The role of subsidiary dual embeddedness and absorptive capacity in a transition economy

Purpose This study aims to focus on dual embeddedness as an important channel through which foreign subsidiaries access and share valuable and idiosyncratic knowledge within the multinational corporation (MNC). The authors examine the dual embeddedness challenges of foreign subsidiaries based in the context of Iran as a transitional market. Design/methodology/approach The final sample includes 144 active foreign subsidiaries in Iran from across a broad range of industries. A structured questionnaire was distributed to firms and structural equation modeling was adopted to analyze the results. Findings The findings reveal how building external embeddedness in an environment with potentially poor access to valuable knowledge, and risk of knowledge leakage impacts the subsidiary’s ability to subsequently transfer this knowledge within the MNC. The authors identify the significance of absorptive capacity as a way for the subsidiary to access knowledge from and share knowledge with firms in the local market. Originality/value Departing from existing work on subsidiary embeddedness in developed markets, the authors reveal how competence creating subsidiaries manage dual embeddedness and knowledge transfer in transition economies that are low in knowledge stocks. The authors unpack how subsidiary absorptive capacity enables access to local knowledge in a transitional market and increases reverse knowledge transfer in the MNC. In doing so, the authors answer calls for work on the dynamic and complementary relationships that exists between subsidiary dual embeddedness, absorptive capacity and knowledge sourcing in less open markets. Focusing on Iran as a transitional economy, this study provides greater contextual nuance to the extant literature on subsidiary dual embeddedness.

Effects of inter- and intra-organizational learning activities on SME innovation: the moderating role of environmental dynamism

Purpose This study aims to investigate how the inter-organizational learning (inter-OL) of small and medium enterprises (SMEs) promote intra-organizational learnings (intra-OL) and how inter- and intra-OL jointly promote organizational innovation in the Korean electronics industry. This study also examines the moderating effect of organizational dynamism. Design/methodology/approach A unique theoretical model shows how inter-OL promotes organizational innovation through intra-OL, knowledge flows and stocks. Data was collected from 201 SMEs in the Korean electronics industry and analyzed by structural equation modeling. Findings The findings show that inter-OL directly and indirectly influences innovation. Inter-OL promotes both knowledge flows and stocks, but the only feedforward flows influence innovation through knowledge stocks while feedback flows directly influence innovation. Additionally, the study finds an indirect effect of inter-OL on knowledge stocks and a strong direct effect on innovation when dynamism is high. Intra-OL activities fully mediate between inter-OL and innovation when dynamism is low. Research limitations/implications This study uses single informants to measure all constructs. Future studies should use multiple informants. Practical implications This study shows that OL in SMEs is shaped by internal processes and external collaborations. Maintaining a connection with various external knowledge sources and creating collaborative opportunities to share learning experiences is critical to innovation. Originality/value This study is the first to empirically examine the relationship between inter- and intra-OL activities within a conceptual framework. The study provides a strategic view of how to facilitate OL activities considering the degree of organizational dynamism.

Unpacking the Agricultural Black Box: The Rise and Fall of American Farm Productivity Growth

Has the golden age of U.S. agricultural productivity growth ended? We analyze the detailed patterns of productivity growth spanning a century of profound changes in American agriculture. We document a substantial slowing of U.S. farm productivity growth, following a late mid-century surge—20 years after the surge and slowdown in U.S. industrial productivity growth. We posit and empirically probe three related explanations for this farm productivity surge-slowdown: the time path of agricultural R&D-driven knowledge stocks; a big wave of technological progress associated with great clusters of inventions; and dynamic aspects of the structural transformation of agriculture, largely completed by 1980.

Intellectual capital stocks and flows: examining the mediating roles of social capital and knowledge transfer

Purpose This study aims to develop and empirically test a “stocks and flows”-based model of intellectual capital (IC) that examines how human-embodied knowledge (i.e., human capital) can be transformed into organisational non-embodied knowledge (i.e., organisational capital) through the mediating roles of social capital and the knowledge management (KM) process of knowledge transfer. Design/methodology/approach A structural model was developed and empirically tested using a survey data set of 295 questionnaires collected from the “knowledge-intensive” pharmaceutical manufacturing industry in Jordan. Findings Empirical results revealed that each of human capital, social capital and knowledge transfer has a positive and significant effect on organizational capital. In particular, knowledge transfer emerged as having the strongest effect. Social capital, on the other hand, emerged as having a positive and significant effect on knowledge transfer. Mediation analysis revealed that while human capital significantly affects organizational capital, such an effect is partially and significantly mediated by each of social capital as well as knowledge transfer. Practical implications This study provides senior managers in pharmaceutical manufacturing firms with valuable insights pertaining to the development of their IC, in terms of how to exploit their knowledge stocks (i.e. human-embodied knowledge and organizational non-embodied knowledge) through managing knowledge flows between them. This was shown to be significantly leveraged by the mediating roles of social capital as well as knowledge transfer. Originality/value This study provides important theoretical and empirical contributions to the extant literature in a number of ways. It provides better understanding of the intricate linkages among IC dimensions, and how these play complementary roles in organizational capital development. It has also provided important empirical evidence highlighting the vital mediating roles of social capital and knowledge transfer in facilitating knowledge flows, which aid in transforming human-embodied knowledge stocks into organizational-embodied ones.

Strategic leadership and ambidextrous learning

Purpose The purpose of this paper is to explore the dynamics of “leadership and organizational learning” process and the factors that shape this process. Building upon the ideas of transformational and transactional leadership (TFL and TAL), explorative – and exploitative – learning (ERL and ETL), dynamic capabilities (DCs) and intellectual capital architecture (ICA), this paper develops a model of organizational learning. The model explains how leadership styles trigger versatile learning, and how DCs and ICA of a firm influence this process. Design/methodology/approach This paper builds upon a systematic review of the literature to develop propositions delineating the complex and poorly understood relationship between leadership styles, organizational learning and the role of DCs and ICA in this process. The paper develops multiple propositions, which together constitute an overarching framework explaining how leadership styles shape organizational learning. Findings Leadership approaches, DCs and ICA of a firm all have a differential effect on ERL and ETL. TFL and TAL promote ERL and ETL, respectively. The presence of DCs facilitates the effect of TFL in supporting ERL but negatively influences the role of TAL in ETL. The effect of ICA is discussed in terms of knowledge stocks (generalist vs specialist), social architecture (entrepreneurial vs cooperative) and organizational capital (organic vs mechanistic). The generalist knowledge facilitates TFL → ERL, while the specialist knowledge facilitates TAL → ETL path. Entrepreneurial architectures are suitable for TFL → ERL, while cooperative structures promote TAL → ETL trajectory. Finally, organic systems facilitate TFL → ERL, while the mechanistic systems promote TAL → ETL. Originality/value The key contribution of the paper is in developing a model furnishing profound insights into leadership approaches and organizational learning and the role of two critical factors. To the best of the author’s knowledge, these aspects have not been discussed in a unified framework in the previous studies. Hence, the paper is novel in its contribution.

THE AMERICAN DREAM, MELTING POT AND REGIONAL KNOWLEDGE STOCK AS DRIVERS OF ENTREPRENEURIAL ACTIVITY

We explore whether the generally construed positive effects of intergenerational upward mobility and racial desegregation, under increasing local knowledge stocks, are positively associated with regional entrepreneurial activity. We find the opposite association in a sample of 2,717 US counties. Our results imply that, when county-level knowledge stocks are high, the American Dream (of greater intergenerational upward mobility) and the American Melting Pot (of lower racial segregation) appear, at a minimum, to be not associated with greater entrepreneurial activity. The results are robust to a variety of alternate specifications. For example, when Metropolitan Statistical Area data are used in lieu of county-level data, the results are broadly consistent with those in the main results.