Malika Chaudhuri, Jay Janney and Roger J. Calantone
March’s 1991 work on exploitation and exploration has been studied in many different industries. The purpose of this paper is to analyze signals emanating from exploration and…
Abstract
Purpose
March’s 1991 work on exploitation and exploration has been studied in many different industries. The purpose of this paper is to analyze signals emanating from exploration and exploitation alliances within the pharmaceutical industry context. Specifically, the authors explore market reactions to announcements of alliance formations based not only on alliance type but also in terms of their marketing intensity and leverage.
Design/methodology/approach
The authors employ a two-stage event-study market model using a two-day event window (event days 0, +1), creating cumulative abnormal returns (CARs). In the second stage, the authors regress the CARs against an array of control and explanatory variables.
Findings
Findings suggest that even though firm announcements of exploration and exploitation formations initially generate favorable market reactions, the former has a greater impact on CAR relative to the latter. Furthermore, leverage and marketing intensity moderate the relationship between firms’ alliance formation announcements and CARs generated. In particular, firms’ alliance formation announcements generate relatively greater market reactions at lower (higher) levels of the firm’s leverage (market intensity).
Research limitations/implications
Event studies are valuable for gauging initial impressions of management action, but they are not meant to address long-term value creation. While market reactions suggest the likelihood of an alliance’s success or failure, managers also assess the risk to a firm’s financial health should the alliance fail. As a result, announcements that signal the firm has discretionary capabilities to ameliorate the effect of a failed alliance are better received.
Originality/value
This study is the first to analyze the stock market’s perception and valuation of different types of risk, classified by exploration vs exploitation alliances. The study also contributes to the literature by analyzing how investors use the information about a firm’s financial leverage and marketing activities to fine-tune their valuation of different types of risk-taking activities.
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Matteo Cristofaro, Frank Butler, Christopher Neck, Satyanarayana Parayitam and Chanchai Tangpong
Rahul Singh Rathore and Rajat Agrawal
The paper aims to review existing performance indicators in technology business incubators (TBIs) and propose some new indicators with a focus on incubation activities in higher…
Abstract
Purpose
The paper aims to review existing performance indicators in technology business incubators (TBIs) and propose some new indicators with a focus on incubation activities in higher educational institutes (HEIs) of India.
Design/methodology/approach
Performance indicators of various types of incubators were identified from research papers followed by interview, consultation and suggestion from experts of the subject. Nature of interrelationship between the identified indicators has been established with the help of Interpretive Structural Modelling methodology and Matrice d’impacts croisés multiplication appliquée á un classment analysis.
Findings
Number of ideas came for screening and number of ideas converted to start-ups, survival rate of incubatees is the indicators which have the highest driving power followed by time taken in screening an idea and number of failed or rejected ideas returned back into incubation. Few indicators (driving indicators) are affecting performance of other indicators as well.
Research limitations/implications
Some performance indicators are proposed which can be used for measuring performance of technology incubators in India. The actual implications will be known when these findings are used to assess performance of some technology incubator. This also is the limitation of the study that some cases can be included to validate the findings of this research.
Practical implications
A total of 15 performance indicators for measuring performance of TBIs in Indian HEIs have been proposed. The proposed indicators will help incubator management to prioritize the efforts and resource allocation.
Social implications
TBIs are looked upon as mechanism for promoting entrepreneurial culture in Indian HEIs. Their success is well linked to growth of society. This research will help technology incubators to identify the most important factors in incubation process. Performance improvement will directly affect society in whole. Culture of IEE (Innovation, Entrepreneurship and Employment ) can be achieved through technology incubators
Originality/value
Identification of new indicators for performance measurement of incubators in Indian HEIs is the novelty of this research. This has a lot of value due to multilevel hierarchy model.
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While previous research has developed unclear positions about the role of organizational resources on alliance formation, the purpose of this paper is to focus on financial slack…
Abstract
Purpose
While previous research has developed unclear positions about the role of organizational resources on alliance formation, the purpose of this paper is to focus on financial slack resources to clarify the conditions that facilitate the formation of strategic alliances. Building on the behavioral theory of the firm, this paper theorizes that internal and external financial slack resources, measured as cash holdings and financial leverage, incentivize managers to form alliances, because they protect them against the risk of alliance failure.
Design/methodology/approach
Complete data were collected from 400 biotech public companies for the period from 2000 to 2015. The data set considered alliances among over 2,200 public and private companies. Hypothesis testing relied on generalized estimating equations.
Findings
Cash holdings positively impact alliance formation; financial leverage negatively impacts alliance formation; cash holdings and financial leverage interact in the prediction of alliance formation.
Research limitations/implications
While research in financial slack resources shows equivocal results, this study illustrates that they exercise a significant effect when it comes to the choice of forming strategic alliances. Limitations include the focus on multiple forms of alliances, possible restrictions in the external validity of the findings, and a lack of measurement of explanatory mechanisms.
Practical implications
Findings help managers understand the financial conditions in which they should choose to form or avoid alliances; findings help managers select alliance partners.
Originality/value
The study contributes by proposing a new outlook on alliances; identifying financial resources as alliance predictors when previous research focused on intangible resources; offering new insights into the often equivocal outcomes of financial slack; building an uncharted bridge between the finance and alliance literatures.
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Parinaz Sami, Farajollah Rahnavard and Alireza Alavi Tabar
The purpose of this study is to investigate the mediator role of product innovation in the relationship between political and business ties (independent variables) and firm…
Abstract
Purpose
The purpose of this study is to investigate the mediator role of product innovation in the relationship between political and business ties (independent variables) and firm performance (dependent variable).
Design/methodology/approach
In this study, research hypotheses were tested using the structural equation modeling method.
Findings
The findings from 267 manufacturing companies in Iran show that business ties have an effect on firm performance through product innovation, while the role of innovation is not proved as a mediating variable in the relationships between political ties and firm performance. In addition, business ties have an effect on product innovation and firm performance, whereas political ties have no such effect.
Practical implications
These results provide useful points for developing economies, theoretically and practically.
Originality/value
Despite the increasing attention to the role of managerial ties (political and business ties) in improving product innovation and firm performance, there is no study conducted on the mediating role of product innovation in the relationship between managerial ties and firm performance.
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Steen Nielsen and Iens Christian Pontoppidan
This paper aims to contribute to the construction of a framework that makes risk management (RM) more effective and visible. This is done by investigating how the concept of…
Abstract
Purpose
This paper aims to contribute to the construction of a framework that makes risk management (RM) more effective and visible. This is done by investigating how the concept of “risk” is included in various activities in the management accounting and control (MA&C) system.
Design/methodology/approach
A cross-sectional analysis of 72 Danish organisations extracted from an alumni database is conducted together with a factor analysis and a partial least squares structural equation modelling approach.
Findings
The authors find four latent variables, namely, expectation, attitude, subjective norms, processes and culture, which all have risk activities in MA&C as the depending variable. Attitude seems to be a powerful antecedent, whereas supporting processes and culture play a crucial partial mediator role for the inclusion of risk.
Research limitations/implications
The findings add to the understanding of the interrelationships between risk and MA&C. An important caveat is that the authors use soft and self-reported data for the dependent variable and for the various independent variables.
Practical implications
The authors propose a dynamic and holistic framework for the analysis of risk. This framework eliminates the limitations found in many prior studies that have neglected the interrelated importance of attitude and supporting processes and culture. The results of this study also provide valuable insights for managers who wish to consider and to explore the interrelations of a number of antecedent risk issues that influence different risk activities in MA&C.
Originality/value
This paper is one of the few papers that assess the impact of different risk issues on firms’ different MA&C activities by including the theory of planned behaviour. The potential key role that supporting processes and culture play as partial mediators for risk inclusion is particularly interesting. The research extends prior research by constructing a framework that makes that implementation of RM processes in the MA&C system more effective. It also proposes a validation process that can lessen the model risk possible.