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Existing research has produced mixed, inconclusive, and even conflicting findings on the impact of open innovation (OI) on innovation output. This article takes a meta-analysis approach, systematically reviews the existent literature to identify the main contextual factors, and statistically tests the significance of these factors in influencing the effect of OI on innovation output. Based on the data of 139 studies published by 2020, this article demonstrates that 1) OI has a stronger effect on innovation output in coupled OI (a combination of inbound and outbound OI) than the inbound or outbound OI alone; 2) OI has a stronger effect on innovation output in developing than developed countries; 3) OI has a stronger effect on innovation output at subfirm than firm level; and 4) OI has a stronger effect on innovation output in service than manufacturing industries. The findings have important implications for managers, researchers, and policy-makers.

As a relatively large production and trade industry in China's manufacturing sector, apparel manufacturing has entered the data analytics era with much-enhanced productivity by using information technology. The extent to which the state-of-the-art information technologies can increase the productivity of this entire industry has not been fully investigated. This article selects 30 Chinese listed apparel manufacturing enterprises from 2012 to 2018 as a sample and analyzes the impact of information technology investment on their performance using the panel fixed effect and random effect models. In addition, the moderating effect of enterprise equity concentration on the abovementioned relationship is studied. Equity concentration reflects the distribution of equity from the total amount. Excessive equity concentration enables large shareholders to obtain higher control rights with smaller cash flows, seizing the interests of small and medium shareholders and digging tunnels. This is, thus, not conducive to healthy and long-term development of the firm. The results show that information technology, such as software investment, hardware investment, and total information technology investment, can improve the enterprise performance. Among them, software investment has the greatest impact on the enterprise performance. When the proportion of the software investment increases by 1%, the enterprise performance increases by 17.6%. The equity concentration has a negative impact on the relationship between the investment in information technology and enterprise performance.

The demand for apparel/fashion products is usually of heavy weather-related uncertainty, which can be solved by the publicly accessible weather information provided by the government. That is because weather information provides a more accurate demand signal, and the key weather indicators fashion brand, the latter determines the wholesale price but usually postpones the price decision to observe the weather information. Alternatively, the small retailer can outsource procurement to a powerful agent, who fixes the fashion brand's wholesale price. In this article, we investigate an apparel supply chain consisting of two competing small retailers (retailers 1 and 2), a powerful procurement agent, and a famous fashion brand. Given retailer 2's procurement outsourcing, retailer 1 decides whether to outsource procurement to the agent or directly procure products from the fashion brand. We identify cooperation and competition relationships in the retailers’ ordering decisions based on the weather information. The different intensities of the cooperation/competition relationships alter retailer 1's preferences of procurement outsourcing because of the mitigated/intensified quantity competition. Interestingly, we show that, when demand uncertainty is high, retailer 1's procurement outsourcing strategy will switch from Turnkey to Consignment and back to Turnkey, as its demand becomes more sensitive to the weather condition.

Motivated by the practices of production sourcing in the apparel manufacturing industry, this article investigates an apparel manufacturing supply chain wherein an original brand manufacturer (OBM) may either outsource production to a competitive manufacturer (CM) or a non-CM (NCM) or set up factories to produce in-house, namely, Strategy C, Strategy NC, and Strategy N, respectively. If the OBM outsources production to the CM, technology spillover happens, and the CM is able to manufacture products with the same consumers’ preference level as the OBM does. We find that the OBM prefers Strategy N regardless of the manufacturing level and consumers’ product preference level when the investment cost is low. However, the OBM prefers Strategy C or NC when the investment cost is high. Specifically, when the manufacturing level is high, or the manufacturing level is medium, and the consumers’ product preference level is high, the OBM prefers Strategy NC; otherwise, the OBM prefers Strategy C. Furthermore, we demonstrate that employing the dual-sourcing strategy wherein the OBM outsources production to both CM and NCM simultaneously does not necessarily help OBM effectively mitigate the negative impact of technology spillover and delivery uncertainty, which depends on specific conditions.

Clean technology (cleantech) is becoming increasingly important as firms and industries seek to address challenges around the global scarcity of resources and also achieve wider social and environmental goals. Yet there are underlying problems with how capital markets respond to this increasing demand for new and innovative cleantech investments. In this article, we use a large U.K. dataset to first consider the extent to which firms engaging with cleantech increase their demand for external capital. We then consider how different types of debt and equity financiers deal with this demand for funds. Our key findings are that: 1) businesses engaging with clean technologies have a higher demand for external capital and 2) these demands are not being fully met by traditional providers which forces firms to seek out alternative and nontraditional sources of finance.

Understanding the drivers of market concentration in the generic pharmaceutical industry is essential to guaranteeing the availability of low-cost generics. In this paper, we develop a structural model to capture the multiple determinants governing manufacturers’ entry decisions; in particular, we focus on how manufacturing complexity and the regulatory environment for generics approval affect concentration in drug markets. We estimate the model using data collated from six disparate sources. We find that manufacturing complexity, as reflected in the number of active ingredients, for example, significantly reduces the likelihood of generics entry. Moreover, the delay in the review process for the generics applications significantly affects the number of firms entering a market. Our policy simulations suggest that a shortened drug approval review time significantly increases the average number of entrants per market and reduces the fraction of markets with no generics entry; however, a notable portion of markets would still lack any generic competition. This paper was accepted by Jayashankar Swaminathan, operations management. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2022.4423 .

“Retail Link” initially developed by Walmart enables the tier-1 supply chain partners to access the sales big data, and hence achieve demand information sharing. Doing so helps improve supplier relationships, but the supplier can make better wholesale price decisions based on accurate demand information, which might hurt the profit of the multinational firm (MNF) such as Walmart. Therefore, it is observed that some MNFs outsource both procurement and logistics functions to a logistics service provider (LSP) for the benefits of “one-stop-shopping,” and meanwhile, cut the information link with the supplier. This significantly changes their decision interactions and the resulted social welfare. In this article, we build a co-opetition model and study an MNF's two typical outsourcing strategies, where the MNF either outsources the logistics or the bundled functions of procurement and logistics to an LSP. We find that, when the market demand uncertainty is low, the MNF prefers bundled outsourcing given its significant brand image advantage. When the market demand uncertainty is high, the MNF prefers bundled outsourcing regardless of its brand image advantage. Interestingly, when market demand uncertainty is moderate, the MNF prefers bundled outsourcing when its brand image advantage is either not significant or very significant. We further compare the social welfare levels under two outsourcing strategies and find that win–win situations in the senses of the MNF's profit and social welfare can be identified.

Motivated by the practices of technology investment in the new energy vehicle manufacturing industry, this article investigates an outsourcing supply chain in which an original brand manufacturer (OBM) possessing the core new energy technology R&D outsources production to a competitive manufacturer (CM). To cater to market demands and increase market competitiveness, the CM may actively invest in technology with the OBM or by himself, or not, i.e., Strategies JI, OI, and NI, respectively. In particular, owing to technology spillover effect, the CM could use the technology inferior to the OBM's to produce his own-branded products in Strategy NI. Our results reveal that the OBM consistently profits the most in Strategy JI. However, the CM's preference strategy is influenced by the competition intensity, technology spillover level, consumers’ product preference, and cost-sharing ratio. In specific, when both the competition intensity and technology spillover are weak or the competition intensity is strong for arbitrary technology spillover level, the CM may prefer Strategy JI or OI depending on consumers’ product preference and cost-sharing ratio and never prefers Strategy NI. However, when the competition intensity is weak but the technology spillover level is strong, the CM may prefer Strategy NI in certain situations. Furthermore, our study extends the model to involve variable production costs, and reveals that the main results derived in the basic model still hold.

Blockchain technology has wide area of application, this article is very particular on emphasising another important field of application named Agro-products supply chain. Wherein this era, and the future needs to nurture the agriculture sector along with latest technologies, so that nation would make a revolution in the process of food supply from the farm to the plate. The main drawback in the agriculture supply chain is lack of transparency in food production and distribution, costly middleman, limited financial resources & disconnection between supplier and retailer. So this article proposes, suitable theoretical auction flow model to overcome all the issues highlighted in this agro-sector, we would like to give the solution by improving the transparency in the supply chain, by providing farmers direct access to suppliers through an appropriate auction system with an option of immediate payment on delivery & transparent transaction information to them. Further we can involve government as a central authority to overcome the technical aspects, education, policies and regulatory frame works, in turn they can generate job opportunities to the unemployed graduates.

Food is an important part of the lives of people and of human cultures across the world. The agricultural and food sector is regarded as a major global employment. Agricultural supply chain management is made one of the most complicated and demanding processes by the huge number and heterogeneity of the stakeholders involved, such as farmers, distributors and retailers, as well as customers. The blockchain technology can monitor the origin of food and so assist construct reliable chains of food supply and increase customer confidence. It makes it easier to employ data based technology to make farming smarter as a confidential means of storing data. It also permits timely payment between stakeholders, utilized in conjunction with smart contracts, which may be triggered by changes in data on the blockchain. This article discusses blockchain technology applications in food supply chains, agricultural insurance, smart agriculture and agricultural goods transactions.

Firms’ knowledge base is one of the key antecedents of firm innovation. While extant literatures identify diversification and depth of firms’ knowledge base as the important inputs of firm innovation, coherence of firms’ knowledge base reflecting the relatedness of knowledge base is largely neglected. This article goes a further step and points out that coherence of firms’ knowledge base will co-affect with diversification or depth of firms’ knowledge base to foster firm innovation, because it improves the efficiency of knowledge combination and integration. Moreover, degree centralization of industrial knowledge networks, as a characteristic of industrial knowledge base, moderates the abovementioned relationships by offering technological combination opportunities in the industry and helping firms break cognitive inertia. Based on patent data of 76 global firms from three-dimensional printing, information and communication technology, wind energy, and lithium battery industries during the period of 1993–2013, the analysis results show that coherence of firms’ knowledge base positively moderates the relationship between diversification of firms’ knowledge base and firm innovation. Furthermore, degree centralization of industrial knowledge networks, together with coherence of firms’ knowledge base, strengthens the positive relationship between knowledge diversification and firm innovation. Theoretical and practical suggestions about firms’ knowledge management were discussed.

Blockchain for supply chain use cases is quickly becoming a prevalent topic of discussion among distribution giants and smaller players. The actual and perceived benefits of blockchain have driven these discussions, as supply chain partners are well aware of the data protection, increased transparency, and end-to-end authentication of goods that blockchain technology can provide. Track and trace mandates from regulatory bodies are also driving the discussions. However, missing from the dialogue is how partners in this ecosystem manage and resolve disputes using smart contracts inherent in blockchain instead of existing dispute resolution mechanisms and processes. This gap is critical; trust will be eroded if supply chain partners do not have adequate dispute resolution mechanisms within the blockchain ecosystem. This paper highlights the areas of friction and potential disputes for supply chains arising from emerging technology such as Artificial Intelligence (AI), asset management using Internet of Things (IoT), and particularly blockchain, a type of Distributed Ledger Technology (DLT). We discuss the importance of regulation in how the use of DLT in supply chains is managed and suggest principles of resolving inevitable disputes with disparate information. We emphasize the need for portable and enforceable contractual terms and argue that standardizing how disputes are resolved may go a long way to technology adoption.

Many small and medium enterprises (SMEs) engage in dyadic information integration partnerships or partial integration with their direct suppliers and customers. They often utilize e-commerce or cloud computing technology platforms hosted by third-party providers to leverage such partnerships. However, information security breaches and disruptions caused by cyberattacks are commonplace in the information technology industry. The effects of said disruptions and breaches on e-commerce businesses under varied disruption conditions are still uncertain. Furthermore, the effect of security breaches on nonparticipating members of the supply chain is poorly understood, especially under various disruption profiles. Using discrete event modeling, in this article, we explore the impact of disruption caused by information security breaches on supply chain performance and the externality effect of partial integration on nonparticipants. We also examine the impact of breach disruption frequency and remediation length on supply chain performance with varying levels of information sharing. These impacts were studied under two typical inventory replenishment policies for SMEs. It was determined that remediation length should be a prioritized factor in impact management and that flexibility in the inventory replenishment policy can help mitigate the impact of information disruption on the inventory performance of businesses, especially that of nonparticipants, in information-sharing partnerships.

When multiple retailers hold inventory to satisfy random demand, retailer inventory-sharing strategies can potentially reduce the supply-demand mismatch and increase overall supply chain performance. In this paper, we experimentally investigate alternative inventory-sharing strategies in a two-tier supply chain with an upstream manufacturer and two downstream retailers. In one setting, retailers act as if they are centralized and use a single quantity to fulfill joint demand. In the other, retailers are decentralized and face separate demands, but they can transfer inventory after demands are realized. In this latter decentralized scenario, we also consider whether the manufacturer or retailers have decision authority over the inventory transfer price. One key result is that when the retailers are decentralized and the manufacturer sets the transfer price, both retailers and the manufacturer earn higher profits than in the centralized retailer strategy, which runs counter to theory. We also find that when retailers are decentralized and set their own transfer price, the most equitable distribution of profits is achieved. In an effort to account for these results, we find that a model of fairness captures decisions well. Overall, by investigating how different inventory-sharing strategies affect the distribution of profits in a two-tier supply chain, our results provide guidance to firms considering how, if at all, they should enter such arrangements. This paper was accepted by Jay Swaminathan, operations management. Funding: The authors acknowledge financial support from Cornell University and the University of Virginia. Supplemental Material: The data files and electronic companion are available at https://doi.org/10.1287/mnsc.2022.4323 .

Problem definition: This paper investigates and compares two types of food safety auditing structures: decentralized and centralized audits. Academic/practical relevance: Decentralized food safety auditing systems are common among developing economies, that is, different tiers of a food supply chain are audited by separate government agencies. Such an auditing structure has been widely criticized as ineffective at mitigating food safety risks. Some developing countries began implementing centralized auditing systems as a remedy for the mis-coordination across local auditing agencies. We compare food safety outcomes and economical payoffs of the two auditing systems. Methodology: We study a parsimonious game-theoretic model of a one-supplier, one-buyer supply chain and two agencies auditing each tier of the supply chain, respectively. Under decentralized audits, each of the two agencies minimizes its individual cost, and their decisions are sequential; under centralized audits, the agencies minimize total agency cost and make auditing commitment up front. Results: We identify forces that drive equilibrium decisions under decentralized audits. The penalty-shield effect of an agency’s auditing capability may lead to risky behavior by the supplier. The free-riding effect between the two agencies may lead to less auditing. A centralized commitment makes the agencies the leader in the game at the expense of them losing the flexibility to respond to the actions of supply chain members. The common objective under centralization strengthens the incentives for at least one agency to conduct an audit, but it may also induce the lower-cost, less-capable agency to audit. Hence, centralized audits can be detrimental to performance regarding both food safety outcomes and system payoff. Managerial implications: Changing the auditing structure from decentralization to centralization may fail to improve food safety and system payoff insofar as it may replace one form of inefficiency with another. Addressing the new inefficiencies should be part of the ongoing effort to enhance the efficacy of centralized audits. History: This paper has been accepted for the Manufacturing & Service Operations Management Special Section on Responsible Research in Operations Management. Funding: The work of D. Shi was supported by the National Natural Science Foundation of China [Grant 72102205]. Supplemental Material: The online supplement is available at https://doi.org/10.1287/msom.2021.1058 .

This article analyzes the effects of three channels of technology transfer—global value chain participation (GVCP), foreign technology import (FTI), and domestic technology purchase (DTP)—on innovation efficiency by using 11 years of data from Chinese manufacturing industries. Empirical results show FTI and GVCP significantly facilitate innovation efficiency, whereas DTP decreases it. Further, absorptive capacity (AC) positively moderates the relationship between FTI and innovation efficiency. Moreover, in the high-tech industry, we find that GVCP positively affects innovation efficiency, and AC positively moderates the effect of GVCP on innovation efficiency. This finding is informative from a strategic perspective as firms can make strategic decisions in the selection of technology transfer channels. In addition, firms may also absorb and apply external technologies while developing AC to improve enterprises' ability according to their own organizational and strategic contexts in order to achieve and maintain competitive advantages. This finding provides convincing empirical evidence on the relationship between technology transfer channels and innovation efficiency and valuable lessons to other developing countries for the selection of technology transfer channels.

Industry 4.0 (I4) technologies are gaining increased importance in the manufacturing industry, as they can provide several benefits such as an increase in efficiency, lower costs, higher revenues, etc. This article empirically examines the critical success factors (CSF) for implementing I4 technologies in Indian automotive manufacturing industry. In this regard, CSF and performance outcomes of I4 technologies are identified from published literature. The relationships between CSF and performance outcomes are then examined by regression analysis. The results indicate that “Data governance” is the most critical factor, as it affects all the four performance outcomes (operational, product, economic, and responsiveness). Similarly, “Legal aspects” affects three out of the four performance outcomes (operational, product, and economic performance), while “Collaboration and teamwork” affects only operational performance and responsiveness. The study provides an understanding of factors which are critical in achieving performance outcomes about I4 technologies in the automotive manufacturing industry. The findings can also help automotive manufacturing firms toward an informed decision making in terms of various strategies required to adopt I4 technologies successfully.

Building on an in-depth study of a manufacturing company’s shift from a product to a product-service business model, we explore how single-focus companies transition to a dual orientation. Although companies generally use highly sophisticated practices to manage a dual orientation, those that transition to one successfully start with less sophisticated practices. Early on, the use of simple tradeoff practices, which maintain the product and service logics, helps single-focus companies explore the emergent tensions that their transition to a dual orientation causes. Conversely, adopting more sophisticated practices at this early stage overwhelms them. At a later stage, these companies’ growing understanding of the tensions allows them to experiment with more comprehensive paradox practices that transcend the product and service logics. Conversely, maintaining simple practices at this stage prevents them from gaining the solution experience required to complete the transition. The evolutionary process culminates in sophisticated routinized practices that institutionalize recurrent tensions’ solution, while allowing for further experimentation to deal with new tensions. The different practices’ appropriate sequence and pacing during the evolutionary process facilitate companies’ transition to a dual orientation.

Innovation and technology have been one of the challenging factors, bringing about uncertain business circumstances. Many business sectors have currently focused on competitiveness by improving a production process and other related operations. This research aims to study the roles of knowledge-oriented leadership and human resource development on a sustainable competitive advantage of an organization using data from employees in the high technology and innovation organizations of Thailand. These sample organizations are called the New S-Curve industries under the definition of the “Thailand 4.0 Model”. The Structural Equation Modeling was employed to analyze the effects. The results showed that knowledge-oriented leadership directly affected the sustainable competitive advantage, where human resource development did not have a significant direct effect on the sustainable competitive advantage. Moreover, both knowledge-oriented leadership and human resource development indirectly affected the sustainable competitive advantage through organizational innovation's component factors.

This article contends that although much research on the business value of IT focuses on firm-level impacts, studies have begun incorporating industry-level variables as explanatory factors of interest to offer better contextualized explanations for the differences in value firms obtained from their IT across different industries. The authors present a multi-level model of IT value where industry-level and firm-level factors jointly determine the value a firm obtains from its IT. By using a nested model to examine industry to firm interactions, they are able to control for problematic violations of statistical assumptions that are likely to bias estimates from conventional methods. Their analysis shows that all of the industry factors we examined had significant interaction effects. Specifically, industry concentration, industry growth, industry capital intensity, industry outsourcing, and presence in service sector significantly impact firm-level IT value. More interestingly, the authors find these impacts manifest not as mean differences between industries, but rather as interactions with firm-level effects.

An interpersonal network within a firm serves as a primary knowledge base for organizational innovation. In this article, we propose that intrafirm network connectivity, which is measured by the transitivity of an intrafirm network, has a nonlinear effect on firm innovation performance. Furthermore, on the basis of the literature on environmental contingency, we propose that two dimensions of environmental uncertainty (i.e., environmental munificence and dynamism) moderate the influence of intrafirm network connectivity on firm innovation performance. To examine our hypotheses, we collect the profiles of firms in the pharmaceutical and biotechnology industries from the COMPUSTAT database and patent data from the United States Patent and Trademark Office database for the period of 1991–2012. Our longitudinal study finds an inverted U-shaped relationship between intrafirm network connectivity and firm innovation performance, and such a relationship is moderated by environmental munificence but not by environmental dynamism.

Motivated by challenges facing IT procurement, this paper studies a hybrid procurement model in which a reverse auction of a fixed-price IT outsourcing contract may be followed by renegotiation to extend the contract’s scope. In this model, the buyer balances the needs to incentivize noncontractible vendor investment and to curb the winning vendor’s information rent by choosing the initial project scope and the buyer’s investment in the quality of the project. We find that a buyer may benefit from inducing ex post renegotiation to motivate vendor investment, especially when the winning vendor has high bargaining power and the quality uncertainty is low. Broadening the initial scope reduces information rent but leaves little room for ex post renegotiation and, hence, discourages vendor investment, whereas increasing the buyer’s investment has opposite effects. Interestingly, the two measures can be strategic substitutes or complements depending on the likelihood of the renegotiation and the two parties’ bargaining powers. The buyer may strategically set a low initial project scope and high investment to incentivize renegotiation and vendor investment, which may explain why many IT outsourcing projects start small and allow expansions. Our findings also generate several testable predictions for IT outsourcing. This paper was accepted by Kartik Hosanagar, information systems.

The rapid development of information technologies enables recycling companies to purchase and collect used products from consumers through both traditional and Internet-based online channels. Because an online channel transmits price information instantly to consumers, choosing the best time to announce the recycling price (i.e., acquisition price) of used products to consumers has become a critical problem for recycling companies. This paper seeks to solve this problem by developing a game-theoretic model describing a dual-channel reverse supply chain consisting of a recycling company and a third-party collector in which the recycling company purchases products not only through a third-party collector, but also directly from consumers online. We derive two major results by solving the model. The first is that first-mover advantage arises, which indicates that each firm constituting a dual-channel reverse supply chain should announce its own recycling price before the other. This first result is notable because it is exactly opposite to conventional wisdom that the second-mover advantage of pricing usually emerges when price competition occurs among firms in a horizontal relationship, which is well known in noncooperative game theory. The second result is that the recycling company can maximize its own profit and consumers' surplus by announcing its recycling price in the online channel before or upon, but not after, determining the transfer price paid to the collector for products collected in the offline channel. Both results can be used as practical decision-making guidelines in dual-recycling channel reverse supply chain management.

The modern day food industries are part of a complex agri-food supply chain, where food production has become efficient, yet potentially vulnerable to supply chain risks. The COVID-19 pandemic is a testament to that end. This article measures and identifies the U.S. food manufacturing industries' vulnerability to upstream industries and labor occupations by (i) calculating a food industry's diversification of intermediate input purchases across upstream industries, (ii) quantifying the relative exposure of food manufacturing in a given industry and location to upstream input suppliers and labor occupations, and (iii) estimating each food industry's gross output elasticity of inputs. Among our results, we find the evidence that the animal processing industry's output is relatively vulnerable to production labor which is consistent with the observed disruptions to the meat packing sector during COVID19, which were largely caused by labor issues. Our results may help academics and practitioners to understand food industries' vulnerabilities to upstream industries and labor occupations.

Problem definition: Solar power companies have introduced innovative non-ownership business models—leasing and power purchase agreement (PPA)—in addition to sales. Under these models, the company installs solar panels for a customer, who purchases the electricity generated from the panels. Under leasing, a customer pays a fixed fee, whereas under PPA, a customer pays a per-unit price for the electricity generated. The adoption of solar panels is also promoted by investment and generation subsidies, which are received by customers under sales, but by the solar power company under non-ownership models. In addition, some states currently have restrictions on non-ownership model(s) to protect utility firms’ profits. Motivated by this context, we analyze the economic and environmental implications of such subsidies and restrictions. Academic/practical relevance: The share of non-ownership business models of the residential solar installations is approximately 40%, and we contribute to the operations management literature by being the first to endogenize a solar power company’s business model decisions to inform policymakers regarding the ongoing discussion on subsidies and restrictions. Methodology: We develop a sequential game between a profit-maximizing solar power company and utility-maximizing residential customers to characterize a solar power company’s optimal business model decisions. Results: We find that a higher investment subsidy makes it more attractive for the company to offer sales, whereas a higher generation subsidy makes it more attractive to offer non-ownership models. Contrary to conventional wisdom, we show that restricting the solar power company from offering leasing can actually lead to higher total adoption and generation of renewable energy. Managerial implications: We show that, although a higher generation subsidy leads to higher total adoption and generation of renewable energy, interestingly, a higher investment subsidy can backfire by leading to lower total adoption and generation. Consequently, a higher investment subsidy can actually lead to a higher profit for the utility firm. Finally, we find that restricting leasing can be detrimental for the utility firm and beneficial for the environment.

Because of the recent surge in the number of unicorns and their role in spurring entrepreneurship and social impacts, venture capitalists, entrepreneurs, and regulators are concerned about how startup firms are valued. This is due to a lack of financial and historical information about startups as well as the need to understand their disruptive technological aspects. The length of observations is 2008–2018. The study uses the average value of variables for cross-sectional estimations. Our study investigates whether the types of recent technologies adopted by startups could serve as key factors to be used in startup valuations. Using a sample of 4903 startup in 13 subregions, we find that financial information (revenues) and nonfinancial information (social media) as well as sectoral and technological differences influence startup equity valuation. Technologies that involve big data, clean tech, mobile and augmented reality are prominent equity valuation premiums, regardless of the subsectors in which the startups originate. In addition, we find that e-commerce and mobile and big data are effective technologies for startup firms to employ for accumulating short-term capital.

This paper explores national strategies for emerging countries with ambitious policy targets for future offshore wind development. A scenario-based economic cost-benefit analysis of multiple approaches to the development of offshore wind projects is conducted based on (1) who takes the initiative on financing (public sector vs. private sector), (2) whether wind turbines are supplied locally or not, and (3) whether investment plans provide managerial flexibility to respond to changing circumstances or not (real options strategy vs. traditional investment decision-making). The analysis demonstrates that a real options strategy that allows flexibility regarding future uncertainties can significantly increase the economic value of a project regardless of the type of developer or dependence on foreign wind turbine technologies. The study concludes with a recommendation that late-mover countries focus on the combination of public-sector initiatives, a real options strategy, and the purchase of domestic turbines.

Policy mixes integrate distinct policy instruments into one coherent policy package as a measure to avoid the potentially counterproductive impacts of any given policy on another. In China, local governments recently have pursued policy mix approaches to resolve the existing policy conflicts, which are associated with the debates over the development priorities between manufacturing productivity growth and environmental mitigations. However, there has been little research that has empirically examined the effects of policy mixes, especially those concerned with the dual-faceted requirements that involve both productivity and the control of emissions. The study presented here employs a model designed to examine firm-level total factor productivity (TFP) and green TFP as performance measures. This article assesses the impacts of municipal-level environmental policy mixes on the textile industry in 13 Chinese cities by using the difference-in-differences technique to analyze the microfirm panel data of 12 133 Chinese textile firms during the period from 1998 to 2012. The results show that these environmental policy mixes could significantly promote green performance without compromising productivity growth. The results also indicate that the impacts varied in different cities. This article offers insight into policy mixes and industrial policy literature as well as practical guides for policymakers and industrialists.

Recent advances in information technology, advanced manufacturing (robotics, 3D printing, etc.), and logistics have allowed firms to customize their products to the specifications of individual consumers, who, in turn, prefer these products to standard ones. In the unlikely event that customized products do not match expectations, however, consumers often feel entitled to a return. Should firms offer returns on customized products? We examine this question via a Stackelberg game model, in which the firm (leader) decides the prices and returns policies for its customized and standard products; consumers (followers) decide which product to buy, given the initial noisy valuations and, upon experiencing the product, whether to return it. Both parties act strategically: Forward-looking consumers incorporate the real option value of possible returns into their initial purchasing decisions, and the firm incorporates consumers’ best purchase and return response into its pricing and returns policy decisions. Our model produces three key insights. First, firms can use customized products to induce some consumers who otherwise would buy and return a standard product to switch to lower-return-rate customized products. Second, it may be optimal to offer returns on customized products, despite their lower salvage value. Third, firms can increase profits and reduce (total) returns by offering returnable customized products. This paper was accepted by Duncan Simester, marketing.

With the rapid evolution of technologies and markets in the IT industry, it is especially crucial for small and medium-sized enterprises (SMEs) in the IT sector to possess the dynamic capability of seizing opportunities. This paper adopts the concept of “opportunity–seizing capability (OSC)” from the perspective of dynamic capability, and investigates its impact on relative firm performance via new market development. Furthermore, we examine whether environmental uncertainty influences the effect of a firm's OSC. Our hierarchical ordinary least squares regression results obtained using the data of 215 IT SMEs indicate that new market development is an important link between a firm's OSC and relative performance. The positive effect of a firm's OSC on new market development is stronger under a highly uncertain business environment. The findings indicate that enhancing an IT SME's OSC is crucial for its survival, particularly under an uncertain business environment.

Product returns will soon cost firms a trillion dollars annually; e-commerce appears more at risk for these costs relative to offline channels. Retailers thus need strategic insights into which factors increase customers’ return propensity and when the short-term costs of returns might be offset by future customer purchases. This article reports two studies that use transaction data from two large apparel e-tailers. Study 1 demonstrates that due to the differences between mobile and traditional online channels, consumers form a larger consideration set when they shop through mobile channels, and this distinctive search practice spills over onto return rates. That is, return rates are lower in mobile channels, and the use of the mobile channel also alters the effect of discount promotions. The findings in Study 2 suggest that future purchases by consumers, after a return, are contingent on category characteristics. In categories in which customers can easily learn from their previous return experience, product returns positively increase future spending, but the opposite is true in categories in which it is difficult to learn.

This study aims to resolve the difficult problem of manufacturers’ service outsourcing strategy decision-making, with services divided into two types: hygienic and motivational. We build a value creation model for the manufacturer, service contractor, and customer under different outsourcing strategies, and we examine optimal outsourcing decision-making in various scenarios and its effect on the value creation of related entities. The results indicate that motivational services have a lower bound characterized by service utility. When the manufacturer derives services higher than this lower bound, it should operate its own motivational service and outsource the hygienic service to create greater value. When the manufacturer is limited by resources or capabilities and is required to outsource the motivational service, it can maintain value creation by setting an appropriate contract coefficient. The service contractor should undertake motivational services within the contract boundary negotiated by the manufacturer and conduct hygienic services outside the boundary. Theoretically, outsourcing both service types can maximize customer value, but this may not achieve the manufacturers’ optimal value creation.

This work was aimed at analyzing the relationships between some selected complementary assets (independent variables) and some specified benefits/value creation (dependent variables), beyond Information Technology (IT) investments in an organizational setting. The purpose was to determine significant complementary assets that impact greatly on value creation beyond IT investments.With 175 questionnaires sent to IT project and program managers of companies in the Telecom industry in Ghana, and analyzed,thefollowing findings were revealed: for value creation beyond IT investments to be achieved, the staff must be computer literate, there must be the availability of experts and firms around to help in resolving IT problems quickly and timely that crop up, and the staff must be empowered to be innovative with IT. Again, the results showed that most of the complementary assets employed in this work, tend to favor benefits of Improved staff morale and Improved business processes. Also, one of the strongest positive relationships was found to exist between “supportive organizational culture that values efficiency and effectiveness” as predictor variable and “service/product quality” as response variable.

One of the most important trends in the pharmaceutical industry is the rapid growth of specialty drugs. Specialty drugs, mostly bio-based, tend to be high-risk, high-priced, and more regulated than traditional drugs, resulting in unprecedented challenges in distribution. Such challenges lead to the emergence of specialty distributors (SDs), which, compared with traditional wholesalers (WSs), manage more controlled networks and carry a smaller variety of drugs. Using a unique dataset assembled from multiple proprietary and public data sources on transactions, inventory, and chargebacks for 419 specialty drugs across 11 manufacturers (including 8 of the top 15 pharmaceutical manufacturers),161 distributors, and129,911 POCs (point-of-care) in 2012-2015, we investigate unique factors associated with manufacturers’ SD usage (vs. WSs). We also develop a nested logit model to examine factors that drive manufacturers’ choice of specific SDs if they were to use an SD channel. We find that the restrictive access element of regulations (instead of regulations in general), downstream POC’s required drug variety, and distributors’ experience in providing critical value-added services for manufacturers (i.e., managing chargebacks) are associated with higher SD usage. Moreover, if a manufacturer were to use an SD channel, it is more likely to choose one if it has used this SD or the SD-affiliated WS before, or if this SD has better performance. WSs and SDs represent distinct approaches to balance channel accessibility and channel control. Our results provide important insights and guidance to manufacturers, regulators, and downstream POCs, while contributing to the limited empirical research on B2B distribution decisions.

Research SummaryThe resource-based view claims that bundles of resources are the key determinants of a firm's value. Yet, market value spillovers stemming from firms' resource bases have received scarce attention in the literature. This article provides evidence of such spillovers in the context of technological acquisitions. I hypothesize that acquisitions act as signals, revealing to investors that the acquired technologies are more valuable than initially expected. These signals should affect firms owning similar technological resources. Measuring technological similarity with the text similarity of firms' patent portfolios, I find that the announcement of an acquisition brings a positive revaluation of firms with technological resources like those of the target. These spillovers also reach firms with a product market focus different from those of the merging firms.Managerial SummaryTechnological resources are key strategic resources that significantly contribute to firms' valuations. These resources are often acquired through corporate acquisitions. This study explores whether acquisitions affect the valuation of technological resources of other companies not involved in the transaction. The results show that a firm that owns patents similar to the company being acquired experience positive stock market returns at the acquisition announcement, which suggests that the deal signals to investors that the acquired resources are more valuable than initially expected. This effect holds regardless of whether the firm belongs to the same industry as the target or the acquirer. These spillovers change the market value of technological resources and are likely to affect the gains from later acquisitions or divestures of similar resources.

This paper considers the digitalisation of food infrastructure as a wider context within which smart farming and big data applications in agriculture are being introduced. It examines the use of digital devices aimed providing traceability and transparency across different sites of food supply chains, from farm to fork. The infrastructural perspective problematises ideas of digitalisation as a technological fix to the uncertainness of food supply chains, and highlights the relational nature of food. Digital devices aimed at ensuring food integrity and the control of supply chains are shown to reconstitute infrastructures of qualification by which the qualities of foodstuffs are established as they move through the processes of the supply chain, from production to consumption. The paper identifies question of power around the ongoing process of infrastructuring that generate a requirement for more labour by some actors; the possibility of new politics and relationships built around increased circulation of quality information; and questions of who controls access to information that are obscured by different understandings of transparency.

Research on open innovation has, in the main, focused on large, high-technology firms and tended to adopt an organization-centric approach in examining external links. In contrast, this article uses social network analysis and network centrality to explore open innovation among a cluster of 33 low-technology small and medium-sized enterprise (SME) manufacturers in Ireland. Adopting a mixed-methods approach this article looks beyond the immediate external links that SMEs form with external organizations and explores the wider network in which such firms are located, their position in these networks and the impact of such positioning on open innovation. This article reports a generally positive relationship between networking activity and innovation performance. Within the context of the low-technology cluster it is apparent that the positioning of a firm within the network may serve to enhance or impede its innovation activity in product development. Despite factors such as fears of appropriation limiting the degree of knowledge and resource exchange within the network, this evidence suggests that those firms occupying central network positions and thus connected to a greater number of other members of the cluster, typically demonstrate greater degrees of innovation activity. Finally, as a means of elucidating the factors that may influence a firm's position the article illustrates that firm size, absorptive capacity, and managerial orientation serve as antecedents of network position.

When confronted with a new product, consumers often find it difficult to predict how it will perform, and such uncertainty reduces consumers’ willingness to adopt the product. In this paper, we consider a market whereby consumers decide when and which product to buy, given that they know the product quality of the incumbent but are uncertain about that of the entrant. We investigate how consumer uncertainty about product quality affects firms’ behavior-based pricing and customer acquisition and retention dynamics. Using a two-period vertical model, we find that, under high-end encroachment, an increase in consumer uncertainty reduces the entrant’s profit and hurts the incumbent’s profit when the quality differential between the products is relatively small, whereas, under low-end encroachment, increasing uncertainty not only benefits the incumbent but also can favor the entrant. An important implication for entrants is that the marketing activities, which aim to reduce consumer uncertainty about product functionalities, may fail to improve profitability. We also find that the entrant lowers the price for uninformed customers and raises the price for repeat buyers under high-end encroachment but lowers the price for all customers under low-end encroachment. We further examine the subsidy strategy and show that, when the entrant’s product has a significant quality advantage and consumer uncertainty is high but not very high, the optimal strategy for the entrant is to acquire all consumers who do not buy from the incumbent by providing subsidies and to drop the low-valuation customers by means of a high price after their uncertainty is resolved. This paper was accepted by Anandhi Bharadwaj, information systems.

With the diversity of customer needs and complexity of technology innovation, many high-tech small- and medium-sized enterprises (SMEs) turn to open innovation, to produce the perfect match between market demands and firm resources. However, questions still exist in relation to open innovation in SMEs. Based on a framework combining both inbound and outbound open innovation with the four-stage new product development (NPD) process, this article explores the open innovation strategies adopted by high-tech SMEs in emerging economies for NPD and the reasons behind it through case studies. Results show that high-tech SMEs in emerging economies selectively adopt open innovation for NPD at different stages with various partners based on their needs. High-tech SMEs prefer to be closed to protect the know-how at the experimentation stage. Regarding the open innovation strategy, at ideation stage, SMEs adopt inbound open innovation for basic research and customer knowledge, while at manufacturing and commercialization stages, SMEs conduct both inbound and outbound open innovation. The analysis raises awareness of customer knowledge and customization to high-tech SMEs for NPD. This article contributes to the theories and practices on open innovation in SMEs.

As a novel retail model in the age of Internet Plus, community group buying (CGB) has received a growing attention from the public. This paper introduces promotion effort (PE) and service level (SL) into system decision-making, and tries to coordinate the CGB supply chain comprising of a supplier, a group buying platform, and a group leader. Firstly, the authors constructed a decentralized decision-making model and a centralized decision-making model for the CGB supply chain, and solved the optimal decisions and profits of each model. On this basis, a coordination mechanism was designed for the CGB supply chain. After that, the model results were verified through numerical simulation. The results show that: Under the decentralized decision-making model, the wholesale price, retail price, platform SL, and leader’s PE are positively correlated with the elastic coefficient of PE, and negatively with the effort cost; under the centralized decision-making model, the retail price, platform SL, and leader’s PE are positively correlated with the elastic coefficient of SL, and negatively with the service cost; using the group leader’s commission as a coordination tool and combining with the traditional revenue sharing contract, the revenue sharing-commission coordination (RS-CC) contract is designed to realize the coordinated operation of the CGB supply chain. The research findings further enrich and improve the theoretical basis of the CGB supply chain, and provide a reference for the decision-making by relevant enterprises.

Motivated by the commonly observed commercial used apparel collection (UAC) programs in fashion retail supply chain operations, this paper analytically explores the associated operational challenges that firms face. First, in the basic model, we consider the case when a fashion retail brand promotes its UAC program and collects the used apparel from consumers. Depending on the conditions of the collected apparel products, the fashion retail brand will classify and either donate them for charity or send them to remanufacturing. For either case, the fashion retail brand gains a benefit. We analytically derive in closed-form the optimal promotion effort and study the mechanism for “profit” coordination. Our results indicate that many traditional supply chain contracts fail to achieve “profit” coordination. Thus, the effort cost sharing (ECS) contract is proposed and proven to be effective for “profit” coordination. Finally, to check the robustness of findings from the basic model, we examine various UAC practice related extended models, such as i) consumer coupon offering, ii) “no remanufacturing” model, iii) consumer heterogeneity in environmental consciousness, iv) own-brand collection vs any-brand collection. Our findings show that the qualitative insights continue to hold in the extended scenarios. Some novel scenario-dependent findings are also obtained. Insights derived in this paper not only contribute to the literature but also provide scientifically sound managerial guidance and insights to practitioners on how UAC programs can be best operated.

We study nascent project-based enterprises (PBEs) through the lens of upper echelons and institutional theory. We analyse the interplay between the different role-congruent reputations of their project entrepreneurs and the institutional endorsement of their project idea, theorizing how these affect PBEs’ ability to attract private investments. In the context of the Italian film industry, we find that the commercial reputation of the project entrepreneur in the producer role is crucial for attracting investors, while the artistic reputation of the project entrepreneur in the creative director role is crucial for attaining institutional endorsement of the project idea. Finally, we find that the effect of the commercial reputation of the project entrepreneur in the producer role on attracting investments is mediated by the institutional endorsement. We contribute to the literature on PBEs by demonstrating how specific combinations of project entrepreneurs’ roles and (role-congruent) reputations can directly and indirectly attract investments.

Consumers may need help using an inherently complex or information-intensive product after purchase. This paper studies the incentive for a manufacturer or a retailer to invest in pre-sales service effort that would reduce the consumer's likelihood of seeking after-sales support. Because providing pre-sales and after-sales support would incur costs for the provider, it is not evident whether the manufacturer or the retailer would be more effective in doing so, and whether both services should be provided by the same firm. We consider different models in which the pre-sales service and the after-sales support is provided by the same or different firms, and show that the service configuration in which both pre-sales service and after-sales support is provided by the retailer is desirable to both the retailer and the manufacturer. Interestingly, in this service configuration, although the pre-sales service is provided at the highest level among all configurations, consumers can show up in the largest numbers to seek after-sales support. We also study the possibility of the firms collaborating in providing pre-sales service, by allowing the manufacturer to share a portion of the retailer's cost of providing pre-sales service. As expected, if the manufacturer provides the after-sales support, cost-sharing by the manufacturer may increase both channel members' profits. However, if the retailer provides after-sales support, cost-sharing by the manufacturer helps increase the manufacturer's profit but, surprisingly, reduces the retailer's profit. In this case, the overall channel can still be better off, and as such, the manufacturer may be able to implement cost-sharing by providing an appropriate transfer to the retailer.

Using a new trademark-based product market competition measure and a novel trademark-merger data set over the period 1983–2016, we show that companies facing greater product market competition are more likely to be acquirers. We further show that postmerger, compared to their nonacquiring peers, acquirers consolidate their product offerings by discontinuing more existing product lines and developing fewer new product lines. Using a quasi-experiment based on bids withdrawn due to exogenous reasons helps us establish the causal effect of deal completion on product-market consolidation. We conclude that acquisitions create product market synergies by cutting overlapping product offerings to achieve cost efficiency.

Scholarship on digital transformation has centered on how waves of digitalization have moved through industries, producing strategic changes within and across firms and enabling new forms of value creation. In this paper, we argue that different but no less important processes of digital transformation are generated by the undertow produced by these waves. This digital undertow, a corollary effect of waves of digitalization, profoundly influences how firms operate by transforming the industry standards that coordinate and regulate their core business activities. Using a genealogical approach, we draw on findings from a longitudinal field study in book publishing to theorize the tensions and processes that constitute the digital undertow. We explain that when waves of digitalization transform firms’ core activities, they unwittingly affect how industry standards correspond with materializations of the phenomena they structure, thus influencing how standards perform in practice. A significant outcome of recent waves of digitalization in the book industry is the loss in correspondence between industry standards and novel digital materializations of the book. This is producing what we refer to as digital displacement, a process that is engendering an existential challenge to the capacity of standards to effectively coordinate and regulate industry operations in the digital age.

Problem definition: We study the coordination of an E-commerce supply chain between online sellers and third party shippers to meet random demand surges, induced by, for instance, online shopping holidays. Academic/practical relevance: Motivated by the challenge of meeting the unpredictable demand surges in E-commerce, we study shipping contracts and supply chain coordination between online sellers and third party shippers in a novel model taking into account the unique features of the shipping industry. Methodology: We compare two shipping contracts: the risk penalty (proposed by UPS) and the flat rate (used by FedEx), and analyze their impact on the seller, the shipper, and the supply chain. Results: Under information symmetry, the sophisticated risk penalty contract is no better than the simple flat rate contract for the shipper, against common belief. Although both the risk penalty and the flat rate can coordinate the supply chain, the risk penalty does so only if the shipper makes zero profit, but the flat rate can provide a positive profit for both. These results represent a new form of double marginalization and risk-sharing, in sharp contrast to the well-known literature on the classic supplier-retailer supply chain, where risk-sharing contracts (similar to the risk penalty) can bring benefits to all parties, but the single wholesale price contract (similar to the flat rate) can achieve supply chain coordination only when the supplier makes zero profit. We also find that only the online seller, but not the shipper, has the motivation to vertically integrate the seller-shipper supply chain. Under information asymmetry, however, the risk penalty brings more benefit to the shipper than the flat rate, but hurts the seller and the supply chain. Managerial implications: Our results imply that information plays an important role in the shipper’s choices of shipping contracts. Under information symmetry, the risk penalty is unnecessarily complex because the simple flat rate is as good as the risk penalty for the shipper; moreover, it is better for the seller-shipper coordination. However, under information asymmetry, the shipper faces additional shipping risk that can be offset by the extra flexibility of the risk penalty. Our study also explains and supports the recent practice of online sellers (e.g., Amazon.com and JD.com), but not shippers, to vertically integrate the supply chain by consistently expanding their shipping capabilities.

Problem definition: Price surge of essential commodities despite inventory availability, due to artificial shortage, presents a serious threat to food security in many countries. To protect consumers’ welfare, governments intervene reactively with either (i) cash subsidy, to increase consumers’ purchasing power by directly transferring cash; or (ii) supply allocation, to increase product availability by importing the commodity from foreign markets and selling it at subsidized rates. Academic/practical relevance: This paper develops a new behavioral game-theoretic model to examine the supply chain and market dynamics that engender artificial shortage as well as to analyze the effectiveness of various government interventions in improving consumer welfare. Methodology: We analyze a three-stage dynamic game between the government and the trader. We fully characterize the market equilibrium and the resulting consumer welfare under the base scenario of no government intervention as well as under each of the interventions being studied. Results: The analysis demonstrates the disparate effects of different interventions on artificial shortage; whereas supply allocation schemes often mitigate shortage, cash subsidy can inadvertently aggravate shortage in the market. Furthermore, empirical analysis with actual data on onion prices in India shows that the proposed model explains the data well and provides specific estimates on the implied artificial shortage. A counterfactual analysis quantifies the potential impacts of government interventions on market outcomes. Managerial implications: The analysis shows that reactive government interventions with supply allocation schemes can have a preemptive effect to reduce the trader’s incentive to create artificial shortage. Although cash subsidy schemes have recently gained wide popularity in many countries, we caution governments to carefully consider the strategic responses of different stakeholders in the supply chain when implementing cash subsidy schemes.

In investigating recent changes to the automotive industry production process, such as modularisation, our work emphasises the process of fragmentation of production as a configuring element of inter-firm power relationships, and as an explanatory element in working conditions. From a theoretical framework focused on power relations, we analyse by way of a selected case study how the capabilities of companies and their network positions, together with the agency of labour, shape the power relations that influence the evolution of working conditions. The study does indeed find relevant changes to inter-firm relationships, for example, within networks of assemblers and suppliers, but without a consequent re-balancing of power. This finding serves to explain differences in the evolution of working conditions between distinct companies, these conditions being fully functional to a strategy for profitability and thus difficult to reverse.

Markets not only enable wide technology diffusion but also shape sustainability transitions. From this perspective, it is critical to investigate the shaping effects of markets and market formation processes for human wellbeing and the environment. Through a systematic literature review, this study explores the limitations of the dominant corporate-led market development model. This constitutes the global compass for present-day energy access programs and international development policy, framed around the potential of foreign-affiliated corporate enterprises for the market-based diffusion of solar products in the Global South. Findings suggest that due to tradeoffs between people, planet, and profit-directed goals, the companies cannot enable sustainability transitions and equal and sustainable access to the energy poor. Instead, the corporate-led market development route reproduces structural injustices. A more pluralistic route with greater roles for local, non-affiliated entrepreneurs, non-profits, and the public sector is proposed for negotiating the tradeoffs to the extent possible.