Figure 2 - uploaded by M. Ann McFadyen
Content may be subject to copyright.
Source publication
While a great deal of scholastic effort has gone into discovering the multifaceted relationships between applied research initiatives and subsequent performance, relatively little empirical research addresses the performance impact from firm investments in basic research initiatives. Even less addresses the interactive roles of both types of resear...
Context in source publication
Context 1
... calculate the nature of the interaction, we dismantled the interaction effect by calculating the effects of applied research on ROI at low, mean, and high values of basic research. Following Cohen and Cohen (1983), we used Basic L , Basic M , and Basic H , which correspond to low ( À 1s), mean, and high ( þ 1s) levels of basic research investment, to generate a series Figure 2. ...
Citations
... These new approaches aim to move beyond simple knowledge transfer as described by the linear model of innovation (Godin, 2006(Godin, , 2011. The linear model posits that innovation follows a sequential process, beginning with basic research, progressing through applied research and culminating in product or service development by a company, which is then introduced to the market (Gulbrandsen & Kyvik, 2010;Henard & McFadyen, 2005;Narayanamurti & Odumosu, 2016). Gibbons et al. (1994) argued that scientific knowledge production has shifted from a Mode 1 paradigm, characterized by the strict separation of basic and applied research, to a Mode 2 paradigm based on the convergence of research orientations. ...
... Research orientations refer to the distinction between basic and applied research (Busch, 1945;Gulbrandsen & Kyvik, 2010;Henard & McFadyen, 2005;Hottenrott, 2012). Applied research focuses on addressing specific practical problems, the results have practical and commercial value, and the research is carried out mainly by industry. ...
... One of the best-known examples is the development of the second law of thermodynamics in the 1820s by Sadi Carnot, which was motivated by the need to understand the efficiency limits of steam engines (Balconi et al., 2010). Therefore, innovation is not a linear, deterministic process that is composed of sequences of independent steps, with no possible feedback among basic research, applied research, technological development and product commercialization (Clarke, 2010;Henard & McFadyen, 2005;Jansen, 1995;Walsh, 1984). ...
In a knowledge-based economy, university–industry collaborations play a pivotal role in driving innovation and economic growth. This study investigates the research orientations of these collaborations, focusing on the balance between basic and applied research. Using data from 631 collaborative projects funded by the French Cifre PhD programme, we find that most projects emphasize basic research (61%), contradicting the common expectation that industry-led partnerships primarily focus on applied research. Importantly, our analysis reveals that this preference for basic research is not contingent on traditional contextual factors such as scientific discipline, company size or university type. These findings challenge established assumptions in the literature and suggest that even in industry-sponsored research, fundamental inquiry is critical in supporting long-term innovation strategies. This paper contributes to the understanding of research orientations in university–industry collaborations and offers practical suggestions for enhancing these partnerships and informing research policy. Additionally, we outline a research agenda for further exploration of the factors influencing research orientations, the impact of early-stage industry engagement and the role of policies in shaping collaboration outcomes.
... Yet such knowledge lends itself to entrepreneurship (Audretsch and Belitski 2021), as its uncertainty offers a greater economic reward to the entrepreneur, and subsequently to the economy (Vincett 2010). It is important to highlight that the pure stock of basic knowledge does not translate into innovation without any additional applied research and development activity (Henard and McFadyen 2005). Instead, it remains just 'shelved knowledge', often published but not commercialised. ...
... Yet such knowledge lends itself to entrepreneurship (Audretsch and Belitski 2021), as its uncertainty offers a greater economic reward to the entrepreneur, and subsequently to the economy (Vincett 2010). It is important to highlight that the pure stock of basic knowledge does not translate into innovation without any additional applied research and development activity (Henard and McFadyen 2005). Instead, it remains just 'shelved knowledge', often published but not commercialised. ...
... The qualitative aspect of knowledge complexity is classified into two primary types of research: basic and applied (Brooks, 1994;Betz, 2003;Cassiman et al., 2002;Cockburn et al., 1999;Henard and McFadyen, 2005). These research initiatives are fundamental to value creation (Henard and McFadyen, 2005). ...
... The qualitative aspect of knowledge complexity is classified into two primary types of research: basic and applied (Brooks, 1994;Betz, 2003;Cassiman et al., 2002;Cockburn et al., 1999;Henard and McFadyen, 2005). These research initiatives are fundamental to value creation (Henard and McFadyen, 2005). Basic research involves experimental or theoretical endeavors aimed at advancing knowledge without immediate commercial goals, while applied research emphasizes acquiring new knowledge for practical applications, often utilizing findings from basic research or targeting specific goals (Skinner, 1998). ...
... Investing in basic research allows firms to access advanced scientific knowledge (Cassiman et al., 2002). However, this approach is associated with high costs, uncertainties, risks, and a prolonged development period (Henard and McFadyen, 2005). On the other hand, the primary goal of applied research is to develop practical and marketable knowledge for specific products or services (Betz, 2003). ...
Purpose
The foreign direct investment (FDI) motivations of emerging market multinational enterprises (EMNEs) are mainly twofold: acquisition of strategic assets in foreign markets, and foreign market penetration. While prior studies have delivered valuable insights, findings regarding the performance of those two types of FDI remain somewhat inconsistent or inconclusive. This study aims to develop complementary perspectives that can motivate scholars to explore the internal mechanisms of achieving goals for these two FDI types by providing a review of prior literature on EMNEs’ knowledge- and market-seeking FDI.
Design/methodology/approach
Indexed to the EBSCO database and Google Scholar from 2000 to 2020, 73 articles from 13 journals were selected and reviewed to identify the main research future research agendas.
Findings
Our findings show that the purpose of EMNEs’ FDI can be divided into value creation and value capturing, with the former pursuing knowledge-seeking and the latter pursuing market-seeking, according to our study, which draws on insights from innovation-focused literature.
Originality/value
International business (IB) scholars have extensively studied both knowledge-seeking and market-seeking outward FDI of EMNEs for decades. Our study contributes to the literature by providing the potential for integrating IB and innovation studies to extend the scope of EMNEs studies.
... Once acquired green technology knowledge, enterprises shall assimilate it, otherwise, it becomes exceedingly challenging to utilize such information. It is the emergence of the digital economy that provides enterprises with the convenient information technology management tool to evaluate, analyze, store, and integrate technical knowledge into every stage of production processes [23]. In the knowledge transformation stage, the digital economy allows enterprises to cross organizational boundaries, minimize uncertainty and opportunistic behavior of green innovation collaboration, and avoid resource mismatch, which is unfavorable for the green technology transfer performance [24]. ...
... As a result, universities mainly train theoretical talent rather than applied talent suitable for the needs of enterprises. This requires enterprises to spend considerable training costs and time to improve the practical operation abilities of employees, which does not support enterprises in carrying out application-oriented technological innovation in the short term (Henard and McFadyen, 2005;Berbegal-Mirabent and Sabate, 2015;Kancs and Siliverstovs, 2016). ...
... The results of research enter the development phase when being commercialised to products that meet customer demands (Czarnitzki et al., 2011). Consequently, potential productivity is transferred to practical productivity (Henard and Mcfadyen, 2005). Salter and Martin (2001) argued that basic research contributed to economic growth by: (1) increasing the stock of useful knowledge; (2) training skilled graduates; (3) creating new scientific instrumentation and methodologies; (4) forming networks and stimulating social interaction; (5) increasing the capacity for scientific and technological problem-solving; (6) creating new firms. ...
This paper employs the Olley and Pakes [(1996). The dynamics of productivity in the telecommunications equipment industry. Econometrica, 64(6), 1263–1297.] method and the generalised propensity score (GPS) methodology to estimate the effects of R&D and its different types, including research activity and development activity, on productivity. Our research sample is an unbalanced panel data consisting of 1808 Chinese listed manufacturing firms from the period 2006–2015. Our analysis reveals how R&D and its different types impact firm productivity: (1) there exists an S-shaped relationship between firm R&D intensity and productivity, which implies the existence of the threshold and diminishing marginal return of R&D for productivity growth. Due to the unbalanced composition of R&D in China, after R&D intensity reaches a critical level (around 50%) a negative marginal effect of R&D presents; (2) an increase of research intensity can improve firm productivity. However, research intensity reaches a saturation point (around 65%) beyond which firm productivity plateaus; (3) there exists an inverted U-shaped relationship between firm development intensity and productivity. The marginal effect of development on firm productivity is negative when development intensity is over 28%. Our empirical evidence implies that firms need to optimise the composition of R&D expenditure in order to realise sustained productivity growth.
... The innovation process relies on the combination of basic research and applied research. Basic research seeks core knowledge (Cassiman, Perez-Castrillo, & Veugelers, 2002) which is a primary contributor to the essential quality of technological resources (Henard & McFadyen, 2005) and increases the radical nature of an MNE's innovation capability (Makri & Lane, 2007). Accordingly, basic research can strengthen the MNE's potential influence on its business networks and industries. ...
... In line with our operationalizations in the previous section, we define subsidiary value creation as the R&D intensity (i.e., the ratio of the number of engineers and R&D personnel to the total number of employees) of each subsidiary and subsidiary value capturing as the advertising intensity (i.e., the ratio of advertising and marketing expenditures to total sales) of each subsidiary. While R&D at the headquarter-level involves basic research (Awate et al., 2015;Glass, 2003), foreign-subsidiary-level R&D focuses on extended or applied research and has a relatively short-term investment perspective (Henard & McFadyen, 2005). Thus, while we employed an accounting-based proxy for headquarters value creation, we focused on human resources (HR) for subsidiary value creation. ...
In anticipation of the upcoming changes and turbulence caused by Industry 4.0, in which digital integration connects all value chain members, managers at leading multinational enterprises (MNEs) are scrambling to predict the associated changes in the market. This pioneering study advances our understanding by investigating the impact of an MNE’s Industry 4.0 orientation on the globalization of its value chain network. Identifying two types of value-generation activities as potential moderators, namely value creation and value capturing, we compare the moderation effects when these activities are conducted by headquarters versus foreign subsidiaries. We test the proposed model using a panel dataset comprising 5572 subsidiary-year observations from 358 Korean MNEs from 2011 to 2019. The results show that an MNE’s Industry 4.0 orientation leads to a more rapid expansion of its distribution network than of its supplier network. Furthermore, value creation by headquarters has a stronger positive impact on the globalization of its distribution network than that of its supplier network, whereas value creation by subsidiaries has a stronger positive impact on the globalization of its supplier network than that of its distribution network. However, value capturing has a stronger impact on the globalization of the MNE’s distribution network than that of its supplier network when performed by both locations. This study concludes by discussing the theoretical and managerial implications.
... Researchers have investigated and identified technology management mechanisms, namely, technology process (Henard and McFadyen 2005), technology acquisition (Tsai and Wang 2007), technology absorption (Fosfuri and Tribo 2008;Lichtenthaler 2009;Pradana, Pérez-Luño, and Fuentes-Blasco 2020), and technology transfer (Rajan, Dhir, and Sushil 2021) that are crucial to the entire value creation (i.e., antecedents) and enhance innovations in the organization. Prior literature on the relationship between technology management and firm innovation is large, but most studies focus on a single aspect of technology management practices (see Guan et al. 2006;Cepeda-Carrion, Cegarra-Navarro, and Jimenez-Jimenez 2012;Kang, Jo, and Kang 2015;Lin, Qin, and Xie 2020, among others). ...
... This study defines the technology process as an ordered sequence of steps that a company follows and implements in investing in basic and applied research initiatives to encourage creativity, innovation, and firm performance and maintain a continued competitive advantage. Prior studies (e.g., Henard and McFadyen, 2005) have indicated that investments in applied and basic research were crucial for innovative research initiatives. Firms that rely on a continuous flow of product innovations to provide a stable income source should generally invest in applied research initiatives. ...
... Firms that rely on a continuous flow of product innovations to provide a stable income source should generally invest in applied research initiatives. Further investments in directed basic research initiatives will increase future applied projects and constitute a sustainable competitive advantage (Henard and McFadyen 2005). The theoretical underpinning of the relationship between the technology process and innovation is based on the perspective of knowledge creation theory (e.g., Cohen and Levinthal 1990;Simon 1991;Nonaka 1994), which states that knowledge is formed or created via the sharing and combining of information and ideas (which are fundamental premises of applied and basic research initiatives) through exchange interactions (Simon 1991;Nonaka 1994), which in turn, facilitates the creation of new knowledge, and ultimately, new products, and enhances innovative activities. ...
In order to investigate empirically the effects of technology management on firm innovation, this paper considers the antecedents and multidimensional views of technology management mechanisms on innovation performance in medium- and large-scale manufacturing firms in a developing country, namely Ethiopia. Using simple random sampling, a total of 200 firms were chosen for this study to obtain responses from respondents. Four hypotheses were proposed for testing. Structural equation modelling and cross-sectional design were used to analyze the data using the LISREL 8.80 SIMPLIS program software tool. This study finds technology transfer and technology acquisition have significant positive effects on process innovation, product innovation, and method innovation. Technology process has a significant positive effect on process and method innovation. Technology absorption has a significant positive effect on product innovation. The major implication of this study is that technology management, coupled with appropriate technology management policies and strategies, is an appropriate resource to be used in the organization to enhance firm performance, particularly innovation and creativity. The paper contributes to the literature in that, unlike previous studies that are based on one aspect of technology management practices, this study examined the effects of each different type of technology management dimension on firms’ innovation. Thus, this study helps to gain further insights into the effects of technology management practices on firm innovation.
... As the competition between countries is gradually shifting toward basic research, the importance of firms as main basic research entities has become increasingly prominent, while the advance planning for engaging in basic research in frontier fields is a vital source of innovation in core industrial technologies and of enhancing national strategic technological strength among firms [1][2][3] . However, basic research is a typical public good with economic characteristics, such as being curiosity-driven, lacking direct commercial value, and having low exclusivity; hence, it is often regarded as a longterm investment [4,5] . Since firms, as market and innovation entities, have their own scopes in terms of activities, laws, and technological transition trajectories, the economic characteristics of basic research prompt them to engage in R&D activities such as applied research and experimental development, thereby causing firms to be naturally "inert" toward engagement in basic research [6][7][8][9] . ...
