The impact of service R&D on the performance of Korean information communication technology small and medium enterprises

In recent years, research and development (R&D) in the service industry has attracted a great deal of attention from both academia and industrial firms. However, compared to the manufacturing sector, little research exists on the implications of R&D for the financial and/or non-financial performance of firms in the service industry. The purpose of this study is to examine the impact of service R&D on the performance of information communication technology (ICT) firms. We identify five categories of R&D activities and investigate their impact on the financial and non-financial performance of 100 ICT firms, with a focus on small and medium enterprises (SMEs) in South Korea. We postulate positive relationships between R&D efforts and a firm's performance. However, the findings only partially support our hypotheses; unexpected results demonstrate that the presence of R&D management negatively influences a firm's performance. We present detailed statistical results and discuss the implications of the study.     

R&D internationalization,product diversification and international performance for emerging market enterprises: An empirical study on Chinese enterprises

One motivation behind R&D internationalization for emerging market multinationals (EM MNEs) is to expand international markets. This paper analyzes whether the R&D internationalization of EM MNEs contributes to an improvement in international performance measured by foreign sales as a percentage of total sales (FSTS). Using panel data on China's listed companies, this paper introduces more scientific and normative indicators for measuring R&D internationalization in terms of geographic distribution (breadth) and overseas investment (depth). The results reveal an inverted U-shape relationship between R&D internationalization and international performance that is initially positive and eventually becomes negative. Product diversification has a significant moderating effect on the relationship between R&D internationalization breadth and international performance.     

Explaining performing R&D through alliances: Implications for the business model of Italian dedicated biotech firms

In recent years management scholars and practitioners have been interested in Research and Development (R&D) partnering, especially in high-tech industries. While the motivations of research partnership formation have been widely explored in literature, little attempt has been undertaken to examine the effects of research partnerships on R&D productivity and the implications for business models of the new ventures. In this paper we try to shed some light on the business models of the young ventures involved in R&D partnerships and their effect on R&D productivity. Our hypotheses are that experience in previous alliances, repeated partnerships and tight relationships have positive effects on R&D productivity while rigid governance structures and public R&D subsidies have negative effects on such productivity. We discuss how these aspects affect the business models of biotech firms. We test our hypotheses on a sample of 55 Italian DBFs (Dedicated Biotech Firms). Results support our hypotheses. Managerial implications and further issues for future research are discussed.     

Cross-border acquisition performance of emerging market multinational enterprises: The moderating role of state-ownership and acquisition experience

This paper draws on the resource-based view and organizational learning theory to analyse the moderating role played by state ownership and acquisition experience in the performance of emerging market multinational enterprises (EMNEs). We contribute to the evolving literature on state-owned EMNEs by identifying various post cross-border acquisition (CBA) strategies, which have an impact on the performance of such firms that differs for the one they have on privately owned EMNEs. We test our hypotheses by performing a panel regression analysis on a large firm-level dataset spanning 43 emerging markets over the 2006–2015 period. Overall, our findings point at an inverted U-shape relationship between diversification through CBAs and firm performance. More specifically, this concave relationship is greater when the diversification occurs in developed countries, as opposed to emerging ones. Furthermore, there is evidence that state-ownership and EMNE acquisition experience moderate these relationships both in domestic and foreign markets, albeit with different intensities.     

The integration of TQM and technology/R&D management in determining quality and innovation performance

This paper presents an empirical study which examines the co-alignment between Total Quality Management (TQM) and technology/research and development (R&D) management in predicting organizational performance in terms of quality and innovation. This study improves our understanding of the relationship between TQM and innovation based on the following two major issues. First, this study contributes to the understanding of the co-alignment between TQM and technology management along with R&D management by bridging the gap between the two areas which are often addressed in a separate fashion. Second, this study also examines the impact of the integration between TQM and technology/R&D on quality and innovation performance which have been considered as the primary sources of a competitive advantage. The empirical data was drawn from 194 Australian organizations and analyzed using the Structural Equation Modeling (SEM) technique. The findings indicate that TQM shows a strong predictive power against quality performance but no significant relationship against innovation performance. On the other hand, technology and R&D management shows a significant relationship with quality performance but at a lower level than that of TQM, and shows much stronger relationship with innovation performance. In addition, there is strong and positive correlation between TQM and technology/R&D management. The major implication of this study is that technology/R&D management is an appropriate resource to be used in harmony with TQM to enhance organizational performance, particularly innovation.     

How does the combination of R&D and types of knowledge matter for patent propensity?

This paper examines whether the combined effects of R&D efforts and the types of knowledge obtained from the invention process determine patent propensity. With this aim, we investigate a unique, manually collected sample of firms and the Spanish and European Patent Offices to analyze how the combination of R&D and knowledge codifiability, observability and simplicity influence the patent decision. Our results contribute to the literature and assist R&D managers by showing that codified knowledge has a positive impact on patent propensity. Furthermore, we find that knowledge observability and simplicity only influence patent propensity when they are combined with internal R&D expenditures.     

Determinants of foreign ownership in international R&D joint ventures: Transaction costs and national culture

In this study, we integrate the transaction costs economics and national culture perspectives by examining the determinants of foreign equity ownership in international R&D joint ventures. Specifically, we focus on the impact of different uncertainty dimensions–environmental and behavioral–on the share of equity that multinational enterprises take in their overseas R&D joint ventures. We further investigate the roles that two national culture components–power distance and uncertainty avoidance–play in this process. Using 543 international R&D joint venture announcements by foreign enterprises in China, India, Japan, and the United States during the period of 1985 to 2004, our results provide support for both transaction costs economics and the national culture perspectives.     

Managing Internal R&D Networks in Global Firms: What Sort of Knowledge is Involved?

How should a global firm manage its network of R&D centres in an effective manner? Some have developed an Integrated Network model in which the R&D centres around the world are tightly integrated into a coherent whole. Others have adopted a Loosely-Coupled Network model in which individual “centres of excellence” are given considerable autonomy. In this paper we argue that the way individual R&D units are structured, and the way the entire network is managed, should be based not on administrative heritage, environmental turbulence or management style, but on the basis of the underlying characteristics of the firm’s knowledge assets. In particular we focus on the observability and mobility of the firm’s knowledge assets, the impact these factors have on the way individual R&D centres are structured, and how they relate to one another in the international network. The argument is supported using examples and data from Swedish firms including ABB, Alfa Laval and Ericsson.     

External technology acquisition and product innovativeness: The moderating roles of R&D investment and configurational context

An increasing number of studies in technology/innovation management contribute to the understanding of the relationship between external technology acquisition and product innovation performance. On the other hand, the meta-analytic reviews of new product development literature indicate a positive impact of product innovativeness on product innovation performance. However, existing research has not examined the link between external technology acquisition and product innovativeness. This study, therefore, aims to fill this gap of knowledge by investigating the external technology acquisition—product innovativeness relationship and examining the moderating roles of R&D investment and configurational context on this link. Based on a panel sample of 105 high-technology firms over a six-year period, a least squared dummy variable s model reveals interesting results. First, external technology acquisition has a positive impact on product innovativeness. Second, R&D investment increases the effect of external technology acquisition on product innovativeness. Lastly, firm size exhibits a negative effect on the contribution of external technology acquisition to product innovativeness. However, firm age positively impacts the relationship between external technology acquisition and product innovativeness. In addition, this study reveals a positive effect of product innovativeness on firm growth.     

Internationalization of R&D and Innovation Performance in the Pharma Industry

This research investigates the effect of R&D internationalization and contingency variables on innovation performance. A number of prior studies addressing this question have concluded in diverse and inconsistent findings, which can be attributed only partly to sample selection and measurement discrepancies. Using a longitudinal dataset of global pharmaceutical firms, we partly solve this ambiguity in the R&D internationalization and innovation performance relationship. The results reveal an S-shaped relationship, suggesting the benefits of R&D internationalization ultimately overcome the costs after critical levels of R&D internationalization. This finding combines and unites prior findings of a U-shaped, followed by an inverse U-shaped curve. In addition, we find that the experience in conducting R&D internationally, but not the degree of general internationalization, moderates the relationship between degree of R&D internationalization and performance. This suggests that the effect is contingent on the knowledge of internationalization path of the firm but can flourish in the absence of overall internationalization as well. Implications for theory and practice are derived.     

Customer knowledge sharing in cross-border mergers and acquisitions: The role of customer motivation and promise management

Knowledge is a vital source of competitive advantage and renewal for contemporary organizations. However, to date, few studies have scrutinized how mergers and acquisitions (M&As)—processes dependent on knowledge sharing—offer a valuable inter-organizational context through which to understand the attainment of customer knowledge sharing following M&As. Applying an integrated theoretical perspective from customer relationship management and M&A performance research, we study a Chinese–Finnish acquisition and customer firms of the acquired party across four advanced Western countries. We find that customer knowledge sharing is an active relationship management process that relies on the factors of customer dedication-based motivation vs. customer concerns about M&As to maintain relationships after acquisitions. In addition, and more importantly, we find that the promise management mechanisms—making promises, enabling promises, and keeping promises—of the M&A parties reinforce the motivational factors to maintain customer knowledge sharing in cross-border M&As. We propose a conceptual framework of customer knowledge sharing in cross-border M&As.     

Complements or substitutes? The contingent role of corporate reputation on the interplay between internal R&D and external knowledge sourcing

Existing research does not provide a clear answer to the question of whether internal knowledge development and external knowledge sourcing are complementary or substitutive innovation activities. This paper adopts a contingent approach for addressing this issue by examining whether and how the interactive effect of internal R&D efforts and external knowledge sourcing on product innovation performance may be affected by the firm’s corporate reputation. In doing so, a three-way interaction model is applied to a sample of 251 Spanish high-technology manufacturing firms. Interestingly, initial results support the substitutive argument: the positive effect of internal R&D on product innovation performance diminishes as the exposure to external knowledge increases. However, in well reputed companies, interaction becomes positive, revealing a complementary effect. Thus, the study extends the traditional approach focused on determining whether internal and external knowledge sourcing are complements or substitutes by showing that their interplay depends on other firm-specific characteristics. Moreover, identifying corporate reputation as a source of complementarity between both activities provides an additional explanation of how corporate reputation contributes to a more effective management of knowledge assets.     

The impact of R&D sources on new product development: Sources of funds and the diversity versus control of knowledge debate

We build on the knowledge-based view to study the relative impact of alternative R&D sources on innovation performance. We contrast two arguments that have created a debate in the literature: One is that diversity of knowledge is better for innovation, because the integration of a larger variety of knowledge helps create new products that can fulfill unmet customer needs; another is that control of knowledge is better, because the incentives and contextual system of the firm facilitate employees' experimentation, which supports the creation of new products. We provide one solution to this debate by arguing that the relative importance of diversity and control of knowledge on innovation depends on the sources of finance. Hence, we find that, in general, control of knowledge has a higher impact than diversity of knowledge on the sale of new products. We also find that alternative sources of finance moderate the relationships: internal funds strengthen the impact of R&D sources with more diversity of knowledge on the sale of new products, while external funds strengthen the impact of R&D sources with more control of knowledge on the sale of new products.     

Internationalization and Indigenous Technological Efforts of Emerging Economy Firms: The Effect of Multiple Knowledge Sources

Getting engaged in competitive international markets motivates exporting firms to enhance their technological competitiveness and invest in research and development (R&D). While in-house R&D investment is important for getting advanced technologies, the technologies needed by exporters located in emerging economies (EEs) typically readily exist overseas. Drawing on organizational learning literature, we argue that the R&D intensity stimulated by exporting may be reduced when 1) EE exporters are better prepared and motivated to absorb foreign knowledge, 2) foreign sources of knowledge are more available, and/or 3) local technology supply is poor. An analysis on 5592 automobile parts and component manufacturers in China during 2005–2007 supports these arguments. To compete in markets abroad, Chinese firms' R&D intensity increases with export intensity when their export intensity is low. As the export intensity exceeds a certain threshold, their R&D intensity starts to decrease as intensive exporters are better prepared and motivated to acquire knowledge from foreign sources. When substitutive foreign knowledge sources such as foreign parents and FDI spillovers in the local industry is available, firms' R&D intensity stimulated by exporting can be further reduced. Better local technology supply can increase the R&D intensity stimulated by exporting.     

The role of R&D resource commitment in accessing co-location advantages

In a globalized economy, multinational enterprises (MNEs) pursue competitiveness through cross-border knowledge exploitation and exploration in international R&D. It is conventionally assumed that for subsidiaries to effectively access co-location advantages in knowledge milieus abroad, high levels of resource commitment are required. This paper analyses the relationship between resource commitment and access to co-location advantages, first theoretically and then through a case study of two MNEs in high-tech industries. We disaggregate the composite concept of resource commitment and demonstrate the dimensions accentuated, respectively, by the resource-based view, transaction cost economics and institutional theory. Next, we analyse the relationship between resource commitment and co-location advantages for 11 R&D subsidiaries of the two MNEs. Based on this analysis, we discuss the relationships between the empirical findings and the theoretically differentiated resource commitment dimensions. The study finds that high resource levels are less important for access to co-location advantages than conventionally assumed, while the level of commitment associated with allocated resources appears consistently to be important, lending more support for the relevance of institutional theory-related dimensions of resource commitment than the resource-based view-related ones. We also find support for the claim that more flexible governance arrangements promote access to co-location advantages in asset exploration.     

International Strategy and Knowledge Creation: The Advantage of Foreignness and Liability of Concentration

International business scholars increasingly emphasize regional strategies based on an optimal location of downstream sales. There has been less scholarly attention, however, to the relationship between international strategy and upstream knowledge creation including R&D. Building on contemporary strategic management theory and the knowledge‐based view we remedy this. The viability of home‐regional or bi‐regional strategies is based on common assumptions that imply negative consequences of distance and foreignness for downstream sales and marketing and benefits from agglomeration for upstream knowledge creation activities including R&D. In contrast, we propose that upstream knowledge creation, radical innovation in particular, rather gains from distance and foreignness and from being dispersed, suggesting the effectiveness of a global strategy. Based on the resource‐based view and recent research on the economics of strategic opportunities and competitive advantage, we provide theoretical explanations for this. We demonstrate how a global multinational corporation is uniquely equipped with knowledge extensity including heterogeneous social‐identity frames in multiple sub‐units. Thanks to arbitrage advantages between the sub‐units’ separate and often locally embedded knowledge, a global multinational corporation can address complex interdependences and interactions between knowledge sets required for knowledge creation. This suggests that maximum exploration capabilities are made possible by a global rather than a home‐regional or bi‐regional strategy.     

The antecedents of new R&D collaborations with different partner types: On the dynamics of past R&D collaboration and innovative performance

We examine firms' propensity to adapt their R&D collaboration portfolio by establishing new types of R&D collaboration with different kinds of partners (suppliers, customers, competitors and universities & public research institutions). We argue that existing R&D collaboration with one of the two value chain partners (suppliers or customers) is associated with the formation of new R&D collaboration with the other value chain partner to ensure temporal alignment in innovation within the value chain. In contrast, issues related to governance and unintended knowledge spillovers suggest that ‘horizontal’ R&D collaboration with competitors only spurs R&D collaboration with other partner types if such competitor R&D collaboration has been discontinued earlier (‘delayed temporal alignment’). We posit that persistent prior R&D collaboration with institutional partners is an antecedent to the establishment of new R&D collaboration with industrial partners, and that discontinuation of a particular type of R&D collaboration is likely to lead to a restart of such R&D collaborative effort. Strong prior innovative performance is expected to increase the probability that firms establish R&D collaborations with new partner types, except for R&D collaboration with competitors, since the most innovative firms may fear leakage of proprietary knowledge to rivals. We find broad support for these predictions in a large panel of Spanish innovating firms (2004–2011). Our findings highlight that it is not just the configuration of R&D collaborations with existing partner types that predicts tie formation with new partner types, but also the intertemporal pattern of prior R&D collaboration and managerial discretion provided by past innovation success.     

Disentangling reciprocal relationships between R&D intensity,profitability and capital market performance: A panel VAR analysis

Research and development (R&D) investments are strategic choices that firms make to create and sustain competitive advantage. Extant literature proposes that firms’ R&D investments and their profitability and capital market performance are reciprocally related. However, the direction of these relationships and their temporal nature are unclear. We take a real options perspective to argue that the long-run firm performance effects of R&D investments are better than their short-term ones, and that the initial level of R&D intensity influences the nature of these relationships. We apply panel vector autoregression (P-VAR) to a sample of 6623 U.S. firms over the 1990–2020 period in order to test our hypotheses. Our results indicate that increases in R&D intensity have negative effects on profitability in the short term, yet these effects diminish relatively quickly. The effects of increases in R&D intensity on capital market performance are positive and persist over time. Consistent with our predictions, they are contingent on the initial levels of R&D intensity and performance. The findings are fundamentally in line with the real options perspective employed here, yet they add important nuance to our understanding of when, how, and under which conditions R&D investments and firm performance affect one another.     

Top management departures in cross-border acquisitions: Governance issues in an international context

This study examined top management team departures in U.S. manufacturing firms acquired by a foreign multinational during the six-year period following acquisition. Results indicated that greater cultural distance between the United States and the home country of the foreign multinational, higher levels of international integration in the target industry, and poor preacquisition performance in the U.S. target company were related to greater postacquisition top management departures. These effects were moderated significantly by the foreign acquirer’s international business and U.S. acquisition experience and showed different patterns over the short-term, intermediate-term, and long-term. Implications for future research on top management teams involved in cross-border acquisitions are discussed.     

Within-cluster determinants of output efficiency of R&D in the space industry

Dynamic slacks-based data envelopment analysis is applied to measure output performance efficiency of space R&D active private firms. Fractional logit panel analysis is used to identify associations between this firm level R&D output efficiency and space industry level R&D specialisation, presence of anchor firms, and public R&D capacity within geographical clusters.Primary data collected for the entire population of space R&D active firms in Belgium for the period 2011–2015 reveals that an environment specialized in the focus firm's space activities exerts a positive influence on R&D output efficiency. The public space R&D capacity and the presence of space anchor firms within the cluster do not influence R&D output efficiency. Firm age, a mixture of space and non-space R&D, and larger amounts of public funding positively affect R&D output efficiency. These findings should be seen in a context of a space industry dominated by SMEs and in a five year time-span.