Impact of Ownership Types on R&D Intensity and Innovation Performance - Evidence from Transitional China

This paper examines the effects of ownership types on firms’ R&D intensity and innovation performance, using a sample of 357,857 Chinese firms from 2005-2007. This study finds considerable divergence among Chinese domestic enterprises in terms of R&D intensity and innovation performance. We find that firms owned by the central government are the key drivers for firms’ R&D activities, while local government, private and foreign ownerships are negatively related to both R&D intensity and innovation performance. This paper finds significant divergence within government ownership category and argue China’s institutional changes generate varied government ownership groups with different levels of resource endowment, which in turn influence firms’ R&D activities. Publisher Statement: This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made

Exchange hazards, relational reliability, and contracts in China: The contingent role of legal enforceability

Building on institutional and transaction cost economics, this article proposes that legal enforceability increases the use of contract over relational reliability (e.g., beliefs that the other party acts in a non-opportunistic manner) to safeguard market exchanges characterized by non-trivial hazards. The results of 399 buyer-supplier exchanges in China show that: (1) when managers perceive that the legal system can protect their firm's interests, they tend to use explicit contracts rather than relational reliability to safeguard transactions involving risks (i.e., asset specificity, environmental uncertainty, and behavioral uncertainty); and (2) when managers do not perceive the legal system as credible, they are less likely to use contracts, and instead rely on relational reliability to safeguard transactions associated with specialized assets and environmental uncertainty, but not those involving behavioral uncertainty. We further find that legal enforceability does not moderate the effect of relational reliability on contracts, but does weaken the effect of contracts on relational reliability. These results endorse the importance of prior experience (e.g., relational reliability) in supporting the use of explicit contracts, and alternatively suggest that, under conditions of greater legal enforceability, the contract signals less regarding one's intention to be trustworthy but more about the efficacy of sanctions. © 2010 Academy of International Business All rights reserved.postprin

Institutional distance and foreign subsidiary performance in emerging markets: moderating effects of ownership strategy and host-country experience

Institutional distance has been known to be an important driver of Multinational Enterprises’ strategies and performance in host countries. Based on a large panel dataset of 10562 firms operating in 17 emerging markets and spanning 80 home countries, we re-examine the relationship described by Gaur and Lu (2007) between regulatory institutional distance and subsidiary performance. We extend this research by (1) examining this relationship in the context of emerging markets, (2) examining the moderating effects of ownership strategy and host-country experience within the context of emerging markets and (3) accounting for a greater variety of institutions by including a large number of home and host countries. We find that institutional distance negatively affects subsidiary performance in emerging markets. Our findings also show that the negative effects of institutional distance on subsidiary performance are lesser for subsidiaries with partial ownership (than for subsidiaries with full ownership) and for subsidiaries with greater host-country experience. We discuss our findings with respect to Gaur and Lu’s model, which explores the relationships between these variables in a general context

Developing international business relationships in a Russian context

The collapse of the former Soviet Union has opened up a wealth of business opportunities for companies seeking new markets in the Russian Federation. Despite this, firms intending to do business in Russia have found themselves hampered by cultural differences in business practices and expectations. As Russia integrates into the global economy, understanding such practices and the managerial mindset of business people is crucial for managers who hope to navigate Russia's complex markets. This study draws on the trust literature and adopts quantitative tools to deconstruct the Russian 'Sviazi' system of social capital business networking. We develop a model isolating three dimensions of Sviazi: one an affective or emotional component; the second, a conative component; and the third, a cognitive component. The model provides a useful guide for helping foreign firms to succeed in Russia, while also serving as a basis for further research in the field. Keywords

Innovation Practices in Emerging Economies: Do University Partnerships Matter?

Enterprises’ resources and capabilities determine their ability to achieve competitive advantage. In this regard, the key innovation challenges that enterprises face are liabilities associated with their age and size, and the entry barriers imposed on them. In this line, a growing number of enterprises are starting to implement innovation practices in which they employ both internal/external flows of knowledge in order to explore/exploit innovation in collaboration with commercial or scientific agents. Within this context, universities play a significant role providing fertile knowledge-intensive environments to support the exploration and exploitation of innovative and entrepreneurial ideas, especially in emerging economies, where governments have created subsidies to promote enterprise innovation through compulsory university partnerships. Based on these ideas, the purpose of this exploratory research is to provide a better understanding about the role of universities on enterprises’ innovation practices in emerging economies. More concretely, in the context of Mexico, we explored the enterprises’ motivations to collaborate with universities in terms of innovation purposes (exploration and exploitation) or alternatives to access to public funds (compulsory requirement of being involved in a university partnership). Using a sample of 10,167 Mexican enterprises in the 2012 Research and Technological Development Survey collected by the Mexican National Institute of Statistics and Geography, we tested a multinomial regression model. Our results provide insights about the relevant role of universities inside enterprises’ exploratory innovation practices, as well as, in the access of R&D research subsidies

Externalizing, internalizing and fostering commitment: the case of born-global firms in emerging economies

This paper examines the HR practices of mature born-global firms from twenty-nine emerging economies. Through an examination of large scale survey data the paper questions the extent to which firm size impacts the employment of temporary workers, the employment of skilled workers and the extent of employee training. Findings suggest that as firm size increases the use of temporary workers decreases, the number of skilled workers increases and the number of employees receiving training also increases. The paper highlights how born-global firms are able to shift away from externalized, market-based approaches towards more internalized, commitment-based approaches in order to survive, adapt and grow

A Transcriptional “Scream” Early Response of E. coli Prey to Predatory Invasion by Bdellovibrio

We have transcriptionally profiled the genes differentially expressed in E. coli prey cells when predatorily attacked by Bdellovibrio bacteriovorus just prior to prey cell killing. This is a brief, approximately 20–25 min period when the prey cell is still alive but contains a Bdellovibrio cell in its periplasm or attached to and penetrating its outer membrane. Total RNA was harvested and labelled 15 min after initiating a semi-synchronous infection with an excess of Bdellovibrio preying upon E. coli and hybridised to a macroarray spotted with all predicted ORFs of E. coli. SAM analysis and t-tests were performed on the resulting data and 126 E. coli genes were found to be significantly differentially regulated by the prey upon attack by Bdellovibrio. The results were confirmed by QRT-PCR. Amongst the prey genes upregulated were a variety of general stress response genes, potentially “selfish” genes within or near prophages and transposable elements, and genes responding to damage in the periplasm and osmotic stress. Essentially, the presence of the invading Bdellovibrio and the resulting damage to the prey cell elicited a small “transcriptional scream”, but seemingly no specific defensive mechanism with which to counter the Bdellovibrio attack. This supports other studies which do not find Bdellovibrio resistance responses in prey, and bodes well for its use as a “living antibiotic”

Catching-up in the global factory: analysis and policy implications

MNEs shape the location of activities in the world economy, linking diverse regions in what has been called the global factory. This study portrays the evolution of incomes and employment in the global factory using a quantitative input–output approach. We find emerging economies forging ahead relative to advanced economies in income derived from fabrication activities, handling the physical transformation process of goods. In contrast, convergence in income derived from knowledge-intensive activities carried out in pre- and post-fabrication stages is much slower. We discuss possible barriers to catching-up and policy implications for emerging economies in developing innovation capabilities, stressing the pivotal role of MNEs

The Role of Responsible Business Practices in International Business Relationships Between SMEs from Developed and Emerging Economies

The different institutional environments of developed and emerging economies may dictate the business practices of small- and medium-sized enterprises (SMEs). With national institutions’ current focus on better integrating SMEs into both international trade and sustainability goals, it is worth investigating the role socially and environmentally responsible business practices (RBPs) plays in SMEs’ international business relationships. The qualitative approach employed in this study reveals that environmental responsibility is not prominent in cross-border business relationships between Finnish and Russian SMEs, while social responsibility in part of ethics, transparency and partner responsibility is crucial for these relationships. The study thus contributes to the literature on responsibility in international business (IB) and international entrepreneurship (IE) by (1) suggesting that international business relationships can help raise the ethical behaviour of SMEs from emerging economies; (2) extending the research on sustainability-related issues in IB/IE towards emerging economies and the SME context; and (3) applying the institutional lens to explain RBP in international business relationships.Post-print / Final draf