Linked versus Non-linked Firms in Innovation: The Effects of Economies of Network in Agglomeration in East Asia

This paper proposes a new mechanism linking innovation and network in developing economies to detect explicit production and information linkages and investigates the testable implications of these linkages using survey data gathered from manufacturing firms in East Asia. We found that firms with more information linkages tend to innovate more, have a higher probability of introducing new goods, introducing new goods to new markets using new technologies, and finding new partners located in remote areas. We also found that firms that dispatched engineers to customers achieved more innovations than firms that did not. These findings support the hypothesis that production linkages and faceâ€toâ€face communication encourage product and process innovation.Southeast Asia, East Asia, Technological innovations, Network, Communication, Business enterprises, Engineer Mobility, Innovation, Linkages

Supplier development framework in the Malaysian automotive industry: Proton’s experience

In a dynamic market, firms need to evolve from traditional to strategic purchasing which aims to reduce the cost of the purchase and that might imply standardization of components, delivery time and levels of inventory. This effort will usually include key suppliers as joint problem solvers and with these problem-solving models to work with; the firm’s attitude towards suppliers may change from confrontation to trust and partnership. From the buyer-supplier relationship perspective, the procurement practice of the buyer is critical and acts as a window to nurture the supplier development effort. This article presents the result of a study on supplier development in the Malaysian automotive industry, which focused on PROTON, and its role in developing the suppliers’ relationships and development. This study indicates that PROTON and its suppliers’ development program plays a crucial role in developing and extending comprehensive support to its supplier’s firm such as supplier selection and appointment, development, match making, and promoting continuous performance development and improvement programs

Foreign Manufacturing Multinationals and the Transformation of the Chinese Economy: New Measurements, New Perspectives

What is the relationship between foreign manufacturing multinational corporations (MNCs) and the expansion of indigenous technological and managerial technological capabilities among Chinese firms? China has been remarkably successful in designing industrial policies, joint venture requirements, and technology transfer pressures to use FDI to create indigenous national champions in a handful of prominent sectors: high speed rail transport, information technology, auto assembly, and an emerging civil aviation sector. But what is striking in the aggregate data is how relatively thin the layer of horizontal and vertical spillovers from foreign manufacturing multinationals to indigenous Chinese firms has proven to be. Despite the large size of manufacturing FDI inflows, the impact of multinational corporate investment in China has been largely confined to building plants that incorporate capital, technology, and managerial expertise controlled by the foreigner. As the skill-intensity of exports increases, the percentage of the value of the final product that derives from imported components rises sharply. China has remained a low value-added assembler of more sophisticated inputs imported from abroad--a “workbench” economy. Where do the gains from FDI in China end up? While manufacturing MNCs may build plants in China, the largest impact from deployment of worldwide earnings is to bolster production, employment, R&D, and local purchases in their home markets. For the United States the most recent data show that US-headquartered MNCs have 70 percent of their operations, make 89 percent of their purchases, spend 87 percent of their R&D dollars, and locate more than half of their workforce within the US economy--this is where most of the earnings from FDI in China are delivered.Foreign Direct Investment, International Investment, China, Multinational Corporations, Exports

COMPETITIVE DYNAMICS IN ELECTRONIC NETWORKS - ACHIEVING COMPETITIVENESS THROUGH INTERORGANIZATIONAL SYSTEMS

Many dramatic and potentially powerful uses of information technology involveinterorganizational systems (IOS). These systems, defined as distributed computing systems thatsupport shared processes between firms, have become fundamental to business operations,spanning multiple activities in value/supply chains. They have opened avenues to unprecedentedcollaborative linkages between firms. As IOS-mediated relational networks are rapidly evolving,roles of IOS have progressively changed beyond those of efficiency and power functions.To fully appreciate modern roles of IOS in e-business, this dissertation addresses two keyresearch questions: (1) How do firms achieve competitiveness through IOS? (2) How do IOSinfluence competitive behaviors of the competing firms in intertwined electronic networks? Itdoes so by integrating three research streams – social network analysis, interorganizationalsystems, and competitive dynamics – into a model of competitive dynamics in electronicnetworks. This study focuses on the paired relationships between the three constructs of networkstructure, IOS use, and competitive action, and empirically investigates nine general hypotheses.Data collection focuses on second-hand data in the automotive industry. A total of 805collaborative relationships, 106 IOS technologies and applications, and 305 competitive actionsinvolving nine major automakers are collected. Data sources include databases, major tradepublications, Web sites, and industry indices. Data analysis includes network analysis, ANOVAtest, and correlation.Empirical results support the general contention that network structure and IOS use coevolveand influence competitive action. Building on these results, a framework characterizingIOS\u27s roles in achieving firm competitiveness is concluded and advanced. This dissertation broadens our view of IOS\u27s roles in e-business. It contributes to IS/IOS theory, methodology, and practice. First, this study examines IOS-mediated networks inmultiple levels, including firm-level, pair-level, and network-level. It provides new theoreticalconceptualizations of IOS\u27s roles. Second, this study advances a new IT value measureaddressing limitations of the traditional measures. Third, it introduces a novel, usefulmethodology for data collection. Fourth, results from this study can guide a firm\u27s e-businessinitiatives for using IOS as powerful tools for achieving firm competitiveness

Effective Interfirm Collaboration: How Firms Minimize Transaction Costs and Maximize Transaction Value

This study of automotive transaction relationships in the U.S.A. and Japan offers data which indicate that transaction costs do not necessarily increase with an increase in relationship-specific investments. We empirically examine the conditions under which transactors can simultaneously achieve the twin benefits of high asset specificity and low transaction costs. This is possible because the different safeguards which can be employed to control opportunism have different set-up costs and result in different transaction costs over different time horizons. We examine in detail the practices of Japanese firms which result in effective interfirm collaboration

Strategic alliances and new product development: the cases of Rover and Seat

The large influence of the automotive industry in the global economy is widely recognised. This sector has undergone enormous changes in order to be ready for the fierce competence of the next to come 21st century. Among theses transformations, the most relevant are those technologies developed for the rapid evolution of the activities linked to new designs, new products, and new manufacturing processes and systems, which aim to cope with the always innovative Japanese car makers. International technology alliances may be one option to gain access to the brand new competitive technologies. At the same time, the risks and costs associated with new product development are shared among the allies, as well as the manufacturing facilities and production capabilities. Sometimes, the agreement may even give place to the deployment of new capabilities. In spite of its many potentialities, the literature presents the success rate of alliances being below a 50 percent. Our study considers two examples of companies that developed international joint ventures (UVs), Rover with Honda, and Seat with Volkswagen, respectively. Since these two European peripheral companies, Rover and Seat, no longer remain as independent firms, we are interested on identifying the reasons leading to the success or failure of these UVs as regards the New Product Development (NPD) process. In spite of the fact that most of the literature characterises the strategic technology alliances as highly successful, new empirical evidences are questioning that consensus. In particular, some recent cases are bringing into the limelight the dangers associated to enter an UV when one of the partners is weaker than the other and it does not have a well defmed strategy. The weakest firm can become completely reliant on its associate, thus aggravating and accentuating its constraints. Our article addresses the question of possible dependencies along the NPD process in the Rover and Seat cases and looks for an answer to the question of how such type of addiction affects the survival of the firms

The competitive repositioning of automotive firms in Turin: innovation, internationalisation and the role of ICT

Following the increasing competitive pressure and the emergence of new industrial poles within the auto industry, Italian firms have been the protagonists of an intense reorganisation, which is still ongoing. This case-study involves 13 supplier firms, operating in the automotive industry, localised in Turin, that have adopted a series of strategies aimed at improving their international competitiveness. The empirical findings show that there is a particularly strong innovative drive for the interviewed firms to position themselves in activities with greater added value and to undertake internationalisation strategies, from the 'lighter' to the more 'complex' forms, coupled with a use of information and communication technologies epresents a case of excellence.Innovation, Internationalisation, ICT, Automotive Industry