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We set out in this study to analyse the impact on the technological performance of firms arising from their vertical integration, along with their escalating commitment to capital investment. Our findings reveal a positive relationship between vertical integration and the technological performance of such firms. A positive correlation is also found to exist between vertical integration and escalating commitment to capital investment; in other words, a firm's rising commitment to its capital investment may well strengthen the positive effects of vertical integration on the technological performance of the firm. More importantly, the interactive effects on technological performance will tend to differ, largely dependent on the type of vertical integration. The findings of this study also indicate that vertical integration can effectively neutralise the threat to exit barriers resulting from a firm's escalating commitment to its prior investment.

Drawing upon the theory of disaggregation and modularity, this study examines how firms may use mechanisms other than internalization to affect their offshore outsourcing strategies in countries wi...

We set out in this study to analyze the impact of vertical integration on the innovative performance of a firm and to explore the interaction between vertical integration and different modes of external knowledge sourcing. Our empirical results reveal an initial increase in the effect of vertical integration on innovative performance up to a certain level of integration, although this is subsequently followed by a decline; that is, the relationship is characterized by an inverted U-shape. The results further reveal that external knowledge sourcing is positively related to the innovative performance of a firm, albeit with a negative interaction with the level of vertical integration. In other words, firms with higher levels of vertical integration may be faced with barriers to the acquisition of external knowledge. Our findings suggest that firms should be cautious in their pursuit of a strategy of vertical integration, given the non-monotonic impact on innovative performance, whilst an increase in the level of vertical integration is also likely to diminish the effectiveness of the external knowledge sourcing.

We propose a theoretical framework for the study of globally offshoring innovations and firm innovativeness by examining both benefits and costs of geographic dispersion over 89 countries. Data on 541 global companies from 2005 to 2011 show a consistent horizontal S-curve relationship between dispersed innovations and firm innovativeness. Further, firms implementing a corporate-wide offshoring strategy could achieve greater innovativeness gains from an increase in the scope of geographical dispersion. Our framework and findings have implications for theory and contribute to research on the broader phenomenon of the internationalization and globalization of innovation by delving into the influence of dispersed innovations on firm innovativeness.

This paper constructs models to investigate the rationale for a multinational corporation to enter into a joint venture to serve a host market. In particular, the model examines the impact of profit sharing, cost reductions, risk reductions, and competition reductions on the profits of international joint ventures. The results may explain the ‘recent’ popularity of international joint ventures. The models show that (1) a joint venture is the dominant entry strategy when there is a formidable local competitor and the risks of operation are high, (2) a wholly owned subsidiary is preferred if a multinational corporation has a significant cost advantage, (3) a joint venture is preferred to a wholly owned subsidiary if significant cost reductions can be achieved through combining the strengths of a multinational corporation and a local firm, and (4) multiple licensing is preferred if the number of local firms is large.

This paper examines the profit to a firm of different production-related strategies for entering a foreign market. The entry strategies examined are foreign direct investment, exclusive licensing, multiple licensing, joint venture, and a combination of joint venture and licensing. It is shown that even though the entering firm is able to charge the optimal licensing fee, foreign direct investment generates the highest profit and is thus the dominant entry strategy in many contexts. This paper also suggests counter-strategies for responding to government restrictions on firms' entry.

Employing the notion of balanced growth postulated by competence-based literature, the present study submits that a firm’s growth strategy can be understood as its ability to manage the interplay of building and leveraging existing competence within the business context. The synergistic effects resulting from the creation of a self-reinforcing cycle of competence building and leveraging initiatives then drive the achievement of superior performance. To examine the validity and usefulness of this conception, we conduct a systematic investigation on the strategy-performance link of contract electronics manufacturers based in Taiwan, who have emerged as the competitive global supply base in electronics and computer industries. Empirical results based on a panel of business-level operating data show that while building product-related competence is essential to the contract manufacturer’s achievement of higher profitability, leveraging competence between subcontracting services and own-brand business will significantly enhance both profitability and sale growth. The implications of formulating a sustainable growth strategy for contract manufacturers in the context of horizontally configured industries, and suggestions for future research endeavors on competence-based management are discussed.

This paper intends to complement the existing literature on the performance of venture capital (VC) investments by presenting a multiple principal-agent framework for examining partner selection strategies aimed at mitigating uncertainties and their effects on investment performance and boundary conditions. Using a dataset of VC investments from 1980 and 2008 in the U.S., we found evidence that the existence of industrial and geographic uncertainties negatively affects the performance of independent VC (IVC) investments. The empirical results show that the strategy of partner selection has no effect on IVC performance. However, from the homophily and resource perspectives, if various VC-specific uncertainties are considered as contextual factors, one would expect CVC firms to be selected as partners by IVC firms as a way to increase the probability of success.