Productivity and innovation in the Japanese construction industry

Purpose The purpose of this study is to identify the essential elements required for innovation in the construction industry. To this end, the authors assessed the innovation at three levels: the firm growth account level, the firm behaviour level and the level of the firm’s experts. The factors influencing innovation at each level were identified and synthesised into guiding strategies for innovation. Design/methodology/approach Three methods were combined to develop a mode of thinking for innovation. First, at the semi-macro level, the authors identified the factors that influence the total factor productivity (TFP) by regressing the TFP across firms of the construction industry on a variety of extrinsic factors. Second, at the firm level, the authors extracted actual innovative firms from a large amount of public procurement individual data. The authors analysed the behaviours of these innovative firms. Third, the authors conducted a survey of expert-level personnel. In addition, a text analysis was performed to determine what was perceived by experts as a factor that leads to innovation. Findings The authors analysed the TFP, the behaviour of innovative firms and the perception issues between industry experts and stakeholders regarding innovation. As a result, two factors were identified. The first factor was the expectation of a positive solution to the problem through monopoly profits, future benefits and increased efficiency. The second factor was peer pressure from other organisations of a similar nature, peer pressure from users and technical information, as well as competitive conditions, e.g. recent environmental growth, including relevant innovations. Practical implications In the context of innovation, static and dynamic thinking were important requirements. Static concepts were based on the accumulation of knowledge, such as patents and technological progress. Dynamic thinking involved a future outlook, including a competitive environment as a necessary condition. Actual technological innovation was driven by incentives and expectations. Social implications According to the results of this study, the authors make the following recommendations for enhancing the construction-industry innovation in Japan: do not rely on a patent policy to drive innovation, create an environment that encourages competition and develop an ongoing initiative that encourages and rewards innovation. Originality/value This study was novel, in that the nature of innovation was investigated at three levels: the TFP, firm behaviour and expert perceptions. The identification and extraction of the two resulting points – statically necessary and dynamically necessary elements – was a significant contribution of the study.

Family ownership

This article reviews the existing literature about the most prevalent form of corporate ownership around the world: ownership by individuals—particularly founders—and families. We summarize the existing evidence about the prevalence and persistence of family ownership around the world, along with its impact on performance—both financial and non-financial—relative to other types of corporate ownership. We discuss how and why these empirical facts and findings come about—why owners in general, and family owners in particular, are critical drivers of firm behaviour and performance, and how they are able to exercise their influence over corporations in which other shareholders, such as institutional investors, and other stakeholders can also play an important role.

Voluntary business initiatives can reduce public pressure for regulating firm behaviour abroad

Almost all regulatory policy stops at the national border. Thus, when conducting business abroad, the behaviour of firms is regulated by their host, not home country. Yet, international institutions have issued (non-binding) codes of conduct on social/environmental aspects of firm behaviour, and various high-income countries discuss how to improve extraterritorial firm behaviour – with high political contestation over the appropriate mix of state intervention and corporate self-regulation. Exploiting a unique national referendum on this issue in Switzerland, we investigate how these interact from a public opinion standpoint. Based on a nationally representative survey experiment (N=1564) we find that while baseline support for state intervention is high (approx. 60%), corporate self-regulation decreases such support. However, only credible voluntary business initiatives lead to substantial reductions. Our results speak to a broad policy debate in European countries and the EU on how to ensure compliance of firms with human rights and environmental standards.

firm behaviour - social network From social network to firm performance: The mediating effect of trust, selling capability and pricing capability

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Investment and Capital Structure of the Firm

This chapter examines the implications of the stochastic discount factor for optimal firm behaviour. The last section focuses on capital structure decisions with bankruptcy costs and the tax shield implied by debt.