Search results
1 – 10 of over 104000Dominik Dellermann, Alexander Fliaster and Michael Kolloch
Past research demonstrated that novel IT-based business models generate tremendous returns for innovators. However, the risks associated with these innovations remain…
Abstract
Purpose
Past research demonstrated that novel IT-based business models generate tremendous returns for innovators. However, the risks associated with these innovations remain under-explored. This paper aims to address this critical gap analyzing risks and offering important insights particularly for practitioners.
Design/methodology/approach
The authors adopted an exploratory multiple-case study research design. It draws on 22 semi-structured interviews with managers from leading energy utilities, as well as leading providers of virtual power plants technology within the German energy industry.
Findings
The research reveals that main risks in new digital business models in the energy sector are associated with three forms of interdependence between innovation actors: the regulatory, the technological and the collaborative. To deal with these interdependencies, the authors propose an original multi-step risk management framework. This framework considers the outreach as a critical dimension for risk assessment and offers a new risk response matrix to draw individual and collective mitigation activities for specific types of risks.
Practical implications
This paper offers a framework for the management of interdependence risks that are fundamental for business model innovations based on IT. Thus, it is applicable in companies both inside the energy sector and beyond.
Originality/value
This paper analyzes an important digital business model innovation that has not yet been explored in management literature – the virtual power plant (VPP). It is based on original and current empirical work and proposes a novel risk management framework for business organizations.
Details
Keywords
Adoptive innovation becomes increasingly important in today’s competitive world. However, in the presence of current economic downturn, cautions are voiced against potential risks…
Abstract
Adoptive innovation becomes increasingly important in today’s competitive world. However, in the presence of current economic downturn, cautions are voiced against potential risks; these innovative activities can bring to from firm to country level. Our research addresses such concerns. The research is drawn from two key streams of literature: risk management and innovation management. We developed a conceptual framework that consists of three components: risk behaviour, environmental conditions and adoptive innovative (REAI). Applying the REAI framework, we examined the risk management efficacy of adoptive innovation activities of one organisation under a historical perspective. We conclude that although adopters have a high tolerance for managing uncertainty and appetite for risk taking in line with competitors, there are two key elements that deter mine the performance of such behaviour: level of environmental turbulence and the role of senior management. It is the first time research determining the relationship between risk and adoptive innovative behaviour is being undertaken and will also provide direct guidance for managers regarding how to manage risk and uncertainty under different circumstances of their innovative practices.
Details
Keywords
Udeni Kumarapeli, Vijitha Ratnayake and Sanath Siroshana Jayawardana
Technological innovation is one of the strongest driving forces in the survival and growth of any organization, including textile and apparel industries. However, technological…
Abstract
Purpose
Technological innovation is one of the strongest driving forces in the survival and growth of any organization, including textile and apparel industries. However, technological innovation inherits a wide array of risks due to the uncertainty involved in it. In-depth research reveals the existence of a significant relationship between innovation failures and the approach used to innovate, that is, the organization’s innovator type. However, quantitative evidence supporting this concern is still lacking. Hence, the purpose of this paper is to bridge the existing gap in the literature on effective management of technological innovation risk factors and the innovator type of textile and apparel industries.
Design/methodology/approach
The risk factors related to technological innovations are identified under different innovator types. Analytic network process (ANP) has been used to evaluate the contribution of risk factors according to the innovator type of the organization. Data was gathered through the literature review and structured and semi structured interviews with textile and apparel industry experts. The contribution of risk factors was determined through priorities, derived according to the ANP using Super Decision software.
Findings
Contribution of risk factors takes different values according to innovator type. This provides comprehensive knowledge on developing a risk management strategy according to the innovator type of the organization. Furthermore, this provides insight into the fact that a generalized risk management strategy will not be effective and sensible for all innovator types.
Originality/value
The findings provide a thorough understanding of developing a customized risk management strategy by determining the “most to least” criticality of risks based on the innovator type of the organization. Furthermore, findings can be used to adopt the most appropriate innovator type based on the organization’s key competencies. Moreover, this guides the organization in making the best use of internal resources during risk management. Furthermore, this provides insight into the risk factors that must be addressed prior to embarking on new innovative approaches.
Details
Keywords
Bilal Mukhtar, Muhammad Kashif Shad, Lai Fong Woon and Salaheldin Hamad
This study aims to propose a conceptual framework to examine the impact of risk management implementation on green innovation in the Malaysian solar photovoltaic (PV…
Abstract
Purpose
This study aims to propose a conceptual framework to examine the impact of risk management implementation on green innovation in the Malaysian solar photovoltaic (PV) manufacturing industry.
Design/methodology/approach
The study is based on primary data to be collected from 30 Malaysian solar PV manufacturing companies through a questionnaire that incorporates the five-point Likert scale. The exploratory factor analysis (EFA) is proposed to be performed using SPSS 24.0 and confirmatory factor analysis (CFA) is suggested to be conducted using AMOS.21 software to explore the factors and reliability of the items and to confirm the factorial structure of risk management implementation and green innovation. Furthermore, partial least square-structural equation modeling (PLS-SEM) is proposed to investigate relationships between constructs and latent variables.
Findings
The proposed framework is based on the stakeholder's theory and suggests that the comprehensive implementation of risk management has a significant and positive impact on green innovation in the Malaysian solar PV manufacturing industry.
Practical implications
This study provides insight into formulating strategies for enhancing green innovation in the solar PV manufacturing sector and serves as a valuable resource for stakeholders.
Originality/value
The significance of the proposed conceptual framework lies in its ability to enhance the workability of the stakeholder's theory and to create value for stakeholders through the implementation of risk management to drive green innovation. This study adds to the existing literature by exploring the relationship between risk management and green innovation in the solar PV manufacturing industry.
Details
Keywords
Ling Zhang, Sheng Zhang and Yingyuan Guo
The purpose of this paper is to compare the effects of equity financing and debt financing on technological innovation, and prove that the enhancement of a financing system’s risk…
Abstract
Purpose
The purpose of this paper is to compare the effects of equity financing and debt financing on technological innovation, and prove that the enhancement of a financing system’s risk tolerance for technological innovation can enhance the innovation risk preference of enterprises and thus promote innovation.
Design/methodology/approach
This study is based on a transnational sample of 35 developed countries from 1996 to 2015, by using the panel econometric model to empirically examine the effects of two financing modes on innovation.
Findings
The findings showed that equity financing, which has higher risk tolerance, has a more positive impact on innovation than debt financing in terms of both economic uptrend and economic downtrend, and that government efficiency plays a significant role in supporting the performance of technological innovation.
Originality/value
The paper provides a research framework for examining how a financing system’s risk tolerance capacity affects the development of technological innovation through promoting risk preference among enterprises. This paper provides transnational and cross-cycle comparative evidence that equity financing with a strong risk tolerance capacity can better support technological innovation, even in periods of economic downtrend. Moreover, the importance of financing system’s risk tolerance capacity for innovation during economic crises is discussed.
Details
Keywords
I. INTRODUCTION This study attempts to extend and expand previous research conducted by the Department of Marketing at Strathclyde on the adoption and diffusion of industrial…
The purpose of this paper is to argue that strategic responsiveness is of paramount importance for effective risk management outcomes and to introduce an empirical study to…
Abstract
Purpose
The purpose of this paper is to argue that strategic responsiveness is of paramount importance for effective risk management outcomes and to introduce an empirical study to demonstrate this.
Design/methodology/approach
Real options logic is adopted to explain how effective risk management capabilities improve performance and how innovation and financial slack enhance this effect. The propositions are examined across 896 companies using two‐stage least square regressions.
Findings
The study reveals that risk management effectiveness combines both the ability to exploit opportunities and avoid adverse economic impacts, and has a significant positive relationship to performance. This effect is moderated favorably by investment in innovation and lower financial leverage.
Research limitations/implications
The analysis is based on a sample of large firms, which may affect the generalizability of results. Nonetheless, the study shows that effective risk management capabilities differentiate the firms and determine success and failure. It further underscores the importance of combined innovation policy and capital structure decisions as firms deal effectively with risk and uncertainty.
Practical implications
The findings indicate that corporate management must consider commitments for innovation and financial slack to enhance positive risk management effects. This result is in dire contrast to traditional beliefs that tighter resource management and higher financial leverage lead to better economies.
Originality/value
This is one of few studies to explicitly consider strategic responsiveness as instrumental for effective risk management outcomes while investigating the economic effects associated with the ability to combine generation of upside gains and downside loss avoidance.
Details
Keywords
The purpose of this study is to investigate whether the surprise components of systematic risk, which are useful in forecasting future investment opportunities, help explain the…
Abstract
Purpose
The purpose of this study is to investigate whether the surprise components of systematic risk, which are useful in forecasting future investment opportunities, help explain the cross-section of average returns associated with portfolios sorted on size, book-to-market and accruals. This study also aims to examine the mispricing attributes of the size, value and accrual effects by investigating the relative economic relevance of aggregate risk factors, which are related to exogenous shocks in state variables, in the cross-sectional returns of triple-sorted portfolios.
Design/methodology/approach
This study uses innovations of systematic risk, which affect the cash flows and risk-adjusted discount rates of all firms in an economy and determines the expected returns of portfolios based on firm characteristics. This study uses independent sorts based on size, book-to-market and total accruals – all of which are measured at the firm level – and construct three-dimensional test portfolios. For unobserved innovations, this study estimates a triangular structural vector autoregressive system and obtain the exogenous innovations in state variables. The author uses Fama-MacBeth two-pass cross-sectional regressions and examines whether the structural innovations explain a significant part of the cross-sectional variation in the average returns of the test portfolios.
Findings
This study finds that variations in expected returns of testing assets are determined by differences in the underlying assets’ exposure to systematic risk innovation. The empirical evidence also shows that exogenous innovation in Fama-French (FF) risk factors leaves out important cross-sectional information about expected returns, and additionally, the FF-factor betas have lower cross-sectional power than the proxy for innovation betas. The cross-sectional differences in the test portfolios’ sensitivity to instruments such as the short-term Treasury bill rate and term spread survive the presence of FF-factor betas.
Originality/value
In contrast to the existing literature, this study uses structural innovations that are uncorrelated and thus exogenous in nature. The author creates test portfolios that display a wide range of average returns and are unlikely to show spurious variability in risk exposures. Unlike the existing research, where size, value and accrual anomalies have been analyzed in isolation, this study examine these pricing patterns jointly, focusing on the possible contributing role of structural innovation in economy-wide predictor variables. To the best of the author’s knowledge, this paper is the first attempt to link the sensitivity of portfolios sorted on size, book-to-market and accruals to exogenous structural innovation.
Details
Keywords
Mengfei Zhu and Yitao Tao
This study investigates the impact of economic policy uncertainty on corporation innovation in innovative cities. The study sheds light on different results from the previous…
Abstract
Purpose
This study investigates the impact of economic policy uncertainty on corporation innovation in innovative cities. The study sheds light on different results from the previous literature by testing the moderator effects of entrepreneurial risk appetite on such impact.
Design/methodology/approach
A static panel estimator is applied to a Chinese sample of 416 firm-year observations from 2010 to 2019. This paper uses regression model to test the impact of uncertainty on enterprise innovation in innovative cities, and to test the regulatory role of entrepreneurial risk appetite. For a series of robustness analysis conducted by the author to deal with endogeneity, the results are robust.
Findings
The author finds reliable evidence that the economic policy uncertainty can promote corporations to invest more in R&D in innovative cities. In addition, the role of the entrepreneurial initiative is significant, and there is a positive moderating effect of entrepreneurial risk appetite between policy uncertainty and corporation innovation.
Research limitations/implications
From a practical point of view, this study examines the impact of economic policy uncertainty on corporation innovation in innovative cities for the first time. It emphasizes the role of entrepreneurial risk-taking in the development of corporation innovation in Shenzhen, an innovative city. This research is of great significance to the formulation of government policies and the innovative choice of entrepreneurs. In addition, the research shows that the entrepreneurial risk appetite in innovative cities can have a positive impact on enterprise innovation. Therefore, when formulating policies, the government should take the subjective factors of entrepreneurs into account and support enterprises with innovation potential. The evidence of this study also helps entrepreneurs make innovative decisions and enhance their confidence in enterprise development.
Originality/value
By studying the impact of economic policy uncertainty on enterprise innovation under the regulation of enterprise risk appetite, this study shows the subjective and positive role of entrepreneurs in risk grasp in innovative cities for the first time. In addition, it fills the gap of the impact of policy uncertainty on innovative urban enterprises. In fact, although it is traditionally believed that economic policy uncertainty has a negative impact on enterprise innovation, the sensitive findings of this study reveal completely different results from previous studies.
Details
Keywords
Hassan Arabshahi and Hamed Fazlollahtabar
This paper presents a stepwise method for identification and analysis of innovative activities in production systems. The purpose of this paper is to provide a structure in order…
Abstract
Purpose
This paper presents a stepwise method for identification and analysis of innovative activities in production systems. The purpose of this paper is to provide a structure in order to propose the risk paradigms and factors corresponding to the innovative activities and evaluation of the impact of these activities on innovation decisions and investment.
Design/methodology/approach
The model used here is an analytical approach that evaluates the impact of innovative activities on innovation decision and investment using product opportunity gap (POG) concept. This framework is applied for innovative activities of Asian industrial field, and the risk of innovative activities is calculated by weighted risk analysis method. In this method, the risk weights and intensities are estimated by the average of experts’ opinions in interviews.
Findings
This implementation discovered some useful information being used by investors, innovators and policymakers for taking the best strategies and decisions in various innovation domains such as innovation management, risk management and innovation policy. The results of this study show that the product innovation is the most popular category of innovation that has occurred in Asian manufacturing industries, and the product innovation, marketing innovation and organizational innovation have the most influence on technology, economic and social changes intensity, respectively.
Research limitations/implications
This study analyzed the risk of innovative activities after their occurrence and because of different views of experts, there were diverse and sometimes contradictory analyses of innovative activities risk.
Originality/value
This paper links two separate and important sectors of innovation domain: innovation risk and innovation decision making and investment. POG plays the role of a bridge to connect the two mentioned sectors and shows how innovation causes the technological, economic and social changes. This paper also provides useful and practical information for innovation investors and decision makers to take the best decisions and to avoid the probable failures and losses.
Details