Role of home and host country innovation systems in r&d internationalisation: a patent citation analysis

This paper has three novelties. First, we argue that any given R&D facility’s capacity to exploit and/or augment technological competences is a function not just of its own resources, but the efficiency with which it can utilise complementary resources associated with the relevant local innovation system. Just as asset-augmenting activities require proximity to the economic units (and thus the innovation system) from which they seek to learn, asset-exploiting activities draw from the parent’s technological resources as well as from the other assets of the home location’s innovation system. Furthermore, we argue that most firms tend to undertake both asset exploiting and augmenting activities simultaneously. Second, we use patent citation data from the European Patent Office to quantify the relative asset augmenting vs. exploiting character of foreign-located R&D. Third, we do so for European MNEs located in the US, as well as US MNEs located in Europe. Our results indicate that both EU (US) affiliates in the US (EU) rely extensively on home region knowledge sources, although they appear to exploit the host country knowledge base as well.     

Retailers’ Merchandise Organization and Price Perceptions

Retailers’ presentation of merchandise to consumers is often organized by brand or by price to facilitate comparison and processing of competitive information. While such organization of product information is presumed to assist consumer decision-making, we suggest that sorting of alternatives on brand names strain cognitive resources more than a price sort, leading to differences in sensitivity to prices for a target product accompanying these two sorts. We conduct three studies to examine this issue and find that sorting of alternatives interacts with consumers’ motivation and influences price perceptions. Our results add nuance to the findings from previous studies examining how assortment affects consumers’ price sensitivity, and suggest that retailers whose appeal is not primarily price-based could benefit by presenting merchandise information sorted by brand name so as to increase perceptions of quality and value.     

When consumers penalize not so green products

To cash in on consumers’ willingness to pay higher prices for green products, several companies are promoting conventional products as green by highlighting a few green attributes. Through a theoretical lens, the authors investigate how consumers perceive such attempts. This research illustrates that not so green products make consumers sensitive to the monetary sacrifice associated with the purchase of such products. The current research shows that consumers have a negative attitude toward such products and they become concerned about the ethicality of the company when they encounter such products. Both implicit and explicit measures suggest that consumers notice the company's motive behind such practices which, in turn, impacts their price perceptions.     

The effects of need for cognition and trait anxiety on price acceptability

This research explored the effects of two personality variables, the need for cognition and trait anxiety, on consumers' price acceptability. The study used 124 subjects to determine support for the predicted relationships between the two personality variables and price acceptability. The results showed that the low need for cognition individuals had significantly lower price acceptability than the high need for cognition individuals. On the other hand, price acceptability showed a U‐shaped relationship with trait anxiety. Price acceptability for both high‐ and low‐anxiety individuals was higher than that for individuals with moderate levels of anxiety. © 2001 John Wiley & Sons, Inc.     

The price is right? Guidelines for pricing to enhance profitability

Pricing is a key element of the marketing strategy. It does not require significant investments or resources, and is perhaps the most accessible lever to manage profitability. Even minor fluctuations in pricing can have a significant impact on both revenues and profitability. As such, lack of careful planning in pricing is a wasted opportunity. With this as a backdrop, we make a case for precision in pricing to enhance profitability. Since consumers vary in their preferences, motivations, and propensity to spend, they assign varying degrees of emphasis regarding price upon their purchase decisions. We argue that pricing is a creative exercise in math and behavioral economics, and companies should stay focused on profits. We also provide a series of guidelines for creating effective base prices, and then modifying them to enhance profitability. Finally, monitoring prices at the transaction level will reduce leakage in profits and further add to the bottom line.     

Multinational Enterprises,Development and Globalization: Some Clarifications and a Research Agenda

This paper considers how economic globalization has affected opportunities and challenges for developing countries in following a multinational enterprise (MNE)-assisted development strategy, revisiting an earlier article by the authors. The growing share of industrial activity owned and/or controlled by MNEs has not—by and large—led to a proportional increase in sustainable domestic industrial growth. Particular attention is paid to how MNEs have responded proactively to globalization by modifying their strategies, spatial organization and the modalities by which they interact with host economic actors, and how these changes alter our understanding of MNEs and development. What has been learnt over the last decade about embeddedness, institutions, inertia, absorptive capacity, spillovers and linkages, and how they can explain the success of some countries (or regions) in promoting growth, and the failure of others, is examined. The need to link MNE and industrial policies systematically is highlighted. Attracting the “right kinds” of MNE activity remains important, but greater heterogeneity of MNE activity and host locations requires greater customization of policy tools.     

Choosing Between Internal and Non-internal R&D Activities: Some Technological and Economic Factors

This paper evaluates some of the technological and economic factors that underlie the choice between in-house R&D, R&D alliances and outsourcing. We recount the reasons for the growth in non-internal activities, and explain why these are not as prevalent for R&D as other value-adding activities, and highlight that outsourcing is most often undertaken where multiple, substitutable sources are available. We then develop two frameworks. First, a static framework is developed, which evaluates the choice of mode based on a firm's distribution of competencies, and their strategic importance. Second, a dynamic framework is developed that demonstrates how the static framework differs depending on whether the firm is engaged in pre-paradigmatic, paradigmatic or post-paradigmatic sectors. We also consider the effect of new technologies being introduced to a firm's portfolio of competencies     

The Eclectic Paradigm in the Global Economy

Economic globalisation and the subsequent growth of global and alliance capitalism have fundamentally affected the way in which MNC activities are undertaken and organised. The various contributions to this special issue have evaluated the eclectic paradigm in the global economy, and its validity as a theoretical basis to understand these developments. This paper places these contributions into context. We highlight that globalisation has increased the interactive dynamics between and among 'O', 'L' and 'I' characteristics at firm, industry and country level, in at least two ways. First, a knowledge-based society has meant that the efficient exploitation of MNCs' ownership advantages and the continual need to augment and sustain their competitive advantages is ever more crucial, leading to a complex interdependence between ownership and location advantages. Second, globalisation has affected how MNCs seek to organise their cross-border activities coherently in response to changing boundaries of the firm. We find that the paradigm continues to provide a framework which facilitates how best to synthesise relevant complementary theories, or how to choose between potentially competing theories, and helps to operationalise them.