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1 – 10 of 29Juan A. Sanchis Llopis, Juan A. Mañez and Andrés Mauricio Gómez-Sánchez
This paper aims to examine the interrelation between two innovating strategies (product and process) on total factor productivity (TFP) growth and the dynamic linkages between…
Abstract
Purpose
This paper aims to examine the interrelation between two innovating strategies (product and process) on total factor productivity (TFP) growth and the dynamic linkages between these strategies, for Colombia. The authors first explore whether ex ante more productive firms are those that introduce innovations (the self-selection hypothesis) and if the introduction of innovations boosts TFP growth (the returns-to-innovation hypothesis). Second, the authors study the firm’s joint dynamic decision to implement process and/or product innovations. The authors use Colombian manufacturing data from the Annual Manufacturing and the Technological Development and Innovation Surveys.
Design/methodology/approach
This study uses a four-stage procedure. First, the authors estimate TFP using a modified version of Olley and Pakes (1996) and Levinsohn and Petrin (2003), proposed by De Loecker (2010), that implements an endogenous Markov process where past firm innovations are endogenized. This TFP would be estimated by GMM, Wooldridge (2009). Second, the authors use multivariate discrete choice models to test the self-selection hypothesis. Third, the authors explore, using multi-value treatment evaluation techniques, the life span of the impact of innovations on productivity growth (returns to innovation hypothesis). Fourth, the authors analyse the joint likelihood of implementing process and product innovations using dynamic panel data bivariate probit models.
Findings
The investigation reveals that the self-selection effect is notably more pronounced in the adoption of process innovations only, as opposed to the adoption of product innovations only or the simultaneous adoption of both process and product innovations. Moreover, our results uncover distinct temporal patterns concerning innovation returns. Specifically, process innovations yield immediate benefits, whereas implementing both product innovations only and jointly process and product innovations exhibit significant, albeit delayed, advantages. Finally, the analysis confirms the existence of dynamic interconnections between the adoption of process and product innovations.
Originality/value
The contribution of this work to the literature is manifold. First, the authors thoroughly investigate the relationship between the implementation of process and product innovations and productivity for Colombian manufacturing explicitly recognising that firms’ decisions of adopting product and process innovations are very likely interrelated. Therefore, the authors start exploring the self-selection and the returns to innovation hypotheses accounting for the fact that firms might implement process innovations only, product innovations only and both process and product innovations. In the analysis of the returns of innovation, the fact that firms may choose among a menu of three innovation strategies implies the use of evaluation methods for multi-value treatments. Second, the authors study the dynamic inter-linkages between the decisions to implement process and/or product innovations, that remains under studied, at least for emerging economies. Third, the estimation of TFP is performed using an endogenous Markov process, where past firms’ innovations are endogenized.
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Palitha Konara, Zita Stone and Alex Mohr
The authors combine options logic with transaction cost economics to explain why firms maintain, divest or buy out their international joint ventures (IJVs). It is suggested that…
Abstract
Purpose
The authors combine options logic with transaction cost economics to explain why firms maintain, divest or buy out their international joint ventures (IJVs). It is suggested that a decline in environmental risk and higher partner-related risk makes a firm more likely to acquire an IJV but less likely to divest an IJV. The study also investigates how IJV age moderates the effects of a decline in environmental risk and higher partner-related risk.
Design/methodology/approach
The study employs competing risks analyses to examine the drivers of different termination outcomes using a dataset consisting of 459 IJVs in the People's Republic of China, of which 110 were either acquired or divested by their foreign parent.
Findings
The study finds that changes in environmental risk and partner-related risk affect how firms terminate their IJVs in the People's Republic of China. Specifically, the authors find that the effect of exogenous and endogenous risk are more pronounced for the acquisition of IJVs than for the divestment of IJVs.
Research limitations/implications
The study contributes to international marketing research by complementing options logic with transaction cost economics to provide a theoretical explanation of the different ways in which IJVs in the People's Republic of China are terminated.
Practical implications
IJVs continue to be an important yet often unstable method to serve international markets. Our findings increase managers' awareness of the effect that two important sources of risk may have on the termination of IJVs in the People's Republic of China.
Originality/value
The study provides novel insights into the effect that changes in exogenous and endogenous risk have on a firm's choice of termination mode drawing on novel data on the different ways in which foreign firms have terminated their IJVs in the Peoples' Republic of China.
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Sung Min Kim, Gopesh Anand, Eric C. Larson and Joseph Mahoney
Enterprise systems are commonly implemented by firms through outsourcing arrangements with software vendors. However, deriving benefits from these implementations has proved to be…
Abstract
Purpose
Enterprise systems are commonly implemented by firms through outsourcing arrangements with software vendors. However, deriving benefits from these implementations has proved to be a challenge, and a great deal of variation has been observed in the extent of value generated for client and vendor firms. This research examines the role of co-specialization as a strategy to make the most out of outsourced enterprise systems. The authors develop hypotheses relating resource co-specialization with two indicators of success for implementation of enterprise software: (1) exchange success and (2) firm growth.
Design/methodology/approach
The hypotheses are tested using a unique panel data set of 175 firms adopting Advanced Planning and Scheduling (APS) software, a type of enterprise system used for managing manufacturing and logistics. The authors identify organizational factors that support co-specialization and then examine how co-specialization is associated with enterprise software implementation success, controlling for the endogenous choice to co-specialize.
Findings
The empirical results suggest that resource co-specialization is positively associated with implementation success and that the two resource co-specialization pathways that are examined complement each other in providing performance benefits.
Originality/value
This paper contributes to the research literature on outsourcing. The study also provides a new empirical test using a unique data set of 175 firms adopting APS Software.
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This study aims to empirically examine the impact of the price structure of two-sided markets on transaction volume and market share (MS) in the context of the Korean credit card…
Abstract
This study aims to empirically examine the impact of the price structure of two-sided markets on transaction volume and market share (MS) in the context of the Korean credit card industry. The Korean credit card market differs from those in the United States (U.S.) or Europe in terms of transaction structure (i.e. a three-party system in Korea vs a four-party system in the U.S. or Europe) and government policy. In addition to the merchant discount rate and the cardholder annual membership fee rate, the authors included and analyzed exogenous variables to eliminate any endogeneity. Based on the analysis results, the authors found that credit card usage performance (i.e. transaction volume) increases with an increase in the relative price ratio (merchant discount rate ÷ cardholder membership fee rate) paid by merchants and cardholders, provided that the total price (merchant discount rate + cardholder membership fee rate) paid by merchants and cardholders remains constant. Therefore, this study is the first to confirm that the Korean credit card market operated as the theoretical mechanism of a two-sided market during the analysis period. This effect can only be observed in specific cases such as the launch of the so-called “Chief Executive Officer(CEO)-designed card.” When a new CEO takes office in a credit card company and launches a “CEO-designed card,” there is a significant increase in not only card usage performance but MS as well owing to the price structure changes caused by expanding the benefits that customers derive from card use.
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Shukuan Zhao, Xueyuan Fan, Dong Shao and Shuang Wang
This study aims to investigate the impact of supply chain concentration (SCC) on corporate research and development (R&D) investment and determine the moderating roles of industry…
Abstract
Purpose
This study aims to investigate the impact of supply chain concentration (SCC) on corporate research and development (R&D) investment and determine the moderating roles of industry concentration and financing constraints on the relationship between SCC and R&D investment.
Design/methodology/approach
The study collected data from Chinese listed companies, used the fixed effects model to test the research hypotheses and further used the two-stage Heckman test and propensity score matching (PSM) to address potential endogeneity issues.
Findings
The result reveals a negative impact of SCC on corporate R&D investment. In addition, industry concentration mitigates the negative impact of SCC on corporate R&D investment, but financing constraints strengthen the negative impact.
Originality/value
This study introduces the concept of SCC and empirically tests its effect on R&D investment, further explaining the lack of corporate innovation. This study inspires companies to strengthen SC management and weigh the level of SCC with environmental factors.
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Jason Donovan, Nigel Poole, Keith Poe and Ingrid Herrera-Arauz
Between 2006 and 2011, Nicaragua shipped an average of US$9.4 million per year of smallholder-produced fresh taro (Colocasia esculenta) to the USA; however, by 2016, the US market…
Abstract
Purpose
Between 2006 and 2011, Nicaragua shipped an average of US$9.4 million per year of smallholder-produced fresh taro (Colocasia esculenta) to the USA; however, by 2016, the US market for Nicaraguan taro had effectively collapsed. The purpose of this paper is to analyze the short-lived taro boom from the perspective of complex adaptive systems, showing how shocks, interactions between value chain actors, and lack of adaptive capacity among chain actors together contributed to the collapse of the chain.
Design/methodology/approach
Primary data were collected from businesses and smallholders in 2010 and 2016 to understand the actors involved, their business relations, and the benefits and setbacks they experienced along the way.
Findings
The results show the capacity of better-off smallholders to engage in a demanding market, but also the struggles faced by more vulnerable smallholders to build new production systems and respond to internal and external shocks. Local businesses were generally unprepared for the uncertainties inherent in fresh horticultural trade or for engagement with distant buyers.
Research limitations/implications
Existing guides and tools for designing value chain interventions will benefit from greater attention to the circumstances of local actors and the challenges of building productive inter-business relations under higher levels of risk and uncertainty.
Originality/value
This case serves as a wake-up call for practitioners, donors, researchers, and the private sector on how to identify market opportunities and the design of more robust strategies to respond to them.
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Aaqib Sarwar, Muhammad Asif Khan, Zahid Sarwar and Wajid Khan
This paper aims to investigate the critical aspect of financial development, human capital and their interactive term on economic growth from the perspective of emerging economies.
Abstract
Purpose
This paper aims to investigate the critical aspect of financial development, human capital and their interactive term on economic growth from the perspective of emerging economies.
Design/methodology/approach
Data set ranged from 2002 to 2017 of 83 emerging countries used in this research and collected from world development indicators of the World Bank. The two-step system generalized method of moments is used to conduct this research within the endogenous growth model while controlling time and country-specific effects.
Findings
The findings of the study indicate that financial development has a positive and significant effect on economic growth. In emerging countries, human capital also has a positive impact on economic growth. Financial development and human capital interactively affect economic growth for emerging economies positively and significantly.
Research limitations/implications
The data set is limited to 83 emerging countries of the world. The time period for the study is 2002 to 2017.
Originality/value
This research contributes to the existing literature on human capital, financial development and economic growth. Limited research has been conducted on the impact of financial development and human capital on economic growth.
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With the increase of state capital, corporate total factor productivity (TFP) has a tendency to jump up at first and then slowly decrease. Generally, no significant “productivity…
Abstract
Purpose
With the increase of state capital, corporate total factor productivity (TFP) has a tendency to jump up at first and then slowly decrease. Generally, no significant “productivity paradox” can be observed in China’s manufacturing industry. With the increase of export density, corporate TFP also shows a trend of initial jump growth and subsequent slow decline. This paper aims to discuss these issues.
Design/methodology/approach
Using the 1996–2013 China Industrial Enterprise Database, this paper studies the monopolistic behavior of Chinese manufacturing enterprises through the measurement of TFP and corporate monopoly power.
Findings
Results show that China’s manufacturing monopoly enterprises are generally innovation-oriented rather than rent-seeking. However, there are certain differences between diversified types of monopoly enterprises: the ones with state capital are more inclined to innovate than those without, whereas the ones with export delivery value are more inclined to seek rent than those without.
Originality/value
Therefore, the government should implement differentiated policies for diversified types of monopoly enterprises, and do so in a targeted manner fully reflecting the containment of rent-seeking and the encouragement of innovation.
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