Mental Models and Successful First‐mover Entry Decisions: Empirical Evidence from Chinese Entrepreneurs

Existing research has identified a variety of mechanisms through which early entrants may be able to develop competitive advantages that favorably influence performance relative to later entrants. At the same time, later entrants can sometimes enjoy cost advantages arising from free riding and the resolution of uncertainty. Despite the impressive array of possible explanations linking entry timing with performance, it is unclear how these explanations align with the cognitive representations that guide managerial decision making. The authors address this gap in the literature by arguing that the resource‐based view of the firm provides potential insight into the way that perceived pioneer advantages and disadvantages influence managerial behavior. The resource‐based view argues that the value of various pioneer advantages will depend on the degree to which those advantages enable pioneers to access and control resources that are costly to copy. Because legal and cultural variables also influence access to resources, the value of specific dimensions of pioneer advantage will vary depending on the macroenvironment within which a firm operates. To test this reasoning, the authors examine the impact of perceived pioneer advantages on the number of first‐mover entry decisions of Chinese service entrepreneurs, who operate in an environment characterized by underdeveloped legal institutions and inadequate legal protections, a fledgling capital market, the limited availability of information about products and industries, and an emphasis on personal connections. The authors hypothesize that these unique characteristics of Chinese markets will affect the perceived importance of sources of pioneer advantage identified in studies of Western (primarily United States) firms. Using data collected from 302 Chinese service entrepreneurs, the authors find strong evidence that the number of pioneer entry decisions made by Chinese entrepreneurs are strongly tied to entrepreneurs’ perceptions that pioneer firms tend to outperform later entrants and have the ability to preempt key assets. In addition, the number of entry decisions is negatively related to perceptions of pioneer cost disadvantages and the level of uncertainty faced by pioneers relative to later entrants. However, consistent with the research hypotheses, perceptions of pioneer leadership and cost advantages do not significantly influence the entry decisions of Chinese service entrepreneurs.     

A Comparative Study of Pioneer Entry Decisions in the United States and China

According to the resource‐based view of the firm, competitive advantages arise from control and deployment of productive resources that are rare and difficult to imitate. Through early entry, pioneers can gain preferential access to key resources. However, the value of that access depends on the presence of isolating mechanisms that limit or prevent competitive imitation. Isolating mechanisms increase the desirability of early entry by lengthening the time horizon over which the firm can earn Ricardian rents on those resources. To explore these implications of the resource‐based view, this study examines the impact of isolating mechanisms on pioneer advantages by analyzing the market entry timing decisions of 209 U.S. and 302 Chinese entrepreneurs. We hypothesize that the stronger intellectual property and legal protections available in the United States are an isolating mechanism that should increase the perceived importance of differentiation and cost advantages in the United States relative to China. Consistent with this argument, we find evidence that the relationships between the number of successful first‐mover decisions and (1) perceived pioneer differentiation advantages and (2) perceived cost advantages are relatively stronger in the United States than in China. We also argue that the importance of personal relationships in China constitutes an isolating mechanism that should increase the perceived importance of preemptive pioneer advantages in China relative to the United States. Consistent with this reasoning, we find that the coefficient linking perceptions of pioneer preemptive advantages with the number of successful first‐mover decisions is significant in the Chinese sample and not in the U.S. sample, but the difference between these coefficients is not significant. These results provide support for the argument that the availability of strong IP and legal protection encourages early entry decisions by entrepreneurs because these protections enhance the pioneer's ability to build a differentiated position in the minds of target customers and secure a cost advantage over later entrants. The results also support the argument that strong personal connections and the practice of reciprocity play a key role in the success of Chinese entrepreneurs.     

Championship Behaviors and Innovations Success: An Empirical Investigation of University Spin‐Offs*

Despite the flurry of scholarly research on champions, no prior article has explicitly addressed how different dimensions of championship behavior actually contribute to innovation success. In this article, based on an extensive literature review, the authors argue that champions display four behaviors, namely (1) pursuing innovative ideas, (2) network building, (3) persisting under adversity, and (4) taking responsibility for the idea. The authors use data from 123 university spin‐offs to test proposed linear and curvilinear relationships between the four behaviors and an objective measure of innovation success, namely a longitudinal measure of sales growth. The results indicate that network building has the desired positive relationship with sales performance. Surprisingly, pursuing the innovative idea is not related to sales growth. Furthermore, the present study also reveals some dysfunctional effects of champion behaviors. Persisting under adversity and taking responsibility have the hypothesized inverted‐U relationship with sales growth. The present study provides a more refined discussion of the benefits and dangers of championing behaviors. Our results show that linking technology to markets can be planned and controlled only to a very limited extent even if champions are working hard to sell the idea to potential customers. Moreover, any new idea is often competing with existing products and pursuing such ideas may result in opposition to the idea. In contrast, network building has the desired positive relationship with innovation success. Effective championing behavior keeps an innovative idea alive by mobilizing support and building coalitions around the idea with critical individuals or important third parties. Moreover, this study challenges the widespread “heroic” discussion of championing as fundamentally positive “across the board.” The results show that persisting under adversity and taking responsibility are desirable up to some levels. Beyond such critical levels, these two champion behaviors may actually become detrimental to the innovation process. Being too persistent in the face of adversity or taking too much responsibility for the innovative idea might undermine the power of the champion's justifications for an innovation and thereby increase resistance to change. An “over‐performing” champion may interpret opposing communications as an unwarranted and injurious response. By taking overmuch responsibility for the innovative undertaking, the champion is likely to discourage contributions from other team members who see no valuable opportunity to bring their expertise and knowledge to the idea.     

浅析中美油品零售管理

美国的油品供应链与中国相比非常高效。同时，复杂的下游供应链所有者结构，阻碍了油品集散过程中的优化，中国正处在一个有利的位置，有机会了解和吸取发达国家的经验和教训。中国车用油品消费是美国车和油品消费量的1／8，但是增长非常迅速。中国目前约有3000座油库，这一数字是美国油库数的2．3倍，而加油站平均单站油品销售量仅为美国的1／10，因此油品零售效率亟待进一步提高。在物流管理上，中国从油库、车队到加油站，整个供应链是单一的所有者，容易实施整体油品配送。另外，在技术装备方面，目前中国的加油站技术条件有限甚至 没有技术设备基础，因此具有独一元二的标准化机会，可以学习并直接跃入最佳的模式，易于实现设备的标准化。     

Gender‐Compensation Differences Among High‐Level Executives in the United States

Bertrand and Hallock (2001: 3) present compelling evidence that female executives in the United States earned 45 percent less total compensation than their male counterparts for 1992–1997. We complement their results by analyzing data over a longer time period and, more importantly, contend that most of the unexplained gender difference in total pay among executives was due to gender differences in the portion of variable pay, in particular a different cash payout from stock option exercises.     

中美财务公司的对比分析

本文对中美两国财务公司的经营环境、业务范围进行了对比分析。分析结果表明,财务公司对于企业集团的发展有着不可替代的作用,中国财务公司的业务范围还需要进一步拓宽。     

Internationalization and the Dynamics of Product Adaptation—An Empirical Investigation

Firms competing in foreign markets can choose to make no changes to the physical product and packaging, called a product standardization policy, which keeps costs low. The main drawback of such a policy is that the product might not satisfy customers. Conversely, firms may choose to modify, or to adapt, the physical characteristics or attributes of a product and its packaging to fit the needs and desires of consumers in different countries better, but this increases development, manufacturing, marketing, packaging, and distribution costs. Though product adaptation is a core aspect of customizing an export market offering, little research has investigated modifying the physical product and packaging. To be successful, an adapted product must add sufficient incremental revenue (through increased sales due to better satisfying customer needs and wants relative to competitive product offerings) such that the additional manufacturing and marketing costs that result from adapting the product are recovered. In this article, a model of the product adaptation process is developed. Using mail surveys, information is gathered from managers in 239 U.S. organizations and 302 South Korean organizations, all of which export products. The goal was to understand better the motivation of firms to adapt their products for export markets as well as the performance implications of adapting products. Furthermore, the model was tested in these two countries to determine if the model is robust and to uncover differences between the United States and South Korea. Using structural equation modeling to analyze the data, a positive association was found between the level of product adaptation and profitability at the project level. Second, U.S. firms appear to be more reactive when adapting products for export markets, doing so when laws and regulations in the export market mandate changes relative to the U.S. market. Conversely, South Korean firms appear to be more proactive and to adapt products even when not required by the governments of export markets. Third, greater international product adaptation is linked to a more responsive marketing organization with customer‐focused practices. Fourth, while a positive link was expected between business unit experience and the extent of international product adaptation, inconsistent results were found between the two country samples. For U.S. firms, it was found that greater experience in international business and product design capability is linked to a higher level of international product adaptation. For South Korean firms, however, a negative relationship was found. Greater international product adaptation occurred with less international business and product design experience. These findings are discussed, and areas for future research are noted.     

Market Orientation and R&D Effectiveness in High‐Technology Firms: An Empirical Investigation in the Biotechnology Industry*

There seems to be lack of consensus among informed scholars about the importance a of market orientation for high‐technology firms. This paper gives a comprehensive review of existing empirical studies on the relationship between market orientation and innovation performance and pinpoints two limitations in this research stream that might be at the origin of such controversy. First, extant research often overlooked key innovation outcomes for high‐technology firms, such as those related to research and development (R&D) performance. Second, organizational conditions that can ensure an optimal integration of market knowledge in the innovation process have been less analyzed in the case of these firms. Against this background, the present study contributes to the literature by providing a test of the effect of market orientation on R&D effectiveness and the moderating role of knowledge integration in this relationship, using a sample of Italian biotechnology firms. The study's objectives are addressed in two steps. The first one consists of an in‐depth qualitative study based on semistructured interviews in five biotechnology firms. The second step consists of a follow‐up survey of 50 biotechnology firms. Results from hierarchical multiple regression analysis show that the different dimensions of a market orientation have diverse effects on R&D effectiveness of high‐technology firms: whereas interfunctional coordination has a positive main effect, the effect of customer orientation is moderated by knowledge integration, and competitor orientation has no effect on R&D effectiveness. Post hoc analyses also show two additional results involving a broader set of dependent variables. First, R&D effectiveness mediates the effects of customer orientation and interfunctional coordination on organizational performance. Second, market orientation does not appear to significantly affect R&D efficiency. The present study contributes to current literature in two main respects. First, it adds to previous work on market orientation and innovation by proposing a new dependent variable—R&D effectiveness—which offers a better perspective to understand the impact of market orientation on innovation performance in high‐technology contexts. Second, while part of the current debate on the role of market orientation in high‐tech markets seems to be polarized by positions that sustain its potential drawbacks or, on the contrary, its advantages, this study's findings on the moderating role of knowledge integration shed light on important contingency factors, such as organizational capabilities. The authors discuss the study's limitations and provide directions for future research.     

Launch Decisions and the Early Market Survival of Innovations: An Empirical Analysis of the Italian Mobile Value‐Added Services (VAS) Industry

There is a surprisingly high number of new products and services that fail to produce enough return on the firm's investments in development and launch activities. Literature has shown that these failures can be due to a poorly planned and executed launch. Although a vast stream of research has studied how strategic and tactical launch decisions affect the performance of new products and services, some issues still need theoretical and empirical investigation. This paper aims to extend new product launch research in two ways. First, it studies how tactical launch decisions (i.e., investments in advertising and involvement of external organizations in the launch process) interact with an important strategic choice (i.e., the degree of radicalness of the new product or service) to affect new product performance. Second, it focuses on a particular dimension of performance, that is, early market survival, which has been overlooked in launch strategy and tactics research so far. Using a data set comprising more than 9300 new mobile value‐added services launched in Italy between 2003 and 2006, the paper finds that launch tactics interact with the radicalness of the innovation to affect early market survival. In particular, communicating the distinctive characteristics of the new product or service and partnering with external organizations during the launch process are tactics that work particularly well with radical innovations. This is possibly due to the fact that they help reduce customers’ uncertainty regarding expected benefits and transaction costs, and hence contribute to win their resistance to adopt the innovation soon after launch. Investments in corporate advertising lead instead to a tangible improvement of the probability of early market survival for both radical and incremental innovations. In other words, the positive impact on the probability of early survival of increasing investments in corporate advertising appears to be relevant for both radically and incrementally new services. One possible explanation is that this tactic helps increase the number of potential customers who come to know about the existence of the innovating firms and its offering soon after launch, but this is likely to be equally important to stimulate early diffusion of both incremental and radical innovations.     

Behind M&;As in China and the United States: Networks,learning, and institutions

Few scholars would dispute the argument that mergers and acquisitions (M&As) are different in China and the United States, but we know little about how they differ. This article reports one of the first studies that systematically compares and contrasts how M&As differ in these two countries. While prior research on M&As tends to emphasize economic and financial explanations while treating firms as atomistic actors severed from their institutional and network relations, we develop a new theoretical framework based on relational, behavioral, and institutional perspectives. We not only consider firms as learning actors embedded in network relations, but also compare and contrast their M&A patterns between China and the United States, two distinctive institutional contexts. We find that both a firm’s structural hole position and its learning orientation (exploration/exploitation) in alliances have direct and joint impacts on subsequent M&As. Further, such impacts differ across the two countries, due to their institutional disparities.     

Residential Immobility of the Elderly: An Empirical Investigation

This paper investigates the reasons for the substantially lower residential mobility rates among the elderly than the non-elderly. Households with low propensities to move are posited to be those that face few benefits from moving—that is, they are near equilibrium with respect to their housing consumption and tenure choice—or those that face large costs to moving. Using household data from the Panel Study of Income Dynamics, measures of housing disequilibrium and tenure disequilibrium were constructed. Elderly renters were found to be largely in equilibrium and would benefit little from moving. In contrast, elderly homeowners are more likely to be in substantial disequilibrium than their younger counterparts. Conclusions as to which costs to moving are most salient could not be made.     

Do early birds get the returns? An empirical investigation of early‐mover advantages in acquisitions

We explore whether pioneering advantages exist for early‐mover acquirers in industry acquisition waves by examining both combined (target and acquirer) and acquirer stock returns. Combined abnormal returns are higher for acquisitions that occur at the beginning of acquisition waves. However, for acquirers' returns, only strategic pioneers—those acting in manners consistent with having superior information—capture significant advantages. Specifically, early‐mover acquirers who realize superior stock returns are those that conduct acquisitions in related industries, during industry expansionary phases, and finance their acquisitions as financial theory suggests they should when they possess an informational advantage—with cash. Our findings extend the first‐mover literature to corporate practices and link these practices to acquisition returns. Copyright © 2004 John Wiley & Sons, Ltd.     

Product Design Innovation and Customer Value: Cross‐Cultural Research in the United States and Korea

Innovation is one of the key drivers of success that a firm must utilize to develop a competitive advantage. The ability to innovate is especially important for a firm's survival in dynamic, changing environments. Customer demands are constantly changing, and more purchases are made when a firm's product design incorporates what customers perceive as cutting‐edge innovations. Satisfying customer demands is a distinct challenge for product designers because firms must develop a clear understanding of what aspects of design the customer wants. Although the importance of design has increased, very little research has been done to explain the relationship between product innovation and product design. Studies indicate that design innovation may create greater customer value through improvements in design value. Previous research has been limited and has not provided a clear concept of design innovation or defined the relationship between design innovation and marketing competencies. This paper seeks to offer a conceptual definition of design innovation, and to define the link between design innovation and marketing competencies. This paper utilizes cross‐cultural research to discover how these concepts differ due to cultural differences between the United States and Korea. This research contributes substantially to our understanding of the relationship between design innovation and customer value.     

Launch Decisions and New Product Success: An Empirical Comparison of Consumer and Industrial Products

Many articles have investigated new product development success and failure. However, most of them have used the vantage point of characteristics of the product and development process in this research. In this article we extend this extensive stream of research, looking at factors affecting success; however, we look at the product in the context of the launch support program. We empirically answer the question of whether successful launch decisions differ for consumer and industrial products and identify how they differ. From data collected on over 1,000 product introductions, we first contrast consumer product launches with industrial product launches to identify key differences and similarities in launch decisions between market types. For consumer products, strategic launch decisions appear more defensive in nature, as they focus on defending current market positions. Industrial product strategic launch decisions seem more offensive, using technology and innovation to push the firm to operate outside their current realm of operations and move into new markets. The tactical marketing mix launch decisions (product, place, promotion and price) also differ markedly across the products launched for the two market types. Successful products were contrasted with failed products to identify those launch decisions that discriminate between both outcomes. Here the differences are more of degree rather than principle. Some launch decisions were associated with success for consumer and industrial products alike. Launch successes are more likely to be broader assortments of more innovative product improvements that are advertised with print advertising, independent of market. Other launch decisions uniquely related to success per product type, especially at the marketing mix level (pricing, distribution, and promotion in particular). The launch decisions most frequently made by firms are not well aligned with factors associated with higher success. Additionally, comparing the decisions associated with success to the recommendations for launches from the normative literature suggests that a number of conventional heuristics about how to launch products of each type will actually lead to failure rather than success.     

Fast‐mover advantages: Speed capabilities and entry into the emerging submarket of atlantic basin LNG

Entry timing benefits and costs typically vary with firms' capabilities. In this study, we empirically examine the entry timing implications of firms' intrinsic speed capabilities, which refer to the ability to execute investment projects faster than competitors. We hypothesize that firms with intrinsic speed capabilities face low preemption risks and, thus, can afford to wait longer for uncertainty resolution before deciding to enter new markets. This hypothesis is more applicable when investment is associated with higher levels of commitment and, thus, greater option value of waiting. A direct implication is that late entrants with intrinsic speed capabilities should have greater expected post‐entry performance. We find support for these hypotheses in the Atlantic Basin liquefied natural gas (LNG) industry from 1996 to 2007. Copyright © 2013 John Wiley & Sons, Ltd.     

English‐Language Proficiency and Occupational Risk Among Hispanic Immigrant Men in the United States

We use data from the Census of Fatal Occupational Injuries, the Survey of Occupational Injuries and Illnesses, and the 2000 U.S. decennial census to analyze how occupational risk relates to the earnings of Hispanic immigrant men. Our findings indicate that those with limited English‐language fluency received significantly higher compensating wages in unsafe jobs than their English‐fluent counterparts. The larger occupational‐risk premiums accrued by limited‐English‐proficient (LEP) foreign‐born Hispanic men also hold when further including U.S.‐born Hispanic, non‐Hispanic Black, and non‐Hispanic White men in the sample. These findings are consistent with underlying differences in preferences toward wages versus safety between LEP and English‐proficient workers and/or differences in coverage under formal workers’ compensation programs, perhaps because undocumented workers (many of whom already faced hazardous conditions when migrating illegally to work in the United States) comprise a disproportionate share of the LEP. However, our data and methodologies do not allow us to determine whether these premiums adequately compensate the LEP for the occupational risk they undertake.     

Occupational Achievements of Same‐Sex Couples in the United States by Gender and Race

This article offers a framework that allows for the simultaneous comparison of all sexual orientation–gender–race/ethnicity groups after controlling for characteristics. The analysis suggests that occupations matter in explaining earnings differences among groups. The article also displays the high magnitude of the gender wage gap in an intersectional framework. The sexual orientation wage premium of lesbians is quite small for blacks and much higher for Hispanics and Asians than for whites. For men, departing from the white heterosexual model involves a substantial punishment; the racial penalty is larger for heterosexuals whereas the sexual orientation penalty is greater for whites.     

Profit Sharing and Public Policy: Insights for the United States

Nations differ in their approach to profit sharing, with policies ranging from nonintervention to mandatory sharing. Mounting evidence that profit sharing has a positive impact on employment and productivity has spurred some American legislators and economists to propose additional tax incentives. While this option has been effective in increasing the number of plans, a more prudent response would be the creation of a national tripartite body to accelerate and enhance the quality of profit-sharing research.     

Youth Apprenticeship in Britain: Lessons for the United States

Britain's effort to introduce youth apprenticeships over the past decade offers important general lessons about the role of employers in school-to-work initiatives. In particular, the incentives facing employers work against efforts to provide skills training. Alternative arrangements for such programs are suggested that create incentives for employers to improve the skills of youth apprentices.     

Testing metric equivalence in cross‐national strategy research: an empirical test across the United States and Japan

We propose a conceptual and analytical framework for assessing metric equivalence in cross‐national strategy research. We illustrate this framework by testing the equivalence of measurement models for a set of strategy constructs across the United States and Japan. Results of a two‐group LISREL analysis conducted on a data set of 447 interorganizational relationships reveal that some constructs have strong cross‐national equivalence, while others need content respecification or reconceptualization. We discuss implications and offer suggestions about how to conduct empirical strategy research in cross‐national settings. Copyright © 1999 John Wiley & Sons, Ltd.