Can founders’ dual roles facilitate innovation? – from the perspective of founders’ R&D network characteristics
Abstract
Founders are crucial for the start-ups, which in turn makes it very important to study how founders’ behaviour affects the development of the start-ups. Based on the data of the companies listed on Growth Enterprise Market (GEM) and Small & Medium Enterprise (SME) board from 2014 to 2017 in China, this paper explores the impact of founders’ dual roles of R&D and management on enterprises’ innovation performance from the perspective of founders’ R&D network characteristics. The empirical research reveals that the more an enterprise’s founders participate in the R&D activities and the more central they are in the R&D network, the better the enterprise’s technological innovation performance. It is because the high network centrality enables founders the stronger ability of innovation and opportunity identification and draws their attention to innovation. This research further discloses that the promotion effect is restrained when enterprises obtain more government subsidies and founders have more power. Italso finds that founders’ R&D role does not transform the innovation output into enterprises’ value effectively though the role increases the innovation output, instead, it even restrains the transformation.
Keyword : founders, network centrality, government subsidies, founders’ power, enterprises’ innovation
How to Cite
Jiang, Y., Wang, D., & Zeng, Q. (2021). Can founders’ dual roles facilitate innovation? – from the perspective of founders’ R&D network characteristics. Journal of Business Economics and Management, 22(5), 1288-1307. https://doi.org/10.3846/jbem.2021.14950
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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López-Cabarcos, M. A., Srinivasan, S., Göttling-Oliveira-Monteiro, S., & Vázquez-Rodríguez, P. (2019). Tacit knowledge and firm performance relationship. The role of product innovation and the firm level capabilities. Journal of Business Economics and Management, 20(2), 330–350. https://doi.org/10.3846/jbem.2019.9590
Luan, C. J., Liu, Z. Y., & Hou, H. Y. (2008). Empirical study on the influence of centrality of collaboration network of inventors on scientific performance: Case study of inventors of world digital information transmission patents. Studies in Science of Science, 26(5), 938–941. http://qikan.cqvip.com/Qikan/Article/Detail?id=28501859
Miller, D., & Shamsie, J. (1996). The resource-based view of the firm in two environments: The Hollywood film studios from 1936 to 1965. Academy of Management Journal, 39(3), 519–543. https://doi.org/10.2307/256654
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Nanda, R., & Rhodeskropf, M. (2013). Investment cycles and startup innovation. Journal of Financial Economics, 110(2), 403–418. https://doi.org/10.1016/j.jfineco.2013.07.001
Okamuro, H., Kato, M., & Honjo, Y. (2011). Determinants of R&D cooperation in Japanese start-ups. Research Policy, 40(5), 728–738. https://doi.org/10.1016/j.respol.2011.01.012
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Tao, J. Y. (2013). An empirical study on corporate network centralization and the performance of technological innovation – The mediating role of organizational learning ability. Market Weekly, 6, 147–150. https://doi.org/10.3969/j.issn.1008-4428.2013.06.069
Wasserman, N. (2003). Founder-CEO succession and the paradox of entrepreneurial success. Organization Science, 14(2), 149–172. https://doi.org/10.1287/orsc.14.2.149.14995
Wildowicz-Giegiel, A. (2011). The relationship between intellectual capital and innovativeness of Polish economy. Journal of US-China Public Administration, 8(11), 1298–1307.
Wu, Z. F., & Xiao, S. F. (2016). Innovation attention shift, R&D spending leap and firm performance: Evidence from China. Nankai Business Review, 19(2), 182–192.
Xu, M. Z., & Cai, N. (2011). Venture capital syndication investment network and investment performance: A case study from IDG venture capital fund. Journal of Chongqing University (Social Science Edition), 17(1), 54–61.
Yan, Z. C, Liu, G., & Liang, H. (2018). Research on venture capitalists investor’s social network centrality and innovative performance of listed companies from new three-plate market. Chinese Journal of Management, 15(4), 523–529. https://doi.org/10.3969/j.issn.1672-884x.2018.04.006
Zhang, H., & Lang, C. K. (2013). The impact of past performance and network heterogeneity on knowledge creation – a central network position isn’t enough. Studies in Science of Science, 31(10), 1581–1589. https://doi.org/10.3969/j.issn.1003-2053.2013.10.023
Zeng, D. M., & Wen, J. Y. (2015). The influences of R&D collaboration network centrality, knowledge distance to firm’s dual-innovation. Chinese Journal of Management, 12(10), 1479–1486. https://doi.org/10.3969/j.issn.1672-884x.2015.10.010
Zhou, Y., & Gong, H. D. (2014). Empirical research on relationship between human capital characteristics of innovative entrepreneur and enterprise performance. Science and Technology Management Research, 34(2), 96–102. https:/doi.org/10.3969/j.issn.1000-7695.2014.02.022
Baron, R. A., & Tang, J. (2011). The role of entrepreneurs in firm-level innovation: Joint effects of positive affect, creativity, and environmental dynamism. Journal of Business Venturing, 26(1), 49–60. https://doi.org/10.1016/j.jbusvent.2009.06.002
Burt, R. S. (1992). Structural holes: The social structure of competition. Harvard University Press.
Cao, X., & Im, J. (2018). Founder human capital and new technology venture R&D search intensity: The moderating role of an environmental jolt. Small Business Economics, 50(3), 625–642. https://doi.org/10.1007/s11187-017-9911-5
Chen, C., & Liu, T. Y. (2012). Founder-manager, management equity dispersion and R & D decisions. Journal of Financial Research, 7, 196–206. http://www.cqvip.com/QK/97926X/20127/42673815.html
Dabrowski, D. (2019). Market knowledge and new product performance: The mediating effects of new product creativity. Journal of Business Economics and Management, 20(6), 1168–1188. https://doi.org/10.3846/jbem.2019.10788
Dalton, D. R., & Kesner, I. F. (1987). Composition and CEO duality in boards of directors: An international perspective. Journal of International Business Studies, 18(3), 33–42. https://doi.org/10.1057/palgrave.jibs.8490410
Finkelstein, S. (1992). Power in top management teams: Dimensions, measurement, and validation. Academy of Management Journal, 35(3), 505–538. https://doi.org/10.5465/256485
Fu, Y. N., Liu, F. C., & Ma, R. K. (2018). Influence mechanism of inventors’ collaboration network on firm’s exploratory innovation: Moderating effect of knowledge network. R&D Management, 30(2), 21–32.
Galloway, T. L., Miller, D. R., Sahaym, A., & Arthurs, J. D. (2016). Exploring the innovation strategies of young firms: Corporate venture capital and venture capital impact on alliance innovation strategy. Journal of Business Research, 71, 55–65. https://doi.org/10.1016/j.jbusres.2016.10.017
Guo, T., Zhang, Y. H., & Liu, H. D. (2018). The influence of entrepreneurs’ background characteristics on the venture enterprise technological capability: The mediating role of innovation attention. Science & Technology Progress and Policy, 1, 143–148.
Haeussler, C., Hennicke, M., & Mueller, E. (2019). Founder-inventors and their investors: Spurring firm survival and growth. Strategic Entrepreneurship Journal, 13(3), 288–325. https://doi.org/10.1002/sej.1326
Honjo, Y., Kato, M., & Okamuro, H. (2014). R&D investment of start-up firms: Does founders’ human capital matter? Small Business Economics, 42(2), 207–220. https://doi.org/10.1007/s11187-013-9476-x
Hovland, C. I., Janis, I. L., & Kelley, H. (1953). Communication and persuasion. Yale University Press. http://doi.org/10.1007/BF02713272
Janoskova, K., & Kral, P. (2015). Optimal timing of innovation as a precondition of successful innovation on the global market. In 15th International Scientific Conference on Globalization and its Socio-Economic Consequences (pp. 254–259). University of Zilina. https://www.researchgate.net/publication/321255282_OPTIMAL_TIMING_OF_INNOVATION_AS_A_PRECONDITION_OF_SUCCESSFUL_INNOVATION_ON_THE_GLOBAL_MARKET
Jin, J. L., Shu, C., & Zhou, K. Z. (2019). Product newness and product performance in new ventures: Contingent roles of market knowledge breadth and tacitness. Industrial Marketing Management, 76, 231–241. http://doi.org/10.1016/j.indmarman.2018.08.009
Kavadias, S., & Chao, R. O. (2008). Resource allocation and new product development portfolio management. In Ch. H. Loch & S. Kavadias (Eds.), Handbook of new product development management (pp. 135–163). Springer. https://doi.org/10.1016/B978-0-7506-8552-8.50009-8
Kato, M. (2020). Founders’ human capital and external knowledge sourcing: Exploring the absorptive capacity of start-up firms. Economics of Innovation & New Technology, 29(2), 184–205. https://doi.org/10.1080/10438599.2019.1598670
Kato, M., Okamuro, H., & Honjo, Y. (2015). Does founders’ human capital matter for innovation? Evidence from Japanese start-ups. Journal of Small Business Management, 53(1), 114–128. https://doi.org/10.1111/jsbm.12094
Liu, Y. L. (2015). Empirical study of the influence of chief financial officer power on accounting conservatism. China Soft Science, 4, 121–130. https://doi.org/10.3969/j.issn.1002-9753.2015.04.013
López-Cabarcos, M. A., Srinivasan, S., Göttling-Oliveira-Monteiro, S., & Vázquez-Rodríguez, P. (2019). Tacit knowledge and firm performance relationship. The role of product innovation and the firm level capabilities. Journal of Business Economics and Management, 20(2), 330–350. https://doi.org/10.3846/jbem.2019.9590
Luan, C. J., Liu, Z. Y., & Hou, H. Y. (2008). Empirical study on the influence of centrality of collaboration network of inventors on scientific performance: Case study of inventors of world digital information transmission patents. Studies in Science of Science, 26(5), 938–941. http://qikan.cqvip.com/Qikan/Article/Detail?id=28501859
Miller, D., & Shamsie, J. (1996). The resource-based view of the firm in two environments: The Hollywood film studios from 1936 to 1965. Academy of Management Journal, 39(3), 519–543. https://doi.org/10.2307/256654
Mueller, E., Syme, L., & Haeussler, C. (2020). Absorbing partner knowledge in R&D collaborations – the influence of founders on potential and realized absorptive capacity. R&D Management, 50(2), 255–276. https://doi.org/10.1111/radm.12395
Nanda, R., & Rhodeskropf, M. (2013). Investment cycles and startup innovation. Journal of Financial Economics, 110(2), 403–418. https://doi.org/10.1016/j.jfineco.2013.07.001
Okamuro, H., Kato, M., & Honjo, Y. (2011). Determinants of R&D cooperation in Japanese start-ups. Research Policy, 40(5), 728–738. https://doi.org/10.1016/j.respol.2011.01.012
Phillips, K. L., & Wrase, J. (2006). Is Schumpeterian “creative destruction” a plausible source of endogenous real business cycle shocks? Journal of Economic Dynamics and Control, 30(11), 1885–1913. https://doi.org/10.1016/j.jedc.2005.05.011
Tao, J. Y. (2013). An empirical study on corporate network centralization and the performance of technological innovation – The mediating role of organizational learning ability. Market Weekly, 6, 147–150. https://doi.org/10.3969/j.issn.1008-4428.2013.06.069
Wasserman, N. (2003). Founder-CEO succession and the paradox of entrepreneurial success. Organization Science, 14(2), 149–172. https://doi.org/10.1287/orsc.14.2.149.14995
Wildowicz-Giegiel, A. (2011). The relationship between intellectual capital and innovativeness of Polish economy. Journal of US-China Public Administration, 8(11), 1298–1307.
Wu, Z. F., & Xiao, S. F. (2016). Innovation attention shift, R&D spending leap and firm performance: Evidence from China. Nankai Business Review, 19(2), 182–192.
Xu, M. Z., & Cai, N. (2011). Venture capital syndication investment network and investment performance: A case study from IDG venture capital fund. Journal of Chongqing University (Social Science Edition), 17(1), 54–61.
Yan, Z. C, Liu, G., & Liang, H. (2018). Research on venture capitalists investor’s social network centrality and innovative performance of listed companies from new three-plate market. Chinese Journal of Management, 15(4), 523–529. https://doi.org/10.3969/j.issn.1672-884x.2018.04.006
Zhang, H., & Lang, C. K. (2013). The impact of past performance and network heterogeneity on knowledge creation – a central network position isn’t enough. Studies in Science of Science, 31(10), 1581–1589. https://doi.org/10.3969/j.issn.1003-2053.2013.10.023
Zeng, D. M., & Wen, J. Y. (2015). The influences of R&D collaboration network centrality, knowledge distance to firm’s dual-innovation. Chinese Journal of Management, 12(10), 1479–1486. https://doi.org/10.3969/j.issn.1672-884x.2015.10.010
Zhou, Y., & Gong, H. D. (2014). Empirical research on relationship between human capital characteristics of innovative entrepreneur and enterprise performance. Science and Technology Management Research, 34(2), 96–102. https:/doi.org/10.3969/j.issn.1000-7695.2014.02.022