environmental technology. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment.     

Technology transactions,announcement effect,and reversal: Dissecting an anomaly

We examine the short term stock price performance of firms that acquire or sell technology rights. We find significant positive announcement-period abnormal returns to the acquirers and sellers. However, the price increases reverse during the subsequent twenty trading days. These quick fortune reversals cannot be attributed to methodology; they prevail in the late 1970s through the 2000s, in bear and bull stock markets, and in both high and low technology industries. Upon splitting the sample into two subsamples comprised each of stocks with either pre-announcement price run-up or decline; we find that the abnormal return reversal is confined to the latter subsample. Stocks that witness price run-up prior to the announcement do not reverse to original prices but lose the momentum right after the announcement-period. We believe this is caused by the combination effect of the momentum prior to-and the impact of the announcement.     

Strategic alliances: managing complementarity to capitalize on emerging technologies

There are many different ways for firms to enter emerging industries and many possible patterns of rivalry within such industries. Although the literature gives prominence to the pioneering role of small start-ups, the fact is that large firms have often tried to pioneer new industries, by leveraging on the achievements of their central research facilities. Some firms have sought an organizational complement to progressiveness in the R&D lab. This complement is the internal venture. However, internal ventures pose the difficulty of internal diversity. Strategic alliances, on the other hand, permit the firm to exploit new technologies in new industries with a minimum of internal diversity. They have the benefit of speedy access to technology or to market expertise, minimizing risk and financial exposure, and providing a greater focus when bringing resources to bear on innovation. Strategic alliances provide alternatives for collaboration between firms with minimal contamination of the pioneering and entrepreneurial spirit of new technology-based firms.     

Corporate self-greenewal: Strategic responses to environmentalism

The rise of environmentalism in the past decade has become a major transforming force in pollutive and hazard prone industries. Corporate environmental responsiveness is not simply a peripheral and one of the many ‘social’ or ‘ethical’ issues facing business. It is becoming a central concern for competitiveness, productivity, and profitability. It is creating strategic transformation of companies in a diverse range of industries such as, Autos, Chemicals, Oil, Fast Foods, Power Generation, Pharmaceuticals, etc. The process of environmentally directed self-renewal, called ‘greenewal’ here, affects all aspects of companies. It implies changes in products, production systems, waste management practices and internal systems. It seeks to make companies simultaneously more competitive and environmentally responsible. This paper describes the pressures of and responses to environmentalism in a selected set of industries. It examines the processes of greenewal that companies are undergoing. It identifies implications for strategic greening of firms.     

Does slack always affect resilience? A study of quasi-medium-sized Italian firms

Research on organizational slack, which has focused mainly on its effect in large, publicly traded firms and on transitional economies, has found that slack functions as a buffer in periods of crisis. However, little work has been done on the value of slack resources for smaller firms in mature industries. This study contributes to the resource-based literature with a quantitative analysis of a broad sample of Italian SMEs that operate in the traditional ‘Made in Italy’ industries. The purpose of the paper is to use longitudinal data from before and after the 2008 world financial crisis to determine whether slack resources drive growth and profitability in organizations with limited resources that operate in mature industries in periods of recession. The results of two-stage least squares regression indicate that, similar to their larger counterparts, small firms must secure high levels of profitability in order to achieve sound growth during recessions. Potential financial slack is equally important in driving profitability in these periods, although it is not related to higher growth. Investing in R&D does not affect small firms’ ability to be profitable and grow during recessions.     

Changing consumer behaviour through eco-efficient services: an empirical study of car sharing in the Netherlands

In this paper ‘innovation’ is discussed as a strategy to change consumer behaviour to reduce the environmental impact of consumption. Innovation aims to improve the ‘production process’ of certain end results or ‘units of service’ for the consumer, which is defined as the ‘consumption technology’. This concept includes the entire organization of how these units of service are produced. ‘Eco-efficient services’ are introduced as an innovation strategy, based on theoretical considerations through which more eco-efficient consumption technologies and less environmentally damaging consumption behaviour could be realized. This strategy is explored through an empirical consumer behaviour study on commercial car sharing services in the Netherlands. Based on an inventory of the environmental effects of this approach, as exemplified by the car sharing schemes, it can tentatively be concluded that the eco-efficient services concept offers an interesting framework for reconsidering the current consumption practice and for generating innovative activities in industry. © 1998 John Wiley & Sons, Ltd and ERP Environment.     

Employment and wage practices of Japanese firms in the Philippines: convergence with Filipino-Chinese and Western-owned firms

In foreign-owned Philippine firms, human resource approaches and practices tend to converge. Japanese-owned firms localize their human resource practices by emphasizing local standards and practices in compensation, hiring, recruitment, job assignments and the like. On the other hand, Western-owned firms tend to adopt well-known Japanese style practices. Filipino-Chinese-owned firms tend to be traditional, emphasizing both informal and hierarchical control mechanisms which put a premium upon loyalty and trust, through familistic, informal but hierarchical control mechanisms. As the owners of these firms pass on control to the next generation, they tend to hire professional managers. These managers include younger generation Filipino-Chinese educated abroad. They are torn between the rational, and traditional norms and practices insisted upon by their Confucian-oriented elders, and the demands of a competitive and ever-changing technology and economy.

It is quite meaningless to attach adjectives like ‘Japanese’, ‘Filipino-Chinese’ or ‘Western’ to universal concepts like industrial relations and human resource approaches - the search for the best approach in work relations is beyond the issue of convergence or divergence.