Export behavior of Italian food firms: Does product quality matter?

Using firm-level data we investigate the export behavior of Italian food firms, focusing on the link between total factor productivity (TFP), product quality, and export across heterogeneous destinations. We test the main predictions of an international trade model based on firm heterogeneity in product quality and non-homothetic preferences in consumption. In this setting, the firm’s export intensity should be increasing in the per-capita income of foreign destinations, and the effect should be largely driven by firms’ heterogeneity in product quality. Using different measures of revenue-TFP, and different proxies for product quality, we find strong support for the main model predictions. Moreover, consistent with the Alchian–Allen effect, we find a positive relationship between the quality of exported products and the distance of destination countries.     

New Product Development Speed: Too Much of a Good Thing?

New product development (NPD) speed has become increasingly important for managing innovation in fast‐changing business environments due to continuous reduction in the product life cycle time and increase in competition from technological advancements and globalization. While the existing literature has not produced consistent results regarding the relationship between speed and success for NPD projects, many scholars and practitioners assert that increasing NPD speed is virtually always important to NPD success. The purpose of this paper is to examine the implicit assumption that faster is better as it relates to new product success (NPS). From the perspectives of time‐compression diseconomies and absorptive capacity, the authors question the assumption that speed has a linear relationship with success. The authors further argue that time‐compression diseconomies depend on levels of uncertainty involved in NPD projects. Using survey data of 471 NPD projects, the hypotheses were tested by hierarchical regression analysis and subgroup polynomial regression. The results of this study indicate that NPD speed has a curvilinear relationship with NPS, and the nature of the speed–success relationship varies, depending on type and level of uncertainty. When turbulence or technological newness is high, the relationship is curvilinear, but when uncertainties are low, the relationship is linear. In contrast, the results of this study suggest a curvilinear relationship under conditions of low market newness but not when market newness is high. The present paper asserts that time‐compression diseconomies and absorptive capacity are important theoretical constructs in understanding speed in NPD. The different impact of market newness and market turbulence on NPD speed supports the distinction of newness and turbulence as two different sources of uncertainty. Discussion focuses on the implications of NPD speed under the different conditions of uncertainty. NPD teams need to pursue NPD speed as a critical strategy, but it is necessary to analyze the source and degree of uncertainty about projects before a time‐based strategy is selected. In order to address the challenges of high uncertainty, a firm needs to probe, learn, and iterate fast. In particular, NPD teams need to distinguish between the different requirements for new products in emerging and new markets, and those in fast‐changing markets. Moreover, NPD teams need to balance how fast they need to go with how fast they can go by considering team absorptive capacity and customer absorptive capacity.     

Product innovation with vertical differentiation: Is a monopolist's incentive weaker?

This paper compares the incentives for product innovation across different market structures when the new product is vertically differentiated and of lower quality, a common case empirically. We show that innovation incentive rankings across market structures can differ substantially when the new product is of lower rather than higher quality. In particular, the incentive to add the new product can be greater for a monopolist over the old product than for a firm that would face any degree of competition from the old product. This incentive ranking cannot occur when, instead, the new product is of higher quality as has been analyzed in previous work. Moreover, in that case, the incentive ranking is the same whether the market is covered or not covered, whereas in our setting the ranking can differ. With the market covered, our setting provides another environment where the monopolist can have the greatest incentive to innovate, as previously shown when the new product is horizontally differentiated. Together, both settings show that Arrow's famous result—a secure monopolist gains less from a nondrastic process innovation than would a competitive firm—does not always extend to nondrastic product innovations. However, in all the cases analyzed here, consumer welfare (though not total welfare) is always lower under monopoly, even when only the monopolist would add the new product.     

Product innovation through coopetition in alliances: Singular or plural governance?

This study researches how firms can improve their product innovation in coopetition alliances through alliance governance. Our survey-based study of 372 vertical alliances in the medical device industry contributes to a clarification of prior studies' contrasting findings on product innovation when coopetition is present in alliances. Our results show that the singular use of relational governance improves product innovativeness in vertical alliances that experience growing levels of coopetition. In contrast, the singular use of transactional governance reduces product innovativeness with growing coopetition. When firms apply both relational and transactional governance as plural governance, vertical coopetition alliances get access to new ways to improve their product innovativeness.     

Behavioral Reasons for New Product Failure: Does Overconfidence Induce Overforecasts?

Efforts to organize and integrate research findings on new product performance determinants have lagged since the last significant overview paper appeared over a decade ago. Importantly, this literature has not considered entire categories of factors that are known to affect managerial decisions and behavior, namely those that pertain to decision‐makers' cognitive limitations and incentive structures. This research empirically investigates one specific cognitive distortion heretofore neglected in studies of new product commercialization—overconfidence, commonly defined in the literature as excessive belief in one's own abilities to generate superior performance. To lay the groundwork for subsequent exploration, the paper first introduces a behavioral model that both organizes well‐understood new product performance determinants and illuminates others heretofore not studied, namely incentive alignment and cognitive limitations and biases. The model summarizes extant research and allows development of research hypotheses related to overconfidence. The hypotheses and empirical investigation motivated by the model address two questions about the impact of overconfidence on new product commercialization activities. First, the study explores whether overconfidence is associated with overforecasting new product demand. Second, it evaluates two complementary mechanisms that may account for overconfidence‐induced overforecasts. The empirical findings are based on data generated in the course of management simulation workshops conducted among graduate students at three leading business schools in India. Three hundred thirty participants played individually four rounds of a computer‐based simulation game that involved decisions pertaining to new product development (including product formulation) and commercialization strategies. The decisions were captured and analyzed using statistical techniques. The results reveal that decision‐makers' overconfidence is associated with a higher likelihood of overforecasting new product sales. The observed effect is fully mediated by flawed tactical decisions that dampen demand, namely elevated product pricing. Sensitivity analyses show that these results are robust to a number of alternative explanations. However, the study finds no evidence implicating overconfident individuals as poor “innovators”—overconfident and nonoverconfident decision‐makers experienced comparable market demand for their new products. The paper concludes with a discussion of the results and provides specific recommendations for practice.     

Leveraging Social Network Sites in New Product Development: Opportunity or Hype?

Leveraging social network sites is high on the list of priorities for a lot of businesses that are eager to find more effective ways to reach, learn about, and engage customers in new product development (NPD). However, the rapidly changing landscape of social network sites can be difficult to navigate successfully and doubts remain about whether and how they can be used to good effect. In fact, empirical research confirming a positive relationship between the use of social network sites in NPD and business performance is scarce. This paper reports on research examining the use of social network sites for three purposes, namely for market research guiding the development of new products, for getting customers to collaborate in the NPD process, and for new product launch. The results of this research suggest that the benefits expected from using social network sites in NPD are largely not being realized by businesses. Using social network sites to conduct market research leading into the NPD process was not found to contribute to business performance, and in fact was found to have negative relationships with both profitability and market growth. Using social network sites to get customers to collaborate in the NPD process was found to be positively related with innovativeness but not with market growth or profitability. Finally, using social network sites for new product launch was where the most positive indications were seen, since this was found to be positively related with innovativeness, market growth, and profitability. Thus, it appears that while businesses may get good results from using social network sites for product launch, they still have a learning curve to traverse before they can successfully use them for market research or customer collaboration in NPD. While there is currently a great deal of enthusiasm—even hype—about the potential opportunities of using social network sites for NPD, this research suggests that businesses should move carefully and recognize that just jumping on the social network bandwagon will not insure success.     

Partnering against Insecurity? A Comparison of Markets,Institutions and Worker Risk in Canadian and Swedish Retail

This article provides insights on how union power influences the outcomes of labour-management partnerships, with a focus on insecurity. It examines matched pairs of food retailers in Canada and Sweden. Trends in wages, scheduling and union coverage from 1980 to 2016 are compared. Actors in both contexts adopted partnering strategies in response to intensified price competition. However, the Swedish partnerships produced stable work arrangements, while working conditions eroded considerably in Canada. Bargaining structures, union security and identity are examined to explain the variations. As market competition intensified, the Swedish union gained leverage by using partnerships to fight unfair competition and promote sectoral well-being in the process. Meanwhile, the Canadian union lost leverage, instead using partnerships to align employment practices with those of low-cost market entrants and enhancing store-level performance at all costs. The argument is that markets can be a resource for unions, even in low-skilled service sectors, but only under inclusive institutions.     

Do Employee‐Owned Firms Produce More Positive Employee Behavioural Outcomes? If Not Why Not? A British‐Spanish Comparative Analysis

Whether ‘employee ownership’ takes the form of worker cooperatives, co‐ownership or simply employee share ownership plans, there are normally high expectations that a range of positive outcomes will result. Yet many empirically based studies tend to find a much more complex picture. An influential segment of that empirical literature has posited the need for a number of mutually reinforcing workforce management components to be in place alongside co‐ownership. Drawing on detailed case research in two large and successful co‐owned retailers in Spain and Britain this paper examines the role of these wider elements supporting employee ownership. We find that employee ownership can be linked to higher productivity and lower employee turnover, while at the same time being linked to higher absenteeism and mixed effects on attitudes. Expectations held by managers and employees are higher; these expectations are not always fully met. The role of managers was also found to be crucial.     

Blocked But Not Tackled: Who Founds New Firms When Rivals Dissolve?

Research summary: This article examines the role of competitive shocks in creating opportunities for new firm foundings. I argue that the sudden dissolution of rival firms may release resources that create opportunities for firm formation, particularly among employees facing impediments to capturing value in their current organizations. Analyzing microdata from the legal services industry, I use unexpected deaths of solo‐practicing attorneys as quasi‐exogenous sources of rival dissolution. Results indicate that these shocks increase the odds of founding by about 30%, with stronger effects among attorneys with weaker social connections or higher competition for promotion. The article thus highlights the role that founders play in reallocating dissolved rivals' resources while demonstrating that founding may be an important outlet for “blocked” employees to capture value from opportunities. Managerial summary: This article finds that the shutdown and dissolution of a rival organization may spur employees to found new firms. As a consequence, managers may find it valuable to pay attention to employees' turnover intentions following the dissolution of a rival. Findings suggest that employees who are having trouble advancing in the firm may be the most likely to found a new organization when a rival dissolves, so managers may want to focus retention efforts on these individuals. To the extent that managers wish to capture customers, employees, and other resources that were formerly attached to a dissolved rival, managers may wish to be aware that they could be in competition with their own employees for these resources and opportunities. Copyright © 2017 John Wiley & Sons, Ltd.     

Paths to Success: How Do Market Orientation and Entrepreneurship Orientation Produce New Product Success?

The purpose of this paper is to examine the relationship between strategic orientation and the performance of new products. In this paper, we develop a conceptual model that explores the roles of market orientation (MO) and entrepreneurship orientation (EO) on new product performance and seek to understand the mediating roles of process and product characteristics. Based on a survey of 471 small and medium‐sized enterprises in Korea, we found that MO and EO positively affect new product performance. The main impact of MO is through new product development proficiency and product meaningfulness and that of EO is through proficient intellectual property management and product novelty. Academic and managerial implications are also discussed.     

The Paradox of Openness: How Product and Patenting Experience Affect R&D Sourcing in China?

External R&D sourcing may help firms compete in an environment characterized by rapid technological changes. Yet, prior studies have produced conflicting findings on how a firm's technological experience affects the extent to which the firm engages in external R&D sourcing. Although many highlight that firms with extensive technological experience are equipped with more technological knowledge, collaborative skills, and absorptive capacity, encouraging greater levels of external R&D, others suggest the opposite due to potential exchange hazards and partnership conflicts. Adopting an external partner's perspective, the current study reconsiders this “paradox of openness” by analyzing how a focal firm's product experience and patenting experience affect an external partner's tendency to provide external R&D services to the focal firm. Specifically, this study explore how a focal firm's knowledge protectiveness and tacitness embedded in its product and patenting experience influences the external partners' motivation for knowledge transfer. This study predicts that a firm's product experience increases the focal firm's external R&D sourcing because it provides high levels of knowledge tacitness and external openness and can encourage external partners to share and exchange knowledge with the focal firm. In contrast, a firm's patenting experience decreases the focal firm's external R&D sourcing because it denotes knowledge explicitness and protectiveness and may discourage external partners to share and exchange knowledge with the focal firm. This study further predicts that patenting experience has a negative moderating effect on the relationship between product experience and external R&D sourcing. Using a data set of 575 high‐tech firms in China, this study finds support for our predictions. Our findings contribute to the growing literature on the knowledge‐based view and technology entrepreneurship in emerging markets.     

The Gender Gap in Funeral Directors: Burying Women with Ready‐to‐Embalm Laws?

Over the last few decades, the gender composition of funeral directors in the United States has changed dramatically as women have entered this traditionally male‐dominated occupation. To practise as funeral directors, women (and men) must be licensed in all but one state. The most extensive training requirements exist in the 27 states with ‘ready‐to‐embalm’ laws, which require funeral directors to be embalmers. Using a sample of 45,989 licensing records from 40 states, we find that 18.1 per cent of funeral directors were women in 2006. However, the proportion is significantly lower in states with ready‐to‐embalm laws. Our regressions imply that these laws reduce the proportion of female funeral directors by 24 per cent. More generally, we find that the number of funeral directors per capita is 17 per cent lower, on average, in states with ready‐to‐embalm laws.     

The Value of Crowdsourcing: Can Users Really Compete with Professionals in Generating New Product Ideas?

Generating ideas for new products used to be the exclusive domain of marketers, engineers, and/or designers. Users have only recently been recognized as an alternative source of new product ideas. Whereas some have attributed great potential to outsourcing idea generation to the “crowd” of users (“crowdsourcing”), others have clearly been more skeptical. The authors join this debate by presenting a real‐world comparison of ideas actually generated by a firm's professionals with those generated by users in the course of an idea generation contest. Both professionals and users provided ideas to solve an effective and relevant problem in the consumer goods market for baby products. Executives from the underlying company evaluated all ideas (blind to their source) in terms of key quality dimensions including novelty, customer benefit, and feasibility. The study reveals that the crowdsourcing process generated user ideas that score significantly higher in terms of novelty and customer benefit, and somewhat lower in terms of feasibility. However, the average values for feasibility—in sharp contrast to novelty and customer benefit—tended to be relatively high overall, meaning that feasibility did not constitute a narrow bottleneck in this study. Even more interestingly, it is found that user ideas are placed more frequently than expected among the very best in terms of novelty and customer benefit. These findings, which are quite counterintuitive from the perspective of classic new product development (NPD) literature, suggest that, at least under certain conditions, crowdsourcing might constitute a promising method to gather user ideas that can complement those of a firm's professionals at the idea generation stage in NPD.     

Backer Motivation in Crowdfunding New Product Ideas: Is It about You or Is It about Me?

Entrepreneurs are using crowdfunding to reach out to the general public to obtain financial support for their new product development. Those who offer project creators financial support are called backers. In this research, the authors examine two types of backer motivation, other‐orientation and self‐orientation, and their respective effects on a backer’s funding decision on new product ideas at the reward‐based crowdfunding platform. Other‐orientation is defined as a backer’s altruistic motivation to help others when making a funding decision; and self‐orientation is defined as a backer’s egoistic motivation to pursue internal feeling, such as personal satisfaction and power to control the project. They find that self‐orientation has a stronger positive effect than other‐orientation on the backer’s funding decision. Furthermore, the authors examine the difference between men and women, and find that the relationship between other‐orientation and funding decision is stronger for women than men, but the relationship for self‐orientation is stronger for men than women. The authors conduct three empirical studies to test the hypotheses in both the backer’s and the project creator’s contexts. In Study 1, they adopt a survey method to investigate effects of the backer’s motivation on his or her funding decision in the film category. In Study 2, they use data of 600 film projects from kickstarter.com to examine linguistic cues used by project creators that stimulate backer motivation. In Study 3, they conduct an experiment to further validate results of the difference between men and women. Although some research suggests that extrinsic reward is a reason for backers’ funding behavior, the authors emphasize that their psychological need also plays an influential role. In addition, findings of the difference between men and women enrich the crowdfunding literature by discovering distinct backer subgroups.     

The (Unknown) Providers to Other Firms' New Product Development: What's in It for Them?

For every inbound activity by a firm in open innovation, a reciprocal outbound activity by another firm must be generated. The reciprocal outbound activities range from transferring of knowledge and ideas to solutions delivered to other firms' new product development projects. This paper names the firms that produce the reciprocal outbound activity for “providers,” and is the first to empirically investigate such providers of ideas, solutions, and technologies for other firms' open innovation activities. The literature review shows a surprising shortage of research on who the providers are, how they engage with other firms, and not least what potential benefits can be achieved from supporting other firms' innovation activities. The paper uses a quantitative survey on Danish small and medium‐sized enterprises (SMEs) carried out in 2010 to identify the providers, the role they take on, and the main benefits the providers gain. This paper finds that firms that are providers are indeed an under‐researched and important phenomenon for firms' innovation activities. Compared to receivers of knowledge, the providers are younger, have a higher R&D intensity, adopt more open innovation practices, have higher absorptive capacity, and fewer barriers toward knowledge sharing as demonstrated by the NIH and NSH syndromes. Finally, although only tentatively, the paper finds that the provider firms are more product innovative compared to nonproviders. The paper further finds that more projects, more embedded relationships, and mutual rather than one‐way exchange relationships significantly raise the probability that a firm experiences a substantial benefit from providing to other firms' new product development projects. The overall ambition of the paper at this point is to inspire other researchers to pursue the agenda on the provider perspective for future research. To support such research, the paper suggests a broadening of the research perspectives from the receiver of knowledge, in the literature on interorganizational relationships and open innovation, to include the provider, and even suggests some preliminary ideas for such research. Hence, the contribution of this paper lies not only in opening a new research topic but also in identifying some first characteristics of the phenomenon adding a substantial perspective to the literature on open innovation and interorganizational relationships. The paper formulates three indicative recommendations for managers that consider becoming a provider to other firms' NPD.     

Service Delivery Networks and Employment Relations at German Airports: Jeopardizing Industrial Peace on the Ground?

In this article, we ask how organizational restructuring towards a network form of service delivery challenges an established form of employment relations in Germany, that is labour–management collaboration. Building on a theoretical discussion of the marketization hypothesis, we develop a structuration perspective on the relationship between network restructuring and labour–management collaboration, which highlights the political economy of inter-firm networks. Empirically, we focus on two major airport authorities in Germany. Our findings show how these authorities at the core of service delivery networks face a strategic trade-off between short-term labour cost reductions and more adversarial employment relations. Apart from coinciding with a deterioration in working conditions for service workers, the handling of this trade-off depends on managers’ and worker representatives’ commitment to collaboration across the network. While unions and works councils initially continued with social partnership-type practices, the more adversarial management practices for enacting the network restructuring cause a fragmentation on the workers’ side and increase the conflict potential. We conclude that the agency of management and worker representatives in the enactment of inter-firm networks oscillates between more partnership-like and more conflictive practices, which turn the network restructuring into a political process with divergent outcomes for employment relations.     

Why Do Firms Enter a New Product Market? A Two‐Dimensional Framework for Market Entry Motivation and Behavior

What are the energetic forces that induce established firms to enter new product markets? While most previous research has explained the economic profits expected from a new product market as firms' distinctive motivation for market entry, some recent studies also emphasize interfirm competition and benchmarking activities as another important factor that motivates firms' new market entry. To explain the established firms' diverse new product market entry behaviors, this study presents a two‐dimensional scheme of entry motivation in terms of the degrees of target market profit focus and competitor focus. The first dimension captures the economic motivation of firms' new market entry that ranges from focusing on the direct expected profits from the target market to considering more strategic/indirect benefit incentives. The second dimension captures the degree of firms' external motivation for entry affected by competitors that ranges from independent entry decisions to fully competitor‐oriented entry decisions. Using multiple‐industry survey data, the current study empirically verifies that these two entry motivation dimensions explain a great portion of actual firms' new product market entry behaviors and that they are independent of each other. Subsequently, this study validates that firms' operational size and their environmental factors like perceived technological uncertainty and competitive intensity upon new market entry affect the degrees of the two dimensions of firms' new product market entry motivation. More specifically, large firms less emphasize target‐market profits than small firms, and when perceived technological uncertainty is high, potential market entrants become less target market profit focused but more competitor focused. Under a highly competitive new market condition, firms focus on both target‐market profits and competitors. Based on the analysis of new market entry motivation dimensions, the current study proposes a new typology of established firms' market entry behaviors. The suggested typology represents the four different types of new product market entrants and examines specific characteristics and entry strategies for each type of potential entrants. This entry‐motivation framework should provide a deeper understanding of the backgrounds of entry behaviors and assist firms in developing appropriate entry strategies and in advantageously responding to rival firms' actions with regard to entry.