Search Results (1,049)

This paper examines the role of internal knowledge in driving innovation and firm performance in sub-Saharan Africa, using panel data from the World Bank Enterprise Surveys covering fifteen countries in the region. Specifically, the analysis assesses the extent to which internal knowledge, measured through employee educational attainment, stimulates innovation, and whether innovation, in turn, contributes to improved firm performance. The findings reveal that internal knowledge has a significant positive effect on innovation, and that both internal knowledge and innovation are key drivers of firm performance in developing country contexts. These results underscore the strategic importance of building firm-level knowledge capabilities to enhance competitiveness, particularly among manufacturing firms. The study offers valuable policy implications, emphasizing the need to strengthen internal learning systems, workforce skills, and innovation support mechanisms to foster inclusive industrial growth in sub-Saharan Africa. Full article

Supply chains are increasingly exposed to sudden disruptive events (SDEs) such as natural disasters and trade wars. We develop a multi-stage game-theoretical model to investigate a novel coping mechanism: when a firm is forced to exit the market because of SDEs, the firm can regain profits by licensing its proprietary production tech to a competitor. We find that, compared with the scenario before SDEs, such events can even increase the profit of each manufacturer under certain conditions. Under certain conditions, the cooperative strategy (i.e., supply chain reshaping) yields a higher supply chain system profit than the non-cooperative strategy. After SDEs, the common manufacturer may either accept or reject cooperation, depending on the customer transfer rate and the cooperation cost. Notably, under the cooperation strategy, the high-tech manufacturer extracts part of the common manufacturer’s profit through patent licensing, and the existence of cooperation cost further contributes to a misalignment between the common manufacturer’s optimal decision and the supply chain system optimum. These findings contribute to the literature by identifying a novel supply chain reshaping mechanism driven by patent licensing and offer strategic guidance for firms and policymakers navigating SDE-induced market exits. Full article

The rapid development of digital technology is reshaping the global economic landscape. However, its impact on firms’ capacity utilization rate (CUR), particularly through technological innovation, remains unclear. This study investigates this issue by developing an endogenous growth model that connects digital technology to CUR. The empirical analysis is based on data from Chinese A-share manufacturing firms. The methods employed include quantile regression, instrumental variable techniques, and various tests to explore underlying mechanisms. CUR is calculated using a special model that looks at random variations, and digital transformation is assessed using text analysis powered by machine learning. The findings indicate that digital transformation significantly enhances CUR, especially for firms with average capacity utilization levels, but has a limited effect on low- and high-end firms. Moreover, technological innovation mediates this relationship; however, factors like “double arbitrage” (involving policy and capital markets) and “herd effects” tend to prioritize quantity over quality, which constrains innovation potential. Improvements in CUR lead to enhanced firm performance and productivity, generating industry spillovers and demonstrating the broader economic externalities of digitalization. This study uniquely applies endogenous growth theory to examine the role of digital transformation in optimizing CUR. It introduces the “quantity-quality” technology innovation paradox as a crucial mechanism and highlights industry spillovers to address overcapacity while offering insights for fostering sustainable economic and social development in emerging markets. Full article

This study evaluates the effectiveness of the B Impact Assessment (BIA) as a catalyst for integrating sustainability into industrial firms through a qualitative case study of LC Paper, the first B Corp-certified tissue manufacturer globally and a pioneer in applying BIA in the pulp and paper sector. Based on semi-structured interviews, organizational documents, and direct observation, this study examines how BIA influences corporate governance, environmental practices, and stakeholder engagement. The findings show that BIA fosters structured goal setting and the implementation of measurable actions aligned with environmental stewardship, social responsibility, and economic resilience. Tangible outcomes include improved stakeholder trust, internal transparency, and employee development, while implementation challenges such as resource allocation and procedural complexity are also reported. Although the single-case design limits generalizability, this study identifies mechanisms transferable to other firms, particularly those in environmentally intensive sectors. The case studied also illustrates how leadership commitment, participatory governance, and data-driven tools facilitate the operationalization of sustainability. By integrating stakeholder and institutional theory, this study contributes conceptually to understanding certification frameworks as tools for embedding sustainability. This research offers both theoretical and practical insights into how firms can align strategy and impact, expanding the application of BIA beyond early adopters and into traditional industrial contexts. Full article

This study explores whether sustainability achievements—proxied through ESG (environmental, social, and governance) reporting—are associated with superior financial performance in Latvia’s manufacturing sector, where ESG maturity remains low and institutional readiness is still emerging. Building on stakeholder, legitimacy, signal, slack resources, and agency theories, this study applies a mixed-method approach (that consists of two analytical stages) suited to the limited availability and reliability of ESG-related data in the Latvian manufacturing sector. Financial indicators from three large firms—AS MADARA COSMETICS, AS Latvijas Finieris, and AS Valmiera Glass Grupa—are compared with industry averages over the 2019–2023 period using independent sample T-tests. ESG integration is evaluated through a six-stage conceptual schema ranging from symbolic compliance to performance-driven sustainability. The results show that AS MADARA COSMETICS, which demonstrates advanced ESG integration aligned with international standards, significantly outperforms its industry in all profitability metrics. In contrast, the other two companies remain at earlier ESG maturity stages and show weaker financial performance, with sustainability disclosures limited to general statements and outdated indicators. These findings support the synergy hypothesis in contexts where sustainability is internalized and operationalized, while also highlighting structural constraints—such as resource scarcity and fragmented data—that may limit ESG-financial alignment in post-transition economies. This study offers practical guidance for firms seeking competitive advantage through strategic ESG integration and recommends policy actions to enhance ESG transparency and performance in Latvia, including performance-based reporting mandates, ESG data infrastructure, and regulatory alignment with EU directives. These insights contribute to the growing empirical literature on ESG effectiveness under constrained institutional and economic conditions. Full article

This paper examines the effect of digital innovation on cost stickiness in manufacturing firms, focusing on the underlying mechanisms and contextual factors. Using data from Chinese A-share listed manufacturing firms from 2012 to 2023, we find that, first, for each one-unit increase in the level of digital technology, the cost stickiness index of enterprises decreases by an average of 0.4315 units, primarily through digital process innovation and digital business model innovation, whereas digital product innovation does not exhibit a statistically significant impact. Second, manufacturing servitization and the optimization of human capital structure are identified as key mediating mechanisms. Digital innovation promotes servitization by transitioning firms from product-centric to service-oriented business models, thereby reducing fixed costs and improving resource flexibility. It also optimizes human capital by increasing the proportion of high-skilled employees and reducing labor adjustment costs. Third, the effect of digital innovation on cost stickiness is found to be heterogeneous. Firms with high financing constraints benefit more from the cost-reducing effects of digital innovation due to improved resource allocation efficiency. Additionally, mid-tenure executives are more effective in leveraging digital innovation to mitigate cost stickiness, as they balance short-term performance pressures with long-term strategic investments. These findings contribute to the understanding of how digital transformation reshapes cost behavior in manufacturing and provide insights for policymakers and firms seeking to achieve sustainable development through digital innovation. Full article

As artificial intelligence (AI) becomes increasingly embedded in organizational development, understanding how leadership shapes employee responses to AI is critical for fostering workplace innovation. Drawing on trait activation theory, this study develops a theoretical model in which employee AI trust enhances innovative performance through AI crafting. Paternalistic leadership serves as a situational moderator, while the leader’s AI opportunity perception functions as a higher-order moderator. A three-wave survey was conducted with 523 employees from 14 AI-intensive manufacturing firms in China. Results show that the interaction between AI trust and paternalistic leadership positively predicts both AI crafting and innovative performance. In addition, AI crafting mediates the effect of the interaction term on innovative performance. Furthermore, the leader’s AI opportunity perception moderates this interactive effect: when this perception is high, the positive impact of AI trust and paternalistic leadership on AI crafting is significantly stronger; when it is low, the effect weakens. These findings contribute to the literature by clarifying the situational and cognitive conditions under which AI trust promotes innovation, thereby extending trait activation theory to AI-enabled workplaces and offering actionable insights for leadership development in the intelligent era. Full article

This study investigates the role of Big Data Analytics Capabilities (BDACs) in ambidexterity explorative innovation (EXPLRI) and exploitative (EXPLOI) innovation for achieving a sustainable performance (SP) in the manufacturing sector of a resource-constrained developing economy. While a BDAC has been widely linked to innovation in developed economies, its effectiveness in developing contexts shaped by indigenous innovation practices like Jugaad remains underexplored. Anchored in the Resource-Based View (RBV) and Dynamic Capabilities (DC) theory, we propose a model where the BDAC enhances both EXPLRI and EXPLOI, which subsequently leads to an improved sustainable performance. We further examine the Jugaad capability as a cultural moderator. Using survey data from 418 manufacturing firms and analyzed via Partial Least Squares Structural Equation Modeling (PLS-SEM), results confirm that BDA capabilities significantly boost both types of innovations, which positively impact sustainable performance dimensions. Notably, Jugaad positively moderates the relationship between EXPLOI and financial, innovation, and operational performance but negatively moderates the link between EXPLRI and innovation performance. These findings highlight the nuanced influence of culturally embedded innovation practices in BDAC-driven ecosystems. This study contributes by extending the RBV–DC framework to include cultural innovation capabilities and empirically validating the contingent role of Jugaad in enhancing or constraining innovation outcomes. This study also validated the Jugaad capability measurement instrument for the first time in the context of Pakistan. For practitioners, aligning data analytics strategies with local innovative cultures is vital for sustainable growth in emerging markets. Full article

How do regulatory policies, funding structures, and cross-sector coordination shape knowledge flows and institutional transformation? Focusing on the smart medical device sector in Taiwan, this study explores how governance dynamics accelerate system transformation and foster demand for adaptive and integrative innovation systems. Building on the National Biotechnology Innovation System framework and qualitative system dynamics modeling, the study analyzes institutional interactions through 28 semi-structured interviews and 18 policy documents. Findings identify systemic bottlenecks, including translational gaps, coordination challenges, and barriers for traditional manufacturers. These gaps have enabled tech firms to emerge as system leaders by bridging these institutional gaps. This study extends innovation systems theory by conceptualizing an emergent governance function that addresses institutional gaps. At the policy level, the study highlights the importance of enabling institutional change in governance to address structural fragmentation and support system-wide transformation. Full article

Industry 4.0 represents a significant transformation in industrial systems through digital integration, presenting both opportunities and challenges for aligning the workforce, especially in emerging economies like Thailand. This study adopts a sequential exploratory mixed-method approach to investigate how strategic human resource development (HRD) contributes to sustainable transformation, defined as the enduring alignment between workforce capabilities and technological advancement. The qualitative phase involved case studies of five Thai manufacturing firms at varying levels of Industry 4.0 adoption, utilizing semi-structured interviews with executives and HR leaders. Thematic findings informed the development of a structured survey, distributed to 144 firms. Partial Least Squares Structural Equation Modeling (PLS SEM) was used to test the hypothesized relationships among business pressures, leadership support, HRD preparedness, and technological readiness. The analysis reveals that business pressures significantly influence leadership and HRD, which in turn facilitate technological readiness. However, business pressures alone do not directly enhance readiness without the support of intermediaries. These results underscore the critical role of integrated HRD and leadership frameworks in enabling sustainable digital transformation. This study contributes to theoretical perspectives by integrating HRD, leadership, and technological readiness, offering practical guidance for firms aiming to navigate the complexities of Industry 4.0. Full article

Based on firm-level data of Japanese listed companies for the period of 2013–2022, this study conducts an empirical analysis to investigate how the issuance of green bonds influences corporate environmental and financial performance. The results show that the green bond issuance demonstrates a reduction in corporate greenhouse gas emission intensity and energy consumption intensity in the long term. Moreover, the issuance of green bonds enhances the financial performance of firms in the long run. However, the positive effect of green bond issuance on corporate environmental and financial performance is significant only among firms that have set specific quantitative environmental targets. In addition, for manufacturing and transportation green bond issuers that have set specific quantitative environmental targets, the improvement in environmental performance is evident in both the long and short term. Full article

As an important direction in industrial evolution, the synergistic agglomeration of manufacturing and productive service industries has become a key path to promote the green transformation of the economy. Based on China’s provincial panel data, this study utilizes a variety of econometric methods to explore in depth the mechanisms, spatial effects and regional differences in the impact of the synergistic agglomeration of manufacturing and productive service industries on the green, low-carbon and recycling development of the economy. The empirical results show that the synergistic agglomeration of manufacturing and productive services not only directly promotes the green, low-carbon and recycling development of the economy, but also generates an indirect impact through the intermediary channel and exhibits significant spillover characteristics in the spatial dimension. This conclusion holds firm after a series of robustness tests. In addition, environmental regulations and the level of regional industrialization play a moderating role on the impact of industrial synergistic agglomeration and green, low-carbon and recycling development of the economy, and the effect of the role varies across regions and levels of economic development. This paper provides a decision-making reference for further optimizing the regional layout of China’s industries and enhancing the green, low-carbon and recycling development of the economy in each province. Full article

Demands for companies to comply with environmental, social, and governance (ESG) requirements are growing, and companies are also expected to play a role in promoting sustainable development. For companies to achieve sustainable growth while addressing ESG, it must be understood whether ESG activities promote improved corporate financial performance. We conducted a five-year panel data analysis of 635 Japanese firms from FY 2019 to FY 2023, using the PBR, PER, and ROE financial indicators as the dependent variables and CSR ratings in the human resource utilization (HR), environment (E), governance (G), and social (S) categories as the independent variables. The results revealed that, depending on the combination of ESG field and financial indicators, companies with advanced ESG initiatives had greater financial performance, with some cases showing a nonlinear relationship; differences in the results between manufacturing and nonmanufacturing industries were also observed. For companies to effectively advance ESG activities, it is important to clarify the objectives and results for each ESG category. For policymakers to consider measures to encourage companies’ ESG activities, it is also important to design finely tuned regulations and incentives according to the ESG category and industry characteristics. Full article

This study examined globalisation, de-globalisation, the combination, and the future of value chains to ascertain which would be best for the future of value chains. The study used a cross-sectional survey of 277 randomly selected employees of multinational manufacturing firms in Nigeria. The data were analysed using structural equation model path diagram techniques. The results indicate that de-globalisation and the combination of globalisation and de-globalisation have direct and indirect significant relationships with the future of value chains, but globalisation does not have any direct significant relationship with the future of value chains but has an indirect significant relationship with the future of value chains. In addition, supply chain management significantly mediates the relationships among globalisation, de-globalisation, the combination, and the future of value chains. By establishing a significant association between the combination and the future of value chains, the study departs from future studies whose results are largely situated on the bipolar ends of a continuum. The study makes significant contributions to the traditional theory of trade protectionism, endogenous growth theory, and institutional theory, as well as to practice. Full article

With rising environmental awareness, numerous firms are transitioning to green investment, such as low-carbon production. However, the consumer adoption of low-carbon products remains low due to transparency concerns. Many firms are leveraging blockchain to address information asymmetry in the supply chain, thereby building consumer confidence in low-carbon products. The purpose of this work is to provide decision support for business firms by analyzing the strategic choices regarding the manufacturer’s green investment and the e-retailer’s adoption of blockchain technology. Three strategy combinations are considered, including the baseline strategy combination without green investment and blockchain technology (NN), the strategy combination with only green investment (LN), and the strategy combination with both green investment and blockchain technology (LB). The optimal pricing and green level decisions are derived, and the conditions under which green investment and blockchain technology are beneficial to the supply chain members are examined. The findings suggest that the e-retailer can obtain the highest profit without adopting blockchain technology if it holds a substantial or extremely low market share, if the consumers’ low-carbon preference is at a low to medium level, or if the consumer green trust coefficient is high when the manufacturer implements the green investment strategy. When consumers exhibit a weak preference for low-carbon products, the strategy combination NN is optimal for the supply chain members. The strategy combination LB becomes optimal if the consumer green trust coefficient is near or below the moderate threshold, if the market share of a channel is neither extremely high nor low, or if consumers exhibit a strong preference for low-carbon products. Full article