Maturing,Technology-Based,Born-Global Companies: Surviving Through Mergers and Acquisitions

To date, there has been little research about the corporate growth of born-global companies and relatively little data exist about their maturation, survival as independent companies (or failure to do so) and their international strategies. The present paper is based on an empirical study of Israeli technology-based companies that were identified in the late 1990s as born global. We collected data about the continuing development of these firms for the decade spanning 2000–2009. Our findings show that maturing technology-based, born-global companies can increase their chances of survival by acquiring other firms. Although such acquisitions do not increase profits, they allow born-global firms to continue increasing their sales and to expand and upgrade their product line, which in turn increases their chances of remaining independent. The data also show that if the firms prefer to merge with another company, they are in a better position if they do not acquire any other firms beforehand. Finally, our data show that although the majority of born-global companies can continue operations if they survived the first decade, they are not highly successful on the measures of growth and shareholder wealth. One of the recommendations of this study is that for maturing, technology-based, born-global companies to remain successful, they must be more aggressive in their M&A strategy than they are at the moment.     

Does National Context Affect Target Firm Employees’ Trust in Acquisitions?

• In this study, we test the assumption that the way target firm employees respond to a takeover is contingent on their national origin.
• The antecedents of target firm member trust in the acquiring firm management were examined in a cross-national sample of German and Singaporean employees using a policy-capturing design.
• Five factors hypothesized to affect target firm member trust after a takeover were found to be significant influences on employees?? trust judgments in a decision-making simulation: (i) combining firms?? collaboration history, (ii) mode of takeover, (iii) whether it was a domestic or cross-border acquisition, (iv) degree of autonomy removal, and (v) attractiveness of the acquiring firm??s human resource policies and reward system. Further analyses suggest that the relative importance of these factors in predicting target firm employees?? reactions to a takeover varies depending on their national origin.
• We conclude that companies engaged in cross-border acquisitions need to consider contingencies in the cultural and institutional contexts in which the acquired firms are embedded and adapt their approaches for integrating them accordingly.

     

Entrepreneurial acquisitions,open innovation and UK high growth SMEs

This paper examines the dynamics of entrepreneurial acquisitions undertaken by UK high growth small and medium enterprises (SMEs). While entrepreneurial acquisitions are increasingly deployed by SMEs, little is known about their antecedents, motivational drivers and organisational outcomes. Drawing on detailed case study evidence from Scotland, the key factor found to be driving these acquisitions was the desire to augment and exploit technological complementarities between the acquiring and acquired firms. Acquisition can therefore be conceptualised as an advanced stage of the outside-in ‘open innovation’ strategies proactively used within these innovative SMEs. Firms executing this strategy typically have an acute propensity for risk, a desire for close customer engagement, effective business models and strong external orientation. The work suggests that greater attention should be paid within M&A theory to the dynamics of these types of smaller scale entrepreneurial acquisitions.     

Taxonomy of information technology strategy and its impact on the performance of third-party logistics (3PL) in China

This paper develops a taxonomy of information technology strategies used by third-party logistics (3PL) firms in China based on a cluster analysis of survey data from 105 of these 3PL firms. The information technology strategies have been classified into three major groups: supportive, technological, and aligned. The paper also investigates the effect of information technology strategies on information technology advantage, competitive advantage, and financial performance. The results of the study indicate that efforts to improve information technology systems can only be effective if the information technology improvements are properly aligned with a company's overall strategy. It is found that companies that attempt to improve their information technology systems without the proper alignment of information technology with the company's overall strategy can achieve information technology advantages relative to their competitors, but not competitive advantages or improved financial performance. This study is the first attempt to develop an information technology strategy taxonomy for 3PL companies in China. It provides valuable guidance and insights for managers in the development of information technology strategies in 3PL companies.     

A structured approach to explore technological competencies through R&D portfolio of photovoltaic companies by patent statistics

When the technological development of an enterprise is path dependent, core technological competencies will develop. In addition, core technological competencies promote technological development. Consequently, enterprises should always examine the advantages of their core technological competencies. Under dynamic competition, enterprises should monitor their own performance as well as their competitors at all times and consequently adjust their technological strategies. This study used two patent indices, Patent Share and Revealed Technological Advantage, to measure the internal core technological competencies of manufacturers. It also integrated four other indices namely: (1) Technology Attractiveness (Relative Growth Rate), (2) growth potential of technologies (Relative Development of Technology Growth Rate), (3) Relative Patent Position, and (4) Revealed Patent Advantages. These were used to analyze the external strengths and weaknesses of the research and development (R&D) portfolios of companies. These two analytical methods can effectively identify the internal core technological competencies and the external advantages of R&D portfolios of leading companies in the solar photovoltaic (PV) industry. This study also discussed the relationship between R&D portfolios and core technological competencies of leading solar photovoltaic companies and compared those with two core technological competencies with those that have a single core technological competence. The study results show that the R&D portfolios of companies engaged in a single, specific technology field have advantages. This study helps improve the quality of technological planning and decision-making of manufacturers, proposes a method of using core technological competencies to analyze the advantages of R&D portfolios, and helps solar PV manufacturers monitor their own core technological competencies as well as their competitors and partner companies.     

Inventory management under financial distress: an empirical analysis

This study analyses inventory reductions as a means of short-term financing of firms under financial distress. We use quarterly panel data of U.S. manufacturing firms for the period from 1995 to 2007. We identify a sample of 198 distressed firms for which we analyse changes in relative inventory. Approximately 70% of distressed firms reduce their inventories until the end of their individual distress periods. This decrease corresponds to a mean reduction of 18.7 inventory days or 9.4%. Additional regression analyses show that differences in inventory adjustments depend on pre-distress inventory performance, firm size, and turnaround strategy. We also compile a sample of 142 firms that defaulted to analyse inventory actions of unsuccessful turnarounds. Our findings indicate that defaulting firms also reduce their inventories but that the reductions are lower than those of firms that resolve their financial distress. We conclude that distressed firms use short-term inventory adjustments to free up cash and to achieve long-term efficiency gains from inventory optimisation. Our findings suggest that inventory optimisation is an essential part of a complete and successful turnaround strategy and financially distressed firms should always consider this action as a means to prevent bankruptcy.     

Bilateral Resource Redeployment and Capabilities Improvement Following Horizontal Acquisitions

This paper studies the incidence and impact of bilateral redeploymentof resources between target and acquiring firms following 253horizontal acquisitions involving North American and Europeanfirms between 1988 and 1992. The resources include ten typesof technical, commercial, administrative and financial resources.We find that acquisitions often involve substantial technicaland commercial integration of the resources of the acquirerand target, while representing managerial and financial expansionof the acquirer rather than the target. In turn, we show thatbilateral redeployment improves five types of capabilities ofthe acquiring and target businesses, induding R&D capabilities,time to market, product quality, product cost and output flexibility.The empirical implications support the conceptual argument thatacquisitions play a key role in business adaptation.     

State-owned enterprises as knowledge-explorer agents

ABSTRACT

This paper deals with the role of the State Owned enterprises (SOEs) in innovation processes. Only a few studies focus on the contribution SOEs as companies might give to produce new knowledge and technological innovation. We argue, however, that SOEs are a pillar of the innovation process and we explore conditions that can make SOEs very effective. Through two in-depth case studies in two different industries (STMicroelectronics in the semiconductor and Thales Alenia Space in the space industry) we illustrate how SOEs can contribute to innovation by exploring new opportunities and recombining different sources of knowledge. We highlight the conditions that can make exploration and recombination possible. We also highlight the ability of the two companies to change their boundaries through a continuous wave of agreements, mergers and acquisitions. This way, they were able to expand beyond their domains in a way that matched the evolution of their original industries.     

Bridging Knowledge Gaps: Returnees and Reverse Knowledge Spillovers from Chinese Local Firms to Foreign Firms

Adopting a knowledge-based perspective and embeddedness theory, this study examines the impact of reverse knowledge spillovers from local Chinese firms to foreign firms using a sample of high-tech firms in Zhongguancun Science Park in China. It also investigates whether returnees in foreign firms help bridge knowledge gaps between local firms and foreign firms. The results show that the presence of returnee CEOs and returnee employees enhances the impact of reverse technological and marketing spillovers on the innovation and financial performance of foreign firms. The findings call for more studies on the social dimensions of knowledge spillovers across international boundaries and have important theoretical and practical implications.     

Learning and assimilation vs. M&A and innovation: Japan at the crossroads

Historically, Japan constructed its socio-cultural system so that it introduced, adopted, assimilated, and developed Western technology selectively without spoiling its own indigenous culture. And until recently, Japan learned and assimilated global best practices without being dependent on mergers and acquisitions (M&A). M&As in Japan were the lowest in the world until 2000, suggesting a low dependence on acquiring technology in this way. Recently, the number of M&As has increased dramatically among certain Japanese manufacturing firms. Prior to 2004, these firms were less profitable than their counterparts that did not depend on M&A. Today Japan's corporate technology and innovation strategy is at a crucial inflection point of maintaining the indigenous learning/assimilation function while also becoming more dependent on M&As. This paper explores the changing role of M&As in Japanese firms, and also considers the role of Web 2.0 and Enterprise 2.0 in the innovation process. Using an empirical analysis of the trajectories of Japan's leading electrical machinery firms, this paper explores the changing role of M&A in the context of business innovation in Japan, and the ongoing dialectic between indigenous strengths and global best practices.     

The relationship between corporate social responsibility and corporate performance: evidence from the US semiconductor industry

This study adopts a two-stage approach to explore the relationship between corporate social responsibility (CSR) and semiconductor companies’ performance during 2004–2008. In the first stage, dynamic data envelopment analysis is adopted to explore whether CSR affects US semiconductor firms’ performance, and the difference in performance between CSR firms and non-CSR firms is analysed; in the second stage, panel data regression is used to determine which quantitative indicators of CSR significantly affect the performance of US semiconductor firms. The empirical results show that social responsibility investment by US semiconductor firms has positive effects on their performance. This study thus suggests that the US semiconductor companies should pay more attention to the CSR quantitative indicators, including human rights, employee relationships, and environment issues in order to enhance their corporate efficiency.     

The Recent Growth Performance of US Firms in the Industrial Design Sector: An Exploratory Study

This paper assesses the competitive factors associated with company growth in the US industrial design sector. This small but technologically advanced sector delivers critical innovation inputs to firms that produce durable goods. Evidence from a survey of 85 US design companies suggests that competitive success hinges upon service diversity. Specifically, the most commercially buoyant companies have diversified their service offerings beyond product or component design. These firms have developed strategic competencies in fields such as contract research, prototype development, product testing, technological forecasting, market analysis and even advertising. Although most US design companies are small-to-medium-sized enterprises, successful firms do not differ from their less successful counterparts in terms of employment size, occupational structure, regional location or market focus (client sectors). Instead, the key differences lie in service diversity and the quality of human capital. The paper concludes with a brief discussion of the implications of the empirical findings for future research on the dynamics of the design industry.     

我国控制权转移并购中目标公司绩效的实证研究

以我国1993～2003年上市公司控制权转移并购为样本,研究了目标公司在并购前后的股价反应和财务业绩变化.结果表明,公司股票在并购首次公告日前后各1个月内获得显著为正的累积反常收益,但股东因并购增加的财富很可能随时间推移而消散.财务业绩方面,目标公司资产管理效率并未在并购后得到多大改善,盈利能力的大幅提升也以成长性的降低为代价,反映了部分收购者在获取上市公司控制权后行为的短期性.研究还指出,在我国应防止控制权过多转让对上市公司质量的损害.     

Measuring technological diversification: identifying the effects of patent scale and patent scope

Although technological diversification is an important strategic decision for both large and small firms alike, the conventional method of measuring such diversification may well introduce significant scale bias against small- and medium-sized firms. We examine this issue in this study using a sample of 73 Taiwanese integrated-circuit (IC) design firms covering the period from 1995 to 2007 and conclude that the conventional measure of technological diversification reflects the spread or distribution amongst technology classes of a company’s current technology portfolio, and does not capture the incremental expansion in technological scope, or the ‘dynamic act of diversification’, as reflected in our alternative scope measure. Our results suggest clear constraints on the applications made under the conventional index, particularly for firms with small patent scale.     

Technological catch-up in the biopharmaceutical sector: Evidence from Iran

This paper addresses the market and technological capabilities required for technological catch-up in the biopharmaceutical sector using a multi-case study method. The paper reveals that the firms that are catching up in biopharmaceuticals first developed their production capabilities (including API production, formulation and obtaining health approvals), then entered the process innovation. Iranian companies have locally re-produced existing products in the market in exact accordance with global standards, and then entered into the introduction of new strains by intensifying their R&D efforts. The paper observes that the existence of strong R&D efforts from the early stages is a prerequisite for technological growth. It also argues that assimilated migratory knowledge can not only complement indigenous efforts, but also stimulate further technological capability-building efforts by local firms. The paper shows that technological development in the Iranian biopharmaceutical industry was firstly geared towards the home market, which we refer to as the ‘test-bed’, before entering into international markets. A key strategic point here is that, despite the maximum use of domestic market capacity, our study considers it necessary to try to enter international markets. Therefore, presence in these markets and the development of capabilities in the biopharmaceutical industry are two blades of a pair of scissors.     

Barriers to the adoption of green operational practices at Brazilian companies: effects on green and operational performance

The objective of this paper is to verify to what degree the internal and external barriers (I/EBs) to environmental management affect the adoption of green operational practices (GOPs) and to determine whether they influence the firms’ operational and green performance in a sample of Brazilian companies. A conceptual framework with 8 hypotheses is proposed and tested at 75 companies using Partial Least Squares-Structural Equation Modeling (PLS-SEM) with WarpPLS 4.0. The main results show that (a) the proposed framework obtained an adequate statistical adjustment, (b) the internal barriers (IBs) are more significant than the EBs when adopting GOPs, (c) GOPs relate directly to the firms’ green and operational performance (OP), (d) the IBs also indirectly influence the firms’ green and OP and (e) the firm size does not significantly influence its green and OP. This work contributes to the literature by showing that companies which are looking for green competitive advantages should try to reduce their IBs. Also, policy-makers should pay attention not only to legislation that promotes ecological modernisation, but also to create a strong set of initiatives to overcome IBs, regardless of the size of the firms.     

Have Chinese universities embraced their third mission? New insight from a business perspective

Have Chinese universities, after enormous investment over the past decade, embraced the university’s third mission—contributing to industrial and technological progress? The literature has not sufficiently addressed this question. This study intends to advance understanding of this issue by empirically addressing this question from a business perspective in a bold and unconventional way. Unlike prior studies that simply used contingent and institutional factors to describe the link between Chinese universities and industrial firms by measuring such aspects as patent licensing, co-patenting, and co-authoring, our work goes further and applies longitudinal analysis to examine the ways firms access university-level knowledge and the impact of such knowledge on firm innovation outputs. We propose that if Chinese universities embraced their third mission, then we would observe a positive effect of university–industry collaborations on firms’ subsequent innovation outputs. Empirical results based on a sample of the top 100 Chinese electronic firms in terms of output value support our hypothesis. Specifically, university patent licensing and co-patenting between universities and firms was found to positively affect firm innovation outputs. Moreover, we found that geographical distance and collaboration dominance moderate the co-patenting–innovation output relationship.