This essay builds on the exposition by Thomas et al. and focuses on analyzing cause and effect in international business research. We attempt to explain how endogeneity problems occur and why they ...are so prevalent in international business research in a non-technical fashion. We then discuss the importance of explicitly identifying how the chosen research design best approximates a randomized-controlled experiment. Finally, we provide some guidelines on achieving this goal and emphasize the practices that seem most relevant to
JIBS
reviewers in evaluating high-quality international business research.
While strategy researchers have devoted considerable attention to the role of firm-specific capabilities in the pursuit of competitive advantage, less attention has been directed at how firms obtain ...these capabilities from outside their boundaries. In this study, we examine how firms' multiplex network ties in business groups represent one important source of capability acquisition. Our focus allows us to go beyond the traditional focus on network structure and offer a novel contingency model that specifies how different types of network ties (e.g., buyer-supplier, equity, and director), individually and in complementary combination, will differentially affect the process of R&D capability acquisition. We also offer an original analysis of how other aspects of network structure (i.e., network density) in business groups affect the efficacy of network ties on R&D capability. Empirically, we provide an original contribution to the capabilities literature by utilizing a stochastic frontier estimation to rigorously measure firm capabilities, and we demonstrate the value of this approach using longitudinal data on business groups in emerging economies. We close by discussing the implications of our supportive results for future research on firm capabilities, organizational networks, and business groups.
Research summary: Although prior research has suggested that equity ties are important for business groups, less attention has been paid to the specific mechanisms through which equity ties create ...value. We develop a framework that specifies how centralization of intragroup equity ties affects the performance of group affiliates. We use the exogenous shock of the 2008 financial crisis and a difference-in-differences analysis of 51,730 observations of business group affiliates in Taiwan to show that centralization of equity ties enhances affiliate performance, but such effects weaken when the environment becomes turbulent. Moreover, we find that listed affiliates obtain fewer benefits from centralization than unlisted affiliates. Overall, our study deepens scholarly understanding of not only how groups create value, but also how value is differentially appropriated among affiliates. Managerial summary: Our research speaks directly to owner-managers of business groups with respect to creating an optimal equity network structure that binds the affiliated firms of the group. Our findings suggest to managers that the overall structure of equity ties in a business group has major implications for the performance of the affiliate firms of the group, and the network structure within the group should be designed deliberately and thoughtfully on an on-going basis. In particular, control through centralized equity ties is performance-enhancing in normal periods, but such control may be counterproductive as turbulence increases in business environments, or as the number of listed group firms increases. Hence, owner-managers may consider optimizing the network structure by lowering the degree of centralized equity ties under such circumstances, or at a minimum, lowering centralized control.
Research Summary
Managers at multiple levels of a firm influence resource allocation but most research focuses on senior rather than middle managers. We study involvement of middle managers in ...decision making, focusing on how rewards and controls shape resource allocation. We argue that higher income growth uncertainty (rewards) and lower monitoring (controls) increase resource allocation most strongly when middle managers are more involved in decisions. We test the arguments for ATM and bank branch allocations in Indian banks from 2011 to 2014. We assess causal mechanisms by comparing more and less favorable conditions for allocation, as well as considering a poststudy exogenous shock. The results suggest that the rewards and controls have different associations with resource allocation depending on the involvement of senior and middle managers.
Managerial Summary
The study examines how rewards and controls shape resource allocation decisions by middle managers, focusing on rewards arising from uncertainty about employee income and controls based on monitoring. The work suggests that rewards and controls that influence resource allocation by one level of managers may have less effect for another level. Hence, a firm's plans for resource deployment need to include rewards and controls that are relevant for both senior and middle managers.
We conceptualize capital markets in terms of resource access and governance, and argue that more developed capital markets facilitate firm restructuring through more effective provision of capital ...and governance of transactions. We then develop a contingency model that specifies that the effects of capital market development on restructuring vary by (1) types of restructuring, (2) the nature of the economic environments, and (3) firms’ access to resources. We evaluate a broad range of restructuring actions among independent firms and business group affiliates in Singapore and South Korea before and during the economic shock of 1998–1999. Results support our predictions of the impact of capital market development and of contingencies, and highlight the value of incorporating an external capital markets perspective to complement internally focused theoretical explanations for firm restructuring.
Using a comparative institutional perspective, we explore whether business groups' roles in facilitating affiliate firms' innovation varies by country and time period. We compare the innovativeness ...of firms affiliated with business groups to that of independent firms in two emerging economies: South Korea and Taiwan. On average, business group affiliates outperform independent firms in South Korea, but not in Taiwan, and in the early 1990s, but not in the late 1990s. The existence of alternative institutional infrastructures for innovation might explain these differences. Groups' abilities to share technological knowledge and financial resources among affiliates enables them to create value by promoting innovation in emerging economies, but groups' diversification might inhibit individual affiliates' innovativeness.
This paper shows that business groups in emerging economies exert dual effects on innovation. While groups facilitate innovation by providing institutional infrastructure, groups also discourage ...innovation by creating entry barriers for nongroup firms and thereby inhibit the proliferation of new ideas. This pattern reflects an evolutionary process in which the interplay of the availability of innovation infrastructure and variety of ideas influences the level of innovation in an industry. We show that group market share has an inverted-U impact on innovation in industrial sectors of both Korea and Taiwan during the 19811995 period. Institutional differences between Korea and Taiwan in terms of market structure and industrial policies lead to different innovation thresholds, the point at which the marginal costs of increasing group share begin to dominate the marginal benefits in the two countries.
We consider the role of government in the process of technological development, showing that the role of government regarding technological development varies over the development process. When a ...country is far from the technological frontier, the government can spur economic development through the centralization of economic and political control, but as the economy approaches the technological frontier, government's role must change considerably, political and economic freedom being necessary. In addition, domestic business groups can act as substitutes for governmental intervention, and multinational corporations can supplement governmental efforts.
Business groups in emerging economies frequently use international joint ventures (IJV) as a channel for knowledge acquisition and technology advancement. While IJVs provide a business group with ...access to new technology, how successful a group is in exploiting that new knowledge for innovative purposes depends on the groups’ ability to recombine new knowledge with its existing pool of knowledge and resources. The more resources a group spends in forming IJVs with foreign partners, the less resources the group has in developing and sustaining organizational mechanisms that facilitate integration of existing ideas and resources. Following this theoretical duality, we view the IJV–innovation relationship not as an “either–or” question, but as a question of whether and how. Specifically, viewing business groups as networks of loosely coupled firms, we examine how intra-group network structure and evolving institutional environment moderates the IJV–patenting relationship in Taiwan between 1981 and 1998.
Technological dynamism in Asia Mahmood, Ishtiaq P.; Singh, Jasjit
Research policy,
06/2003, Letnik:
32, Številka:
6
Journal Article
Recenzirano
We analyze innovation in emerging and newly industrialized economies over the past 30 years, with the emphasis being on Asian economies. We use US patent data to study how the innovative capabilities ...of Taiwan, South Korea, Hong Kong and Singapore have expanded in relation to emerging economies in Asia and Latin America. We then carry out a sector-level analysis of innovation for South Korea, Taiwan, Singapore, Hong Kong, India and China. We also study the relative importance of foreign multinationals, business groups, individuals, domestic firms and research institutes in innovation. Finally, we study the overall concentration of innovative activity in Asian economies.
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