Regional related variety and companies' productivity in Brazil

There is a discussion in the literature about the benefits that the regional diversity can result in the companies' productivity due to knowledge recombination, which allows greater opportunities to imitate, share and recombine ideas. However, few studies have been conducted in developing economies. This study aims to analyze the effects of the regional related variety (an indicator that captures the complementarity between sectors) on the companies' productivity. Also, we intend to verify whether the absorptive capacity is a significant moderator in this process and its thresholds. For the empirical study, a database containing data on 80 Brazilian municipalities and 194 companies was used, with data between 2010 and 2014. By calculating the related variety indicator to measure regional diversity and threshold regressions to measure absorptive capacity, this research contributes to the literature, given that empirical studies on this subject in Brazil are still limited. Besides, as the country has a diversified economy, we believe in recombination as an option for economic growth. The results indicate that the related variety has no significant effect on productivity when analyzed alone, but when moderated by the absorptive capacity it has a positive effect.Não recebi financiamentoHá uma discussão na literatura sobre os benefícios que a diversidade regional pode resultar na produtividade das empresas devido à recombinação do conhecimento, que permite maiores oportunidades de imitar, compartilhar e recombinar ideias. No entanto, poucos estudos foram realizados em economias em desenvolvimento. Este estudo tem como objetivo analisar os efeitos da variedade relacionada da região (indicador que capta a complementaridade entre setores) na produtividade das empresas. Além disso, pretendemos verificar se a capacidade de absorção é um moderador significativo neste processo e quais são seus limiares. Para o estudo empírico, uma base de dados contendo dados sobre 80 municípios brasileiros foi utilizada, com dados entre 2010 e 2014. Ao calcular o indicador de variedade relacionada para calcular a diversidade regional e regressões por limiar para medir a capacidade de absorção, esta pesquisa contribui com a literatura, dado que estudos empíricos sobre esse assunto no Brasil ainda são limitados. Além disso, como o país possui uma economia diversificada, acreditamos na recombinação como opção de crescimento econômico. Os resultados indicam que a variedade relacionada não tem efeito significativo na produtividade quando analisada isoladamente, mas quando moderada pela capacidade de absorção possui efeito positivo

Radical versus Non-Radical Inventions

This paper looks at the special characteristics of radical inventions. It tries to identify those variables that differentiate radical inventions from non-radical inventions. Since radical inventions are very important for the economy as a whole and for the individual firm performances, understanding what makes radical inventions differ from non-radical inventions is very important. For our research we made use of the EPO (European Patent Office) database on patents. We used the number of forward patent citations per patent to identify radical from non-radical inventions. For our analysis we used the backward patent citations per patent. In order to test if the two groups we are considering are truly different and to see on what factors they differ we made use of discriminant function analysis. Some of our main conclusions are that radical inventions are to a higher degree based on existing knowledge than non-radical inventions. Also the combination of emergent and mature knowledge is more important for radical inventions. A further result that follows from our analysis is that radical inventions are induced by the recombination over more knowledge domains as compared to non-radical inventions. Our research hints also on the importance of alliances and an open innovation system for the development of radical inventions.radical inventions, patents, organizational learning, alliances

Learning and Innovation in Inter-Organizational Relationships and Networks

This paper gives a survey of insights into inter-firm alliances and networks for innovation, from a constructivist, interactionist perspective on knowledge, which leads to the notion of 'cognitive distance'.It looks at both the competence and the governance side of relationships.Given cognitive distance, organizations need to align cognition sufficiently to enable the fast and efficient utilization of opportunities from complementary capabilities.This, I propose, is done by means of a culturally mediated 'organizational cognitive focus'.The problem with that is that it yields a greater or lesser organizational myopia that, for the sake of innovation, needs to be complemented by means of outside relations with other firms, at larger cognitive distance. Hence the importance of networks for innovation.On the governance side, the paper gives a review of relational risks and instruments to manage them.Next to the effects of cognitive distance, the paper analyses the effects of density and strength of ties in innovation networks, concerning both competence and governance.inter-organizational relationships;networks;competence;governance;innovation;cognitive distance

Essays on dynamic capabilities: the role of intellectual human capital in firm innovation

Following the dynamic capabilities perspective, I suggest that antecedents to innovation can be found at the individual, firm, and network level. Thus, I challenge two assumptions common in prior research: (1) that significant variance exists at the focal level of analysis, while other levels of analysis are assumed to be homogeneous, and (2) that the focal level of analysis is independent from other levels of analysis. Accordingly, I advance a set of hypotheses to simultaneously assess the direct effects of antecedents at the individual, firm, and network level on innovation output. I then investigate whether a firm s antecedents to innovation lie across different levels. To accomplish this, I propose two competing interaction hypotheses. I juxtapose the hypothesis that the individual, firm, and network-level antecedents to innovation are substitutes versus the proposition that these innovation mechanisms are complements. I test my multi-level theoretical model using an unusually comprehensive and detailed panel dataset that documents the innovation attempts of global pharmaceutical companies within biotechnology over a 22-year time period (1980-2001). I find evidence that the antecedents to innovation lie across different levels of analysis and can have compensating or reinforcing effects on firm-level innovative output.Ph.D.Committee Chair: Frank T. Rothaermel; Committee Member: J. Jeongsik Lee; Committee Member: John Walsh; Committee Member: Luis Martins; Committee Member: Matt Higgin

The Joint Effect of Technological Distance and Market Distance on Strategic Alliances.

The literature on strategic alliances has deepened our understanding of the mechanisms behind their formation. This literature has given a central role to complementarities between firms, whereby complementarities are usually measured by technological overlap. An established result tells us that, there is an inverted-u relationship between technological distance and learning by firms. In this paper, we argue that technological distance is only one aspect of complementarities. Equally important is the market distance, which we define as the extent to which the value generated by the alliance depends on the synergies between firms’ products. These synergies may occur because of the complementarities between products, or the possibilities to apply similar knowledge fields in different product domains. Through an agent based simulation study, we show that when firms consider both distances jointly, an alliance strategy which favours being close in at least one dimension yields the highest payoff, rather than being at the intermediate distance in both dimensions.

Genetic Codes of Mergers, Post Merger Technology Evolution and Why Mergers Fail

This paper addresses the key determinants of merger failure, in par- ticular the role of innovation (post-merger performance) and technology (ex-ante selection) when rms decide to separate. After a brief review of the existing literature we introduce a model of process innovation where merged firms exibit intra-merger spillover of knowledge under different mar- ket regimes, depending on whether firms integrate vertically or horizontally. Secondly, we describe an ideal matching pattern for ex-ante selection cri- teria of technological partnering, abstracting from nancial market power issues. In a final section we test the model implications for merger failure for M&A data from the US biotechnology industry in the 90s. We find that post-merger innovation performance, in particular with large spillovers, in- creases the probability of survival, while we have no evidence that market power effects do so in long run. Additionally, we find extensive technology sourcing activity by firms (already in the 90s) which contradicts the notion of failure and suits well the open innovation paradigm.merger failure, innovation performance, technology, matching, open innovation, biotechnology

Empirical Tests Of Optimal Cognitive Distance

This article provides empirical tests of the hypothesis of ‘optimal cognitive distance’, proposed by Nooteboom (1999, 2000), in two distinct empirical settings. Variety of cognition, needed for learning, has two dimensions: the number of agents with different cognition, and differences in cognition between them (cognitive distance). The hypothesis is that in interfirm relationships optimal learning entails a trade-off between the advantage of increased cognitive distance for a higher novelty value of a partner’s knowledge, and the disadvantage of less mutual understanding. If the value of learning is the mathematical product of novelty value and understandability, it has an inverse-U shaped relation with cognitive distance, with an optimum level that yields maximal value of learning. With auxiliary hypotheses, the hypothesis is tested on interfirm agreements between pharmaceutical companies and biotech companies, as well as on interfirm agreements in ICT industries.innovation;organizational learning;ICT;biotechnology;alliances