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Article
Publication date: 28 February 2019

Luiz Fernando de Paris Caldas, Fabio de Oliveira Paula and T. Diana L. van Aduard de Macedo-Soares

The purpose of this paper is to analyze to what extent spending on innovation activities and collaboration at the industry level affects the relationship between firm…

Abstract

Purpose

The purpose of this paper is to analyze to what extent spending on innovation activities and collaboration at the industry level affects the relationship between firm innovation and performance.

Design/methodology/approach

A conceptual model was proposed and empirically tested using multiple linear regression. The data were obtained from the Community Innovation Survey 2012, composing a sample of 890 Italian manufacturing firms.

Findings

The results provided full support for the positive moderating effect of intra-industry innovation spending and partial support for the positive moderating effect of intra-industry collaboration, both regarding the relationship between firm innovation spending and performance. Knowledge spillovers derived from intra-industry innovation spending and intra-industry collaboration affect firm performance. While this finding corroborates other studies that have found that the intra-industry R&D spending influences firms’ innovation and performance, it also contributes to improve the understanding about the complementarity of internal innovation activities and knowledge spillovers.

Originality/value

This study contributes to theory by filling a gap concerning the complementarity of internal innovation activities and the effect of knowledge spillovers to improve firm performance. Our findings suggested that intra-industry openness to collaboration and innovation spending, as proxies of knowledge spillovers, plays an important role in complementing firm level innovative efforts, even in the case of firms that spend less on innovation and have a lower degree of collaboration. This is especially relevant for small and medium enterprises, which can take advantage of access to the necessary information to overcome their internal resource constraints for R&D and innovation. The originality of these findings adds value in terms of furthering the understanding of this phenomenon.

Details

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

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Article
Publication date: 27 July 2011

Lamia Ben Hamida

The purpose of this paper is two‐fold: to discuss the key factors determining foreign direct investment (FDI) intra‐industry spillovers and to examine the presence and the…

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Abstract

Purpose

The purpose of this paper is two‐fold: to discuss the key factors determining foreign direct investment (FDI) intra‐industry spillovers and to examine the presence and the extent of these spillovers in Switzerland, by testing them for the services/construction industry, where there is currently a scarcity of evidence.

Design/methodology/approach

The assessment of spillovers calls for a detailed analysis of these effects according to the mechanisms by which they occur (namely, the increase in competition, demonstration effects, and worker mobility), and whether the size and the extent of spillovers depend on the interaction between their mechanisms and the existing technological capacities of domestic firms.

Findings

The regression results are affirmative, in that domestic firms with high technological capacities appear to gain spillover benefits from FDI heightening competition, while mid‐ and low‐technology firms benefit a lot from demonstration effects. In addition, spillovers for high‐ and mid‐technology firms appear to be largely co‐determined by the level of their human capital. Only domestic firms that invested heavily in absorptive capacity benefit from spillovers.

Research limitations/implications

The evidence on spillover effects has not yet been conclusive. Hence, this paper proposes some components for a research agenda on FDI and intra‐industry spillovers.

Practical implications

The study provides insights for Swiss policy makers about how to promote the beneficial spillover effects of FDI.

Originality/value

The process of spilling over is correctly described in a more satisfactory model and then the impact of this process is accurately identified.

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Article
Publication date: 21 May 2009

Xiaowen Tian and Shuanglin Lin

Using panel data of 11324 firms in China from 1996 to 1999, the study finds that FDI tends to generate positive technology spillovers to domestic firms within the same…

Abstract

Using panel data of 11324 firms in China from 1996 to 1999, the study finds that FDI tends to generate positive technology spillovers to domestic firms within the same industry, but adversely affect productivity of domestic firms in other industries. It is also found that both the positive and the adverse effects are more significant at the local than the national level. Evidence from China thus suggests that FDI technology spillovers are in favor of domestic firms within the same industry rather than domestic firms in other industries, and are most likely to affect domestic firms within the same locality. The finding has significant implications for the study of the interaction between MNEs and local firms in emerging markets.

Details

Journal of Asia Business Studies, vol. 3 no. 2
Type: Research Article
ISSN: 1558-7894

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Article
Publication date: 11 July 2016

Kung-Chi Chen, Lee-Young Cheng, Sheng-Jie Huang and Yan Zhao

– The purpose of this paper is to examine market reactions to private equity placements and intra-industry information spillover effects in the Taiwan Stock Exchange.

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Abstract

Purpose

The purpose of this paper is to examine market reactions to private equity placements and intra-industry information spillover effects in the Taiwan Stock Exchange.

Design/methodology/approach

The authors first use the market model to compute the abnormal announcement returns. To examine the joint impact of the private investment in public equity (PIPE) purposes and the lead investor industry, the authors regress the issuers’ cumulative abnormal returns (CARs) on the dummy variables of PIPE purposes and the lead investor industry. To study the spillover effects, the authors regress the rivals’ CARs on the issuers’ CARs, PIPE purposes, and the lead investor industry. Finally, the industry Herfindahl index is used as a proxy for the market power of issuers and rivals to examine its impact on the spillover effects.

Findings

The authors find that issuing firms experience positive abnormal returns during the announcement period. Issuers enjoy more positive market reactions when the proceeds of offerings are primarily used to establish a long-term strategic alliance or to integrate business and when the lead investor is in the same industry. Furthermore, the authors show that the contagion effect dominates the competitive effect in private equity placements at the aggregate level. At the subsample level, the authors find competitive effect overpowers contagion effect when the purpose of offerings is primarily used to establish a long-term strategic alliance or to integrate business and when the lead investor is in the different industry. Finally, the authors show that rivals with relative lower market power enjoy more positive contagion effects.

Originality/value

First, the analysis documents the simultaneous importance of both the purposes of private offerings and the lead investor’s industry on announcement reactions, which shed new light on the positive abnormal returns during the announcement period. Second, the study adds to the literature on the information spillover effects by analyzing the role played by purposes of offerings and rivals’ market power. This paper provides a more complete picture of the offsetting competitive and contagion effects.

Details

Managerial Finance, vol. 42 no. 7
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 25 October 2011

Chun‐Yao Tseng, Da Chang Pai and Chi‐Hsia Hung

The purpose of this paper is to discuss whether the three knowledge sources, knowledge input, knowledge spillover and knowledge absorptive capacity, really increase the

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4024

Abstract

Purpose

The purpose of this paper is to discuss whether the three knowledge sources, knowledge input, knowledge spillover and knowledge absorptive capacity, really increase the innovation performance of firms in the Taiwan IC design industry, one of the most important knowledge‐intensive business services (KIBS) industries in Taiwan.

Design/methodology/approach

Based on the knowledge‐based theory, this study uses pooled regression analysis and tests with fixed effect model to analyze the influence of three knowledge sources on innovation performance in the KIBS sector.

Findings

The results demonstrate that: knowledge input is positively related to innovation performance; knowledge spillover effect is partial positively to innovation performance; and knowledge absorptive capacity is positively related to innovation performance.

Originality/value

The paper advances the concept of absorptive capacity by defining it as the interactions between knowledge input and knowledge spillover and refines the measurement of absorptive capacity as the multiplication of knowledge input and knowledge spillover effects. Moreover, knowledge spillover effects and knowledge absorptive capacity are both divided into four kinds which help us distinguish clearly different sources of knowledge spillover and absorptive capacity. In addition to that, this study also contributes to the empirical evidence to innovation activities by using firm‐level micro data.

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Article
Publication date: 28 June 2019

Errol G. Stewart and Timothy D. Cairney

This study aims to examine the association between audit report lag (ARL), the length of time between the fiscal year end and the date the auditors’ report is signed, and…

Abstract

Purpose

This study aims to examine the association between audit report lag (ARL), the length of time between the fiscal year end and the date the auditors’ report is signed, and client industry homogeneity, a measure of the similarity of operations of members of an industry.

Design/methodology/approach

Regression models are used to test the significance of industry homogeneity on the ARL, of specialists in homogenous industries on the ARL, and the completion of the audits of homogenous industry clients in the year of tightening Securities and Exchange Commission (SEC) filing deadlines.

Findings

The evidence suggests that auditors complete audits of clients more quickly in more homogenous industries. The association between ARL and homogeneity is negative, which indicates that auditors are more efficient in audits in homogenous industries. The association between ARL and specialist audits in homogenous industries is also negative. Finally, homogenous industry audits are better able to be completed by the compressed filing dates imposed by the SEC on accelerated and large accelerated filers in 2003 and 2006.

Originality/value

This study extends recent research on industry homogeneity’s influence on the audit market. By reporting an association between the homogeneity of a company’s industry and the ARL, investors and regulators have additional information to better evaluate the timing and monitor trends in the timing of the audit report dates.

Details

Managerial Auditing Journal, vol. 34 no. 8
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 11 August 2020

Faheem Ur Rehman, Yibing Ding, Abul Ala Noman and Muhammad Asif Khan

Over the past two decades, China’s outward foreign direct investment (OFDI) has risen remarkably. Whether such an increase affects the Chinese export diversification (ED…

Abstract

Purpose

Over the past two decades, China’s outward foreign direct investment (OFDI) has risen remarkably. Whether such an increase affects the Chinese export diversification (ED) is a significant issue that has surprisingly remained unaddressed. This study aims to explain this issue that how OFDI plays a vital role in symmetric and asymmetric effects on its ED.

Design/methodology/approach

The authors introduce a robust nonlinear autoregressive distributed lag (NARDL) model. Ironically, the purpose of this study is to analyze the symmetric and asymmetric effect of OFDI on ED.

Findings

The authors propose that growing OFDI would be more advantageous to China, rather than the policies of contraction. Therefore, the study provides valuable policy insights to consider the long-run asymmetric momentum given to ED by China’s OFDI.

Originality/value

The results of this study may seem to be an important newsletter for further policy discussion on how China can catch up on the benefits of ED through OFDI.

Details

Journal of Chinese Economic and Foreign Trade Studies, vol. 13 no. 2
Type: Research Article
ISSN: 1754-4408

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Article
Publication date: 2 February 2015

Taotao Chen, Ronald W. McQuaid and Maktoba Omar

The purpose of this paper is to develop a double mechanism model to separate two foreign direct investment (FDI) intra-industry spillovers mechanisms: spillovers by FDI…

Abstract

Purpose

The purpose of this paper is to develop a double mechanism model to separate two foreign direct investment (FDI) intra-industry spillovers mechanisms: spillovers by FDI intensity and by FDI efficiency. This paper seeks to illustrate the potential use of the double mechanism model rather than provide precise estimates of spillovers. The evidence on the links between technology and the nature, size and mechanisms of FDI spillovers effects in economically developing countries is mixed.

Design/methodology/approach

A model is developed and tested, in principle. Empirical testing was conducted in two steps. In the first step, the authors examined the effect of each influencing factor to FDI spillovers separately. To complete this step, the authors divided the whole sample industry into sub-groups and tested them with the double-mechanism using ordinary least squares regression. This study applies Chinese National Bureau of Statistics manufacturing industry level data, for the years 2000, 2001 and 2002, including the food industry, beverage industry, textile industry, textiles and garments, chemicals and chemical products industry, overall manufacturing equipment, special equipment, computer and other electronic equipment manufacturing industries.

Findings

The analysis suggests significant differences between types of spillovers: export orientation of domestic firms mainly influences FDI spillovers by intensity; the capability gap between local and foreign firms influences spillovers by efficiency; and the growth of local firms influences both types of spillovers. This paper develops existing models of FDI and suggests that disaggregating spillovers types may provide important theoretical and policy insights.

Originality/value

This study has found, first, that compared with the classic single mechanism model, the double mechanism model is more appropriate for testing FDI intra-industry spillovers, as it is able to separate spillovers by intensity and spillovers by efficiency, which are shown as two distinct mechanisms for FDI spillovers. This allows a deeper analysis into each mechanism and the identification of relevant influencing factors.

Details

Journal of Chinese Economic and Foreign Trade Studies, vol. 8 no. 1
Type: Research Article
ISSN: 1754-4408

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Article
Publication date: 10 August 2015

Naqeeb Ur Rehman

The purpose of this paper is to identify the drivers of firm’s growth such as research and development (R & D), absorptive capacity, knowledge management…

Abstract

Purpose

The purpose of this paper is to identify the drivers of firm’s growth such as research and development (R & D), absorptive capacity, knowledge management, organisation culture, access to finance, internationalisation and so forth. As far as the contribution is concerned, two objectives have been achieved from this empirical paper. First, this paper fills an important gap in the literature by determining the drivers of firm’s growth. Second, this study analysed the Pakistani software industry at micro level by investigating the firm’s knowledge-based assets and their significant association with labour productivity growth. Based on a face to face interview of 69 software firms, this study found that firm size, access to finance, internationalisation (exporting and outward foreign direct investment), business improvement methods and knowledge management have a positive impact on the firm’s labour productivity growth. In comparison, firm undertaking R & D and absorptive capacity showed negative association with labour productivity growth. This study implies that these software firms have low investment in knowledge-based assets. In summary, this empirical study suggests that high sunk costs, low investment in knowledge-based assets and shortage of skills generally affect the labour productivity of these software firms.

Design/methodology/approach

Survey analysis, using cross section data analysis.

Findings

This study found that firm size, access to finance, internationalisation (exporting and outward FDI), business improvement methods and knowledge management have a positive impact on the firm’s labour productivity growth. In comparison, firm undertaking R & D and absorptive capacity showed negative association with labour productivity growth. In summary, this empirical study suggests that high sunk costs, low investment in knowledge-based assets and shortage of skills generally affect the labour productivity of these software firms.

Research limitations/implications

Additionally, suggestions for future research would be to investigate the relationship between drivers of firm growth and innovation performance. The survey analysis could be extended to other parts of country such as Karachi and Lahore for resolving causality.

Originality/value

First, this paper fills an important gap in the literature by determining the drivers of firm’s growth. Second, this study analysed the Pakistani software industry at micro level by investigating the firm’s knowledge-based assets and their significant association with labour productivity growth.

Details

Journal of Management Development, vol. 34 no. 8
Type: Research Article
ISSN: 0262-1711

Keywords

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Book part
Publication date: 1 January 2008

Lamina Ben Hamida and Philippe Gugler

This chapter examines intra-industry spillover effects from inward foreign direct investment (FDI) in Swiss manufacturing firms. It suggests that (a) the assessment of…

Abstract

This chapter examines intra-industry spillover effects from inward foreign direct investment (FDI) in Swiss manufacturing firms. It suggests that (a) the assessment of spillovers calls upon a detailed analysis of these effects according to the mechanisms by which they occur (viz. the increase of competition, demonstration effects, and worker mobility), and (b) spillovers depend on the interaction between their mechanisms and the levels of domestic absorptive capacity. Results are affirmative in that high-technology firms benefit from FDI heightening competition, while mid-technology firms benefit from demonstration effects. And low-technology firms, which are not able to benefit from foreign affiliates via demonstration effects alone, manage to reap the benefit via the recruitment of MNCs labor. In addition, only firms which largely invest in absorbing foreign technology benefit from spillovers.

Details

New Perspectives in International Business Research
Type: Book
ISBN: 978-1-84855-279-1

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