Yuanfei Kang

Revenue-sharing (RS) contracts are a common approach in incentivizing innovation of upstream suppliers by addressing the uneven profit distribution between upstream and downstream firms. Considering the possible overconfidence characterizing decision makers in the supply chain, we investigate the effect of the RS contract and the tendency of overconfidence of supply chain members on the investment in R&D of key components of products in the context of an upstream supplier that is a leader in the R&D and production of key components. We find that regardless of the bargaining power of either party, an RS contract can increase the R&D investment in key components. Regarding the effects of overconfidence of either the downstream manufacturer or upstream supplier, an RS contract can increase the R&D investment in key components. Supplier (manufacturer) overconfidence can harm their own profits but increase the profits of the manufacturer (supplier), and when the level of overconfidence is below a certain threshold, the damage to their own profits is less than the increase in each other’s profits, thus benefiting the whole supply chain. In addition, we also find a joint effect of RS contracts and overconfidence: when the bargaining power of the supplier is low, the RS contract has a certain compensatory effect on the loss of their own profits caused by overconfidence.

Revenue-sharing (RS) contracts are a common approach to incentivize innovation of upstream suppliers by addressing the uneven profit distribution between upstream and downstream firms. Considering the possible overconfidence characterizing decision makers in the supply chain, we investigate the effect of the RS contract and the tendency of overconfidence of supply chain members on the investment in R&D of key components of products in the context of an upstream supplier that is the leader in the R&D and production of key components. We find that regardless of the bargaining power of either party, a RS contract can increase the R&D investment in key components. Regarding the effects of overconfidence of either downstream manufacturer or up-stream supplier, it can increase the R&D investment in key components. Supplier (manufacturer) overconfidence can harm their own profits but increase the profits of the manufacturer (supplier), and when the level of overconfidence is below a certain threshold, the damage to their own profits is less than the increase in each other's profits, thus benefiting the whole supply chain. In addition, we also find a joint effect of RS contracts and overconfidence: when the bargaining power of the supplier is low, the RS contract has a certain compensatory effect on the loss of their own profits caused by overconfidence.

Motivated by the research gap on intergenerational succession dynamics of family firms, this study examines the effects of initiating intergenerational succession on firms' innovation activities. We propose that initiation of intra-family succession can result in founder–successor co-governance that represents a strategic transition to the succession and incorporates the two conflicting yet complementary directions of change and continuity. Grounded in the theory of altruism, we suggest that co-governance will positively affect firms' innovation activities and that this positive link is contingent on the idiosyncratic intra-family relationships of kinship type, age difference, and gender difference between the founder and the successor. Furthermore, we posit that co-governance will lead to a flow of resources to low risk, rather than more inventive but higher risk, innovations. Based on the unbalanced panel data of 4,694 firm-year observations in our sample from listed Chinese family firms during the 2006–2015 period, empirical analysis supports our hypotheses and confirms that when examining family firms' innovation, there is a need to take the heterogeneity of the intra-family governance structure more fully into consideration.

Financial derivatives have been increasingly used by firms to hedge against financial risks. However, it is still not clear what factors at the firm level lead to firms’ derivative use and whether derivative use can generate performance improvement, especially in the context of firms operating in emerging economies. Using the unbalanced panel data consisting of 2529 listed firms from China covering an 11-year period from 2005 to 2015, this study examines these two questions regarding firms’ use of financial derivatives. Based on results from the empirical analysis, this study identified operational cash flow, tax shield, R&D investment, and the possibility of bankruptcy, as the firm-level factors that enable firms’ decision to invest in financial derivatives. More importantly, empirical findings from this study suggest that a firm’s derivative use tends to negatively affect firm performance, rather than improve firm performance. The negative effect of derivative use on firm performance is not consistent between the two groups of the better performer and poorer performer firms. While the poorly performed firms are more likely to use financial derivatives for the purpose of performance improvement, their derivative use tends to further damage, rather than improve, performance. These research findings have theoretical and practical implications.

Prior research has mainly emphasized the strategic importance of a collaborative green innovation (CGI) between the manufacturer and supplier in a supply chain, leading to an overlook at the decision-making mechanism and determinants of CGI. Guided by the transaction cost economics and social exchange theory, our study constructs a mathematical game model to incorporate the key dimensions of an effective inter-firm collaboration for green innovation. Applying the Nash game bargaining principles, our evolutionary game model analysis provides an analytic system to understand the mechanisms of forming and operating a collaboration partnership between the manufacturer and supplier for green innovation. Based on various scenarios from the numerical simulation parameters for the involved influencing factors, our simulation has produced the Nash equilibrium solutions and identified the major determining factors for successfully forming and operating CGI. They are the trust level between the manufacturer and supplier as the CGI partners, value/profit sharing ratio between the partners, knowledge complementarity of the partners, and product type for the green innovation.

Peering through the lenses of the strategic intent perspective and strategic fit paradigm, in this study, we seek to examine the contingent conditions under which emerging market multinational enterprises (EMNEs) with strategic asset seeking (SAS) intent can achieve improved innovation performance. We developed a contingency model of how the relationship between SAS intent and innovation performance is contingent on the moderating effects of firms’ innovation capability and institutional quality in the host country, as well as on the synergistic interaction of independent moderating effects from these two factors. We combined survey data from 320 Chinese MNEs with archival data to test our hypotheses. Our results show that SAS intent can lead to positive innovation performance when (a) the investing firm has developed high levels of innovation capability, and (b) synergistic interactions exist between institutional quality and firms’ innovation capability regarding their moderating effect on the SAS intent-innovation performance link.

Purpose: This study aims to provide insights into the development of firm strategies of international expansion by examining the direct relationship between internationalization speed and firm performance and by exploring the interactive role played by networking capability. Design/methodology/approach: This is an empirical study based on survey data collected from 343 small and medium-sized enterprises operating in Australia and New Zealand. Regression modelling analysis was performed. Findings: This study found an inverted U-shape relationship between the speed at which a firm expands internationally and its performance. Expanding too fast or too slow leads to lower performance, and this performance implication is because of an interactive effect of the firm's networking capability. Research limitations/implications: This study contributes to the literature by generating insights into how firm strategies of international expansion lead to improvement of firm performance, thereby giving guidance and providing suggestions to managers regarding how quickly to internationalize. Practical implications: This study contributes to the literature by generating insights into how firm strategies of international expansion lead to improvement of firm performance and by providing suggestions to managers regarding decision-making in developing strategies for international expansion speed. Originality/value: This is an original study based on empirical data collected from a management survey.

Prior research of knowledge sharing between firms mainly focuses on enabling factors, such as benefits resulting from knowledge sharing, leading to an overlook at barriers. Guided by transaction cost economics and social exchange theory, our study constructed an evolutional game model to analyse the dynamic evolution process of the firm’s knowledge sharing behaviour in a setting of supply chain networks. Using a simulation in our game model, we firstly reveal how a long-term strategy for supply chain partners towards knowledge sharing is determined through reaching an equilibrium between enabling factors (revenue gained in various forms) and impeding factors (knowledge leakage) in a dynamic process. Secondly, our analysis demonstrates that the competition or rivalry side of the “co-opetition” relationship acts as the major barrier for knowledge sharing due to the sharer’s concern of knowledge leakage. Thirdly, our model has identified knowledge relevancy as the inherent property of knowledge and the firm’ ability of knowledge inference as two important factors influencing knowledge leakage.

Purpose: The purpose of this paper is to examine how interpersonal relationships (IPRs) and inter-organisational relationships (IORs) interact with each other as driving forces of supply chain integration (SCI). More specifically (the) three dimensions of IPR – personal affection, personal credibility, and personal communication – are examined in regards to how they affect inter-organisational relationships during SCI.Design/methodology/approach: The research employed an exploratory multiple case study approach with four New Zealand case companies selected as the empirical basis. Data were collected through semi-structured interviews of managerial executives in relation to supply chain activities, which were triangulated with company archival data.Findings: The authors found that IPRs are able to interact with IORs to influence the integration of supply chains. More specifically, IPRs influence IORs by initiating organisational relationships in the SCI context; and influences from IPR dimensions on IORs tend to be of differing magnitudes and have different evolutional paths across the whole SCI process.Originality/value: This research contributes to knowledge about the roles and mechanisms through which IPRs shape and enable inter-organisational level relationships within the SCI context.