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Accepted papers

The Effect of European Intellectual Property Institutions on Chinese Outward Foreign Direct Investment

Nikolaos Papageorgiadis, Yue Xu and Constantinos Alexiou

Abstract: This study examines the role of the strength of the Intellectual Property (IP) institutions of 23 European countries in attracting Chinese Outward Foreign Direct Investment (OFDI) during the time period 2003–2015. Following a dynamic panel data analysis methodology, we find that the strength of IP institutions has a positive effect in attracting higher levels of OFDI from China. This is an important finding for the OFDI literature from emerging markets, since previous studies have researched this relationship from the OFDI perspective of developed countries. However, we also find a weak indication of a potential U-shaped relationship between the strength of IP institutions and Chinese OFDI. To better understand this relationship, we interact a European country’s membership in the Former Eastern Bloc (FEB) with the strength of IP institutions and find a negative moderating effect. We therefore find that when investing in FEB countries, Chinese firms are attracted to weaker levels of IP institutional strength. The results of this study have important implications for future studies on the determinants of OFDI from emerging markets, as well as for European and Chinese businesses and policy-makers concerning the importance of IP institutional strength.

Domestic Acquisition Experience and the Internationalization of Chinese Firms: The Role of Institutional Heterogeneity

Yulia Muratova

Abstract: The liability of foreignness increases firm risk of doing business abroad. However, it appears not to deter Chinese firms as evidenced by their risky internationalization pattern. This study is concerned with explaining this phenomenon. Drawing on organizational learning and institutional theories, I argue that institutional heterogeneity in China gives firms an opportunity to develop routines to overcome the liability of foreignness through acquisition experience gained outside of their home provinces. Further, I propose that coastal and inland firms draw different routines from their acquisition experiences. I test these arguments on a panel data of listed Chinese firms, tracing their acquisition behavior from 2006 to 2015. My analyses suggest that acquisition experience outside of home province matters and that, in the case of inland firms, coastal acquisition experience facilitates subsequent internationalization. The present study contributes to the literature on the internationalization of Chinese firms. It highlights the value of context-specific measures for Chinese management research, sheds light on the functionality of institutional heterogeneity in China and provides evidence to re-evaluate the riskiness of Chinese firms’ internationalization pattern.

An Alternative Way to Make Knowledge Sharing Work in Online Communities? The Effects of Hidden Knowledge Facilitators

Jason Li-Ying, Zhinan Zhang and Qing Long

Abstract: Some firms use hidden knowledge facilitators (HKFs) to facilitate knowledge sharing among employees within intrafirm online communities. These firms hope for enhanced knowledge sharing outcomes within their organizations without letting employees know that HKFs exist. Yet, the extent to which HKFs’ interventions are effective remains unknown to researchers and managers. Built on the knowledge sharing (KS) literature, this study explores the unique roles of HKFs as moderators between a company and its employees. We develop several hypotheses to test the impact of the quantity and quality of HKFs’ online interventions on several KS outcomes. By analyzing log data of a Chinese corporation’s online R&D community, we find that (1) the quantity of HKFs’ intervention has a mostly positive impact on KS outcomes; (2) the quality of HKFs’ intervention has a mixed impact on several KS outcomes, depending on which aspect of quantity is considered; and (3) the quality of HKFs’ intervention also moderates the positive impact of the quantity of HKFs’ intervention in different ways on different intended KS outcomes. This study makes a clear contribution to the literature on knowledge sharing and knowledge facilitation by demonstrating the impact of HKFs on KS outcomes in a Chinese context.

Mitigating Negative Spillovers from Categorization of Foreign-Listed Firms: The Role of Host-country Independent Directors

Eugene Kang and Asda Chintakananda

Abstract: This study examines how cognitive categorization by host-country investors give rise to negative spillovers among host-country foreign-listed firms from the same home country when one of these foreign-listed firms discloses a financial reporting irregularity. This study further examines how attributes of host-country independent directors mitigate such negative spillover effects through signaling fulfilment of their fiduciary duties. Our results based on Chinese foreign-listed firms on the Singapore Stock Exchange from 2007-2014 reveal that host-country independent directors increase spillover effects among foreign-listed Chinese firms from financial reporting irregularities. However, such increase is attenuated when these directors signal fulfilment of their fiduciary duties through home-country, industry or task-related experiences, and the observed mitigating effect is stronger when they possess a combination of these experiences.

A Delicate Balance for Innovation: Competition and Collaboration in R&D Consortia

Dong Chen, Li Dai and Donghong Li

Abstract: This study examines how competitive and cooperative relationships within R&D consortia influence member firms’ innovation output. We propose a U-shaped relationship between the presence of market competitors for a member firm and the firm’s joint R&D output with other consortium members and examine how the relationship is mediated by interactions with other members at the firm level and moderated by collaborative efforts at the consortium level. Using a unique sample of 320 firms from 52 R&D consortia in China, we find support for our predictions. This multi-level study extends our understanding of competition and coopetition in multi-party networks and provides insights for creating a balance between the two forces that is conducive to innovation.

Coopetition and Firm Survival in a Cluster: Insights from the Population Ecology on the Yacht Industry in an Emerging Economy, 1957-2010

Hsi-Mei Chung and Li-Hsuan Cheng

Abstract: Firms that are located in a cluster may confront the cooperation and competition at the same time. The advantage of cooperation and the disadvantage of competition on a firm may need to examine the firm survival in a cluster as the cluster evolves. Employing the population ecology viewpoint, this study tries to address the coopetition issues in a cluster to examine the impact of coopetition on firm survival rate. Analyzing the yacht industry data in Taiwan from 1957-2010, this study indicates that the founding rate of the yacht firms will be positively related with the cluster size. Additionally, during the competition period, those firms located inside the cluster may have the higher dissolution rate than those firms outside the cluster, indicating the disadvantage of competition on the firm. Finally, this study finds that those firms located inside the cluster will be more likely to become larger and have capabilities to survive. The results in this study provide insights on addressing coopetition issues in a cluster.

From Cross-Cultural Economic Experiments to Experimental Indigenous Management Research – A Suggestion

Sven Horak

Abstract: This study provides an overview, categorization, and integration of what has been achieved in the niche of cross-culture experimental economics (CCEE) so far, aiming to inspire indigenous management researchers to extend their methodological toolbox by including experimental methods. As a result of the review, we find that most of the early studies lack depth and contextualization as well as detailed explanation about why human behavior differs. Hence, a better understanding about the influence of culture on economic decision making is rather limited if it cannot be explained in more detail. In contrast, deep contextualization is a principle in indigenous management research (IMR). Both have so far not benefited from each other in the study of how culture affects human behavior, as both currently develop in parallel. Following the call for high-quality IMR (Tsui, 2004), this paper argues that an experimental methodology can make a contribution to IMR in the future by drawing on the strengths of both IMR (i.e., contextualization) and CCEE (i.e., methodology).

Subsidiary Networks and Foreign Subsidiary Performance: A Coopetition Perspective

Yang Liu, Jie Jiao and Jun Xia

Abstract: From a coopetition perspective, we differentiate between a multinational enterprise’s product-similar subsidiary network and product-different subsidiary network in a host country. We argue that the product-similar network will have a curvilinear (inverted U-shaped) effect on foreign subsidiary performance, whereas the product-different network will produce a monotonic (positive) effect. Moreover, we introduce host-country economic advantage and intangible resource of the subsidiary as moderators into the relationship between subsidiary network and performance. Using longitudinal panel data of foreign subsidiaries, we find evidence that when host-country economic advantage is large, and the level of intangible asset intensity is high, the inverted U-shaped effect of product-similar subsidiary network is less pronounced. Moreover, host-country economic advantage and intangible asset intensity both enhance the positive effect of product-different subsidiary network. However, the moderating effect of intangible asset intensity is opposite to our prediction.

The Institutional Context of Incubation: The Case of Academic Incubators in India

V. K. Narayanan and Jungyoun (Natalie) Shin

Abstract: We introduce incubators as an organizational form intended to facilitate entrepreneurship. The theorizing and research on incubators have been primarily anchored in market failure perspective and carry over the assumptions about a free market economy, mostly implicitly into the empirical work. This ignores the influence of the institutional context and obscures processes that may come into play in emerging economies like India. Using Scott’s model (1995, 2008) of institutional context, we argue how the institutional context provides a complementary perspective that may reveal a richer picture of incubator operation in emerging economies. We illustrate this in the case of academic incubators in India.

How Early Entrants Impact Cluster Emergence: MNEs vs. Local Firms in the Bangalore Digital Creative Industries

Mark Lorenzen

Abstract: This article addresses the question of how the emergence of a cluster in a global innovation system is influenced by early entrants. It does so by presenting an explorative study of the emerging digital creative industries cluster in Bangalore. I find that MNE entrants develop production and technological capabilities comparatively fast within a narrow range of value chain activities with limited spillovers to the cluster. In comparison, local entrants develop such capabilities more slowly, but within a broader range of value chain activities and with higher spillovers of skills and knowledge, as well as higher participation to building a local entrepreneurial ecosystem. I propose that these effects are moderated by the size of national consumer markets as well as industry context in the guise of project lengths and technological modularity. I also point to the role of global connectivity, proposing that local entrants, in particular, leverage international personal relationships for development of not only relational, but also production capabilities.