Knowledge-flows and firm performance

This study advances the understanding of how knowledge-flows impact on firm performance. Incorporating recent research on the knowledge-based view of the firm, this paper tests and extends the knowledge flow model by using more fine-grained measures and by proposing a nonlinear effect. This study tests the predicted effects in a longitudinal research design with data on a global sample of public biopharmaceutical firms. The results largely support the expectation that knowledge-flows largely have a nonlinear impact on firm performance. However, one traditional measure of knowledge-flows, geographical location, turns out to have no significant influence in the extended model. The paper explains the implications of these findings for practice and research.     

Managing the foreign investment portfolio: How industry and governance diversity influence firm performance

Foreign investment has been seen as an important strategy for learning about new technologies and markets. However, the link between the characteristic of a foreign investment portfolio and firm performance has not been examined in detail. Using panel data from 199 Taiwanese firms, this study examines how the foreign investment portfolio in terms of industry and governance diversity influences firm performance. This study finds that governance diversity has an inverse U-shaped relationship to firm performance, whereas industry diversity does not. In addition, this study also finds that their relationships are affected by R&D capability and industry profitability. The empirical findings of our study are useful for firms that invest in emerging economies.     

Reducing environmental uncertainty: How high performance work systems moderate the resource dependence‐firm performance relationship

Firm performance is a major concern for all organizations and involves a multitude of antecedents. Reducing environmental uncertainty and dependency through the use of strategic actions in the resource dependency theory (RDT) framework and enhancing work practices through high performance work systems (HPWS) lead to higher levels of firm performance. We reveal the interconnectivity between RDT and HPWS and develop propositions as to how components of HPWS positively moderate the relationship between firm performance and the environmental uncertainty‐reducing strategic actions proposed by RDT such as mergers and acquisitions, joint ventures, boards of directors, political action, and executive succession. Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd.     

Management ownership and firm performance

This article explores the relationship between management ownership and firm performance. Using the panel data of Chinese listed firms from 2000 to 2004 and the average model, we attempt to avoid some of the deficiencies in research design and performance indicator selection in prior studies. Results show that the proportion of shares held by top management is significantly and positively related to firm performance. Empirical tests of sub-samples in each year confirm the above conclusion.     

Geographic cluster size and firm performance

We examine whether there are increasing returns to locating in clusters—a fundamental premise of agglomeration theory. This premise is worth exploring because a) it has infrequently been studied; b) recent evidence suggests that diseconomies of agglomeration change over time and may alter the payoffs to firms located in clusters; and c) recent evidence suggests that there may be negative returns to agglomeration. We examine firm payoffs to clustering in the biotechnology industry, and consider five different measures of performance. Our results lend support to the view that there are increasing returns to cluster size, but also suggest that diseconomies of agglomeration play an increasingly important role as clusters evolve. We believe these results help in reconciling previous findings.     

Knowledge assets and firm international performance

This paper investigates how intangible knowledge assets impact upon firm international performance through the analysis of a sample of 290 European listed companies. We draw upon the knowledge-based view of the firm, and argue that more knowledge assets have a positive impact on foreign sales intensity, but only a up to a point. The inverse quadratic relationship found suggests that it is necessary to balance knowledge assets with complementary assets in order to achieve a higher degree of international performance. Furthermore we also suggest that externally-generated knowledge assets may have a positive impact upon international performance, but that the impact will be mediated by the possession of internally generated knowledge assets.     

Challenges in predicting new firm performance

Research examining predictors of new firm performance is clearly of interest to entrepreneurs and to those who provide advice and funds for their ventures. A growing body of research has examined the influence upon performance of such variables as entrepreneurs' characteristics, processes of founding, venture attributes, and environmental characteristics. However, considered as a whole, this research has shown mixed results and limited findings to date.This paper considers some of the challenges that arise in attempting to predict new firm performance. A key factor is the heavy dependence of new ventures upon environmental developments, many of which may be very difficult to predict. All firms are impacted by the environment, but new ventures have a concentration of risk upon a few products or services, narrow markets, and a few key resources. Thus, well-conceived ventures can fail because of unforeseen environmental shocks and the lack of “deep pockets” to ride out hard times. These same factors can cause new firm performance to swing widely, confounding attempts to identify predictors of good or poor performance.There are also challenges because many entrepreneurs pursue personal goals, some of which are noneconomic in nature. Thus, decisions about whether to found ventures, about how vigorously to grow them, or about whether or not to close down marginal businesses are all influenced by the personal values of entrepreneurs.The diversity of ventures, encompassing firms that differ greatly in scale and potential, complicates the task of determining predictors of performance. It may be that the influence of a particular variable, such as management experience, varies by type of venture. Previous research has also used a variety of performance measures, making comparisons across studies more difficult. Little has been done to determine whether the factors that enhance one measure of performance, such as survival, are the same as those that lead to others, such as growth or profitability.Previous research has been hampered by inadequate theoretical frameworks and, in some cases, by inappropriate methods of analysis. In addition, past research often could have been characterized by a tendency to examine variables that were easy to study, rather than those that were important.Despite limited success to date, we should not forsake research on predictors of new venture performance. The challenges discussed probably put limits on our ability to predict performance of individual ventures. However, the field of study is young and there is much that can be done to add to our understanding. The paper then develops recommendations for future research, noting that each of the challenges considered raises specific research opportunities.     

How culture shapes consumer responses to anthropomorphic products

Anecdotal evidence suggests that Eastern consumers respond more favorably to anthropomorphic products than their Western counterparts. In the present work, we examine the validity of this common intuition and uncover the specific cultural dimension underlying this difference in consumer response. Specifically, across a cross-national field study and three controlled experiments, we demonstrate that collectivistic consumers favor anthropomorphic products more than non-anthropomorphic products, whereas non-collectivistic consumers do not display this relative preference. This interactive effect holds across various product categories, regardless of whether collectivistic thinking is measured, manipulated, or operationalized based on nationality or ethnicity. We offer managerial and theoretical implications that stem from our findings.     

How income shapes moral judgments of prosocial behavior

The current research extends past work on how consumers (as “observers”) view ethical choices made by others (“actors”). Using a person-centered approach to moral judgments, we show that consumers are judged differentially, based on their income, for engaging in certain prosocial behaviors. Nine studies demonstrate that engaging in the same prosocial behavior, such as volunteering, leads to different responses depending on whether the actor earns income versus receives government assistance. Consistent with our theorizing, we find that aid recipients are given less latitude in how they spend their time than those earning an income and are scrutinized to a greater degree for their choices because people believe their time would be better spent seeking employment. Consequently, the lower moral judgments of aid recipients who choose to volunteer (vs. income earners) are driven, at least in part, by the anger observers feel about the perceived misuse of time. Additional information or cues about employment efforts or work inability attenuate these judgments. Importantly, we document implications for support for federal spending on welfare programs.     

Small firm innovation performance and employee involvement

It is known that small firms rely mainly on the CEO’s individual knowledge for developing innovations. Recent work suggests that this approach is inefficient since it underutilizes other employees’ knowledge. We study to which extent using CEOs, managers and non-managerial employees’ ideas enhances small firms’ innovation performance. A Heckman selection model on 305 small firms shows that not only CEO’s and managers’, but also non-managerial employees’ ideas contribute to innovation performance. However, contributions depend heavily on the individuals’ area of expertise and on whether product or process innovation is desired. Our findings enrich the current view on the entrepreneurial team, but also warn against the implementation of one-size-fits-all employee involvement programs in small firms.     

Board gender diversity and firm performance: The moderating role of firm size

This paper investigates the relationships among board gender diversity, firm performance, and firm size. Our paper provides new insights into the relationship between board gender diversity and firm performance by examining whether firm size alters the impact of board gender diversity on firm performance. We use a panel data from A-share-listed non-financial firms in China to examine the relationship during the period of 2007–2012. Our finding demonstrates that the gender diversity on the board has a positive impact on firm performance if and only if the value of firm size is less than some critical value. In addition, we also find that firm size may undermine the positive impact of board gender diversity on firm performance. This paper contributes to the literature by offering a contingency approach to examine the relationship between board gender diversity and firm performance as well as shedding light on the relationship in the context of a developing economy.     

Outside directors,firm life cycle,corporate financial decisions and firm performance

We investigate whether directors with multiple outside board directorships are related to corporate financial strategy across firm life cycle stages. Using a large sample of firms from the Gulf Cooperation Council (GCC) countries, we find that when the number of directors with multiple board seats increases, firms' level of cash holdings rises, capital expenditure declines, selling, general and administrative (SG&A) expenses increase, and firm performance decreases. We further demonstrate how the relationship varies across different stages of their life cycle. Our findings have significant implications for policy makers, regulators and stockholders in GCC countries and in other emerging markets.     

Modeling the relationship between networking and firm performance

Network theory suggests that successful business ownership might depend on the ability of owners to gain access to resources not under their control in a cost effective way through networking. To date, however, there has been little empirical support for this proposition, particularly for established firms. The results of this study, based on a large longitudinal database, indicate a significant positive relationship between networking (particularly with formal networks such as external accountants) and both firm survival and, to a lesser extent, growth, but not ROE. Further, network intensity is found to be associated with survival, and network range with growth.     

The impact of service innovation on firm performance

This study empirically examines the impact of service innovation on performance in developing countries such as China. We construct a more integrative model linking service innovation, service quality and performance and collect 277 samples in the Chinese tourism sector. The findings are: First, service innovation affects firm performance through direct and indirect paths where service quality plays a positive mediating role, and the direct impact is larger than the indirect one; Secondly, the innovation mode is cost-reductive, which focuses on eliminating internal cost rather than improving service quality; Third, the assessment of service quality emphasizes the dimensions of assurance and reliability.     

A unified systems perspective of family firm performance

Theory and practice indicate that in family-influenced firms, the interaction of the family unit, the business entity, and individual family members create unique systemic conditions and constituencies that impact the performance outcomes of the family business social system. Habbershon and Williams [Fam. Bus. Rev. 12 (1999) 1] have suggested that these unique systemic family influences can be captured through an analysis of the resources and capabilities of the organization. In this paper, we pursue their line of thinking and more specifically examine the systemic relationship of resources and capabilities as a source of advantage or constraint to the performance outcomes for family-influenced firms. The idiosyncratic firm level bundle of resources and capabilities resulting from the systems interactions are referred to as the “familiness” of the firm. Wealth-creating performance for family-influenced firms is a function of the “distinctive familiness” generated by the family business system. The performance model focuses on a particular subset of family-influenced firms whose performance goal is transgenerational wealth and wealth creation potential. We refer to those families that meet this premise as “enterprising families.” We develop a unified systems model of performance that links the resources and capabilities generated in the enterprising families system with their potential for transgenerational wealth creation.     

Innovation patterns and their effects on firm performance

This study aims to identify various innovation patterns and understand their effects on firm performance across business service sectors. By collecting empirical data from 198 Korean business services firms, we explore these firms’ major innovation patterns, conceptualized as combinations of different service innovation dimensions: service concept, service delivery, customer interaction, and technology. Then, in accordance with the innovation patterns they display, we group these firms into four clusters: ‘service delivery-based high-technology', ‘service delivery and customer interaction-integrated', ‘customer interaction-based high-technology', and ‘strongly balanced’ innovators. Last, we investigate whether these patterns influence firm performance. Our findings are three-fold: (1) the innovation patterns in business service firms result from the creation of new combinations of major service innovation dimensions, (2) four independent innovation patterns emerge in business service firms, and (3) these patterns lead to different levels of firm performance. Practically, our findings highlight the importance of highly qualified employees, customer interaction, and technology in improving financial performance.     

Foreign ownership and firm performance in German services

This study provides the first comprehensive analysis of foreign-controlled enterprises in the German service sector based on new micro-data from official German statistics. Various performance measures were examined via comparison of unconditional and conditional means and through use of quantile regression techniques. Foreign-controlled affiliates consistently performed better than German-owned affiliates. In contrast, profitability exhibited precisely the opposite trend. Moreover, labour productivity did not significantly differ when the comparison group consisted of domestically owned affiliates with a high degree of internationalization. A breakdown by country of origin showed that European affiliates pay lower wages and export less relative to non-European affiliates, and US firms have no productivity advantage as in manufacturing.     

National advertising,dual-channel coordination and firm performance

With the rapid development of e-commerce, many manufacturers nowadays opt to open an online channel to engage in direct online sales. The mix of retailing with an online channel adds a new dimension of competition and complementarity to a product's distribution channels. Our model focuses on the strategic effect of the manufacturer's national advertising on alleviating the channel competition. We use a game-theoretical model to show that opening an online channel with the added national advertising effectively alleviates the channel conflict and thus helps improve the whole channel and each channel member performance. Depending on the different product categories and the degree of channel substitutability, the manufacturer's investment in the national advertising also will be different. The value of national advertising increases as product is more compatible with online sales and channel substitutability increases.     

Impact of positioning strategies on service firm performance

This research examines the application of positioning strategies of retail service firms in Texas. Four in-depth qualitative case studies and covert observation methods provide candid subterranean insight into retail positioning in a dynamic marketplace. “Branding”, “service”, “value for money” and, to a lesser extent, “reliability” and “attractiveness” positioning strategies emerge as the most dominant positioning strategies, although emphasis placed on each varies from firm to firm. Furthermore, all of the firms achieve acceptable sales and favorable consumer perceptions when employing these positioning strategies. Desired profits, return on investment (ROI), and market share are associated with these positioning strategies although not as “sales” and favorable “consumers' perceptions”. The results further show that the pursuit of multiple positioning strategies relates to multiple performance indicators. The paper concludes by providing normative suggestions and discussing theoretical and managerial implications.     

Technological opportunism and firm performance: Moderating contexts

Technological opportunism is a sense-and-respond capability of firms with respect to new technologies. This research examines the effect of technological opportunism on firm performance from the dynamic capabilities' perspective, and how such an effect depends on relevant firm and/or market contingencies. Analyzing data from a variety of Taiwanese manufacturing industries, the authors find that technological opportunism has a positive effect on firm performance. The technological opportunism–firm performance link is negatively moderated by market orientation and network externality, and positively moderated by technological turbulence. These results confirm the underlying theme of the dynamic capabilities approach to technological changes and contextual (environmental and organizational) relevance. The finding that technological opportunism and market orientation fail to produce any synergistic impact implies that technological opportunism is a more influential source of a firm's competitive advantage.