Who Follows Whom? A Location Study of Chinese Private and State-Owned Companies in the European Union

This paper analyses the location decision of Chinese manufacturing firms for their greenfield investments in Europe. The analysis draws on neo-institutional theory to formulate hypotheses on the importance of mimicry in Chinese firms’ location decisions and how this differs between private and state-owned enterprises. The analysis is conducted at the subnational (regional) level while taking into account economic integration across regions. The results confirm the importance of mimicry and show that Chinese firms not only follow previous Chinese investors in the same sector but also in unrelated sectors. Furthermore, Chinese investors only follow previous investments by Chinese private-owned companies while the results also show that Chinese private-owned companies generally have a higher tendency than state-owned companies do to follow prior investment decisions by compatriot firms. As the empirical evidence demonstrates the importance of bandwagon effects, the implication is that investment decisions can have a lasting influence on the geographical pattern of Chinese investments across regions.     

Institutional systems inducing R&D in Amazon- the role of an investor surplus toward stakeholder capitalization

Amazon demonstrated a conspicuous increase in R&D and became the world's top R&D firm in 2017 with a skyrocketing increase in market capitalization, making it close to being the world's biggest company.Such a remarkable accomplishment can be attributed to Amazon's institutional systems, which orchestrate techno-financing systems that fuse a unique R&D transformation system and a sophisticated financing system centered on the cash conversion cycle (CCC). These institutional systems support and endorse aggressive investment in R&D that incorporates the characteristics of uncertainty, a long lead time, and successive inflows of very large amounts of funding without interruption.While some of this investment can be endorsed by Amazon's positive business results in terms of a sustained increase in sales and free cash flow, such a large amount of aggressive investment is beyond endorsement. In addition to actual economic performance, investors have been betting on a high level of risky investment with the expectation of Amazon's future success by trusting its R&D-inducing institutional systems.While the former can be considered to be a general reaction to a producer surplus, the latter can be postulated as an investor surplus in which investors bet on overly optimistic future prospects instead of actual accomplishments. This is similar to a consumer surplus in which consumers pay more than the actual market price for attractive goods and services.By introducing a concept of gross market value consisting of a producer surplus and an investor surplus, this paper attempts to elucidate the institutional systems that enable Amazon to invest a very large amount of financing resources in aggressive R&D.An intensive empirical analysis focusing on the development trajectory of Amazon's techno-financing system over the last two decades was conducted, together with comparative analyses of the performance of the big four online service companies, Google, Apple, Facebook, and Amazon (GAFA).It was identified that among GAFA, Amazon demonstrated the highest dependence on an investor surplus, which suggests that investors are betting on the continuation of Amazon's solid growth by means of its aggressive investment in R&D, supported and endorsed by its institutional systems. This idea is supported by the high elasticity of its investor surplus to R&D investment.Noteworthy is that investors incorporate not only shareholders but also broad stakeholders centered on users, and that they expect not only economic value but also supra-functionality beyond such value.A broadly applicable practical approach for measuring an investor surplus and an insightful suggestion highlighting the significance of an investor surplus toward stakeholder capitalism are thus provided.     

Note on R&D expenditures and fixed capital formation

In this paper we deal with the fixed capital nature of the means of production and labour employed in research and development which generate scientific and technological knowledge. We argue that these R&D current expenditures typically have the nature of fixed investments. We then present an empirical analysis which shows that expenditures on industrial R&D are more strongly linked to the formation of fixed capital than to the formation of capital in general. Applying this conclusion to the economics of research and innovation would make it possible to analyse investments in the production of scientific and technological knowledge with a higher degree of clarity and precision.     

政府研发补贴与企业创新投入:数量激励抑或质量导向?

如何有效发挥政府“有形之手”对企业创新的激励作用,优化公共资源配置效率,是实施创新驱动战略和推动经济高质量发展的关键一环。基于2001-2017年中国非金融类A股上市公司面板数据,用研发投资衡量创新投入数量,用专利产出衡量创新投入转化质量,从理论上分析政府研发补贴对企业创新投入数量和投入转化质量的作用机制,并采用固定效应模型、联立方程模型等进行实证检验。结果发现:第一,政府研发补贴能够显著提高企业研发投资额,表明政府补贴对企业创新投入存在数量激励,同时,企业研发投资对专利产出具有显著正向影响,增加创新投入资金数量是确保投入转化质量的必要非充分条件;第二,在控制内生性后,政府研发补贴对企业专利产出具有不显著负向影响,表明政府研发补贴未能形成创新投入质量导向;第三,在政府干预程度较低、法治水平较好的情况下,政府研发补贴能够同时提升企业研发投资与专利产出,证实寻租行为、逆向选择行为和缺乏政府监管等是政府补贴无法有效发挥投入质量导向作用的潜在原因。     

Firm market valuation and intellectual property assets

ABSTRACT

This paper investigates the relationship between the innovative activity of the top corporate R&D investors worldwide and their market valuation. The analysis exploits a sample of more than 1,250 publicly listed Multinational Corporations (MNCs) and their intellectual property rights (IPR) – patents and trademarks – filed between 2005 and 2012. The study contributes to the literature on the IPR-market value link by examining the premium resulting from the interactive use of different IPR. Moreover, the empirical setting allows differentiating the effects of an increase in market value derived from additional IPR (within-effects) with respect to the premium received for holding more IPR than the competitors (between-effects). The findings suggest that investors value the simultaneous use of the two IPRs and form their expectations by benchmarking firms. Finally, significant industrial specificities are observed in the individual effects of patents, trademarks and their interactions on the market value of firms.     

Patent evolution in relation to public/private R&D investment and corporate profitability: Evidence from the United States

Summary In this paper we analyze the (historical) co-evolution of technological development and economic progress (by relating public and private R&D investment, patenting, and corporate profitability). We relate to the work ofSchmookler(1966),Griliches(1990),Pakes&Griliches(1980) andPakes(1986) who all have studied the techno-economic interplay by considering patents as in indicator of technological performance. We use United States industry and government data over the period 1953-1998 (45 years). Co-evolution analysis over this period reveals a strong interdependency among the variables. Patent evolution is strongly related to the development of private R&D and corporate profitability; the levels of public and private R&D expenditure in combination with the level of technological output (i.e. patents) have a strong predictive and explanatory power towards corporate profitability (R² value of 94.9%). Causality tests reveal a joint determination between R&D investment and corporate profitability (L=2; p<0.01).     

Relationship with Headquarters and Divestments of Foreign Subsidiaries: The Hysteresis Perspective

This paper examines the conditions under which foreign subsidiaries of multinational corporations (MNCs) are less prone to divestments. In the study, we examine the importance of foreign subsidiaries to MNCs based upon (1) product-level vertical integration, (2) human capital investments, and (3) technological investments in the subsidiaries. Given that we examine the probability that a subsidiary divestment will occur under the condition that all other subsidiaries are also at risk during the same time period, we employ a Cox proportional hazard rate model as a commonly used statistical method in the event history analysis. For empirical testing, we utilized a sample of Korean 439 MNCs and its 5306 foreign subsidiaries over a period of 1990–2011. We find that even under hostile host market demand conditions, MNCs are less likely to divest their foreign subsidiaries when those subsidiaries are vertically integrated with their headquarters, benefiting from a top management team dispatched from their headquarters or other affiliates, or possessing technological knowledge shared by their headquarters. These findings imply that relationship-specific investments with headquarters cause a hysteresis effect that deters these subsidiaries from being divested, even during times when divestments seem most likely because of unfriendly economic conditions in their host countries.     

The institutionalization of ICT and civic participation: Evidence from eight European nations

In the present study we examine the impact of information technology on civic participation in eight European nations. Drawing from the social welfare regimes, social origins and media ecology perspectives, we employ a merged Eurostat and OECD data set (2014) to show that (a) investments in ICT are associated with an increase in civic participation, and (b) ICT effects are higher than the effects observed following investments in social welfare and nonprofit activity. More specifically, the study shows that after controlling for social welfare and nonprofit activity, (a) mobile broadband investment increases civic participation in social democratic regimes; and (b) fixed broadband investment is associated with an increase in civic participation in liberal regimes. We conclude that ICT exerts an institutional-level effect on civic participation that finds expression in significant variations in civic participation among European nations, after controlling for the traditional effects of social welfare and nonprofit activity.     

The effects and time lags of R&D spillovers in Brazil

Government's innovation investments for science intensive sectors, such as the capital goods industry for developing countries play an important role in technology dissemination; however, few studies have addressed this issue. This study is conducted in the framework of a developing economy (Brazil), and aims to estimate the spillover effects throughout the industry resulting from public investment in innovation, as well as the spillovers of R&D and management investment performed by the capital goods industry through the rest of the industrial sector, and also the time lapse between the occurrence of innovative investment and output growth due to such expenditures. The results of the estimated econometric model exhibit significant and positive spillover effects by the government R&D expenditures for the capital goods industry with a three-year lapse, as well as a one-year lag for the occurrence of output effects on the other companies of the manufacturing sector, resulting from innovative investments by the capital goods industry.     

Stable profit sharing in cooperative investments

This paper examines profit sharing in cooperative investments where investors bundle their capital endowments to meet the capital requirements of long term investment projects. Furthermore, investors may reinvest intertemporal gains from existing projects into new projects. Focus is on stable allocation schemes as stability is necessary to sustain the long term cooperation of investors. The paper presents sufficient conditions for the existence of stable profit sharing schemes using linear programming techniques.This complete issue was revised and published online in November 2004. The previous version contained a false date. Correspondence to: Anja De WaegenaereThe authors wish to thank two anonymous referees for comments that helped to improve the paper significantly. The research of J. Suijs is made possible by a fellowship of the Royal Netherlands Academy of Arts and Sciences (KNAW).     

Competition, Learning and Investment in New Technology

Efforts to describe the evolution of production costs must simultaneously include the impact of investment in new technologies as well as experience-based learning. In this paper we formulate a dynamic model of technological investments, which includes the impacts of learning curve effects, investment levels in new technologies with uncertain timing, and competitive responses. Our results highlight the interaction of investment and output rate decisions in monopolistic and duopolistic situations, and illuminate the impact of the planning horizon length on such decisions. The model results elaborate upon how the attractiveness of new technologies is related to the firm's ability to learn using its existing technology, how competition can increase or decrease the market size for new technologies, and how investment levels are driven in opposite directions by considering longer horizons on one hand and the competitive response on the other.     

Supplier selection for outsourcing from the perspective of protecting crucial product knowledge

This paper considers the supplier selection problem in terms of the characteristics of the products/processes to be outsourced. Emphasis is placed on the possible risk that may arise in sharing or transferring crucial product/process knowledge to suppliers during outsourcing. Two indices are employed to assess the suitability of a supplier for outsourcing a product/process. The first measures the supplier's capability for technological innovation in the products for which they offer outsourcing services, and includes investment in R&D projects and the ratio of R&D personnel to the total work force. The second index measures the supplier's practices in protecting its clients’ intellectual property rights, and includes corporate image, track record in protecting clients’ intellectual property rights, and compliance with internal and external requirements. These two indices are then used to classify suppliers into four major groups, which are in turn assigned to classes of components/processes depending on their strategic importance and vulnerability – a portfolio approach. The proposed portfolio approach has been validated via a substantial empirical study involving data for 401 parts, 216 suppliers, and 36 manufacturing companies operating in China.     

Identification and evaluation of corporations for merger and acquisition strategies using patent information and text mining

This paper proposes a framework to identify and evaluate companies from the technological perspective to support merger and acquisition (M&A) target selection decision-making. This employed a text mining-based patent map approach to identify companies which can fulfill a specific strategic purpose of M&A for enhancing technological capabilities. The patent map is the visualized technological landscape of a technology industry by using technological proximities among patents, so companies which closely related to the strategic purpose can be identified. To evaluate the technological aspects of the identified companies, we provide the patent indexes that evaluate both current and future technological capabilities and potential technology synergies between acquiring and acquired companies. Furthermore, because the proposed method evaluates potential targets from the overall corporate perspective and the specific strategic perspectives simultaneously, more robust and meaningful result can be obtained than when only one perspective is considered. Thus, the proposed framework can suggest the appropriate target companies that fulfill the strategic purpose of M&A for enhancing technological capabilities. For the verification of the framework, we provide an empirical study using patent data related to flexible display technology.     

How R&amp;D partner diversity influences innovation performance: an empirical study in the nano-biopharmaceutical field

R&D partner diversity is generally acknowledged to help organizations to improve innovation performance. This study investigates the influence mechanism in depth by introducing technological diversification as mediator and the structural holes of new knowledge elements from R&D partners and the degree centrality of the focal organization’s knowledge elements as two moderators. The empirical analysis is based on patent data in the emerging nano-biopharmaceutical field and includes 554 innovative organizations. Results show that partners’ organizational diversity and geographical diversity have positive effects on focal organizations’ innovation performance through improving technological diversification. The structural holes of new knowledge elements from R&D partners and the degree centrality of the focal organization’s knowledge elements moderate the process in the way that when they are at high levels, the indirect positive effects of partner diversity on innovation performance through technological diversification are strengthened.     

The impact of M&;As on company innovation: evidence from the US medical device industry

The acquisition of new technologies represents a vitally important and fundamental goal of many corporate managers, particularly those within the medical device industry. We collect data on ten medical device companies as our sample in this study, covering the period from 1990 to 2006; this sample is drawn from the top 20 companies in the US, on the basis of international sales performance. We also collect details on all of the acquisitions undertaken by these companies, along with their patenting performance. The empirical results of this study suggest that technological acquisitions are only likely to be of help to the acquiring firms, in terms of improving their innovative performance, if they set out to acquire those companies that are in similar proximity, in terms of their technological field. There is also a clear need for such acquiring firms to ensure their continuing commitment to internal R&D investment in order to maintain their own versatility.     

The effects of internal technological diversity and external uncertainty on technological alliance portfolio diversity

This research proposes internal and external determinants that influence the diversity of a firm’s alliance portfolio. Focusing on technological aspects of the firm as well as investigating internal and external factors, we suggest that the internal technological diversity of the focal firm, as well as the technological uncertainty of the industry, affects the technological diversity of the alliance portfolio. The hypotheses are tested on a sample of U.S.-listed semiconductor firms’ global R&D alliances from 1990 to 2010. We find that the internal technological diversity of a firm has a negative influence on its technological alliance portfolio diversity. However, technological alliance portfolio diversity seems unaffected by the uncertainty of the firm’s environment. This study contributes to prior literature which has extensively studied the effects of alliance portfolio diversity on firm performance but has paid little attention to its determinants.     

Requirement-oriented core technological components’ identification based on SAO analysis

Technologies play an important role in the survival and development of enterprises. Understanding and monitoring the core technological components (e.g., technology process, operation method, function) of a technology is an important issue for researchers to develop R&D policy and manage product competitiveness. However, it is difficult to identify core technological components from a mass of terms, and we may experience some difficulties with describing complete technical details and understanding the terms-based results. This paper proposes a Subject-Action-Object (SAO)-based method, in which (1) a syntax-based approach is constructed to extract the SAO structures describing the function, relationship and operation in specified topics; (2) a systematic method is built to extract and screen technological components from SAOs; and (3) we propose a “relevance indicator” to calculate the relevance of the technological components to requirements, and finally identify core technological components based on this indicator. Based on the considerations for requirements and novelty, the core technological components identified have great market potential and can be useful in monitoring and forecasting new technologies. An empirical study of graphene is performed to demonstrate the proposed method. The resulting knowledge may hold interest for R&D management and corporate technology strategies in practice.     

Technological Knowledge Intensity and Entry Mode Diversity

• This paper expands the entry mode literature by referring to multiple modes exerted simultaneously in different value chain activities within and across host markets, rather than to a single entry mode at the host market level. We apply competing theoretical perspectives—internalization theory and knowledge transfer efficiency considerations on the one hand, and organizational learning theory on the other—to argue that firms’ technological knowledge intensity affect their entry mode diversity across value chain activities, across host markets, and at the overall corporate level.
• Analyzing a unique dataset we show that high technological knowledge intensity is strongly associated with high entry mode diversity across value chain activities and at the corporate level, but only weakly associated with greater entry mode diversity across geographic host markets.

     

Business Cycles and Investment in Productivity-Enhancing Activities: Evidence from Spanish Firms

This paper tests the opportunity-cost theory on the long-run effects of business cycles using a panel of Spanish firms during the period 1991–2010. Under this theory, the share of productivity-enhancing activities (PEAs), such as R&D investment or on-the-job training, relative to production activities should increase during downturns because of the fall in their relative cost — in terms of forgone output. This would imply that business cycles may have a (positive) long-term impact on firms' productivity growth. In the spirit of Aghion et al. (2008), we allow the impact of the cycle on PEA to vary between firms with different access to external funding. We find that, in accordance with the opportunity-cost approach, the share of R&D investment and training expenditures on total investment outlays follow a countercyclical pattern, which in the case of R&D may be reversed by the presence of credit constraints. However, the share of investment in other non-R&D-related intangible investments is found to be acyclical, which could suggest some kind of substitution across different PEAs over the cycle.     

Overview of research on carbon information disclosure

Against the background of addressing global climate change and carbon emission reduction, corporate carbon information disclosure (CID) has become an important measure to achieve carbon emission reduction worldwide and a research hotspot closely investigated by the academia. This study provides a systematic overview of literature on CID, including its research trend, theoretical basis, disclosing features, influencing factors, and consequences. Results indicate that, first, CID has been increasing in recent years, but the content and quality of the disclosure still need to be improved. Second, the main influencing factors of CID include company features, corporate governance, environmental performance, institutional characteristics, and stakeholders. Third, the consequences of CID are based mainly on company performance, ecological environment, and investors’ decision-making. Lastly, most studies have confirmed the positive effect of CID on company performance and investors’ decision-making, but the nexus of environmental performance and corporate CID remains to be investigated. Several important future research directions are also proposed based on these results.