Global Supply Chains as Drivers of Innovation in China

China’s manufacturing and innovation capabilities are directly related. Availability of complementary resources in rapid prototyping, test production, and components and the ability to deploy innovations at scale increasingly lead high-technology firms, including startups, to consider China as a developmental base across sectors from big data to cloud computing, smart grid, renewable energy, and alternative energy vehicles. Entry into global value chains (GVCs) has led to vast transfers of knowledge, creating human resource capabilities that continuously facilitate the upgrading of Chinese firms. China’s most advanced industries were all those characterized by active participation in GVCs. China’s entry into GVCs has differed significantly from the experiences of other emerging economies, arguably affording China greater innovation benefits. This is directly related to China’s institutional environment of “structured uncertainty.” Structured uncertainty shaped the pattern and impact of entry into GVCs, dictating which regions entered GVCs, when, and how, with long-term knowledge transfer effects.

Long-term buyer-supplier relationships in IT services

Purpose The purpose of this study is to explore an integrative model of supplier success, using a case study of the Thai high-technology firms. The study focuses on buyer-supplier relationships of information systems (IS), including bundles of hardware, software and services because these relationships are dependent on both immediate performance quality of the IS and long-term maintenance of a strong buyer-supplier relationship. Design/methodology/approach The research used an integrative model that incorporated the DeLone and McLean (2003) IS success model, representing system quality and Clauss and Tangpong’s (2018) impregnable exchange relationship model, representing relationship quality. Exploratory mixed methods study incorporated interviews with supplier relationship managers at five Thai high-technology firms (n = 15) and a quantitative survey of buyer firms (n = 393). Findings Results supported the integrative system-supplier success model. The most significant limitation is that the study was only conducted in a single industry (high tech) when the IS buyer-supplier relationships modeled here are ubiquitous in modern business. Research limitations/implications Despite this limitation, the research contributes to the literature by developing and testing a long-term buyer-supplier relationship success model that incorporates both the characteristics of an IS and the supplier characteristics that lead to positive outcomes. Originality/value This study makes intuitive sense and being demonstrated statistically – the fact that the overall quality of an IS, coupled with a well-liked, non-substitutable supplier with a history of good performance, would be considered to be a successful supplier relationship is not especially controversial. The value of the study lies in the integration of the two models to represent different aspects of supplier performance, which could have a different effect on the buyer-supplier relationship in the long-term.

Consequences of Mergers and Acquisitions on Firm Performance: A Sector-Level Study of Public Listed Companies in China

As the motives of mergers and acquisitions (M&As) are different across industries, this study examined the synergy effects of technological gains and capital intensity on the operating performance of the acquiring firms after M&As. The sample comprised 434 completed M&As initiated by Chinese firms listed on the Shanghai and Shenzhen Stock Exchanges with 2,170 observations over the years 2012 to 2016. On average, the firms performed better after M&As. The results show that the operating performance of public health, information technology, telecommunication and financial service firms within the high-technology sector increased after M&As. This suggests that high-technology firms can benefit from M&As through a more extensive knowledge base and financial synergy. We also found that good governance characterized by board independence affects firm performance positively. Therefore, the acquisition of technology through M&As could be an essential corporate growth strategy in the Chinese capital market, which is transforming from a state-controlled economy to a more market driven one. The findings provide useful insights to both corporate players and policy-makers on the types of M&As that stand higher chances to generate positive outcomes and those that need extra measures and further scrutiny to prevent inefficient allocation of resources.

A Fuzzy-MOP-Based Competence Set Expansion Method for Technology Roadmap Definitions

Technology roadmaps have been widely adopted as an important management tool during the past three decades after their invention by Motorola in the 1980s. Technology roadmapping processes can be integrated with a firm’s competence sets and play dominant roles in strategy definitions. Although the issue of how multiple objectives can be dealt with in technology roadmaps by including the uncertainties of the modern management environment is important, it has seldom been addressed. To remedy this, we aim in this research to propose a competence set expansion method based on fuzzy multiple objective programming (FMOP). An empirical study based on the roadmapping of silicon intellectual properties (SIPs) of automotive applications will be used to demonstrate the feasibility of the proposed roadmapping method. In the future, the proposed analytic technique can be integrated with the data mining results of academic research database, patent libraries, etc. The well-verified mathematical programming method can serve as a basis for research and development (R&D) strategy definitions by managers of high-technology firms as well as policy makers of governments.

Fraud and Innovation

We show that fraudulent firms allocate resources differently than honest companies. Resources obtained through fraudulent means are likely to be viewed as unearned gains and are less likely to be invested in productive activities, such as recruiting talent. We posit that honest and fraudulent companies also invest in different types of innovation: honest firms pursue technically significant innovations, while fraudulent companies are likely to make smaller investments in less challenging inventive opportunities that contribute to the appearance rather than the substance of innovation. We test these predictions in a longitudinal dataset tracking the personnel recruitment and patenting activities of 467 Chinese high technology firms, all of which applied for state-funded innovation grants. We identify fraud by comparing two sets of financial books prepared by each company in the data in the same fiscal year, which are legally required to be identical but are discrepant in over 50 percent of cases, in a direction that benefits the firm. We find that relative to honest companies, fraudulent firms are more likely to receive state grants and are less likely to recruit new employees or produce important inventions in the post-grant period.

How environmental turbulence influences firms’ entrepreneurial orientation: the moderating role of network relationships and organizational inertia

Purpose Environmental turbulence represents a double-edged sword, simultaneously fueling and hindering a firm’s entrepreneurial orientation (EO). Drawing on the theories of EO and network relationships, this study aims to develop and test a conceptual model that provides a nuanced account of the relationship between environmental turbulence and firm EO. Design/methodology/approach Data for this study were collected using a survey of high-technology firms in Hsinchu Science Park (HSP) in Taiwan. Questionnaires were mailed to 297 high-technology firms in the semiconductor, photoelectric and communication industries within HSP. Completed questionnaires were received from 94 firms, which included responses from 94 research and development managers and 462 employees. Findings The results reveal that the degree of environmental turbulence exhibits an inverted U-shaped relationship with a firm’s EO. Moreover, this relationship is positively moderated by network relationships between firms, but negatively moderated by organizational inertia. Originality/value The empirical and conceptual findings have important implications for understanding EO, because the findings explain causal relationships that transform a firm’s interactive and inner control capabilities into firm-level results.

Combining Knowledge to Improve Product and Process Innovation and Performance of SMES in Developing Economies

The aim of this study was to investigate how combining internal and external knowledge sources (KS) may influence product and process innovation of small and medium enterprises (SMEs) from developing economies in order to improve their financial performances (FPs). Previous research mostly supported that internal KS influence innovation directly as well as indirectly, moderating the relationship between external KS and innovation performance (IP), with this moderation being more prominent in the case of high-technology firms. These studies also supported that innovation influences FP more strongly in this type of firm. The present study proposes that, in developing countries, the opposite occurs. The moderation relationship of internal KS on the relationship between external KS and IP would be stronger in low-technology firms, as well as the positive effect of innovation on FP. We tested our propositions using a sample of 1551 Brazilian manufacturing SMEs controlling by the technological intensity of the industry and confirmed a good part of the proposed hypotheses.

Openness and firm innovation performance: the moderating effect of ambidextrous knowledge search strategy

Purpose Openness to external knowledge has recently gained popularity as a means for firms to complement and leverage internal knowledge in the pursuit of innovation outcomes. However, conflicting evidence exists regarding the role of openness in external knowledge acquisition. This paper aims to propose that openness to external knowledge has a nonlinear effect on innovation performance and that this nonlinear relationship is contingent on an ambidextrous knowledge search strategy. Design/methodology/approach Based on original large-scale survey of 246 interfirm collaborations in the high-technology industry, it is found that the impact of openness to external knowledge on innovation performance exhibits an inverted-U shape and that this relationship is affected by an ambidextrous knowledge search strategy. Findings The results indicate that an ambidextrous knowledge strategy that addresses the depth and breadth of external knowledge significantly influences a firm’s ability to derive benefits from increased openness to external knowledge. Empirically, the authors provide an original contribution to high-technology firms by exploring how and why an ambidextrous knowledge strategy can be a critical catalyst spurring innovation performance. Research limitations/implications The research scope is limited to a single industry. Further research could extend the theoretical framework to multiple industries, which may increase the likelihood of innovation theory development. Practical implications The results suggest that firms opening up the boundaries of their innovation activity to engage in external knowledge are able to leverage their in-house innovation to enhance their innovation performance. The authors advocate that in innovation management domains, greater emphasis is needed on how openness to external knowledge has more positive impacts not only on innovation performance but also on innovation implemented management. Originality/value This study is among the first to investigate the ambidextrous knowledge search effect on the external knowledge of high-technology firms. This paper contributes to the theoretical and practical literature concerning openness innovation and knowledge management by reflecting on the ambidextrous knowledge search strategy.