How does trust affect alliance performance? The mediating role of resource sharing

Although the direct impact of trust on alliance performance is well documented, little is known about how trust affects alliance performance. Based on the resource-based view, this study develops a model that employs resource sharing as a critical mediating mechanism through which trust affects alliance performance. Using survey data from 205 Chinese firms that were engaged in alliances, we find broad support for the mediated effects of trust. Interestingly, we also find that goodwill trust matters more to tangible than to intangible resource sharing, whereas competence trust matters more to intangible than to tangible resource sharing. Overall, our research provides important implications for firms seeking to translate their trust into superior alliance performance.     

Evolution of service-dominant logic: Towards a paradigm and metatheory of the market and value cocreation?

We explore S-D logic's development in the direction of a unifying paradigm that can provide the foundations for a general theory of the market and value cocreation. The evolution of S-D logic can be grouped into three periods: a formative period, spanning 2004 to 2007, that provided an alternative perspective of markets and marketing; a refinement period from 2008 to 2011, that clarified and broadened S-D logic's narrative; and an advancement period (2012 onwards), which has seen the emergence of S-D logic's paradigmatic status. Drawing on three categories of conditions (metaphysical, sociological and artefacts), we analyze the extent to which S-D logic meets the conditions of a paradigm. Our findings indicate that while S-D logic aligns with most of the metaphysical and sociological conditions for a paradigm, further development is needed for S-D logic to meet the conditions for an artefact. S-D logic references many different theories and methodologies, a situation that implicitly assumes different philosophical perspectives or orientations, notably objective, subjective and inter-subjective. To further develop S-D logic we offer a variety of ontological, epistemological and methodological questions. We also outline research directions that have the potential to move S-D logic towards a unifying paradigm.     

What is the intrinsic value of fertilizer? Experimental value elicitation and decomposition in the hill and terai regions of Nepal

We use Becker-DeGroot-Marshak value elicitation methods to derive the intrinsic value that farmers in Nepal place on fertilizers. Eliciting values under three distinct procurement scenarios, we are able to decompose the total intrinsic value of fertilizer into a willingness-to-pay (WTP) to travel to procure fertilizer, a WTP for assured fertilizer supplies, and a WTP for the productivity benefits of fertilizer. Disaggregating our sample according to location (hills versus terai), we are able to estimate differences in total intrinsic value as well as value components along these geographical dimensions. While farmers in the hills are generally willing to pay more for urea than their counterparts in the terai, the total amount they are willing to pay is, on average, less than the market price for urea. We explore heterogeneity in valuations and discuss the implications of our findings on fertilizer procurement and distribution policies, as well as direct support policies that the Nepal government may consider. While support policies such as subsidies may encourage increased utilization of fertilizers, policies that lower barriers to private sector entry and increase the density of fertilizer retailers could also increase fertilizer utilization.     

How do industrial robots applications affect the quality upgrade of Chinese export trade?

This study examines the effect of industrial robots applications on the quality upgrade of China's manufacturing export products at the enterprise level. It analyzes import and export data obtained from the China Customs and Chinese Industrial Enterprises databases from 2000 to 2013. The results show that the industrial robots applications significantly promotes the quality upgrade of Chinese manufacturing export products. Moreover, the impact of industrial robots applications on the export product quality is dynamic; it initially increases and then decreases. Heterogeneity test results indicate greater quality improvement effects if robots feature applications in high-tech industries. We also show that importing more robots and for extended periods promotes the effects of industrial robots applications on the export product quality upgrades of Chinese enterprises. Mechanism tests reveal that industrial robots applications can upgrade the quality of export products by improving the labor productivity and human capital level of enterprises. Finally, spillover analyses show that industrial robots applications intensity significantly affects export quality upgrades through spillover effects.     

Co-management of purchasing and marketing: Why,when and how?

This article discusses the theoretical and conceptual foundations for the co-management of purchasing and marketing and thereby provides some answers to the questions, why, when and how purchasing and marketing should be co-managed. It develops a conceptual framework distinguishing between internal and external co-management of purchasing and marketing. Improving value creation and value capture is identified as a necessary “pull factor” driving the co-management of purchasing and marketing. Based on resource dependence theory (RDT), we argue that dependence on critical resources is another important “push factor” for the emergence of external co-management. We present a RDT-based typology of co-management constellations showing that co-management is not a one-size-fits-all approach and summarize our findings in five propositions on the co-management of purchasing and marketing. In sum, we conceptualize co-management of marketing and purchasing as a bridging strategy that allows a focal firm to accommodate dependence on critical upstream and/or downstream resources and improves value creation within the supply chain.     

How do standards committees affect the success of a standard? Comparative analysis of RCS and VoLTE and proposed hybrid standards development model of open and bandwagon approaches

Standards have become enablers of complex digital systems that provide a foundation for the present-day digital economy. While existing literature analyzes the factors behind the dominance of one standard over another, there has been little focus on the standards committees that define the standards. This study comparatively analyzes the case of the Rich Communication Services (RCS) and Voice over LTE (VoLTE) standards to examine the characteristics of standards committees. The findings provide lessons learned for standards committees, including non-tiered open membership, and sufficient depth of specifications. Most importantly, a new model is proposed for standards development, based on which the standards committee focuses on technical specifications with open membership, while industry consortia focus on commercial profiling of the technical specifications with the lead of influential players. The new model is expected to resolve the tradeoff between the development speed and stability of communications standards.     

Organizational capabilities and business performance: When and how does the dark side of managerial ties matter?

Though the dark side of business-to-business relationships exists at both the firm and personal level, recent research evidence suggests that the theoretical conceptualization and empirical investigation concerning the latter is still under development. Building upon theoretical perspectives of organizational capability, organizational networking and social capital theories, this study investigates the boundary conditions of personalized business-to-business relationships (managerial ties) on business performance. Specifically formulated hypotheses are tested using the perceptions of senior executives in 137 Taiwanese firms operating in a variety of industrial sectors. Our study extends extant literature by revealing that the dark side of managerial ties is evident in the perceived management capability-political ties-performance and technology capability-business ties-performance interplays. More importantly our survey results are corroborated by evidence from interview results with twelve senior executives. Such findings collectively demonstrate the dark side of political ties (governmental interference in employment, blockage of information flow as well as conflicts of interest), and business ties (reciprocal obligations, time consuming factors and maintenance costs).     

How do country‐level governance characteristics impact the relationship between R&D and firm value?

This article addresses the question of how country‐level governance characteristics moderate the market valuation of research and development (R&D). Using a valuation model and panel data from companies in the European Union, United States, and Japan, we find that effective corporate governance allows the market to better assess a firm's R&D investments. This finding is the conjunction with the effect of the legal system, the financial system, and mechanisms of control. First, as effectiveness of investor protection increases, the market valuation of R&D projects also increases. Second, more developed financial systems do a better job assessing R&D. Third, effective control mechanisms reinforce the positive effect of R&D on a firm's market value. In sum, our findings shed light on how policymakers can increase the benefits from firms' R&D spending and thus foster economic growth and social welfare using these country‐level governance characteristics.     

Cross‐border acquisitions by state‐owned firms: How do legitimacy concerns affect the completion and duration of their acquisitions?

Research summary: Cross‐border acquisitions may raise legitimacy concerns by host‐country stakeholders, affecting the acquisition outcomes of foreign firms. We propose that theorization by local regulatory agencies is a key mechanism that links legitimacy concerns with acquisition outcomes. Given that theorization is time consuming and its outcome is uncertain, we argue that state‐owned foreign firms experience a lower likelihood of acquisition completion and a longer duration for completing a deal than other foreign firms. Moreover, we introduce a set of firm characteristics (target public status, target R&D alliances, and acquirer acquisition and alliance experiences) that may affect the threshold level of legitimacy, thereby altering the proposed relationships. Our framework and findings provide useful implications for institutional theory on its core concept of legitimacy. Managerial summary: Cross‐border acquisitions by state‐owned foreign firms may lead to national security concerns and thus debates and discussions among local regulatory agencies. We argue that such institutional processes may reduce the likelihood of acquisition completion and prolong the duration of acquisition completion. Using cross‐border acquisitions in the United States, we find that acquisitions by state‐owned foreign firms are not less likely to be completed than acquisitions by other foreign firms, but they take more time to be completed. Moreover, state‐owned foreign firms are less likely to complete an acquisition when the target firm has more R&D alliances. However, their acquisition experience and alliance experience in the host country increase the likelihood of acquisition completion, whereas their alliance experience alone shortens the acquisition duration. Copyright © 2016 John Wiley & Sons, Ltd.     

How do consumers in developed countries value the environment and workers’ social rights in developing countries?

This paper uses a lab experiment to investigate developed countries’ consumer valuations of characteristics linked to the environment and workers’ social rights in developing countries. It focuses on seafood products and distinguishes between regular, environmentally friendly and fair trade varieties. Consumer valuations are elicited with a multiple price list. Results show that environmental and social labels have similar effects on participant willingness-to-pay when they are first presented. Using welfare variation coming from the labels, we also show that the absence of negative information linked to the regular variety may lead to an underestimation of the value of information associated with the label.     

Doomed from the start: what is the value of selecting a future dominant design?

This study investigates how important it is for a firm to select what turns out to be a dominant design in a technology‐driven industry. Using the personal computer industry as a case study, this research shows that firms are not doomed when their entry design choices turn out to be ‘wrong.’ For early entrants, we found that switching to the dominant design is associated with increased chances of survival and market share. Contrary to our expectations, we found that even later entrants that switched to the dominant design also enjoyed higher survival rates and greater market position. Copyright © 1999 John Wiley & Sons, Ltd.     

How do SOEs and FIEs affect POEs’ performance in emerging economies? Moderating effects of managerial ties

Asia Pacific Journal of Management - In emerging economies, informal ties are important instruments that firms use to overcome market competitiveness disadvantages. Higher proportions of...     

Shareholder value,stakeholder management,and social issues: what's the bottom line?

We test the relationship between shareholder value, stakeholder management, and social issue participation. Building better relations with primary stakeholders like employees, customers, suppliers, and communities could lead to increased shareholder wealth by helping firms develop intangible, valuable assets which can be sources of competitive advantage. On the other hand, using corporate resources for social issues not related to primary stakeholders may not create value for shareholders. We test these propositions with data from S&P 500 firms and find evidence that stakeholder management leads to improved shareholder value, while social issue participation is negatively associated with shareholder value. Copyright © 2001 John Wiley & Sons, Ltd.     

Multinationals' response to major disasters: how does subsidiary investment vary in response to the type of disaster and the quality of country governance?

We investigate the response of multinational corporations (MNCs) to major disasters at the subsidiary level. We examine the type and severity of the disaster and whether and how country governance moderates the relationship between exogenous disaster risk and subsidiary investment. We test our hypotheses with a panel dataset of 71 large European MNCs and their subsidiaries (2001–2006) with 31,285 total observations. Findings suggest that the number of a firm's foreign subsidiaries is likely to decrease in response to terrorist attacks or technological disasters but not natural disasters, regardless of the severity of the event. For terrorist activities, MNC subsidiary‐level disinvestment is less likely when the quality of host country governance is higher. Copyright © 2011 John Wiley & Sons, Ltd.     

Money secrets: How does trade secret legal protection affect firm market value? Evidence from the uniform trade secret act

Research summary : We investigate the impact of trade secret legal protection on firm market value in the context of acquisitions. On one hand, market value may increase because trade secret assets become better protected from rivals. On the other hand, market value may decrease because trade secret protection reduces information about the target and its competitors available to potential buyers, increasing uncertainty about its value. Buyers will discount their offers in expectation of being compensated for riskier deals. Using a sample of private equity investments in the United States, we find that trade secret protection has a positive effect in industries with high mobility of knowledge workers, but a negative effect in industries with (1) high resource–value uncertainty and (2) high poor‐investment risk. Managerial summary : We argue that an increase in trade secret legal protection might not unequivocally benefit firm owners when selling their business. A stronger trade secret protection increases the market value of firms in industries with high workers' mobility, but it decreases the market value of firms in industries with uncertain resource value and/or high risk of poor‐acquisition investments. Based on the contingent effect of trade secret protection, companies may want to adjust their strategic decisions, including where to locate or relocate, based in part on whether they will derive benefits or suffer losses when trade secrets are better protected. Finally, our study should help policymakers understand more fully the economic impact of government policies associated with trade secrets. Copyright © 2016 John Wiley & Sons, Ltd.     

Examining the new product innovation – performance relationship: Optimizing the role of individual-level creativity and attention-to-detail

New product innovation has been identified as the key to firms' marketplace success, profit and survival. Yet, the failure rate for new products is high. Because of the high costs associated with new product development, there is considerable theoretical and managerial interest in how to minimize the high failure rates of new products and what separates new product winners from losers. This study focuses on individual level ambidexterity – namely head of the R&D departments' capacity to engage in creativity and attention-to-detail simultaneously, a skill involving different centers of attention, and relying on somewhat incompatible behaviors and processes. The ability to engage in these behaviors simultaneously is seen as being ambidextrous. Drawing from the data of 150 advanced manufacturing firms in India (gathered from one CEO and one head of the R&D department for each firm), the results show that when an individual head of R&D engages heavily only in creativity, too many new, risky ideas may come and when he/she engages heavily only in attention-to-detail, he/she may suffer through a lack of novel ideas. Both approaches limit individual's contribution to enhancing product innovation – financial performance relationship. The results also show that an individual head of R&D needs to engage in high levels creativity and attention-to-detail in the pursuit of enhancing product innovation to achieve superior financial performance.     

Which boundaries? How mobility networks across countries and status groups affect the creative performance of organizations

Research summary : Losing key employees to competitors allows an organization to engage in external boundary‐spanning activities. It may benefit the organization through access to external knowledge, but may also increase the risks of leaking knowledge to competitors. We propose that the destination of departed employees is a crucial contingency: benefits or risks only materialize when employees leave for competitors that differ from the focal organization along significant dimensions, such as country or status group. In the context of the global fashion industry, we find that key employees' moves to foreign competitors may increase (albeit at a diminishing rate) their former employers' creative performance. Furthermore, firms may suffer from losing key employees to higher‐ or same‐status competitors, but may benefit from losing them to lower‐status competitors. Managerial summary : Losing key employees to competitors can provide organizations with access to external knowledge, but increase risks of leaking knowledge to competitors. We find that an organization's access to external knowledge and its risks of knowledge leakage through employee mobility may be affected by whether its employees leave for competitors in a foreign country or in a different status group. In the context of the global fashion industry, we show that key employees' moves to foreign competitors increase (up to a point) their former employers' creative performance. Furthermore, firms may suffer from losing key employees to higher‐ or same‐status competitors, but benefit from losing them to lower‐status competitors. Hence, executives in creative industries and possibly beyond could welcome losing employees to competitors in foreign countries or to lower‐status competitors. Copyright © 2016 John Wiley & Sons, Ltd.     

The myth of the unique decomposability: specializing the Herfindahl and entropy measures?

This research note investigates the trend towards specializing the Herfindahl index H for measuring industry concentration and the entropy measure E for expressing firm diversity. Examining the “decomposability” of E and H, we show that the professed overriding advantage of the entropy measure with respect to decomposability is not its exclusive preserve; the paper contains a proof that this property is also shared by the Herfindahl index. It is also shown that, due to its more stable range, the H index is more versatile with respect to inversion than the E measure. Strategy researchers are thereby cautioned that the current trend toward an increased use of entropy is risky and should be reassessed. Copyright © 1999 John Wiley & Sons, Ltd.     

How widespread is undernourishment?: A critique of measurement methods and new empirical results

Programmes against hunger require the identification of the undernourished. For this purpose a cutoff point is fixed which partitions the population of a region into two groups: those with insufficient access to food and those whose food needs are satisfied. We describe the standard method used to set the cutoff point. We explain how the choice of a unique cutoff point for a group of people may underestimate or overestimate undernourishment when requirements vary between people. Furthermore, we present corrected estimates of the proportion of the undernourished for a large sample of developing countries. Our results reveal that the estimation error of the standard method can be large.