scholarly journals The effect of absorptive capacity on the financial performance of Brazilian and Portuguese companies in a low technological intensity sector

2021 ◽  
Vol 18 (5) ◽  
pp. 537-560
Author(s):  
Juliane Laviniki ◽  
Claudionor Laimer ◽  
Carlos Rodrigues ◽  
João Marques
Keyword(s):  
Financial Performance ◽  
Absorptive Capacity ◽  
Technological Intensity

scholarly journals Effects of Emerging-Economy Firms’ Knowledge Acquisition from an Advanced International Joint Venture Partner on Their Financial Performance Based on the Open Innovation Perspective

2021 ◽  
Vol 7 (1) ◽  
pp. 67
Author(s):  
Choo Yeon Kim ◽  
Eun-Hwa Seo ◽  
Canisha Booranabanyat ◽  
Kwangsoo Kim
Keyword(s):  
Financial Performance ◽  
Knowledge Acquisition ◽  
Absorptive Capacity ◽  
Open Innovation ◽  
Joint Venture ◽  
Emerging Economy ◽  
Innovation Performance ◽  
Mediation Effect ◽  
International Joint Venture ◽  
International Joint

Although emerging-economy firms (E-E firms) must have a keen interest in improving their performance by utilizing knowledge transferred from their advanced international joint venture (IJV) partner, there has been little research on the performance implications of E-E firms’ knowledge transferred from their advanced IJV partner. So, drawing on open innovation and organizational learning perspectives, we examine whether, how, and when E-E firms’ knowledge acquisition from their IJV partner has a positive impact on their financial performance. Based on data collected from 127 Thai manufacturing firms with a local IJV partnered with an advanced overseas firm, our results reveal that E-E firms’ knowledge acquisition from their IJV partner has an overall positive influence on their financial performance in terms of growth and profitability. Our results further show that innovation performance mediates the relationship between E-E firms’ knowledge acquisition and their financial performance based on a moderated mediation analysis including innovation performance as a mediator and absorptive capacity as a moderator. It is also found that the positive mediation effect of innovation performance is more pronounced in the presence of higher absorptive capacity than otherwise. That is, our results show that even among E-E firms which have acquired much knowledge from their IJV partner, those with higher absorptive capacity achieve better innovation performance than those with lower absorptive capacity, and improved innovation performance subsequently contributes to producing superior financial performance. The key conclusions, implications, and limitations of our study are presented based on these findings.

Absorptive capacity, innovation, and financial performance

2011 ◽  
Vol 64 (12) ◽  
pp. 1335-1343 ◽  
Author(s):  
Konstantinos Kostopoulos ◽  
Alexandros Papalexandris ◽  
Margarita Papachroni ◽  
George Ioannou
Keyword(s):  
Financial Performance ◽  
Absorptive Capacity

scholarly journals Foreign market-related knowledge absorption and the international financial performance of SMEs

2013 ◽  
Vol 17 (4) ◽  
pp. 178-193 ◽  
Author(s):  
Raluca Mogos Descotes ◽  
Björn Walliser
Keyword(s):  
Financial Performance ◽  
Absorptive Capacity ◽  
Steel Industry ◽  
Foreign Market ◽  
Direct Influence ◽  
Turnover Rates ◽  
Knowledge Processing ◽  
Organizational Process ◽  
The Impact ◽  
Knowledge Absorption

This study uses the absorptive capacity framework of Zahra and George (2002) to explain how exporting SMEs can achieve higher international financial performance. Based on the survey of 107 SMEs from the steel industry, results show that the impact of export knowledge processing on international financial performance is indirect, depending on the organizational process devoted to export knowledge absorption. The acquisition and assimilation of export knowledge have a direct influence on the export responsiveness capacity of SMEs, which ultimately allows them to derive higher turnover rates and profits from foreign market operations.

scholarly journals The Impact of Technological Capability on Financial Performance in the Semiconductor Industry

2021 ◽  
Vol 13 (2) ◽  
pp. 489
Author(s):  
Jun Hong Park ◽  
Hyunseog Chung ◽  
Ki Hong Kim ◽  
Jin Ju Kim ◽  
Chulung Lee
Keyword(s):  
Regression Analysis ◽  
Financial Performance ◽  
Semiconductor Industry ◽  
Technological Capability ◽  
High Group ◽  
Technological Diversity ◽  
Technological Efficiency ◽  
Rapid Changes ◽  
Technological Intensity ◽  
The Impact

The modern semiconductor industry is going through rapid changes as new markets and technologies appear. In this paper, such technology-intensive firms’ relationship between technological capability and financial performance is analyzed with regression analysis. Revenue and market capitalization are used as dependent variables. For the independent variables, the technological intensity, technological diversity, technological asset, and technological efficiency are used. The analysis results revealed different effects of technological capability on financial performance. Also, regression analysis is conducted by dividing firms into high and low groups based on technological asset and technological efficiency, and the analysis result revealed different effects of technological intensity and technological diversity on financial performance. For technological asset, the financial performance in the high group is affected more by technological intensity, and the financial performance in the low group is affected more by technological diversity. For technological efficiency, only the financial performance in the high group is affected by technological intensity. Although both groups’ financial performance is somewhat affected by technological diversity, there was no statistically significant differences between the groups. By separating the effect of technological capability on financial performance, this research can provide more detailed analysis results compared to previous literature and the methods of managing technological capability for semiconductor firms.

scholarly journals The impact of different types of innovation and governmental support in the performance of firms: the case of Central and Eastern Europe manufacturing SMEs

2019 ◽  
Vol 17 (4) ◽  
pp. 923-939
Author(s):  
FÁBIO DE OLIVEIRA PAULA ◽  
JORGE FERREIRA DA SILVA
Keyword(s):  
Financial Performance ◽  
Eastern Europe ◽  
Absorptive Capacity ◽  
Central And Eastern Europe ◽  
Business Environment ◽  
Eu Member States ◽  
Different Types ◽  
Short Run ◽  
The Government ◽  
The Impact

Abstract This study examined companies from two different groups of countries in Central and Eastern Europe and their partnerships with the Government for the development of four types of innovation (product, process, organizational, and marketing). The research included ex-soviet republics (Eu members and non-members), and observed how each type of innovation affects the firms’ financial performance. A sample of 1,143 manufacturing SMEs from the Business Environment and Enterprise Performance Survey (BEEPS) were tested using multiple regression and logit. Based on the absorptive capacity theory, the results show that manufacturing SMEs from EU-member countries have a higher absorptive capacity and take advantage of the EU’s innovation promotion programs to innovate. On the other hand, the SMEs from non EU-member states perceive a quicker effect of the innovations in financial performance, considering that there is a technological gap between the two groups (non EU-members are less developed). Also, the introduction of different types of innovations simultaneously boosts the performance of firms from non EU-member countries in the short run.

Foreign market entry through acquisition and firm financial performance

2018 ◽  
Vol 13 (5) ◽  
pp. 1348-1371 ◽  
Author(s):  
Andrews Adugudaa Akolaa
Keyword(s):  
Financial Performance ◽  
Absorptive Capacity ◽  
Market Entry ◽  
Parent Company ◽  
Foreign Subsidiaries ◽  
Acquisition Performance ◽  
Content Type ◽  
Entry Strategy ◽  
Parent Companies ◽  
Local Firms

Purpose The international market entry strategy by acquisition is one of the critical options for success in international business. The decision to acquire a local firm is expected to impact the post-entry financial performance of the local firm as the acquirers come with proprietary advantages to improve the overall performance of the acquired company. The purpose of this paper is to empirically examine the post-acquisition financial performance of acquired foreign subsidiaries and comparable unacquired local firms in Ghana to determine the effect of foreign acquisition on the financial performance of the local subsidiaries. Design/methodology/approach A quantitative approach was adopted in this study. A sample of 100 locally acquired and non-acquired firms were studied using purposive and convenience sampling method. The research adopted the propensity score matching and the differences in difference methodologies to determine the returns on assets (ROA) of non-acquired local firms and acquired foreign subsidiaries are compared one year pre-acquisition t1 to two years post-acquisition t2. Findings The results demonstrate a higher post-acquisition financial performance of locally acquired foreign subsidiaries in relation to their local counterparts in Ghana. Firms with pre-acquisition modernized ownership structures performed better than state-owned firms and firms with high pre-acquisition absorptive capacity outperformed firms with lower pre-acquisition absorptive capacity. The results also indicate that ROA for acquired local firms in the year of acquisition drops in relation to the year prior to acquisition Research limitations/implications A major limitation of this research is that the relative capability of the parent companies and experience in the transfer of knowledge to the acquired local subsidiaries was not considered. The real impact of the various multinationals would have revealed how the capability and competencies of the different parent companies whose subsidiaries this study considered in the paper make a difference in their performance. The study did not also consider the value of parent company participation in the local management of the acquired subsidiaries. Whereas some acquired firms had parent company staff participating in the local management, others did not have same, thus challenging the performance results without any control of this variable. The other limitation of this research is the fact that it did not also consider the experience of the parent company as a factor that can influence the performance of the subsidiary. The more experienced the parent company is in engaging foreign markets, the more likely the support for the subsidiary will result in higher performance as parent company brings previous learnings. Another limitation of this study is that it measures the financials only (ROA) and hence does not provide a 360° assessment of the subsidiary performance, which includes the operational and overall subsidiary effectiveness. This research has not empirically examined all aspects of foreign acquisitions in Ghana and thus has many aspects for future exploration that other researchers may focus on. The paper has not considered the experience and capability of the parent company to transfer technology, innovation and all the advantages of multinationals to the post-acquisition performance of subsidiaries. More experienced multinationals are most likely to transfer knowledge faster to subsidiaries than less experienced ones, thus likely to show better performance post-acquisition than the less experienced ones. The effect of this phenomenon has not been considered in this study. Parent company participation in the local management of the subsidiary can also make a difference in the post-acquisition performance equation but this has not been considered in this research. Some parent companies actively participate in the local subsidiary management as management support for the subsidiary. This might have some effect on the subsidiary post-acquisition performance but this study does consider this. Other researchers may want to look into this factor. Future researchers may also assess the differences in performance of subsidiaries that are wholly owned and partial owned in Ghana. The performance of Greenfield joint ventures and local firm acquisitions can also be studied. Practical implications Findings of this research has implications for firms using acquisition as foreign market entry strategy to inform the choice of local partners to select for acquisitions as pre-acquisition ownership structure and absorptive capacity of local Ghanaian firms impact post-acquisitions performance. Ghanaian firms also seeking to attract foreign investments into their businesses will also find the results useful as they organize to meet prospective acquirers’ expectations, for example, building their human capacity and ownership structures, developing export and ensuring debt rations to attract potential acquirers. Originality/value Acquisitions as an international market entry strategy continue to gain grounds with lots of research in the area. However, there is scanty research on post-acquisition financial performance, especially in the developing country context, and this paper fills that yawning knowledge gap by comparing acquired and non-acquired local firms in Ghana to determine if foreign acquisitions lead to better ROA.

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