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Article
Publication date: 26 July 2021

Duy Quoc Nguyen

Organizational innovations are closely associated with organizational knowledge, and thus a firm builds its knowledge base to enhance its innovative performance. However…

Abstract

Purpose

Organizational innovations are closely associated with organizational knowledge, and thus a firm builds its knowledge base to enhance its innovative performance. However, insights into this process are still limited, especially in the context of firms in developing countries. Building on the dynamic managerial capabilities literature and open innovation paradigm, this paper attempts to fill this gap by developing and empirically testing a model that investigates how firms in developing countries accumulate knowledge to innovate.

Design/methodology/approach

A model of a firm's knowledge accumulation and innovation is proposed in which it specifies relationships among absorptive capacity, knowledge breadth, research and development (R&D), knowledge depth, exploratory innovation and exploitative innovation, and then it is empirically tested by using the structural equation modeling (SEM) technique based on the surveyed data of Vietnamese firms.

Findings

The results indicate that absorptive capacity positively influences both knowledge breadth and knowledge depth, knowledge breadth positively influences R&D, R&D positively influences exploratory innovation and knowledge depth, and knowledge depth positively influences exploratory and exploitative innovation.

Practical implications

The study proposes an “acquire and develop” open innovation model for firms in developing countries in which firms acquire external technologies and then develop R&D (develop and design) capability to adapt acquired technologies to their local conditions to create new organizational-specific capabilities and exploratory innovation.

Originality/value

This study argues that external knowledge acquisition is beneficial to innovative performance of firms in developing countries via renewing their knowledge base. Furthermore, the study provides the unique evidence that novel external knowledge acquisition and internal R&D are fit to each other in the fit-as-mediation form in which novel external knowledge acquisition is mediated by R&D to positively influence exploratory innovation.

Details

Management Decision, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0025-1747

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Book part
Publication date: 10 August 2016

Ulf Andersson, Suma Athreye and Georgios Batsakis

We argue that a foreign-based R&D subsidiary of a multinational enterprise (MNE) can potentially source knowledge from three diverse knowledge networks, namely (i) external

Abstract

We argue that a foreign-based R&D subsidiary of a multinational enterprise (MNE) can potentially source knowledge from three diverse knowledge networks, namely (i) external knowledge network of the home country, (ii) external knowledge network of the host country, and (iii) internal (MNE) knowledge network. Drawing on the relative costs and benefits associated with the process of synergistic knowledge, this study examines whether a substitutive or a complementary relationship exists when two of the aforementioned networks collaborate in order to generate new knowledge at the subsidiary level. Our study’s sample is based on a survey questionnaire addressed to foreign-based R&D subsidiaries of Fortune 500 companies. We assess the existence of complementarity/substitutability using the “production function approach.” Our results indicate that a complementary relationship exists between external knowledge network of the host and the home country, as well as between external knowledge network of the host country and internal knowledge network. On the other hand, external knowledge network of the home country and internal knowledge network form a substitutive relationship. Our study offers a more comprehensive view of the diverse sources/knowledge networks that R&D subsidiaries are sourcing knowledge from when compared to existing research. We also specify and account for the costs/benefits involved in knowledge sourcing and thereby detect possible substitution/complementarity between different sources of knowledge. So far, there has been limited to nonexistent research into the diversity of knowledge networks of R&D subsidiaries and the examination of potential substitutabilities and complementarities. Hence our empirical study contributes to the development of this particular research stream.

Details

Perspectives on Headquarters-subsidiary Relationships in the Contemporary MNC
Type: Book
ISBN: 978-1-78635-370-2

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Article
Publication date: 6 April 2020

Tao Wang, Xue Yu and Nan Cui

This paper aims to provide a new perspective in investigating how internal research and development (R&D) and external knowledge acquisition interact regarding their…

Abstract

Purpose

This paper aims to provide a new perspective in investigating how internal research and development (R&D) and external knowledge acquisition interact regarding their influence on innovation performance in an emerging market context. Building on an attention-based view (ABV), it argues that internal R&D and external knowledge acquisition can be substitutes for each other in emerging markets. Its contingency factors are also discussed according to the principles of the ABV.

Design/methodology/approach

The proposed hypotheses were empirically tested using a Tobit model approach. The data used was from the enterprise survey and the follow-up innovation survey conducted by the World Bank in 10 emerging market countries.

Findings

The results indicate that internal R&D and external knowledge acquisition entails a substitute effect among emerging market firms (EMFs). A higher level of manager’s open-mindedness to external knowledge and firm performance and a lower level of firm administrative control help mitigate the substitute effect of internal R&D and external knowledge acquisition. While adequate financial resources may not necessarily mitigate the substitute effect, it is an essential condition for the external knowledge acquisition to play a role in enhancing innovation performance.

Research limitations/implications

The research uses a set of cross-sectional data. A dynamic study will provide a deeper understanding of the long-term effects of innovation investments.

Practical implications

To better use innovation investments, EMFs need to assess their specific conditions and the possible substitute effect of internal R&D and external knowledge acquisition activities.

Originality/value

Previous research discussing the interactive effect of internal R&D and external knowledge acquisition has mostly focused on an absorptive capacity perspective, which represents a firm’s technical ability. This study argues that these investments not only involve in absorbing knowledge technically but also form a challenge for the limited firm resources and can cause cognitive problems in management, especially for EMFs.

Details

European Journal of Marketing, vol. 54 no. 5
Type: Research Article
ISSN: 0309-0566

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Article
Publication date: 16 May 2019

Shoaib Abdul Basit and Kehinde Medase

The combination of different knowledge sources has been considered conducive for innovation performance. While the literature has advanced regarding the combination of…

Abstract

Purpose

The combination of different knowledge sources has been considered conducive for innovation performance. While the literature has advanced regarding the combination of knowledge inputs as in internal and external research and development (R&D), the evolvement of knowledge blend from customers and competitors has also received substantial attention. The purpose of this paper is to delineate the sources of information from the customers into private and public and examine their direct effect on firm-level innovation. While the extant literature is mixed regarding this, no clear-cut results have emerged yet on the effect of knowledge combination from the private and public customers with internal R&D and human capital on innovation activities. This study, however, shed more lights on the inconclusiveness of the effect of knowledge diversity on firm-level innovation.

Design/methodology/approach

Using the microdata from the German Community Innovation Survey 2013, the authors employ a binary instrumental variable treatment model with Heckman selection, a suitable strategy to estimate binary variables to cope with a possible endogeneity issue.

Findings

The paper demonstrates that knowledge from customers in the private and public sector, and competitors are positively and significantly associated with innovation. The authors find evidence of a positive and significant effect of the combination of firm internal knowledge competencies with information from the public sector. In contrary, the blend of knowledge competencies with information from customers in the private sector and information from the competitors results in decline to innovation. The results also show that the blend of internal R&D with knowledge source from the customers in the public sector appears to have a stronger influence in the manufacturing sector than services. The results offer strong evidence of the positive link between knowledge diversity and firm-level innovation performance.

Practical implications

The results have significant managerial implications on the role of the blend of different sources of information in supporting a compelling internal knowledge development to optimise innovation performance.

Originality/value

This study is foremost to focus on knowledge sources from the customers in the public and private sector and its relationship with R&D and human capital in supporting a successful introduction of innovation.

Details

European Journal of Innovation Management, vol. 22 no. 4
Type: Research Article
ISSN: 1460-1060

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Article
Publication date: 25 October 2011

Christopher Williams and Brigitte Ecker

The purpose of this paper is to investigate researchers' operationalization of the construct of embedment of overseas R&D subsidiaries.

Abstract

Purpose

The purpose of this paper is to investigate researchers' operationalization of the construct of embedment of overseas R&D subsidiaries.

Design/methodology/approach

First, the paper provides a systematic literature review of subsidiary embedment research. Second, it draws on resource dependence theory (RDT) and argues how embedment of overseas R&D subsidiaries should be treated as a more multi‐faceted and complex phenomenon than has been apparent in the literature to date.

Findings

The authors find a large variation in the operationalization of embedment (e.g. frequency of communication versus depth of integration versus direction of communication). They also find scant attention to the nature of differences between external actors (types of actors, including local and international). These represent weaknesses that inhibit the advancement of theory and policy within the context of the globalization of innovation.

Research limitations/implications

Researchers should treat R&D subsidiary embedment as a multi‐level phenomenon consisting of resource‐dependence interactions between collective entities internal and external to the subsidiary. R&D subsidiary embedment research design can be improved by being: formative; multiple‐actor; bi‐directional; and longitudinal.

Practical implications

Managers should treat external R&D subsidiary embedment as pattern of resource dependencies in which the actors that matter most to R&D subsidiary performance are a function of the importance and availability of the innovation‐specific resources they contain. This involves building a capability in multi‐level networking with R&D resource providers in the external environment.

Originality/value

The contribution of the current paper is to provide a critical evaluation of scholarly treatment of the construct of R&D subsidiary embedment, and to develop a foundation for operationalizing and analyzing the external embedment of R&D subsidiaries.

Details

Critical perspectives on international business, vol. 7 no. 4
Type: Research Article
ISSN: 1742-2043

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Article
Publication date: 11 July 2019

Sung Joo Bae and Sangyun Han

How should managers organize their R&D workforce in order to maximize the benefit of internal R&D and R&D outsourcing strategy? The purpose of this paper is to examine the…

Abstract

Purpose

How should managers organize their R&D workforce in order to maximize the benefit of internal R&D and R&D outsourcing strategy? The purpose of this paper is to examine the effects of R&D workforce diversity on firms’ performance when the firms use internal and external knowledge acquired from R&D outsourcing. Diversity of R&D employees as R&D workforce can enable firms to utilize the knowledge of internal R&D and internalize the external knowledge.

Design/methodology/approach

Panel data analysis with fixed effects is used. The authors conduct hierarchical multiple regression analyses to test the moderating effect of R&D workforce diversity with 10,401 data from Korean manufacturing firms.

Findings

This study finds out that age and education diversity of R&D workforce have positive moderating effects on the relationship between the R&D outsourcing and firm performance. In contrast, internal R&D is negatively associated with firm performance when the age diversity of R&D workforce increases. The results point to the significant role of R&D workforce diversity in R&D unit since firms often use both internal R&D and external R&D.

Practical implications

For practical implications to be more effective, CEOs and managers of firms should employ differentiated approaches to manage the diversity of R&D workforce based on whether they primarily focus on their internal R&D or utilize external R&D.

Originality/value

This research extends recent efforts to better understand the effect of organizational diversity on the firms’ performance when firms use internal R&D and R&D outsourcing strategy.

Details

European Journal of Innovation Management, vol. 23 no. 3
Type: Research Article
ISSN: 1460-1060

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Article
Publication date: 30 September 2020

Cristina Doritta Rodrigues, Felipe Mendes Borini, Muhammad Mustafa Raziq and Roberto Carlos Bernardes

This study aims to look at the relationship of external embeddedness and institutional distance (governance aspects) with the foreign subsidiary research and development (R

Abstract

Purpose

This study aims to look at the relationship of external embeddedness and institutional distance (governance aspects) with the foreign subsidiary research and development (R&D) capacity. Furthermore, it examines whether these relationships are mediated by subsidiary product and process innovation, and whether institutional distance plays a moderating role in the relationship between subsidiary innovation and R&D capacity.

Design/methodology/approach

The authors draw on survey data from 130 foreign subsidiaries operating in Brazil and test their model using variance-based structural equation modeling.

Findings

Results suggest that subsidiary (product and process) innovation fully mediates the relationships between: subsidiary external embeddedness and R&D capacity; and institutional distance and subsidiary R&D capacity, such that the relationship is positive in case of the former and negative in case of the latter. The relationship between subsidiary product and process innovation and R&D capacity is positive and stronger at lower levels of institutional distance.

Originality/value

The research ignores the underlying mechanisms of the external embeddedness and institutional distance relationship with subsidiary R&D capacity. Furthermore, institutional distance based on formal governance aspects and their impacts on subsidiary innovation and R&D capacity are rarely investigated. This paper contributes with regard to these aspects.

Details

Journal of Knowledge Management, vol. 24 no. 10
Type: Research Article
ISSN: 1367-3270

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Article
Publication date: 5 August 2019

Ángel Martínez-Sánchez, Maria-Jose Vela-Jimenez, Silvia Abella-Garces and Sophie Gorgemans

The purpose of this paper is to analyze simultaneously two moderator effects on a model of relationships between external human resource (HR) flexibility and innovation in…

Abstract

Purpose

The purpose of this paper is to analyze simultaneously two moderator effects on a model of relationships between external human resource (HR) flexibility and innovation in a large sample of manufacturing firms.

Design/methodology/approach

The study sample consisted of 1,864 Spanish industrial firms in 2012 compiled from a large set of statements from the Survey of Business Strategies questionnaire. Logit and linear regressions tested the moderator effects of inter-organizational technology cooperation and environmental (market) dynamism in the relationship between external HR flexibility and innovation performance. To control for multicollinearity the Lance’s residual centering technique was used.

Findings

Process innovations seemed to be dependent on industry while innovative firms have developed a greater flexibility than non-innovative firms. Some moderator effects were found regarding inter-organizational cooperation while the market dynamism was negatively related to the measures of innovation with absence of moderator effects.

Research limitations/implications

Future studies should integrate more moderator effects that may influence the relationship between external HR flexibility and the firm’s innovation performance. The results regarding the influences of external flexibility on innovation have to be differentiated as inter-organizational technological cooperation compensated the influence of external workplace flexibility on innovation.

Practical implications

Managers should use a right mix of external flexibility measures according to the inter-organizational cooperation but regardless the level of environmental dynamism.

Originality/value

This paper is original in the sense that it studies the relationship between external HR flexibility and innovation with the simultaneous moderator effect of inter-organizational technology cooperation and market dynamism. The value of the paper lies in the discussion of interrelated moderator effects in order to propose adequate strategies to develop external HR flexibility.

Details

Personnel Review, vol. 48 no. 6
Type: Research Article
ISSN: 0048-3486

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Article
Publication date: 12 September 2016

Zhiqiang Wang, Qiang Wang, Xiande Zhao, Marjorie A. Lyles and Guilong Zhu

Chinese firms were operating within a closed economic environment before the “opening up” in the late 1970s, but it has only been in the late 1990s that China has…

Abstract

Purpose

Chinese firms were operating within a closed economic environment before the “opening up” in the late 1970s, but it has only been in the late 1990s that China has recognized the importance of innovation. The Chinese government has attempted to rectify this liability by providing funding to assist Chinese firms in developing innovation capability by increasing R&D collaborations and employing external experts. The purpose of this paper is to study the innovation of Chinese firms by examining how internal and external resources interactively impact the innovation capability.

Design/methodology/approach

Panel data collected from Chinese manufacturers are used to test the hypothesized relationships.

Findings

The results have shown that the interplay between internal and external resources exhibits differential patterns of impact on innovation capability. The authors discover different moderating patterns of the two types of external resources: visiting experts are helpful in enhancing the effects of internal human resources, while R&D collaborations are useful in exploiting internal financial and physical resources, even when the main effect of financial resources on innovation capability is not significant.

Originality/value

The study contributes to the literature by providing empirical evidences on the roles of absorbed external resources and knowledge to catalyze internal resources in building up innovation capability in an emerging economy.

Details

Industrial Management & Data Systems, vol. 116 no. 8
Type: Research Article
ISSN: 0263-5577

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Article
Publication date: 8 May 2017

Alberto Ferraris, Gabriele Santoro and Luca Dezi

This paper aims at exploring the effect of knowledge management (KM) practices on the relationship between external research and development (R&D) and innovative…

Abstract

Purpose

This paper aims at exploring the effect of knowledge management (KM) practices on the relationship between external research and development (R&D) and innovative performance. The authors argue that the firms which develop and possess superior KM capabilities have the ability to better manage external knowledge and combine it with the internal one.

Design/methodology/approach

The authors used a sample of 117 European MNC subsidiaries. An OLS regression analysis was carried out to evaluate the moderator effect of KM on the relationship between external R&D and innovative performance.

Findings

The authors found positive evidences in favor of a moderator effect of KM. This means that subsidiaries with superior KM capabilities are more effective in using external R&D, augmenting the magnitude of their external sources of knowledge and, consequently, improving their innovative performance.

Practical implications

Managerially speaking, both corporate and subsidiaries’ managers need to understand the relevance of managing knowledge effectively and efficiently at the subsidiary level. Corporate managers need to allocate more resources (both financial and managerial) to the subsidiaries that are active in knowledge transfer and sharing, while subsidiaries managers need to implement practically the KM tools and processes at the subsidiary organizational level to improve subsidiary’s innovative performance.

Originality/value

This paper contributes mainly to the KM field, highlighting the importance of KM at the subsidiary level, whereas most of previous studies focus on different units of analysis.

Details

Journal of Knowledge Management, vol. 21 no. 3
Type: Research Article
ISSN: 1367-3270

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