Thesis (doctor of public administration)--University of the Philippines). / Includes bibliographical references (p. 284-286).

Innovations as a source of economic wellbeing and social prosperity has been well researched, albeit primarily done in the context of developed economies. However, of late, interest in the effect of innovation on economic performance and quality of life has been renewed as the world observes the rise of emerging economies, and at the same time, the prolonged recession in the more developed economies (i.e. North America and European countries). There has been a marked increase in the quantity and quality of research and development, spawn by innovative companies from emerging economies that are making their mark in global marketplace. These phenomena challenge the traditional concept that innovation flows from the resource rich developed countries to less developed countries, and that the latter are at a disadvantage in terms of knowledge, technology and competitiveness. Existing studies on national innovation highlight the relationships between innovative capability and its outcomes; however, few have tried to explain the determinants of a nation’s innovative capabilities. Using a sample of 95 countries and panel data analysis covering 28 years of observation, this study attempts to model the determinants of innovative capability at national level, and focuses on absorptive capacity and institutional framework as the main determinants of innovative capability. Further, this study identifies different aspects of absorptive capacity: creation and exploitation of innovation. Findings offer support on the importance of various sources of external knowledge in the creation of innovation, with FDI inflow and High Technology Export as the strongest sources. Corruption as institutional factor has negative effect on innovative capability, whereas openness shows no effect. National absorptive capacity moderates the effect of external knowledge on innovative capability, except on FDI outflow in which a negative effect on trademark application as a measure of innovative capability. The findings suggest that innovative capability and moderating role of absorptive capacity enhance economic wellbeing. Findings show that economic wellbeing increases happiness and income inequality (as the measures of quality of life); same thing as innovative capability, which also increases both happiness and income inequality. This study demonstrates that for happiness, higher education and better infrastructure (as the measure of foundational absorptive capacity) decrease the level of happiness. Higher education and ease access to information may increase expectation, which lead to unhappiness when the expectation is not met. For income inequality, negative effect of the moderating role of absorptive capacity means that higher education and better infrastructure contribute to lowering income inequality. Based on these findings, a nation should continue to attract FDI and trade in high technology because these sources of knowledge contribute to innovative capability. Policy makers can develop country positioning and country’s marketing activities by using the combination of the improvement of national factors and policy reforms. The upgrading of national factors helps to achieve higher economic wellbeing and quality of life in general.

Social enterprises (SEs) are playing an increasingly important role in fostering a more sustainable and equitable society around the world. Previous studies have suggested that developing capabilities to manage knowledge is a key driver of an SE's success (Domenico et al., 2010; Guclu et al., 2002; Tracey et al., 2011). An SE operates much like a business, but manages operations and directs its surpluses towards the pursuit of social goals (Austin et al., 2006; Dart, 2004; Dees, 2001; Granados et al., 2011; Mair & Marti, 2006; Nicholls, 2006) in an unstable or unpredictable market (Jaworski & Kohli, 1993; Mair & Marti, 2009; Nicholls, 2010; Sharir & Lerner, 2006). When the market is highly turbulent, customers' product expectations and preferences change over time. In such a situation, an SE has to pay more attention to the development of high-quality new innovative products and solutions that satisfy the social needs of specific customer segments, including underprivileged groups and socially responsible consumers, thereby more effectively addressing societal problems in a sustainable way. Indeed, the question of how absorptive capacity contributes to an SE's financial and social return is largely under-researched (Dacin et al., 2011; Granados et al., 2011; Haugh, 2005). Drawing on the dynamic capabilities perspective, this study proposes a research model in which absorptive capacity affects an SE's firm performance in both financial and social terms via marketing capabilities. It advances the existing SE-related literature by investigating the mediating role of marketing capabilities in the relationship between absorptive capacity and firm performance in the context of SEs. Also, market turbulence is theorized to moderate the relationship between marketing capabilities and performance. To perform this study, I collected data using questionnaires based on a list generated randomly from the database of the Hong Kong Council of Social Service SE Directory, and the contacts obtained from other sources such as Fullness Social Enterprises Society and the Workforce Development Agency, Ministry of Labour Taiwan. The data collection was performed over an eight-month period, with 109 valid responses being collected for this study. Multiple regression and a bootstrapping approach were used to test the hypotheses. The results provide support for most of the proposed hypotheses. Specifically, an SE's absorptive capacity is positively related to its marketing capabilities. Likewise, an SE's marketing capabilities are positively linked to its financial performance. In addition, an SE's marketing capabilities mediate the relationship between its absorptive capacity and its financial performance. Furthermore, the results show a positive moderating role of market turbulence in an SE's marketing capabilities-financial performance relationship. In summary, this study lends support to previous studies that show dynamic capabilities do not necessarily result in better financial performance directly in the context of SEs. It contributes to unpacking the black box of the absorptive capacity-financial performance relationship, and it shows that an SE's marketing capabilities play an important role as an underlying mediation mechanism. It also extends and contributes to the social enterprises literature by revealing the mediating role of marketing capabilities between absorptive capacity and financial performance, and the moderating effect of market turbulence on the relationship between marketing capabilities and financial performance in the context of SEs.

Diss. Stockholm : Handelshögskolan, 2009.

Drawing on the dynamic capabilities perspective, this study provides some important insights into the paradox of the knowledge transfer-firm performance relationship in international joint ventures (IJVs) in an emerging market, China. It examines the IJV’s distribution capability as the underlying mediating mechanism through which the potential benefits of foreign parent-IJV knowledge transfer can be channeled and transformed into superior IJV performance. In this mediation process, the IJV’s absorptive capacity and market turbulence work as two boundary conditions that reinforce the role of foreign parent-IJV knowledge transfer on the IJV’s distribution capability. Specifically, this study delineates how the IJV’s distribution capability mediates 1) the complementary effects of knowledge transfer and absorptive capacity, and 2) the interactive effects of knowledge transfer and market turbulence, on IJV performance, respectively. Five hypotheses are proposed and empirically tested based on a random sample of 136 equity-based manufacturing IJVs in China. Overall, the results support the proposed hypotheses except hypothesis 1 which posits the IJV’s distribution capability mediates the effect of foreign parent-IJV knowledge transfer to the IJV’s ultimate performance. The findings reveal that 1) the IJV’s absorptive capacity and market turbulence strengthen the link of foreign parent-IJV knowledge transfer and the establishment of the IJV’s distribution capability; and 2) distribution capability mediates two complementary effects (knowledge transfer and absorptive capacity, and knowledge transfer and market turbulence) on superior IJV performance in emerging markets. The plausible explanation for the unsupported hypothesis 1 is the majority of the knowledge transferred by foreign parent is related to product development, organizational management and operational processes, rather than market knowledge. Hence, because distribution capability is an ability closely related to market, the true impact of the knowledge transferred on distribution capability may be blurred and even concealed if IJVs lack sufficient absorptive capacity or are currently operating in stable markets. In summary, this study makes an original contribution to extant IJV literature by unpacking the black box of the knowledge transfer-IJV performance relationship and reveals that the IJV’s distribution capability plays as an underlying mediation mechanism. It also identifies the moderating roles of the IJV’s absorptive capacity and market turbulence on the knowledge transfer-distribution capability relationship, and makes important empirical contribution to extant dynamic capabilities literature by substantiating the theoretical claim that dynamic capabilities have an indirect effect on firm performance, and that the existence and use of dynamic capabilities are more effective under rapidly changing environments. Keywords: Knowledge Transfer; Distribution Capability; Absorptive Capacity; International Joint Ventures; China

This dissertation examines the free-rider problem of entry deterrence, the profitability of a horizontal merger, and the effects of a horizontal merger on the outsiders’ profits and industry prices, in the markets where firms' capacity costs are sunk. We investigate the free-rider problem of entry deterrence in the subgame perfect Nash equilibria of a three-stage game in which in the first stage multiple incumbent firms choose their capacities simultaneously and independently, in the second stage a potential entrant, after observing the incumbent firms’ capacity vector, chooses its capacity, and in the third stage the firms engage in capacity-constrained Cournot competition. We show that the free-rider problem may occur: there are situations where both entry prevention and allowing entry are equilibria but entry prevention is Pareto superior for the incumbent firms. We also show that increasing the number of incumbent firms may cause the equilibrium price to increase and thus consumer welfare to decrease. The free-rider problem is still manifested in a modified model in which multiple potential entrants choose their capacities sequentially after the first stage incumbents’ capacity decisions. Several recent papers which theoretically analyze the profitability of a horizontal merger and its effects on the outsiders’ profits and industry prices, all observe that a merger never decreases industry prices, a merger to a monopoly is always profitable, and a merger never hurts the outsiders. However, we demonstrate, in a market for a homogeneous product where firms with sunk capacities compete in quantities and there are potential entrants, that a merger can decrease industry price and a merger of incumbent firms to a monopoly may not be profitable. We also show, in a market for a homogeneous product where firms with sunk capacities engage in capacity-constrained price competition, that a merger can hurt the outsiders. / Ph. D.

Absorptive capacity plays an important role in the organizational adaptation process. Prior research on absorptive capacity focuses on its role in organizational outcomes such as financial performance, innovation, new product development, etc. Recently, scholars have called for research on factors that influence absorptive capacity. Because absorptive capacity plays a vital role in achieving organizational outcomes, it behooves us to improve our understanding of absorptive capacity and its antecedents to serve both researchers and practitioners. In this investigation, strategic thinking is posited to be a key antecedent of absorptive capacity. Capability theory suggests that strategic thinking is a metaphysical (higher order) capability that influences an organization's absorptive capacity. Combining this argument with Miles and Snow's typology of organizational adaptation process, it is posited that the relationship between strategic thinking and absorptive capacity can be clustered into different "groups." Prospectors, defenders, and analyzers, characterized in Miles and Snow's typology of firms are viewed as distinctive groups that exhibit different relationships between strategic thinking and absorptive capacity. Results from an empirical examination suggest that strategic thinking is positively related to absorptive capacity. The results also suggest that the relationship between these two constructs is different between these groups and that the strategic thinking of prospectors has a weaker relationship with absorptive capacity than other type of firms.