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This paper explores how two understudied characteristics of a firm's product portfolio, namely, aging of products and (non)innovativeness of products, affect firm survival. The influence of these product portfolio characteristics on organizational mortality can be observed both at the firm and at the industry levels. Paradoxically, the portfolio's influence at the firm and at the industry levels may go in opposite directions. Specifically, I predict that portfolios with aging products make their firms weaker competitors and survivors. However by weakening these firms, “aging” portfolios reduce competitive pressures at the industry level and, therefore, improve firm survival indirectly by changing industry vital rates. In contrast, firms with innovative product portfolios should be stronger survivors. At the same time, they are likely to intensify competition in the industry and, as a result, diminish survival chances of all firms, including those with innovative products. The analyses of all firms’ product portfolios in the worldwide optical disk drive industry, 1983–1999, support these predictions.

In a dynamic environment where underlying competition is “for the market,” this chapter examines what happens when entrants and incumbents can instead negotiate for the market. For instance, this might arise when an entrant innovator can choose to license to or be acquired by an incumbent firm (i.e., engage in cooperative commercialization). It is demonstrated that, depending upon the level of firms’ potential dynamic capabilities, there may or may not be gains to trade between incumbents and entrants in a cumulative innovation environment; that is, entrants may not be adequately compensated for losses in future innovative potential. This stands in contrast to static analyses that overwhelmingly identify positive gains to trade from such cooperation.

Purpose – This chapter examines the extent to which public support for internationalization can be considered as a determinant of foreign direct investment (FDI).

Design/methodology/approach – The chapter examines the traditional determinants of FDI and the capability-building argument; and augments this by testing a set of public support measures as complement of the firm's internal needs, using a probit model.

Findings – The chapter shows that a special theory is clearly required to explain the particular circumstances of the use of public support for internationalization activities. However, the received theory relying on capability-building argument performs well.

Practical implications – The importance of specific characteristics related to competencies and the use of certain types of public support that improve competencies lead us to consider that public support matters for capability-building. Despite this issue, the analysis of the FDI determinants can be explained by standard theory. However, the impact of public policies on FDI suggests new models capable of capturing the behaviour of foreign direct investors in presence of public incentives.

Originality/value – This research provides useful information to understand the role of intrinsic characteristics of the firms and how they bridge their internal gaps with external support in carrying out demanding activities. External support provides a good test of the general theory of FDI, and a special theory nested within this gives a great deal of insight into current issues of FDI in the link between the home-country government and the firm's needs. This study goes beyond the traditional analysis of the effects of public support on exports. It uses a uniquely rich data set to evaluate the importance of public support as FDI determinant.

What is the academic community's contribution to the understanding of merger and acquisition (M&A) performance to date? Although there exists already a vast amount of theoretical as well as empirical studies aiming at explaining, predicting or understanding post-acquisition performance, there seems to be a growing dissatisfaction among scholars with the fragmented findings that have emerged to date. A possible explanation is that M&A scholars have mainly dealt with explaining the variance in M&A performance and have generally overlooked that contradictory findings are due to different measures of performance. This state of affairs is even more marked in the realm of technology-driven acquisitions, in that we find measures of both overall post-acquisition performance and post-acquisition innovative performance. Academics are therefore called upon to investigate what M&A scholars measure as post-acquisition performance in high-technology industries.

This chapter points toward a better understanding of M&A performance construct in high-tech settings through a review of existing empirical research of technology-based M&As within a broad range of scholarly journals. Findings present a fragmented state of affairs with a proliferation of operational definitions of post acquisition performance and a wide array of indicators. Moreover, different perspectives and time lags are accounted for.

The knowledge economy (KE) which provide for an alternative to production-based economy and brick and mortar economy has a tremendous opportunity. KE has emerged due to the advent of skill concentration in nation states. However, the traditional production economy provides individual arbitrage opportunity which acts as a sideline for growth of the economy. In the modern economy, the higher the ability to create an edge for price for the knowledge, the greater will be the ability of the nation state to create and arbitrage process. Any economy which is driven by an innovative education system, appreciates, and adopts knowledge is the one which becomes successful in the knowledge process and a developed KE. Information technology forms a major component of knowledge process but is not the entire gamete of knowledge. Hence, it should not be confused that KEs are information industry driven alone. This paper tries to develop a model to check whether KE has the ability to support arbitrage process. Here the probability rate of growth in GDP is taken as the key element for the purpose of solving the theoretical proposition. The result shows that there are positive probabilities of the KE in providing arbitrage premium for individual which can fire the growth of the economy.

All three Baltic countries – Estonia, Latvia, and Lithuania – share common features, similar history, and took similar steps to establish an external evaluation of their science base. Even though the three countries have similarities in terms of their geography, size, economic structure, development and demography, they demonstrate differences, for example Estonia is often considered to be ahead of Latvia and Lithuania in terms of the economy and development. So, do the Baltic countries share similarities or differences from the point of research management and administration?

Volgograd, Russia, my home for most of my life, was entirely rebuilt after World War II. Under its prior name, Stalingrad, the city was the epicenter for what many believe was the most crucial battle in the entire war. That battle came at the cost of many millions dead and wounded and the destruction of all but one shell of a building. From this oblivion, a new city arose under the direct order of Stalin, who mobilized captured German engineers for the task. Following his concept of planning, the city would be long and narrow, hugging the banks of the mighty Volga River for some 80km. The width would involve only two main thoroughfares with side streets. The narrow profile would allow for farms and dachas to be close by on one side and the river on the other, providing bounteous and accessible food. Residences were organized in neighborhoods formed around key enterprises lining the river to meet their needs for water. The neighborhood designs allowed workers to easily walk to work. It was a truly utopian scheme.

Purpose – To explore the influence of autonomy on subsidiaries' development and transfer intensities and their interrelationship.

Methodology/approach – We develop a theoretical model that we test on a sample of 85 innovation projects developed in 63 subsidiaries in 14 countries. The data were collected by personal interviews and analysed using the Partial Least Squares technique.

Findings – Autonomy is an important driver of subsidiaries' innovation intensity although, surprisingly, we find no influence on transfer intensity. We confirm the positive relationship between subsidiary innovativeness and its role as provider of new competence to sister units within the multinational enterprise (MNE).

Research limitations/implications – In line with previous studies, we can say that autonomy is a desirable result of subsidiary evolution. We can also suggest that overall subsidiary autonomy is beneficial not just to the subsidiary but to the rest of the MNE, since the more the subsidiary innovates the more related competence will be transferred. In other words, innovation efforts at subsidiary level are critical to sustain MNEs' overall competitive advantage.

Practical implications – First, it seems that the more a subsidiary's innovativeness is fostered, the more transfers to other units will occur. Second, we have seen how autonomy is beneficial to the innovative activity of the subsidiary and that it does not seem to harm transfer intensity.

Originality/value – Following studies that point out the potential trade-off between the output of development and transfer activities by subsidiaries, our research contributes by empirically testing the relationship between the intensities of subsidiary innovation development and transfer.

The literature documents a shortage in the supply of external funding to small- and medium-sized enterprises (SMEs) in general and to innovative SMEs in particular. This study separates cognitive from financial constraints on innovative SMEs’ growth opportunities. Using data gathered through in-depth interviews with the CEOs of 115 SMEs, we reveal that over and above a problem with supply, there exists a twofold problem on the demand side. Specifically, we document that there is a tendency for these companies to avoid approaching external funding sources, especially ones that gear their investments toward innovation. Our results reveal a cognitive bias (over-pessimism) affecting the entrepreneurs’ (lack of) demand for external financing over and above other firm-specific factors. CEO tenure — our proxy for human and social capital — is significantly lower (higher) in firms that did (did not) pursue external funding. This finding may provide some support for our hypothesis regarding the cognitive bias and over-pessimism of the more veteran CEOs who have had negative experiences regarding recruiting external resources. The impact of this entrepreneurial cognition is shown to be economically detrimental to the enterprise. Nevertheless, the negative effects are not limited to the micro level, but have implications at the macro level as well, due to under-realization of the potential for employment, productivity, and growth of the firms comprising the vast majority of the economy.