Organizational design of R&amp;D after mergers and the role of budget responsibility

Jost, Peter‐J.; Velden, Claus van der

doi:10.1016/j.jeconbus.2007.05.001

Cited by 12 publications

(9 citation statements)

References 19 publications

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“…In order to turn the negative cost–benefit balance into a positive one, MNEs managers need to carefully design and implement devices to prevent leakages of key knowledge to competitors. This is a very challenging task as devices traditionally used to limit knowledge leakages often hinder also knowledge absorption and transfer, being these processes inherently correlated (Easterby‐Smith, Lyles, & Tsang, ; Jost & Velden, ) . However, investing managerial resources to improve contextually firm's appropriability and absorption may lead to high economic returns.…”

Section: Discussionmentioning

confidence: 99%

Location and survival of MNEs' subsidiaries: Agglomeration and heterogeneity of firms

Mariotti

Mosconi

Piscitello

2019

Strategic Management Journal

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Research summary Our study provides a quasi–replication of Shaver and Flyer (2000), which was among the first studies that challenged the positive role of agglomeration in determining companies' location choice and performances, thus changing the way management scholars view companies' attitude towards agglomeration forces. We employ the same research design, specification and tests, and a different population, to discuss the generalizability of the original study. Building on the framework of Shaver and Flyer (2000), our findings offer intriguing new empirical evidence highlighting the importance of the differential between entering foreign firms and host country firms as a crucial condition in understanding agglomeration forces and adverse selection mechanisms. Managerial summary Our exercise confirms that agglomeration forces act differently on stronger versus weaker multinational enterprises (MNEs). However, we find that stronger MNEs tend to avoid location in highly specialized areas when they are afraid of knowledge leakages towards host country–based rivals that have enough absorptive capacity to benefit and improve their competitive advantages. Managerial implications are quite relevant. Indeed, when MNEs avoid co–location in highly specialized areas, they also limit their own access to local knowledge and other agglomeration economies, such as supply networks and qualified workforce. Thus, MNEs managers need to design and implement devices that, on the one hand prevent local leakages of their knowledge and, on the other, do not hinder their access to local unique knowledge and resources.

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Section: Discussionmentioning

confidence: 99%

Location and survival of MNEs' subsidiaries: Agglomeration and heterogeneity of firms

Mariotti

Mosconi

Piscitello

2019

Strategic Management Journal

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“…Innovative firms may also merge to combine their R&D resources, learn from each other, and dampen competition in their market (Huck et al 2000). As an example, Jost and Velden (2004) discuss the development of a new drug in the pharmaceutical industry, which requires large R&D investments and takes several years. The requirement for large investments has led to mergers between large companies in this industry, such as GlaxoWellcome and SmithKline Beecham in 2001 and Hoechst and Rhone-Poulenc in 1998 among many others.…”

Section: Introductionmentioning

confidence: 99%

Is innovation a factor in merger decisions? Evidence from a panel of US firms

Entezarkheir

Moshiri

2018

Empir Econ

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The impact of innovation on mergers has been a subject of debate in merger enforcements. Firms may decide to merge because of increasing market share and expanding capacity. However, mergers may also be motivated by innovation since they provide resources for commercialization of innovation and allow for capturing knowledge spillovers. There are myriad studies on the drivers of mergers, but empirical evidence on innovation-induced changes of merger likelihood is limited. In this paper, we construct a panel data set of mergers among publicly traded US manufacturing firms from 1980 to 2003 and investigate the impact of innovation on merger decisions controlling for business cycles and proxies of neoclassical, behavioural and Q-theories of mergers. Our measure of innovation is based on the citation-weighted patent stock. We find that innovations are positively and significantly correlated with firms' merger likelihood. Our results on the control variables, such as business cycles, Tobin's q, and market shares, are also consistent with those reported in the literature. We also find that the magnitude of the merger impact of innovation varies across industries. Our main result is robust to alternative measures of innovation and different estimation methods.

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“…This may happen when companies transfer knowledge that encompasses both technology and know-how of foreign affiliates by some kind of leaks and which is absorbed by those firms. According to Jost and van der Velden (2008), knowledge leakage and knowledge spillover are related and can have both positive and negative impacts on organizations, depending on the way they occur and the quality of the exchange.…”

Section: Introductionmentioning

confidence: 99%

“…In the era of innovation, many companies regardless of size are being pushed to outsource, make joint ventures, transfer knowledge to other business partners, or develop new businesses or additional companies (Jost & van der Velden, 2008). Taking a holistic perspective of knowledge-seeing knowledge as both as an asset and a liability-the purpose of this paper is to review extant empirical research on both knowledge leakage and knowledge spillover in organizations to establish our current body of knowledge.…”

Section: Introductionmentioning

confidence: 99%

“…Taking a holistic perspective of knowledge-seeing knowledge as both as an asset and a liability-the purpose of this paper is to review extant empirical research on both knowledge leakage and knowledge spillover in organizations to establish our current body of knowledge. According to Jost and van der Velden (2008), only small levels of spillover must 47 exist in industries because spillovers may reduce the positive profit effect arising from competition. Supporting that line of thought, Czarnitzki and Kraft (2012) highlighted that incoming knowledge spillover is expected to have a positive impact on firms Conversely, knowledge spillover going out to rivals will most likely have a negative effect on the originating company.…”

Section: Introductionmentioning

confidence: 99%

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Recognizing Knowledge Leakage and Knowledge Spillover and Their Consequences

Ferenhof

2016

International Journal of Knowledge and Systems Science

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This paper, is interested in reviewing the literature on knowledge leakage and spillover together in order to understand their existence on organizations, establish the current body of knowledge and, on this basis, suggest some promising avenues for future research. The study consists of a systematic review of peer-reviewed articles addressing knowledge leakage and spillover in organizations. As result a better understanding of the differences and similarity as well as challenges and opportunities of knowledge leakage and knowledge spillover that could assist practitioners to better cope with risks when developing innovation is shown in a conceptual model. From an academic perspective, the paper may provide a starting point for new researches that are interested in knowledge at risk.

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Organizational design of R&D after mergers and the role of budget responsibility

Cited by 12 publications

References 19 publications

Location and survival of MNEs' subsidiaries: Agglomeration and heterogeneity of firms

Location and survival of MNEs' subsidiaries: Agglomeration and heterogeneity of firms

Is innovation a factor in merger decisions? Evidence from a panel of US firms

Recognizing Knowledge Leakage and Knowledge Spillover and Their Consequences

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