Operational flexibility and market valuation of earnings

Tang, Charles; Tikoo, Surinder

doi:10.1002/(sici)1097-0266(199908)20:8<749::aid-smj53>3.0.co;2-l

Cited by 126 publications

(85 citation statements)

References 24 publications

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“…Hence, the greater the number of cities in which the group operates, the higher the breadth of its network of units. This approach is consistent with measures employed by numerous other studies to capture the geographic scope of business activities (e.g., Allen and Pantzalis, 1996;Liang et al, 2013;Tang and Tikoo, 1999).…”

Section: Independent Variablessupporting

confidence: 80%

“…Hence, a network of geographically dispersed business units may mitigate the risk and uncertainty associated with innovation as such networks help the group balance any deficiencies or fluctuations specific to a location. It may further facilitate the development of new capabilities and improve performance within the group by increasing operational flexibility (Tang and Tikoo, 1999).…”

Section: Network Breadthmentioning

confidence: 99%

“…Hence, the city is considered as an appropriate level of analysis. Following previous studies (Allen and Pantzalis, 1996;Tang and Tikoo, 1999), network concentration is operationalized by measuring the number of business units that the corresponding group has established in each given city. Thus, the higher the number of business units per city, the higher the concentration of the group.…”

Section: Independent Variablesmentioning

confidence: 99%

See 2 more Smart Citations

Technology transfer within China and the role of location choices

Kafouros

Wang

2015

International Business Review

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We examine how emerging country business groups overcome various technological constraints and succeed in enhancing their performance. Our theoretical contribution lies in showing how the ability of a business unit to benefit from intra-group technology transfer depends on the idiosyncratic manner in which the group geographically configures its network of units. The findings reveal that the geographic dispersion and concentration of the units of a group alter both the ability and willingness of its business units to transfer technologies to (or receive technologies from) other units and subsequently result in different performance outcomes. The location of a business unit also determines whether or not a unit competes with other fellow units and, consequently, influences how much a unit benefits from the technologies held by the group.

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Section: Independent Variablessupporting

confidence: 80%

Section: Network Breadthmentioning

confidence: 99%

Section: Independent Variablesmentioning

confidence: 99%

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Technology transfer within China and the role of location choices

Kafouros

Wang

2015

International Business Review

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“…In terms of real options theory, firms benefit from the possibility to exercise the switching options provided by the network. The value creation of such operational flexibility for MNEs has been formally modelled by researchers in economics, finance and management (Huchzermeier and Cohen, 1996;Kogut and Kulatilaka, 1994a;Mello and Parson, 1995), and has also been investigated empirically (Allen and Pantzalis, 1996;Tang and Tikoo, 1999;Goerzen and Beamish, 2003).…”

Section: Flexibility and Affiliate Growthmentioning

confidence: 99%

On the growth of foreign affiliates: multinational plant networks, joint ventures, and flexibility

Belderbos

Zou

2007

J Int Bus Stud

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We take a flexibility perspective to analyze employment growth in a large sample of Japanese manufacturing affiliates in nine Asian countries during the years leading up and into the Asian financial crisis (1995)(1996)(1997)(1998)(1999). We find that joint ventures are less flexible than wholly owned affiliates in responding to changing environmental conditions in the focal country and underperform in high growth environments. Multinational enterprises use the flexibility created by their multinational plant network to adjust affiliate employment in response to labor cost changes in other countries in which they operate plants. However, no evidence was found that the presence of joint ventures in multinational plant networks reduces this network flexibility. Our findings suggest that more research is needed on the heterogeneous responses of multinational enterprises and their affiliates to changing economic environments.

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“…To understand sources of heterogeneity in the geographical configuration of R&D, we focus on two distinct dimensions of R&D portfolios that vary significantly across firms: the (global) geographic dispersion of R&D, which is defined as how widely a firm spreads its R&D units across countries; and R&D co-location, which refers to the placement of several R&D units in each country. Global geographic dispersion reflects the fact that while some firms spread their R&D units across multiple countries, others choose to innovate in only a few countries (Delios and Beamish, 1999;Tang and Tikoo, 1999;Jiang et al, 2016). It thus captures the international geographic scope of R&D portfolios (Kim, 2016).…”

Section: Introductionmentioning

confidence: 99%

Geographic dispersion and co-location in global R&D portfolios: Consequences for firm performance

et al. 2018

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A B S T R A C TWe examine how the ways in which firms geographically configure their global portfolios of R&D units influence the effectiveness of firms' own R&D investments and of external technical knowledge in enhancing firm performance. Our analysis indicates that the strength of these effects depends on the extent to which firms spread their R&D units across countries (geographic dispersion of R&D) and the extent to which firms establish multiple R&D units within each country (co-location of R&D). We show that geographic dispersion and co-location are associated with distinct value creation and value capture mechanisms and in turn lead to different performance outcomes. Although geographic dispersion enhances the effects of a firm's own R&D on its performance, R&D co-location limits such effects. These relationships are reversed when we consider the effects of external technical knowledge on firm performance. R&D co-location, rather than geographic dispersion, is what renders the exploitation of external knowledge more effective in enhancing firm performance. Our results suggest that future research should shift its focus from the degree of R&D globalization to how a portfolio is globalized and geographically structured.

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Operational flexibility and market valuation of earnings

Cited by 126 publications

References 24 publications

Technology transfer within China and the role of location choices

Technology transfer within China and the role of location choices

On the growth of foreign affiliates: multinational plant networks, joint ventures, and flexibility

Geographic dispersion and co-location in global R&D portfolios: Consequences for firm performance

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