Making Up Is Hard to Do: Knowledge Acquisition Strategies and the Nature of New Product Innovation

Innovation creates significant challenges for firms in high‐technology industries. This article examines how the use of external knowledge acquired from mergers and acquisitions (M&As) and joint ventures (JVs) influence the nature of innovative competence in the global pharmaceutical industry. We create a unique database on never‐before approved products that measure the scientific merit of new, exploratory product innovations, ranging from radical to incremental. We then follow their market success by recording the number of new exploitative product innovations that stem from these product innovations and that are later approved and subsequently marketed. Using a large data set spanning a 15‐year period, we find that firms were able to “make up” for their lack of exploitation or exploration innovative capabilities through the use of M&As and JVs. These external knowledge acquisition strategies were found to overcome internal processes that otherwise could cause firms to overemphasize exploitation over exploration and vice versa. Our findings suggest that acquiring external knowledge via M&As is associated with diminished exploratory product innovation, while assimilating external knowledge sourced from JVs is associated with a reduction in new exploitative product innovation.     

Company Support for Employee Volunteering: A National Survey of Companies in Canada

Company support for employee volunteerism (CSEV) benefits companies, employees, and society while helping companies meet the expectations of corporate social responsibility (CSR). A nationally representative telephone survey of 990 Canadian companies examined CSEV through the lens of Porter and Kramer’s (2006, ‘Strategy and society: the link between competitive advantage and corporate social responsibility’, Harvard Business Review, 78–92.) CSR model. The results demonstrated that Canadian companies passively support employee volunteerism in a variety of ways, such as allowing employees to take time off without pay (71%) or adjusting their work schedules (78%). These Responsive CSR efforts contribute to the company’s value chain by enhancing employee morale, a perceived CSEV benefit. More active forms of support requiring company time or money are less common; for example, 29% allow time off with pay. Companies perceive that support for employee volunteering enhances their public image, a Responsive CSR strategy when employed to ameliorate a damaged reputation or a Strategic CSR strategy when contributing to a competitive position. A minority perceive challenges like covering the workload. Many companies target and/or exclude particular causes and link CSEV efforts with other philanthropic donations, suggesting a Strategic CSR application of CSEV. Where programs exist, they frequently are neither tracked nor evaluated, suggesting that companies are not using these programs as strategically as they might.     

A small country's high-tech dilemma: the challenge facing new technology-based firms in Norway

Judging from their profit trends, new technology-based firms have not been very successful in Norway. After ten or more years of activity, fewer than half a dozen has accumulated profits over £1 million. Those that risked large initial investments in order to standardize an innovative new technology enjoyed the greatest amount of success. Most firms were able to develop a prototype, but many had great difficulties gearing up for production. Insufficient financing and know-how were the main problems. Firms have had more problems with production than with marketing, but very few seem prepared for the costs and challenges of an international marketing effort. Most lacked a clear marketing strategy or business plan. Financing was often a problem: there was little private investment, and equity capital was often scarce with a mean debt to equity ratio of less than 30%. Most firms received some sort of public funding, usually in support of product development, but so far it has had little impact on profit trends. A multi-national follow-up study with access to a larger data base would provide many more insights.     

“Pacific Rim: The forefront of international tourism”: Report on the 1997 conference of the international society of travel and tourism educators (ISTTE)

The 1997 conference of the International Society of Travel and Tourism Educators (ISTTE) was held from October 23–26, 1997 in San Diego, California, USA. More than 150 travel and tourism educators and industry professionals gathered at the Mission Valley Hilton Hotel to attend the society's ninth annual event. Delegates represented over 80 tow‐ and four‐ year colleges and universities, private travel schools, and high school in Australia, Canada, Korea, Japan, New Zealand, the United Kingdom, and the United Sates. Also present were representatives of nearly 30 companies from various sectors of the travel and tourism industry. Special to this year's conference was the theme of “The Pacific Rim: Tomorrow‐Today” —a recognition of the region as the fastest growing inbound and outbound market of international tourism. It was the first time the society chose a region as the center stage of its biggest annual event. It also was the first conference held after the society adopted its present name. At last year's conference in Ottawa, Canada, the Society's Board of Directors recommended, and members voted, to add “International” to its original name to reflect the increasing representation of international membership in the organization. This year's conference was presided over by Dr. Kaye Chon, President of ISTTE and Professor of Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston, USA.     

A Visual Analysis of Destinations in Travel Magazines

This study presents a visual analysis of photographs of six destinations (Hong Kong, Macau, Japan, South Korea, Vietnam, and Taiwan) published in Chinese travel magazines. The object and subject categories, size, and providers of the photographs are content analyzed. The three most popular object categories were Culture, history, and art; Leisure and recreation; and Physical environment. The dominant subject category was No people. Multiple Correspondence Analysis showed that the different destinations correlated with diverse object and subject categories. All six destinations were portrayed differently in terms of the source and size of the photographs. These findings can be utilized by destination marketing organizations (DMOs) to devise positioning and promotion activities for implementation in the Chinese market.     

Entry decisions of multinational firms: The role of competition threats

How do multinational corporations (MNCs) influence each other's foreign entry decisions? In this paper, I examine the interactions in MNCs' entry decisions by investigating how MNCs respond to competition threats from their multinational competitors. The analysis shows that entry threats anticipated through foreign investment news encourage MNCs to take preemptive actions by entering the same city after the news, while the actual entry of competitors and the anticipated expansion of incumbents discourage more entry. Incumbent MNCs, on the other hand, respond to entry threats by upgrading productivity. The effect of competition threats depends on each MNC's own existing activity and production network within the region. The effect of entry threats increases with the size of threats, measured by the investment value, expected employment and expected output, the influence of the news, the credibility of the news and the local market orientation of the threats. Across industries, MNCs' entry decisions are found to respond to only the actual entry—not anticipated entry—in vertically linked industries. Further, by exploring the time path, I find that MNCs' preemptive entry is only taken before FDI news expires. The main results are robust to IV analyses that explore unique information from news source and news content.     

Golden eggs versus plastic eggs: hyperbolic preferences and the persistence of debit

The popularity of debit cards is good news from a social perspective since they carry a lower transaction cost than other non-cash payment methods. Unfortunately, the reason for this consumer driven growth remains a mystery. Consumers do not benefit from any of the gains created by the low transaction costs. Rather, the incentives being offered to consumers encourage them to use credit cards despite higher transaction costs. We demonstrate that consumers may be using debit cards as a means of budgetary precommitment when preferences are hyperbolic. Using data from the 2004 Survey of Consumer Finances, we find that consumers substitute debit use for investment in illiquid assets as a method of self constraint as incomes fall.     

Multi-regime nonlinear capital asset pricing models

A multiple-regime threshold generalized autoregressive conditionally heteroskedastic capital asset pricing model is introduced. The model captures asymmetric risk through allowing market beta to change discretely between regimes that are driven by market information. Asymmetric volatility and mean equation dynamics are also captured. We confirm the time-varying nature of market risk, in response to changes in the market, and that this discrete time variation can differ across assets. These findings could have important implications for optimizing investment decisions: e.g. in risk assessment, portfolio selection and hedging decisions.     

New directions for international retail joint venture research

Abstract

This paper contends that a range of questions arising from the geographical and organizational dynamics of international retail joint ventures have been bypassed by studies in the international retail field. It argues that, despite its importance as a corporate growth strategy, comparatively less is known about the way in which retailers have employed joint ventures in international markets. Based on a review of the literature and illustrated with examples of international retail joint venturing activity, this paper reveals several gaps in our understanding of the internationalization process of retail firms. Suggestions for further research are made throughout the paper on the basis of gaps in the retailer internationalization literature.