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In their well-known contribution to the “varieties of capitalism” debate, Peter Hall and David Soskice (2001, Ch. 1) highlight the distinction between a “coordinated market economy” as exemplified by Germany and a “liberal market economy” as exemplified by the United States. Under the heading, “Liberal Market Economies: The American Case”, Hall and Soskice (2001, p. 27), argue:Liberal market economies can secure levels of overall economic performance as high as those of coordinated market economies, but they do so quite differently. In LMEs, firms rely more heavily on market relations to resolve the coordination problems that firms in CMEs address more often via forms of non-market coordination that entail collaboration and strategic interaction. In each of the major spheres of firm endeavor, competitive markets are more robust and there is less institutional support for non-market forms of coordination.

Globalization increases concerns about national governments’ ability to regulate firms’ environmental conduct because firms can avoid complying with stringent environmental regulations by locating polluting operations in countries with low regulations. Business self-regulation is increasingly seen as a force that can counterbalance the decreasing power of governments in the global economy. Previous research identified external stakeholder pressures as an important determinant of business self-regulation. In this chapter we explore how firm capabilities affect the likelihood that firms self-regulate their environmental conduct by adopting ISO 14000 environmental standards. Our findings show that firm capabilities are indeed an important determinant of self-regulation in the global economy. We discuss implications of this finding for governments, other stakeholders, and business decision makers.

An emerging stream of literature has observed that project-based organizations rely increasingly on a network of collaborations originating from the ongoing process of creating and dissolving relationships that bring new project opportunities. Project-based networks are widespread in knowledge-intensive and creative industries, such as life-science and biotechnology, nanotechnology, and software, film, and music industry. This chapter examines the structural characteristics of project-based network-ties in German biotech. We focus on the consequences of local versus international network ties for the innovative success of German biotechnology firms. The findings of our longitudinal event history analysis indicate that the most valuable learning drivers are international research alliances and centrality within the international research network. Surprisingly, we do not find any local effects: neither the density of a local research cluster, nor its diversity or age is of significance. Our results shed new light on the relevance of international linkages for firms that are engaged in project-based learning networks.

Adopting an EU policy lens, this chapter primarily addresses the proposed pivotal role of firm-level innovation capability (FLIC) in small and medium-sized enterprises (SMEs) as a stimulant of sustainable development (SD) and green growth in Ireland/Wales. The chapter specifically examines the scale and scope of the green economy (GE), and considers the importance of organizational inherent “green” innovation capabilities (GICs) to achieve it. Underpinning the study is the methodology and concept of utilizing a facilitated cross-border multi-stakeholder learning network to enable knowledge transfer and exchange practices to flourish between partners, acting as a significant predictor of the development of SME GICs structures. Specifically, against the backdrop of the Green Innovation and Future Technologies (“GIFT” hereafter) INTERREG 4A Project, the research assesses how academic–industry partner exchange and inter-group learning and cooperation facilitates the development of GICs in smaller enterprises to realize a sustainable smart green economy in Ireland.

Broadly speaking, internationalisation means the entry to new-country markets. It may, therefore, be described as a process of innovation (Bilkey & Tesar, 1977; Andersen, 1993; Casson, 2000). Faced with increasing international competition, innovation has become a central focus in firms’ long-term strategies. Firms competing in global markets face the challenges and opportunities of change in markets and technologies. One important aspect within innovation management is the optimal integration of external knowledge, since innovation increasingly is derived from a network of companies interacting in a variety of ways (Veugelers & Cassiman, 1999).

This chapter seeks to explain how societal institutions, which may exist at the national or regional levels, shape the types of organizational learning predominating at the level of the firm. It focuses on education and training systems, and labour markets as key societal institutions shaping the micro-level processes of learning and knowledge creation within and between firms. The chapter argues that tacit knowledge, which is difficult to create and transfer in the absence of social interaction and labour mobility, constitutes a most important source of learning and sustainable competitive advantage in the knowledge economy. It looks at the cases of Japan, the high-technology clusters in the USA and U.K., and Denmark as illustrative examples.

Firms competing in national contexts other than their own suffer from “the liability of foreignness” (Zaheer, 1995). This liability stems from their lack of in-depth knowledge relating to economic, cultural, social, and political factors that influence the operating environment in these countries. Without such knowledge, firms will incur greater risks than local firms who have detailed understanding of these factors, or other firms with more experience in such environments, thereby putting them at a competitive disadvantage. To compensate, firms expanding internationally need to develop, leverage, and deploy capabilities that provide them with advantages unavailable to their local competitors. For this reason, national context has been the foundation on which past theoretical treatments of the MNE rested, greatly influencing the formulation of international strategy.

In relation to firms’ innovative performance this study investigates the importance of human capital for the firm’s absorptive capacity. The estimation of an ordered probit model including 1938 firms from the private manufacturing and non manufacturing sectors shows that the share of highly educated employees, development of a closer relationship with both vertically related actors and knowledge institutions and, application of human resource management (HRM) practices within the firm, not only promote the ability to innovate but also reduce the degree of innovative imitation. Finally, estimations according to size show that development of a closer relationship with a complete network of actors is especially important for firms with less than 50 employees.

Purpose – This study explores subsidiaries' local network embeddedness and how it contributes to localised subsidiary innovation output from a social network perspective. In particular, we are interested in analysing the consequences of local network density, diversity and, subsidiaries' network position on its innovation outcomes.

Design/methodology/approach – Data are derived from a longitudinal quantitative study of the entire R&D network within one of the largest life science cluster in Germany, the ‘BioRegion Rhein-Neckar-Dreieck’.

Findings – Our findings indicate that the size (density) of the local network has an inverted U-shaped effect on the innovation outcomes of MNC subsidiaries. Our findings further indicate that a strong brokerage position in the local network has a significant positive influence on the innovation output while a position in the core of the network has a significant negative effect on the innovation output.

Research implications – Our results shed new light on the relationship between local embeddedness, brokerage, the danger of overembeddedness and innovation output of MNC subsidiaries.

Purpose – Structural embeddedness of social networks within and beyond work organizations has shown its association with the innovation at work for employees from literature. Structural embeddedness includes three dimensions: the diversity, density, and trust of accessed networks. This chapter attempts to compare how structural embeddedness mechanizes on innovation at work differently for employees in hi-tech and non-hi-tech sectors.Methodology/approach – We analyzed 1,817 cases of currently employed respondents from the 2005 Taiwan national survey on social capital. All the indicators on structural embeddedness are operationalized from position-generated networks, and we performed regression models for total, hi-tech, and non-hi-tech samples.Findings – Except the universal effects of diversity on innovation at work for employees in both hi-tech and non-hi-tech sectors, density and trust of accessed networks significantly affect innovation at work only for employees in non-hi-tech sectors. There is a slight interaction effect between trust and density on innovation at workplaces. Those individuals with high-degree trust in accessed networks tend to have a lower degree of innovation while their network density is high. It implies that complementary networks seem to be more useful for applying new ideas at the workplace for non-hi-tech workers.Originality/value of chapter – This chapter contributes to the literature by presenting the importance of structural embeddedness of accessed social networks for innovation at work.