The purpose of this paper is to examine the impact of social capital on organizational ambidexterity in the context of emerging economies. Moreover, this paper aims to…
The purpose of this paper is to examine the impact of social capital on organizational ambidexterity in the context of emerging economies. Moreover, this paper aims to study the moderating influence of absorptive capacity on the relationship between social capital and organizational ambidexterity.
The authors conducted two studies using survey data collected from 97 Ecuadorian and 100 Chinese small and medium-sized enterprises (SMEs).
The authors found that social capital, the extent to which organizational members interact, collaborate and share knowledge with one another and with external actors, has a positive effect on the simultaneous implementation of exploratory and exploitative innovations (i.e. organizational ambidexterity). Moreover, the authors found that absorptive capacity positively strengthens the impact of social capital on organizational ambidexterity.
Drawing on the knowledge-based view and the innovation literature, the authors theoretically argue the importance of social capital and absorptive capacity for SMEs to develop and manage exploratory and exploitative innovations simultaneously in emerging economies of different cultures. The authors empirically test proposed hypotheses in Ecuador and China, two emerging markets with important cultural differences, and show the relevance of social capital in multiple settings.
This research examines the effect of external, organizational and individual variables on the rate of adoption of new technologies in the financial sector in Ecuador…
This research examines the effect of external, organizational and individual variables on the rate of adoption of new technologies in the financial sector in Ecuador. Results suggest that size, functional differentiation, and formalization are the best predictors of adoption of innovations. Additionally, competition is significantly related to adoption.
The purpose of this paper is to study the influence of corporate governance and internationalization on research and development (R&D) investments in US‐based…
The purpose of this paper is to study the influence of corporate governance and internationalization on research and development (R&D) investments in US‐based international firms.
The paper draws from agency theory to examine the influence of corporate governance mechanisms and internationalization on R&D intensity by the use of longitudinal data from 1991, 1994, 1997, and 2000 in a sample of large, manufacturing US firms with international operations.
The paper finds that CEO total compensation is positively associated with R&D intensity, whereas equity voting power, insider ownership, and duality are negatively associated.
The findings regarding insider ownership confirms agency theory, in that agents will tend to make decisions to maximize their own utility and thus would be expected to reject R&D investments. In terms of duality, the augmented discretion that CEOs assume when they also hold the chairmanship position may reduce the monitoring function of the board, making it easier for the CEO to avoid engaging in short‐term risky ventures. Additionally, CEOs are likely to demand larger salaries when faced with risky decisions because their employment stability and reputation are at stake.
Boards concerned with firm innovation should focus their decisions on CEO salaries on total compensation rather than on short‐term performance. Total compensation may motivate CEOs to commit to R&D investments that lead to innovations despite the risk of failure and detrimental impact on short‐term profits. Firms should be cautious in granting ownership to board members. Although ownership often stimulates commitment to strategic decisions, over‐involvement of board insiders may result in risk aversion, leading to decreases in R&D efforts.
This paper extends the literature by integrating agency theory and organization learning in a comprehensive framework, showing that governance and internationalization play a significant role in firm R&D intensity.
The success of multinational enterprises (MNEs) is at least as much a function of management ability and behavior as it is of industry characteristics or environmental factors. MNE managers, like all managers, display human limitations, e.g., overconfidence that affect judgment. Yet IB researchers still tend to ignore management in their research, treating the firm as a black box. To the extent that the top management team is considered, rational behavior in the classical economic sense is assumed, yet, clearly, managers behave according to different rules than those assumed in much of the IB literature. Further, managers are not part of a herd, but unique. The result of such a lacuna is that theory fails to predict actual behavior and does not allow best guidance for policy options. The paper summarizes research on behavioral decision making and calls for its application in future research in international business.
Movement of people from one retail trade area to another in search of better options and deals has been studied across the world owing to its large impact on trade flow…
Movement of people from one retail trade area to another in search of better options and deals has been studied across the world owing to its large impact on trade flow. Studies have been done in various rural and urban settings. However, almost all except one fails to provide a comprehensive model of outshopping which has its own limitations with regard to its applicability’s across cultures and in various settings. Nonetheless findings from the literature provides necessary inputs to start studies in various other cultures and settings. Results are presented in form of various definitions, various types, methodologies used, factors identified (individual characteristics, market characteristics, product related variables and accessibility factors) and patterns across continents. Attempts have also been made to explain their applicability to Indian conditions along with various limitations and gaps.
The need for a firm’s business strategy to be responsive to the institutional contexts of emerging markets is well-established in the literature. Often, however, strategic…
The need for a firm’s business strategy to be responsive to the institutional contexts of emerging markets is well-established in the literature. Often, however, strategic responsiveness is impeded by defining institutional contexts as country-level aggregations (macro-level) and glossing over sub-national variations (micro-level). The purpose of this paper is to investigate micro-level contexts that can defy macro-level assumptions of economic rationality.
As a research site, the motivations of street vendors in Mexico City are analyzed in terms staying in one sub-national context, the informal sector, as opposed movement to another, the formal sector. Unanticipated reluctance to move from one context to another is defined as stickiness.
Sub-national institutional contexts are found to be sticky, with less movement between informal and formal sectors than would have been anticipated. Unexpectedly, it is found that a significant number of street vendors prefer the hardship of the informal sector to the relative security of the formal sector.
International business research makes assumptions about the growth narrative of emerging markets, often characterizing a growing middle class as a rising tide that lifts all boats. In terms of further research on adapting strategy, however, assumptions of rational expectations ought to be tempered, as demonstrated by the stickiness of the informal sector.
A contribution is made to the international business literature by showing that macro-level assumptions about institutional context based on rational expectations of wealth-maximizing behavior in emerging markets may result in an incomplete view of institutional context. Ultimately, adaptation of strategy could be impaired as a result.
Background in Germany In the Federal Republic of Germany the employment of men and women in the public service is governed by the Basic Law (constitution) and labour laws…
Background in Germany In the Federal Republic of Germany the employment of men and women in the public service is governed by the Basic Law (constitution) and labour laws, which also apply to employees in the private sector. Except for the provi‐sions protecting working women, the laws do not make any distinction according to sex.
The paper explores the implications for monetary policy from the greater integration of major capital markets since 1980 using long‐term interest rates. The empirical…
The paper explores the implications for monetary policy from the greater integration of major capital markets since 1980 using long‐term interest rates. The empirical approach is the multivariate vector moving average GARCH model, which examines the nature of the spillover mechanism across markets. The results have shown that since 1990 there has been a stronger linkage among major bond markets at the volatility level. Evidence that globalization has seriously affected the behavior of interest rates and made them more synchronized across countries is suggested from the way disturbances in a major market spill over fast and heavily, at times, to other related markets thereby affecting the conduct of monetary policy in all involved parties. This happens because investors now have more information about and choices of bonds from many countries and that makes them efficient in their assessment of assets. Therefore, their concerted actions generate more volatility as they continuously rebalance their global portfolios.