Centralization and innovation performance in an emerging economy: testing the moderating effects

Abstract

Previous research examining the relationship between centralization and innovation performance has suggested conflicting views and mixed results. Drawing on the knowledge-based view, this study identifies two mechanisms underlying the relationship between centralization and innovation performance: information flow and behavior change of organizational members. We argue that the relationship between centralization and innovation performance can be positively moderated if the constrained information flow can be compensated, or the undermined motivation of employees can be adjusted, or both information and behavior drawbacks can be mitigated. With a sample of Chinese high-tech firms, we find that a positive relationship between centralization and innovation performance is more likely to occur if the firm owns higher-level human capital, charismatic leadership or entrepreneurial orientation. These findings shed light on the debate concerning when centralization enhances innovation performance and provide managerial implications for firms in emerging economies.

Unpacking Institutional Distance: Addressing Human Capital Development and Emerging-Market Firms’ Ownership Strategy in an Advanced Economy

“…In addition to traditionally considered “pull” factors, such as large markets and wealthier consumers in the host, advanced markets, “push” factors such as weak institutions and economic underdevelopment in home countries play an important role in driving EMNCs to invest in developed countries (i.e., the phenomenon of “escape motivation” noted by Cuervo‐Cazurra & Ramamurti, , and Shi, Sun, Yan, & Zhu, ). In particular, plagued by a lack of well‐developed human capital in their home countries, EMNCs may seek internationalization to acquire needed talent to improve their competitive advantage (Yang, Zhou, & Zhang, ). This leads to our second research question: how does human capital development in the home market moderate the main effect of institutional distance (formal and informal) on EMNCs’ ownership strategy?…”

Entrepreneurial Leadership: A Review of Measures, Antecedents, Outcomes and Moderators

“…Distributed leadership, transactional and transformational and laissez-faire leadership, and charismatic leadership were also found to influence the performance of business apart from entrepreneurial leadership (Cope, Kempster, & Parry, 2011;Yang et al, 2015;Zaech & Baldegger, 2017).…”

“…Various studies in the past have uncovered the importance of social, human capital and financial capital influencing the funding of new firms, categories of financing, time for new firms to get the IPO and emergence of young women as entrepreneurial leaders in business (Gartner, 2011;Jayawarna, Jones, & Macpherson, 2011;Mcgowan et al, 2015;Nicholls, 2010;Yang, Zimmerman, & Jiang, 2011;Yang, Zhou, & Zhang, 2015).…”

“…Work value has been found to contribute to the development of entrepreneurial leadership (Lechner et al, 2018). (Mcgowan et al, 2015), (Yang, Zhou, & Zhang, 2015), (Nicholls, 2010), (Yang, 2011;Zimmerman, & Jiang, 2011), (Leitch et al, 2013), Uncertainty Absorbing (Gupta et al, 2004) Ambidexterity (Dean & Ford, 2017) Clearing path (Gupta et al, 2004Entrepreneurial Mindset (Shepherd & Haynie, 2009) Commitment Building (Gupta et al, 2004Limits specification (Gupta et al, 2004Social Capital (Mcgowan et al, 2015, (Jayawarna, Jones, & Macpherson, 2011), (Leitch et al, 2013), (Vecchio, 2003), (Prabhu, 1999) (Lechner et al, 2018)…”

“…The presence of human and social capital and ability to identify the resources in the entrepreneurial leader is not enough to enhance firm performance. The entrepreneurial leaders' ability to manage the resources strategically affects the performance of the business by creating wealth (Ireland et al, 2003) 4.3.3 Innovation Performance Yang et al (2015) has examined the impact of centralization on innovation performance in 60 firms of China. The presence of entrepreneurial orientation of leader and employees determines performance of the firm in terms of innovation.…”