Corporate Entrepreneurship of Emerging Market Firms: current research and future directions

Purpose – The purpose of this paper is to examine the current state of corporate entrepreneurship (CE) of emerging market firms (EMFs) and provide direction for future research on the topic. Design/methodology/approach – The authors specifically review the recent literature between the years 2000 and 2019 on CE with the keywords “corporate entrepreneurship,” “emerging economies” and “emerging countries” published in the Australian Business Deans Council list journals. The authors review the existing literature about CE in emerging markets, summarize current achievements and present an agenda for future research. Findings – Based on the review, the authors categorized the macro and micro contexts of CE and summarized the current articles on CE in emerging markets within each macro and micro context. The authors conclude that despite the abundance of research on CE that investigates the three prongs of CE in terms of innovation, strategic renewal and new venturing in developed market contexts, there is a scarcity of literature that focuses on CE in emerging markets from a holistic perspective. Originality/value – While there is an abundance of literature review on CE in general in terms of the drivers of the construct, the contexts contributing to it and the outcomes, the reviews are lacking about CE specifically within the context of emerging markets. Emerging markets vary from developed markets institutionally, economically, culturally, socially and technologically. However, the questions of how these differences impact the CE activities, as it relates to innovation, venturing and strategic renewal in EMFs, and how these differences provide incentives or hinder the activities that contribute to CE remain mostly unanswered. This paper reviewed the research on CE and emerging market contexts from 2000 to present. It targets to provide a better understanding of the current achievement on this topic and what to be done in the future

Exploring the Evolution of Scientific Networks of Biotechnology Firms

Despite decades of network research, the crucial question, “How do networks evolve?” has not been sufficiently explored. We explore this question by analyzing the co-authorship networks in the U.S. biotechnology firms. Specifically, from network management and network inertia perspectives, we argue that structural changes in the firms’ co-authorship networks are dependent on the specific characteristics of firms’ initial networks. Longitudinal analysis of the U.S. biotechnology firms over a span of seventeen years largely supports our arguments. Overall, we find that firms’ existing tie-specific characteristics in the form of a firm’s existing network size, tie strength, and the knowledge quality carried through these ties constitute significant determinants of network evolution

Implications of strategic alliances for earnings quality and capital market investors ☆

Strategic alliances are well-established organizational forms and a means of strategy implementation. Despite their growing pervasiveness in the economy, existent literature provides few insights about earnings quality of strategic alliances. This challenge is especially severe in contractual alliances (CAs), where firms do not form a new corporate entity that is separate from the parent organization in comparison to joint ventures (JVs). We investigate how earnings attributes differ depending on involvement in strategic alliances of 8137 CAs and 3026 JVs spanning 1997-2007. We find, in particular, that earnings attributes of firms involved in contractual alliances are broadly reflective of low underlying accounting quality. Relative to JV firms and non-alliance (NA) firms, they have higher levels of discretionary accruals, lower accrual quality, and earnings that are less persistent, less smooth, less relevant, less timely, and less conservative. They also have lower earnings response coefficients

The Impact of Governance Structures on the Choice Between Exploration and Exploitation in Family Enterprises

Ambidexterity, the ability of firm to balance the need to explore for new and novel and exploit its existing knowledge, skills and capabilities has become an important issue for firms in these volatile times. What‘s been missing from this discussion is consideration of how the unique character of family enterprises influences their investments in exploration or exploitation? In this paper we develop a theoretical model to explain how the governance and ownership characteristics of a family enterprise impact the family enterprise‘s investments in exploration and exploitation activities. We contribute to the literature on family enterprises by proposing that certain governance characteristics such as the tenure of the generation in control, the proportion of senior management positions controlled by the family, the dispersion of family ownership and the transfer of control to the younger generation will all have certain effects on the investments in exploratory activities. Building on the relational view of family enterprises, we suggest that the characteristics of their relations with their employees and outside partners will influence the level of investments in exploratory and exploitative activities. Our theoretical standpoint within the context of organizational adaptation also shows that the two seemingly contradictory theories of stewardship and agency can be reconciled

Guest Editorial : New Trends in Entrepreneurship: A Global Context

When management guru Peter Drucker wrote about entrepreneurship in 1984 (Drucker, 1984), entrepreneurial activities were primarily perceived as an American phenomenon. Today, entrepreneurship has spurred globally, from developed countries to emerging economies, thanks to accelerated globalization, integration of people and cultures, and rapid technological innovation. While Drucker’s focus on entrepreneurial decisions in the late 1980s was mainly about established corporations, millions of empowered individual entrepreneurs are increasingly recognized as the backbone of the global economy (Khanna, 2007). Thomas Friedman once described this stage of globalization as globalization 4.0, which features empowered entrepreneurial individuals (Friedman, 2005). New technology, especially information and communication technology, enables new business creation every day around the world (World Bank, 2022). In today’s global economy, entrepreneurs have an opportunity to interact with the global world more than ever before. Even if the target marrket is local, competition could come from anywhere in the world (Dawar and Frost, 1999)

Strategic decision making of top management: earnings management and corporate acquisitions

Although acquisition strategies have been widely used by firms, past research has suggested that this type of strategic tactic can be risky, hence top management must justify this decision. Top management can engage in hubristic behaviors to do so. Therefore, we investigate if it is possible to identify the hubristic managerial before the decision is implemented, and how hubristic behaviors by the managers impact the long-term market performance of the firm. Using a sample of 11 596 firms over a span of 27 years, we found that managers actively manipulate firm performance prior to an acquisition, the degree of manipulation affects the degree of long-term performance, and the top management's decision to purchase the asset will negatively affect firm organizational performance. We contribute to organizational strategic decision-making literature by showing that managers may act with hubris in acquisitions decisions and that this hubris is predictable. Our results also suggest that top managers in pursuit of a corporate acquisition will need to justify their decision making to the board of directors by illustrating their success in managing the firm through high firm performance

Strategic decision making of top management: earnings management and corporate acquisitions

Although acquisition strategies have been widely used by firms, past research has suggested that this type of strategic tactic can be risky, hence top management must justify this decision. Top management can engage in hubristic behaviors to do so. Therefore, we investigate if it is possible to identify the hubristic managerial before the decision is implemented, and how hubristic behaviors by the managers impact the long-term market performance of the firm. Using a sample of 11 596 firms over a span of 27 years, we found that managers actively manipulate firm performance prior to an acquisition, the degree of manipulation affects the degree of long-term performance, and the top management's decision to purchase the asset will negatively affect firm organizational performance. We contribute to organizational strategic decision-making literature by showing that managers may act with hubris in acquisitions decisions and that this hubris is predictable. Our results also suggest that top managers in pursuit of a corporate acquisition will need to justify their decision making to the board of directors by illustrating their success in managing the firm through high firm performance

Research Collaboration Networks and Innovation Output

During the last decade, researchers in strategic management have attempted to look into the various aspects of network evolution (Gulati & Gargiulo, 1999; Madhavan, et al., 1998; Powell et al., 2005). However, current research on how networks evolve and how this evolution affects organizational outcomes has been mostly static in nature (Powell et al., 2005). Most studies that look into the evolution of networks have not been able to establish causal relationships since there have been very few studies that employ longitudinal data to analyze networks (McPherson et al., 2001; Burt, 2000). The literature still lacks an understanding of how network characteristics are likely to change as networks expand and contract and how these changing characteristics require a change in the networking behavior of firms? Moreover, existing studies have not yet explained how evolving characteristics of networks affect organizational outputs, nor are there studies that directly examine the potential limits to network growth. The purpose of this study is to develop and empirically test theory that directly links changes in the structure of the firm’s ego network across time to firm specific outcomes by considering both the benefits and potential costs of changes in the ego network. Specifically, we address the question: How does the evolution of firms’ research based ego networks affect firm performance across time

The Performance Consequences of Ambidexterity in Strategic Alliance Formations: Empirical Investigation and Computational Theorizing

Although alliance studies have generally favored an ambidextrous approach between exploration and exploitation, they tend to overlook a firm's characteristics, its industry constraints, or the dynamic network in which the firm is embedded. This study examines the ambidexterity hypothesis and its boundary conditions with a unique research method. We not only analyze empirical data from five U.S. industries spanning eight years, but also expand theoretical insights to the network level by building a computer simulation model. Both our empirical and simulation results reveal the contingencies of the ambidexterity hypothesis in alliance formation. Our findings show that although an ambidextrous formation of alliances benefits large firms, a focused formation of either exploratory or exploitative alliances benefits small firms. In an uncertain environment an ambidextrous formation enhances firm performance but so does a focused formation in a stable environment. Finally, the simulation model demonstrates that a firm's centrality and structural hole positions in network relations can moderate the relationships between alliance formation choices and firm performance, and that the ambidexterity hypothesis may be limited to the earlier stage of the network. Our study provides critical evidence into the viability of adopting a dynamic network perspective in understanding the ambidexterity hypothesis and advancing strategic alliance research beyond static and dyadic levels.alliance formation, ambidexterity hypothesis, social networks, empirical analysis, computer simulation