The Corporate Innovation in Europe

In this article we investigate the political and industrial determinants of firm investment in Research and Development. We use data from the European Innovation Scoreboard of the European Commission for 36 countries in the period 2000-2019. We found that firm investments in Research and Development are positively associated with “Linkages”, “Innovation Index”, “International Co-publications”, “Medium and high-tech product exports”, “Non-R&D innovation expenditure”, “Turnover share large enterprises”, “Human Resources”, “Intellectual Assets”. Firm investments in Research and Development are negatively associated to “Foreign doctorate students”, “Knowledge-intensive services exports”, “Private co-funding of public R&D expenditures”, “Basic-school entrepreneurial education and training (SD)”, “New doctorate graduates”, “Trademark applications”, “Tertiary education” “Design applications”, “Lifelong Learning”, “Foreign-controlled enterprises – share of value added (SD)”, “Total Entrepreneurial Activity (TEA) (SD)”.

The SMEs Innovation in Europe

In this article we investigate the determinants of SMEs Innovation in Europe. We use data from the European Innovation Scoreboard of the European Commission in the period 2000-2019 for 36 countries. Data are analyzed through Panel Data with Fixed Effects, Random Effects, Dynamic Panel at 1 Stage and WLS. Results show that the presence of Innovators is positively associated with “Enterprise births”, “Government Procurement of Advanced Technology Products”, “Firm Investments”, “Intellectual Assets”, “Sales Impacts”, “Share High and Medium High-Tech Manufacturing” and negatively associated to “FDI Net Inflows” and “Population Density”.

The Determinants of Design Applications in Europe

In this article we estimate the level of “Design Application” in 37 European Countries in the period 2010-2019. We use data from the European Innovation Scoreboard-EIS of the European Commission. We perform four econometric models i.e., Pooled OLS, Panel Data with Random Effects, Panel Data with Fixed Effects, Dynamic Panel. We found that the level of Design Applications is negatively associated to “Enterprise Births”, “Finance and Support”, “Firm Investments” and positively associated with “Venture Capital”, “Turnover share large enterprises”, “R&D expenditure public sector”, “Intellectual Assets”. In adjunct we perform a cluster analysis with the application of the k-Means algorithm optimized with the Silhouette Coefficient and we found three different clusters. Finally, we confront eight different machine learning algorithms to predict the level of “Design Application” and we found that the Tree Ensemble is the best predictor with a value for the 30% of the dataset analyzed that is expected to decrease in mean of -12,86%.

The Broadband Penetration in Europe

In this article we estimate the determinants of broadband penetration in Europe. We use data from the European Innovation Scoreboard of the European Commission for 37 countries in the period 2010-2019. We apply Panel Data with Fixed Effects, Panel Data with Random Effects, WLS, OLS and Dynamic Panel. We found that the level of “Broadband Penetration” in Europe is positively associated to “Enterprises Providing ICT Training”, “Innovative Sales Share”, “Intellectual Assets”, “Knowledge-Intensive Service Exports”, “Turnover Share SMEs”, “Innovation Friendly Environment” and negatively associated with “Government procurement of advanced technology products”, “Sales Impact”, “Firm Investments”, “Opportunity-Driven Entrepreneurship”, “Most Cited Publications”, “Rule of Law”. In adjunct we perform a clusterization with k-Means algorithm optimized with the Silhouette Coefficient and we find the presence of three different clusters. Finally, we apply eight machine learning algorithms to predict the level of “Broadband Penetration” in Europe and we find that the Polynomial Regression algorithm is the best predictor and that the level of the variable is expected to increase of 10,4%.

Capital Round-Tripping: Determinants of Emerging Market Firm Investments into Offshore Financial Centers and Their Ethical Implications

Foreign direct investment (FDI) in offshore financial centers (OFCs) is gaining increased attention in business ethics research. Much of this research tends to focus on OFCs as locations where firms can avoid taxes, considering such behavior as unethical. Yet, there is dearth of studies on capital round-tripping by emerging market firms, which is an integral part of this phenomenon. Such round-tripping involves firms sending capital into OFCs only to invest it back in the home country under the guise of “foreign” investment. Presently there is little discussion of the ethical implications of such round-trip FDI activities. In this paper, we conceptualize round-tripping as institutional arbitrage and look at the determinants and ethical implications of such investments into OFCs. Exploring Russian round-tripping we note that firms tend to invest more funds in OFCs that offer a combination of tax and secrecy, or secrecy and property rights protection arbitrage opportunities. In either case firms exploit the opportunities provided by institutional differences between the OFC and Russia while investing back into Russia. Our results tend to indicate that equating OFC investment to tax avoidance and thus deeming it as unethical behavior is too narrow an explanation in the case of emerging economy round-tripping. This is because such investments are often motivated by the unethical behavior of home country stakeholders and may in fact provide benefits to society.

Evidence of an Inverted U–Shaped Relationship between Stakeholder Management Performance Variation and Firm Performance

Empirical research is largely supportive of the assertion of instrumental stakeholder theory that a positive relationship exists between “managing for stakeholders” and firm performance. However, despite considerable debate on the subject, the amount of variation across firm investments in stakeholders (stakeholder management performance) has not been adequately investigated. We address this gap using a sample of more than eighteen thousand firm-level observations over ten years. We find evidence to support an inverted U–shaped relationship between variation in stakeholder management performance and Tobin’s q, suggesting that firms that have some imbalance in their stakeholder management, but not too much, perform best. We discuss the implications of our study for instrumental stakeholder theory and managerial practice.

Networking in Weak Institutions: When Is It Good for Small Business Investment? The Case of Vietnam

ABSTRACT This study investigates the influence of business-specific, bank-specific, and political-specific networks on small firm investments in Vietnam. Also, I aim to explain how these social networks substitute the weaknesses of local institutions. Examining a set of more than 9,800 firm-year observations of small businesses in Vietnam from 2005–2015, I find that social ties with bank officials can boost firm investments; social ties with government officials can help firms overcome institutional voids; whereas social ties with businesspeople appear trivial to investment decisions. More importantly, I propose that networking, especially networks built upon connections with government officials, can substitute local institutions by addressing weaknesses in (1) inefficient legal enforcement, (2) corruption, (3) bureaucratic compliance, and (4) non-transparent governance system.

Do Affiliated Bankers on Board Enhance Corporate Social Responsibility? US Evidence

In this study, we examine whether and to what extent affiliated bankers on board may affect firms’ corporate social performance. Using a propensity score-matched sample from 2002 to 2016, we find that board directors from affiliated banks exert significantly positive influence on firms’ corporate social performance. Furthermore, board of directors from affiliated banks are negatively associated with firm investments in corporate social responsibility (CSR) activities when firms experience financial distress. Finally, we find that the effect of affiliated bankers on board on firms’ CSR performance depends on the affiliated banks’ CSR orientation, as affiliated banker directors from banks with higher CSR orientation have a stronger influence on firms’ investments in CSR activities. The results suggest that improving firm’s CSR performance is consistent with the affiliated banks’ interests.

Innovation Indicators and the Innovation Process - Evidence from the European Innovation Scoreboard

The purpose of this paper is to determine the influence of specific innovation indicators on the overall innovation process. In this sense, a quantitative methodological approach has been employed and data has been analysed using IBM SPSS version 24. Innovation is one the themes of considerable interest at worldwide and at European level, this being reflected by the 2020 European innovation indicator. Innovation is considered to generate economic growth and create competitive advantage for both large organizations and small and medium enterprises, thus being examined as a factor that influences overall business efficiency. In this sense, the data used for this research contains the information published in the European Innovation Indicator Scoreboard 2020 database. In this regard, two innovation indicators have been considered for analysis, namely firm investments and employment impact. An exploratory factor and correlation analysis have been performed in SPSS in order to provide an answer to the research question: “How do firm investments and employment impacts influence the overall Summary Innovation Index?”. The findings show that there is a positive correlation between the selected innovation indicators, namely firm investments and employment impact and the overall summary innovation index. These findings reveal a strong correlation between firm investments and the innovation process, which results into guidance for companies and their innovative efforts. In this sense, this paper further provides recommendations for firms on where to channel and focus their efforts in order to create more innovative products and activities.