What drives business failure? Exploring the role of internal and external knowledge capabilities during the global financial crisis

Martínez, Marian García; Zouaghi, Ferdaous; García‐Marco, Teresa; Robinson, Catherine

doi:10.1016/j.jbusres.2018.07.032

Cited by 77 publications

(53 citation statements)

References 87 publications

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“…In Appendix D, the Cronbach's alpha demonstrates the reliability of the scale. The factor analysis is valid because the amount of explained variance exceeded 50%, the weighting factors of all the items in each scale exceeded 0.5, and the reliability when presenting a Cronbach's alpha greater than 0.7 [78,[86][87][88][89].…”

Section: Absorptive Capacitymentioning

confidence: 99%

“…There are authors who establish that bigger companies are less likely to need to form external partnerships, as they have more resources and can generate the necessary knowledge internally [78]. Others, however, consider them more likely to need R&D collaboration with different kinds of partners [88]. Lastly, in the case of foreign participation, there are studies that argue that the benefits of alliance networks are subject to the liability of foreignness, especially in smaller companies [21].…”

Section: Control Variablesmentioning

confidence: 99%

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Cooperation Networks as a Driver of Sustainability-Oriented Innovation

Melane-Lavado

Álvarez-Herránz

2020

Sustainability

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Companies can contribute to sustainable development in a dynamic and globalized market, such as today’s, through Sustainability-Oriented Innovation (SOI). However, to do this implies meeting specific requirements and dealing with greater complexity because of the higher level of sophistication of cooperation networks for this kind of innovation. In this context, to meet the requirements demanded by SOI, Foreign Direct Investment (FDI) is considered fundamental. However, it is not known whether their capacity to focus more on heterogeneous knowledge sources, which, thanks to their cooperation networks, are broad and geographically diverse, would have a differential impact on SOIs. Through comparative analysis, this paper attempts to shed light on the possible network differences for companies, with and without FDI, looking to undertake SOI. It focuses on the knowledge framework and geographical scope stemming from cooperation for successfully undertaking sustainable developments. To this end, three networks had to be set up, which include diversity, scope, experience, and frequency of national, European, and global cooperation. The results lend strength to the theory that SOI is favored by European and global cooperation networks if companies have FDI, and by national networks if there is no foreign participation. For this, the role of absorptive capacity is key, understood as a joint analysis of R&D intensity and the skills and education of employees tasked with innovation, and the implementation of new organizational methods. Lastly, it is confirmed that having FDI allows companies to have qualified employees, and better methods and organizational practices in connection with an openness to innovation.

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Section: Absorptive Capacitymentioning

confidence: 99%

Section: Control Variablesmentioning

confidence: 99%

Cooperation Networks as a Driver of Sustainability-Oriented Innovation

Melane-Lavado

Álvarez-Herránz

2020

Sustainability

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“…Following previous literature (e.g., Colombelli et al 2016;Yang et al 2017;García-Martínez et al 2019), we controlled for three variables: firm size (the log of the number of employees, founders included); firm age (number of years since founding); and knowledge intensive business -the founders' assessments of the following statement: "My firm fits the category of technology-based firm", for which there are three possible answers: 1) To some extent, 2) To a great extent, and 3) Unquestionably.…”

Section: Control Variablesmentioning

confidence: 96%

“…Therefore, for these firms, it is of interest to understand the factors that condition innovation, in case those factors affect the development of innovations able to increase or decrease venture performance. Among the factors that condition firms' innovation, we are interested in knowledge resources, since knowledge is critical for innovation (García-Martínez et al 2019), one of the most valuable resources that generates sustainable competitive advantage (Cristo-Andrade and Ferreira 2018), and a limited resource for NTBFs (Atuahene-Gima et al 2006). In addition, small independent ventures find it more difficult to develop innovations because of the costs of integrating knowledge or accessing external knowledge (Löfsten 2016a).…”

Section: Introductionmentioning

confidence: 99%

Knowledge, innovation and NTBF short- and long-term performance

2020

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The purpose of this paper is to analyse the effect of knowledge resources stemming from the founding team's human capital and the access to external sources of knowledge available at or near the NTBF's inception on the venture's short-and long-term performance. Whether innovation is a vehicle through which knowledge resources have an impact on results is also studied. While previous studies have often focused on one dimension of performance, we cover complementary indicators of short-term performance (i.e., foreign market performance, total market performance and superior financial outcomes) and one indicator of long-term performance (TBF survival). Thus, the current research contributes to a wider understanding of the effect of knowledge resources at or near a venture's inception and innovation on the performance of NTBFs. A sample consisting of 175 Spanish NTBFs allows these relationships to be analysed. Results indicate that NTBFs' knowledge resources available at or near inception are of relevance to firms' innovations and to different dimensions of performance. Several knowledge resources have different positive and negative effects on different dimensions of short-and long-term performance, so those that can be good at one stage of a NTBF's life cycle can be bad at others times (e.g., founding teams with more members in the early years of the NTBF may be positive for the results, but in the long term, fewer people is better). Innovation mediates the effect of some knowledge resources on total market performance.

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“…The risks faced by these small businesses are brought about by both internal and external factors (Everett and Watson 1998;Gaskill et al 1993). 40% of small businesses do not survive past their first year and 60% of those that survive fail to make it past five years (Amankwah-Amoah 2016; Martineza et al 2019). The high churn rate of small businesses lends weight to the need to identify and evaluate the nature of these agency conflicts and the value of risk associated with investments made into these small businesses (Ahmad and Seet 2009;Everett and Watson 1998;Gaskill et al 1993).…”

Section: Introductionmentioning

confidence: 99%

Small Family Businesses: Innovation, Risk and Value

Harith

Samujh²

2020

JRFM

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This article reviews the literature and applies principal-to-principal (PP) conflict theory to small family based businesses. The lack of accurate measurement and communication of risk leading to issues with innovation, is the primary cause of PP agency costs. Careful analysis of the risk levels reflected in the cost of debt and opportunity cost of equity provides a theoretically robust and empirically estimable process for ascertaining the true PP agency cost. Awareness of the constraining governance structures and the suggested method, based on the cost of capital, to assess small business risk can assist SME owners and financiers to SMEs to promote business efficiency and innovation.

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What drives business failure? Exploring the role of internal and external knowledge capabilities during the global financial crisis

Abstract: The version in the Kent Academic Repository may differ from the final published version. Users are advised to check http://kar.kent.ac.uk for the status of the paper. Users should always cite the published version of record.

Cited by 77 publications

References 87 publications

Cooperation Networks as a Driver of Sustainability-Oriented Innovation

Cooperation Networks as a Driver of Sustainability-Oriented Innovation

Knowledge, innovation and NTBF short- and long-term performance

Small Family Businesses: Innovation, Risk and Value

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