The emergence of markets and capabilities, dynamic transaction costs and institutions: effects on organizational choices in offshored and outsourced business services in China

This paper has three aims: 1) to use Langlois’ framework of dynamic transaction costs to illustrate the coevolution of firm capabilities and the emergence of new markets for offshored and outsourced business services in China; 2) to use Coase’s institutional structure of production framework to analyse the influence of Chinese institutions on the organizational choices made in the offshoring and outsourcing of business services in China and 3) to link the two themes and understand the interaction between Chinese institutions and the emergence of markets and capabilities in business services in China. We use case studies and interview data to look at these issues.offshoring, China, business services, institutions, dynamic transactions costs

The Role of Informal Institutions in Corporate Governance: Brazil, Russia, India and China Compared

This paper argues that the role of informal institutions is central to understanding the functioning of corporate governance. We focus on the four largest emerging markets; Brazil, Russia India and China – commonly referred to as the BRIC countries. Our analysis is based on the Helmke and Levitsky framework of informal institutions and focuses on two related aspects of corporate governance: firm ownership structures and property rights; and the relationship between firms and external investors. We argue that for China and some states of India, ‘substitutive’ informal institutions, whereby informal institutions substitute for and replace ineffective formal institutions, are critical in creating corporate governance leading to positive domestic and foreign investment. In contrast, Russia is characterized by ‘competing’ informal institutions whereby various informal mechanisms of corporate governance associated with corruption and clientelism undermine the functioning of reasonably well set-out formal institutions relating to shareholder rights and relations with investors. Finally Brazil is characterized by ‘accommodating’ informal institutions which get round the effectively enforced but restrictive formal institutions and reconcile varying objectives that are held between actors in formal and informal institutions.institutions (informal and formal), corporate governance, shareholder rights, suppliers of finance, emerging markets

The impact of technological regimes on patterns of sustained and sporadic innovation activities in UK industries

This paper brings together ideas about technological regimes and looks at their influence on patterns of sustained or persistent innovation across UK manufacturing and services industries using two waves of the UK Community Innovation Surveys. It builds a link between technological regimes and Schumpeterian patterns of innovation, and tests these on the CIS databases. It creates a model using the variables within the technological regime to see whether these can explain sustained patterns of innovation. These variables include appropriability, cumulativeness, technological opportunity and closeness to the science base as well as enterprise size. The paper finds that strong appropriability, a high degree of cumulativeness, and closeness to the applied science base are strong predictors of sustained innovation activities. The results on technological opportunity are ambiguous. High tech manufacturing industries, i.e. chemicals and scientific instruments as well as some high tech services i.e. telecoms are more likely to register persistent innovation.

R&D offshoring and the domestic science base in India and China

This paper uses patent and publication data to assess the nature of technological advantages that are attracting R&D offshoring and outsourcing activities to India and China and the possible consequences of such R&D offshoring in increasing domestic innovative capability and building domestic research infrastructure. We find evidence that domestic patenting is concentrated in sectors that are different from sectors of R&D offshoring. Furthermore, whilst the domestic science base (as measured by publications data) in India and China shows strong complementarities in its specialisation profile to that in the US, our data also suggest that the location of international R&D activity in these economies from 1995 may not have strengthened the science base of these economies. Foreign patenting activities in India and China are also marked by a low attachment to the science base.R&D offshoring/internationalisation, Science base, Emerging economies, India and China

Patterns of Innovation in UK Industry: Exploring the CIS Data to Contrast High and Low Technology Industries.

This paper is divided into two parts. The first part is an examination of the OECD classification of industries into high, medium and low technology industries, to look at the basis for this classification and to use that as a benchmark with which to classify the Community Innovation Survey (CIS) data for the UK into similar groupings. The industries are ranked according to their research intensities and the rankings between the two datasets are compared. Some features of the UK rankings are highlighted and anomalies between the two datasets pointed out. The second part of the paper goes on to use the OECD classification into high, medium and low technology industries, applied to the CIS dataset, to contrast patterns of innovation in high technology industries with those in low technology industries. We build on the three types of innovation surveyed in the CIS, namely product, process and organisational innovation and contrast those types across high and low technology sectors. The expected relationship between high technology industries and product innovation holds - that enterprises tend to do more product innovation, the higher their research intensity. But process innovation does not conform to this pattern and there is not such a clear division between high and low technology industries. However the way they do process innovations differs with high technology industries more reliant on internal resources whereas lower technology industries tend to do it using external resources in collaboration with others. Organisational innovation is more complex, with certain types of innovation done as widely by lower technology industries as by the more research intensive industries. This supports the idea that all types of innovation should be considered, with the diffusion of ICTs making an impact across the technological spectrum of industries and showing up in various forms of organisational innovation

New Product Development and Product Supply Within a Network Setting: The Case of the Chilled Ready-Meal Industry in the UK

This paper analyses inter-organizational networks that link together firms operating in the food processing and distribution industry in the UK. In doing so, the paper draws on insights recently developed by Mark Casson that treat inter-firm networks as an institutional response to the changing costs and opportunities of information management. Detailed analysis of product innovation and supply chain management issues within the industry, exemplified by the growth of chilled ready-meals, leads to the identification of two distinct but complementary inter-firm networks: a network of control and a network of innovation. In each case, the study finds that the critical information is derived from the retailers’ interface with consumers and thus that these information-based networks are effectively controlled by the leading supermarket chains. The study’s conclusions are considered in relation to the recent findings of the Competition Commission following its investigation into grocery retailing in the UK

Geographic clustering and network evolution of innovative activities: Evidence from China’s patents

This study examines the spatial distribution and social structure of processes of learning and knowledge creation within the context of the inventor network connecting Chinese patent teams. Results uncover mixed tendencies toward both geographic co-location and dispersion arising from combined processes of intra-cluster learning and extra-cluster networking. These processes unfold within a social network that becomes less fragmented over time: as a giant component emerges and increases in size, social distances among inventors become longer. The interplay between geographic and network proximity is assessed against China’s institutional environment. Implications of the findings are discussed for regional development and policy-making.clusters; knowledge transfer; social networks; patenting

The role of informal institutions in corporate governance: Brazil, Russia, India, and China compared

This paper argues that the role of informal institutions as well as formal ones is central to understanding the functioning of corporate governance. We focus on the four largest emerging economies: Brazil, Russia, India, and China-commonly referred to as the BRIC countries. Our analysis is based on the Helmke and Levitsky framework of informal institutions and focuses on two related aspects of corporate governance: firm ownership structures and property rights; and the relationship between firms and external investors. We argue that for China and some states of India, "substitutive" informal institutions, whereby informal institutions substitute for and replace ineffective formal institutions, are critical in creating corporate governance leading to enhanced domestic and foreign investment. In contrast, Russia is characterized by "competing" informal institutions whereby various informal mechanisms of corporate governance associated with corruption and clientelism undermine the functioning of reasonably well set-out formal institutions relating to shareholder rights and relations with investors. Finally Brazil is characterized by "accommodating" informal institutions which get around the effectively enforced but restrictive formal institutions and reconcile varying objectives that are held between actors in formal and informal institutions. © 2010 Springer Science+Business Media, LLC

A survey on institutions and new firm entry: how and why do entry rates differ in emerging markets?

This paper considers the impact of institutions on new firm entry in emerging markets. In particular, it surveys the findings of a 2-year research project on the sources of success in terms of entry rates and conditions (including gross entry rates, exit rates and therefore net entry rates) across the BRIC countries (Brazil, Russia, India, China). These emerging market economies display widely varying entry and exit rates and a framework is developed to capture the interaction between key aspects of formal institutions, how those institutions play out in practice, and their impact on entry and exit rates. The country case studies reveal that, whilst different contingencies affect the relationships between institutions and entry in each country, there are some empirical regularities in the determinants of successful entry and conversely in its constraints. One such regularity is the critical interaction between formal rules and informal mechanisms. There is also variation in whether these works so as to compensate for deficiencies in formal institutions, as in China and India, or whether deficiencies in formal mechanisms are compounded by poor informal mechanisms, as is sometimes true in Brazil. Indeed, relatively good formal rules and structures can be undermined by informal mechanisms deterring or blocking entry, as is largely the case in Russia