Corporate Science, Innovation, and Firm Value

Simeth, Markus; Cincera, Michele

doi:10.1287/mnsc.2015.2220

Cited by 114 publications

(60 citation statements)

References 41 publications

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“…Hall, Jaffe, and Trajtenberg () used a market‐value approach to measure the return to R&D investment for U.S. firms in the 1980s, but do not distinguish between research and development. The literature also reports a positive relationship between the market valuation of firms and the science intensity of their patents (Deng, Lev, & Narin, ) or their stocks of scientific publications (Simeth & Cincera, ).…”

Section: Changing Value Of Engaging In Science: a Taxonomymentioning

confidence: 99%

The decline of science in corporate R&D

Arora

Belenzon

Patacconi

2017

Strategic Management Journal

245

152

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Research summary: In this article, we document a shift away from science by large corporations between 1980 and 2006. We find that publications by company scientists have declined over time in a range of industries. We also find that the value attributable to scientific research has dropped, whereas the value attributable to technical knowledge (as measured by patents) has remained stable. These trends are unlikely to be driven principally by changes in publication practices. Furthermore, science continues to be useful as an input into innovation. Our evidence points to a reduction of the private benefits of internal research. Large firms still value the golden eggs of science (as reflected in patents), but seem to be increasingly unwilling to invest in the golden goose itself (the internal scientific capabilities). Managerial summary: There is a widespread belief among commentators that large American corporations are withdrawing from research. Large corporations may still collaborate with universities and acquire promising science‐based start‐ups, but their labs increasingly focus on developing existing knowledge and commercializing it, rather than creating new knowledge. In this article, we combine firm‐level financial information with a large and comprehensive data set on firm publications, patents and acquisitions to quantify the withdrawal from science by large American corporations between 1980 and 2006. This withdrawal is associated with a decline in the private value of research activities, even though scientific knowledge itself remains important for corporate invention. We discuss the managerial and policy implications of our findings.

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Section: Changing Value Of Engaging In Science: a Taxonomymentioning

confidence: 99%

The decline of science in corporate R&D

Arora

Belenzon

Patacconi

2017

Strategic Management Journal

245

152

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“…Finally, the influence of R&D (Research & Development) on firms' ROA was considered. Prior researchers have revealed the positive effect of innovation on financial performance [65]. A variable named R&D estimated by R&D expenditure was used.…”

Section: Hierarchical Regression Analysismentioning

confidence: 99%

The Sustainable Effect of Operational Performance on Financial Benefits: Evidence from Chinese Quality Awards Winners

Liu

Zhong

et al. 2020

Sustainability

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Quality management practices have become increasingly important as firms seek to obtain quality certifications to dominate markets. To date, adequate research evaluating the effects of quality management is lacking. In this work, we used Chinese quality awards to evaluate a firm's quality level. A PSM-DiD (propensity score matching and difference-in-difference) model describing the relationship between quality award effects and financial benefits in terms of return on assets was developed. We further used a hierarchical regression to examine the influence of operational performance on financial benefits. The results show that quality awards cannot assure their winners a higher return on asset. Indicators of operating performance, such as less lead time and higher inventory turnover, can significantly enhance firms' profitability. The moderating effects of operational performance suggest that firms may focus on how to translate quality management practices into business improvement. This study also contributes to the operation management literature by describing how firms need outstanding financial performance for sustainable development and continuous improvement.Sustainability 2020, 12, 1966 2 of 23 for Just-in-Time (JIT) and Six Sigma, respectively, their products still suffer from serious quality-related problems [7].In addition, operational performance is considered to play an important role in quality management practices. Operational performance is defined as the strategic dimensions of competing firms and consists of operational level indicators, such as flexibility and delivery [8]. The results of quality management systems are also shown in operational levels. However, few studies have explored the effects of operational performance on financial benefits. In addition, researchers may merely consider one dimension of operational performance, such as efficiency [9] or inventory [10]. These studies failed to provide a complete description of the influence of operational performance on financial benefits.This study aims to fill the above research gaps by answering the following two questions: (1) How do quality management practices affect firms' financial benefits? (2) What is the relationship between operational performance and financial benefits?We use quality award winners as the research samples and examine whether these firms can obtain a higher return on assets than their counterparts. The results show that the awarded firms could not achieve significant improvement and that the effects of the awards are not obvious. In addition, we explore the impact of operational performance on the return on assets. The findings demonstrate that less lead time and a higher inventory turnover can enhance the financial benefits. Additionally, decreasing the operating costs and tracking sales more closely can improve the return on assets. Besides this, we also find that shorter lead time and larger inventory turnover can positively moderate the impact of quality awards on the ROA.This study contributes to previous rese...

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“…Firm-level publication data have been also used to develop proxies of a firm's knowledge base and capabilities (e.g. D 'Este, 2005;Gittelman and Kogut, 2003;Simeth and Cincera, 2016) and to estimate a firm's propensity to disclose its knowledge (e.g. Alexy et al, 2013;Baker and Mezzetti, 2005;Gans et al, 2017) or to pursue an open science strategy (e.g.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

“…D 'Este, 2005;Gittelman and Kogut, 2003), examining the relationship between a firm's publication activity and its economic performance (e.g. Pellens and Della Malva, 2018;Simeth and Cincera, 2016), and a firm's propensity to pursue an open science strategy (e.g. Ding, 2011;Polidoro and Theeke, 2012;Simeth and Raffo, 2013) have all contributed to shed light on corporate publishing.…”

Section: Introductionmentioning

confidence: 99%

Do firms publish? A multi-sectoral analysis

2019

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Corporate Science, Innovation, and Firm Value

Cited by 114 publications

References 41 publications

The decline of science in corporate R&D

The decline of science in corporate R&D

The Sustainable Effect of Operational Performance on Financial Benefits: Evidence from Chinese Quality Awards Winners

Do firms publish? A multi-sectoral analysis

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