Understanding commercialization of technological innovation: taking stock and moving forward

The commercialization of technological innovation, which is key to entrepreneurial success, represents a combination of several entrepreneurial activities. Building on research in management, strategy, entrepreneurship, and economics, this research summarizes 194 articles from 62 journals, categorizing them into six broad entrepreneurial activity themes: sources of innovations, types of innovation, market entry competence and feasibility, protection, development, and deployment. This review and synthesis suggest a framework of commercialization and an agenda for future research along with recommendations and guidance for future research. The proposed agenda provides topics and research questions for research, as well as related recommendations regarding the study and practice of the commercialization of innovation.     

Product market pricing power, industry concentration and analysts’ earnings forecasts

This is the first study to establish a link between product market power and analysts’ earnings forecast accuracy and bias. Relating two different dimensions of market power to earnings forecastability, we document that (a) a firm’s relative pricing power and (b) its industry concentration are strong positive determinants of analysts’ earnings forecast accuracy. We find that forecasting earnings of higher market power firms is less complex due to their ability to withstand cost shocks as well as greater informational-efficiency enjoyed by such firms. Further, forecast optimism increases with weakening product market pricing power and with lower industry concentration. The knowledge derived from this study will hopefully improve the accuracy of equity valuation, and thereby engender better buy-side (stock selections) and sell-side recommendations by analysts. Our analysis also suggests that brokerage firms compensating analysts based on forecast accuracy need to adjust for the differential in the information complexity of different industries.     

Endogenous Imitation and Technology Absorption in a Model of North–South Trade

Abstract

This paper considers the transfer of technology from the North to the South that occurs through trade in high-technology goods and explicitly models the ‘reverse-engineering’ process that allows the South to assimilate new technologies. A key finding of this study is that the South's rate of growth is dictated by the size of the country's human capital, which determines its absorptive capacity and its ability to assimilate knowledge from the North. We find that while a Southern country that is poor in human capital can only imitate, Southern countries that possess sufficiently large human capital endowments, beyond a certain threshold, signal the onset of innovation. We also find that the North enjoys a higher rate of innovation and growth with trade than without. North's gains are the highest when it trades with a human-capital ‘poor’ South, because imitation increases South's demand for Northern intermediates. But trade with the Southern countries that are human capital rich (and therefore involved in innovation), dampens their demand for Northern imports, adversely affecting North's growth. The model predicts growth convergence between the North and a South that is well passed the threshold for innovation.     

Strategic group theory： A customer-oriented view

Barney and Hoskisson （1990） argue that the strategic group research has neither established the existence of strategic groups, nor their relationship to firm performance. The primary reason behind the unsatisfactory results is the lack of a theoretical framework： what strategic variables to include in the analysis and their relative importance; the definition of an industry, and how to make competitive strategy operational. First, the author presents a customer-oriented theory of management which submits that, like Procter and Gamble, understanding customers should be the primary focus of a business. Second, the author proposes an integrated approach to competitive strategy. Because customer-perceived quality is far more critical to long-term success than any other factor, it should be the centerpiece of competitive strategy. The author suggests that competitive strategy should be divided in two interdependent dimensions： external and internal. It is the external strategy that should be considered the primary dimension because it reflects the customers＇ perspective, and provides a sense of direction regarding how the internal resources should be used. Next, the author presents an operational framework of competitive strategy which proposes that the best route to market share leadership in consumer markets is competing in the mid-price segment, offering superior quality compared to competition at a somewhat higher price： （1） to maintain an image of quality, and （2） to ensure that the strategy is profitable and sustainable. Finally, the author offers a framework of business or industry definition that extends Abell＇s （1980） three dimensions to seven. He suggests that an integrated approach to market segmentation provides the foundation for conducting strategic group analysis in consumer markets. So, in strategic group research, we need a bottom-up approach that begins with a product-market segment. In each product market, real competition occurs at the brand level. This is the ground where actual competitive wars are fought, and this is where the rich dynamics of competition often come to light.     

Managerial characteristics and willingness to send employees on expatriate assignments

This paper examines the characteristics of managers that influence their willingness to send employees on expatriate assignments. Data from 336 senior managers in a major U.S. professional services firm indicate that managers who are higher up in the organizational hierarchy are more willing to send employees on expatriate assignments. In addition, our findings show that managers who have more extensive international experience are more inclined to send employees on such assignments and that managers with expatriate experience themselves are much more willing to send their employees overseas, regardless of whether they currently work with international clients. © 2009 Wiley Periodicals, Inc.     

Divestiture and Its Implications for Innovation and Productivity Growth in U.S. Telecommunications

This study has sought to determine the impact of policy changes that led to the breakup of the monopoly structure of U.S. telecommunications on productivity and research activities of AT&T. A simultaneous-equations model is used to examine the relationship between research intensity, market share, firm size, and total factor productivity (TFP) before and after divestiture. The results show that the effect of divestiture on productivity is negative but that competition has a significantly positive effect. Contrary to popular argument, competition led to significant increases in R&D investment by AT&T. The study also finds a strong and positive relationship between R&D and productivity in the postdivestiture period, marked by its absence in the predivestiture years. Scale economies remain important, indicating the industry continues to favor large firms.     

THE WEEKEND EFFECT AND CORPORATE DIVIDEND ANNOUNCEMENTS

Numerous studies document a day-of-the-week effect in stock returns. Although a common explanation for this phenomenon concerns a potential daily pattern in the release of corporate information, existing studies provide conflicting evidence. To aid in resolving this issue, possible seasonalities in a sample of 138,824 dividend announcements are investigated over twenty-six years across 3,484 firms. Tests provide no support for the information hypothesis and suggest that the anomalous pattern of returns is driven by some factor unrelated to information arrivals.     

INCOME,CONSUMPTION AND SAVING IN URBAN AND RURAL INDIA*

The main purpose of the study is to determine the savings potential of urban and rural households in India and in the process determine the possible savings and consumption functions separately for urban and rural areas. Four different possible functions have been used for determining the savings behaviour of the households both at the aggregate level and at the per capita level. The rural households, according to the results, have an extremely low rate of saving with income elasticity of saving of less than unity. For the urban households on the other hand, the income elasticity of saving is high enough to suggest the possibilities of considerably high savings potential. To understand the consumption behaviour of these households, the long-run and the short-run marginal propensities to consume and the marginal propensities to consume out of‘permanent’ or ‘normal’ income and ‘transitory’ income have been worked out. For the urban sector none of these give encouraging enough results and the analysis has been extended to examine whether other factors like prices and household assets are of any significance. Whereas for the rural sector, Milton Friedman's theory of ‘permanent’ or ‘normal’ income is somewhat substantiated, other factors like ‘transitory’ income, prices and assets appear to inthence urban consumption behaviour though no single one of them substantially enough. A negligible effect of ‘permanent’ income on urban consumption behaviour is, on the other hand, very clearly suggested by the results. Household consumption and savings have next been projected using the above results to determine the possible levels for the next three years. The results suggest that the rate of domestic savings likely to be achieved by the end of the Third Five Year Plan (1965–66) falls short of the targets laid down.