IDEAS home Printed from https://ideas.repec.org/a/eee/techno/v126y2023ics0166497223001281.html
   My bibliography  Save this article

On or off: The triggering effect of underperformance duration on cooperative innovation

Author

Listed:
  • Su, Taoyong
  • Yu, Yuzhu
  • Chen, Yongheng
  • Hou, Wanrong

Abstract

By complementing performance feedback theory with organizational pressure, we argue that underperformance duration breaks the balance between growth pressure and survival pressure and triggers the shift from “on” to “off” of cooperative innovation, which shows an inverted U-shaped relationship between the duration of underperformance and cooperative innovation. Moreover, compared with firms with historical underperformance, firms with peer underperformance will reach the inflection point of the inverted U-shaped relationship after a longer duration. In addition, we find that managerial overconfidence weakens the above relationship. Our hypotheses receive general support by testing the sample of 70 public biopharmaceutical manufacturing companies between 2007 and 2019 in China.

Suggested Citation

  • Su, Taoyong & Yu, Yuzhu & Chen, Yongheng & Hou, Wanrong, 2023. "On or off: The triggering effect of underperformance duration on cooperative innovation," Technovation, Elsevier, vol. 126(C).
    • Handle: RePEc:eee:techno:v:126:y:2023:i:c:s0166497223001281
    DOI: 10.1016/j.technovation.2023.102817
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0166497223001281
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.technovation.2023.102817?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Lee Fleming & David M. Waguespack, 2007. "Brokerage, Boundary Spanning, and Leadership in Open Innovation Communities," Organization Science, INFORMS, vol. 18(2), pages 165-180, April.
    2. Christian Schumacher & Steffen Keck & Wenjie Tang, 2020. "Biased interpretation of performance feedback: The role of CEO overconfidence," Strategic Management Journal, Wiley Blackwell, vol. 41(6), pages 1139-1165, June.
    3. Montserrat Manzaneque & Alfonso A. Rojo-Ramírez & Julio Diéguez-Soto & Maria J. Martínez-Romero, 2020. "How negative aspiration performance gaps affect innovation efficiency," Small Business Economics, Springer, vol. 54(1), pages 209-233, January.
    4. Delmar, Frédéric & Wallin, Jonas & Nofal, Ahmed Maged, 2022. "Modeling new-firm growth and survival with panel data using event magnitude regression," Journal of Business Venturing, Elsevier, vol. 37(5).
    5. Saemundsson, Rögnvaldur & Candi, Marina & Sigurjonsson, Throstur Olaf, 2022. "The influence of performance feedback and top management team orientation on decisions about R&D in technology-based firms," Technovation, Elsevier, vol. 113(C).
    6. Delmar, Frédéric & McKelvie, Alexander & Wennberg, Karl, 2013. "Untangling the relationships among growth, profitability and survival in new firms," Ratio Working Papers 205, The Ratio Institute.
    7. John Joseph & Vibha Gaba, 2015. "The fog of feedback: Ambiguity and firm responses to multiple aspiration levels," Strategic Management Journal, Wiley Blackwell, vol. 36(13), pages 1960-1978, December.
    8. Grossman, Zachary & Owens, David, 2012. "An unlucky feeling: Overconfidence and noisy feedback," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 510-524.
    9. Vibha Gaba & Henrich R. Greve, 2019. "Safe or Profitable? The Pursuit of Conflicting Goals," Organization Science, INFORMS, vol. 30(4), pages 647-667, July.
    10. Joel A. C. Baum & Kristina B. Dahlin, 2007. "Aspiration Performance and Railroads’ Patterns of Learning from Train Wrecks and Crashes," Organization Science, INFORMS, vol. 18(3), pages 368-385, June.
    11. Martínez-Noya, Andrea & García-Canal, Esteban, 2021. "Innovation performance feedback and technological alliance portfolio diversity: The moderating role of firms’ R&D intensity," Research Policy, Elsevier, vol. 50(9).
    12. Jo Thori Lind & Halvor Mehlum, 2010. "With or Without U? The Appropriate Test for a U‐Shaped Relationship," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 72(1), pages 109-118, February.
    13. Guoli Chen & Craig Crossland & Shuqing Luo, 2015. "Making the same mistake all over again: CEO overconfidence and corporate resistance to corrective feedback," Strategic Management Journal, Wiley Blackwell, vol. 36(10), pages 1513-1535, October.
    14. Richard F. J. Haans & Constant Pieters & Zi-Lin He, 2016. "Thinking about U: Theorizing and testing U- and inverted U-shaped relationships in strategy research," Strategic Management Journal, Wiley Blackwell, vol. 37(7), pages 1177-1195, July.
    15. Sergio Mariotti & Rocco Mosconi & Lucia Piscitello, 2019. "Location and survival of MNEs' subsidiaries: Agglomeration and heterogeneity of firms," Strategic Management Journal, Wiley Blackwell, vol. 40(13), pages 2242-2270, December.
    16. Audia, Pino G. & Brion, Sebastien, 2007. "Reluctant to change: Self-enhancing responses to diverging performance measures," Organizational Behavior and Human Decision Processes, Elsevier, vol. 102(2), pages 255-269, March.
    17. Christel Lane & Jocelyn Probert, 2007. "The External Sourcing of Technological Knowledge by US Pharmaceutical Companies: Strategic Goals and Inter-organizational Relationships," Industry and Innovation, Taylor & Francis Journals, vol. 14(1), pages 5-25.
    18. Erk P. Piening & Ferdinand Thies & Michael Wessel & Alexander Benlian, 2021. "Searching for Success—Entrepreneurs’ Responses to Crowdfunding Failure," Entrepreneurship Theory and Practice, , vol. 45(3), pages 626-657, May.
    19. Saif Mir & John A. Aloysius & Stephanie Eckerd, 2017. "Understanding Supplier Switching Behavior: The Role of Psychological Contracts in a Competitive Setting," Journal of Supply Chain Management, Institute for Supply Management, vol. 53(3), pages 3-18, July.
    20. Beverly B. Tyler & Turanay Caner, 2016. "New product introductions below aspirations, slack and R&D alliances: A behavioral perspective," Strategic Management Journal, Wiley Blackwell, vol. 37(5), pages 896-910, May.
    21. Cohen, Wesley M & Levinthal, Daniel A, 1989. "Innovation and Learning: The Two Faces of R&D," Economic Journal, Royal Economic Society, vol. 99(397), pages 569-596, September.
    22. Brown, Rayna & Sarma, Neal, 2007. "CEO overconfidence, CEO dominance and corporate acquisitions," Journal of Economics and Business, Elsevier, vol. 59(5), pages 358-379.
    23. Esteban Lafuente & Jasmina Berbegal-Mirabent, 2019. "Assessing the productivity of technology transfer offices: an analysis of the relevance of aspiration performance and portfolio complexity," The Journal of Technology Transfer, Springer, vol. 44(3), pages 778-801, June.
    24. Roijakkers, Nadine & Hagedoorn, John, 2006. "Inter-firm R&D partnering in pharmaceutical biotechnology since 1975: Trends, patterns, and networks," Research Policy, Elsevier, vol. 35(3), pages 431-446, April.
    25. Yu Zhang & Yan Gong, 2018. "Stock Return or Sales Growth? Multiple Performance Feedback and Strategic Investments Under Securities Analysts’ Earnings Pressure," Journal of Management Studies, Wiley Blackwell, vol. 55(8), pages 1356-1385, December.
    26. Elio Shijaku & Martin Larraza-Kintana & Ainhoa Urtasun-Alonso, 2020. "Network centrality and organizational aspirations: A behavioral interaction in the context of international strategic alliances," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(5), pages 813-828, July.
    27. Wang, Ming-Chao & Chen, Pei-Chen & Fang, Shih-Chieh, 2018. "A critical view of knowledge networks and innovation performance: The mediation role of firms' knowledge integration capability," Journal of Business Research, Elsevier, vol. 88(C), pages 222-233.
    28. Ambra Mazzelli & Robert S. Nason & Alfredo De Massis & Josip Kotlar, 2019. "Causality Rules: Performance Feedback on Hierarchically Related Goals and Capital Investment Variability," Journal of Management Studies, Wiley Blackwell, vol. 56(8), pages 1630-1654, December.
    29. James G. March, 1991. "Exploration and Exploitation in Organizational Learning," Organization Science, INFORMS, vol. 2(1), pages 71-87, February.
    30. Piening, Erk Peter & Thies, Ferdinand & Wessel, Michael & Benlian, Alexander, 2021. "Searching for Success—Entrepreneurs’ Responses to Crowdfunding Failure," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 124588, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    31. Shantanu Dutta & Om Narasimhan & Surendra Rajiv, 2005. "Conceptualizing and measuring capabilities: methodology and empirical application," Strategic Management Journal, Wiley Blackwell, vol. 26(3), pages 277-285, March.
    32. David Souder & J. Myles Shaver, 2010. "Constraints and incentives for making long horizon corporate investments," Strategic Management Journal, Wiley Blackwell, vol. 31(12), pages 1316-1336, December.
    33. Cheng, Ruiqi & Yuan, Peng & Jiang, Gongxiong, 2023. "Growth, agglomeration externalities, and survival: Evidence from Chinese manufacturing start-ups," Journal of Business Research, Elsevier, vol. 154(C).
    34. Andrew V. Shipilov & Stan Xiao Li & Henrich R. Greve, 2011. "The Prince and the Pauper: Search and Brokerage in the Initiation of Status-Heterophilous Ties," Organization Science, INFORMS, vol. 22(6), pages 1418-1434, December.
    35. Turanay Caner & Olga Bruyaka & John E. Prescott, 2018. "Flow Signals: Evidence from Patent and Alliance Portfolios in the US Biopharmaceutical Industry," Journal of Management Studies, Wiley Blackwell, vol. 55(2), pages 232-264, March.
    36. Purdy, Lauren & Eslami, Hadi & Eshghi, Kamran & Rod, Michel, 2023. "Technology sourcing and the dark side of open innovation: Evidence from the biopharmaceutical sector," Technovation, Elsevier, vol. 119(C).
    37. David W. Lehman & Jungpil Hahn & Rangaraj Ramanujam & Bradley J. Alge, 2011. "The Dynamics of the Performance--Risk Relationship Within a Performance Period: The Moderating Role of Deadline Proximity," Organization Science, INFORMS, vol. 22(6), pages 1613-1630, December.
    38. Wennberg, Karl & Delmar, Frédéric & McKelvie, Alexander, 2016. "Variable risk preferences in new firm growth and survival," Journal of Business Venturing, Elsevier, vol. 31(4), pages 408-427.
    39. James G. March & Zur Shapira, 1987. "Managerial Perspectives on Risk and Risk Taking," Management Science, INFORMS, vol. 33(11), pages 1404-1418, November.
    40. Bat Batjargal, 2013. "Institutional Polycentrism, Entrepreneurs??? Social Networks, And New Venture Growth," William Davidson Institute Working Papers Series wp1060, William Davidson Institute at the University of Michigan.
    41. Alex Makarevich, 2018. "Performance feedback as a cooperation “switch”: A behavioral perspective on the success of venture capital syndicates among competitors," Strategic Management Journal, Wiley Blackwell, vol. 39(12), pages 3247-3272, December.
    42. Miotti, Luis & Sachwald, Frederique, 2003. "Co-operative R&D: why and with whom?: An integrated framework of analysis," Research Policy, Elsevier, vol. 32(8), pages 1481-1499, September.
    43. Wei Yu & Maria Minniti & Robert Nason, 2019. "Underperformance duration and innovative search: Evidence from the high‐tech manufacturing industry," Strategic Management Journal, Wiley Blackwell, vol. 40(5), pages 836-861, May.
    44. Jared Harris & Philip Bromiley, 2007. "Incentives to Cheat: The Influence of Executive Compensation and Firm Performance on Financial Misrepresentation," Organization Science, INFORMS, vol. 18(3), pages 350-367, June.
    45. John Joseph & Ronald Klingebiel & Alex James Wilson, 2016. "Organizational Structure and Performance Feedback: Centralization, Aspirations, and Termination Decisions," Organization Science, INFORMS, vol. 27(5), pages 1065-1083, October.
    46. Thomas Astebro & Scott A. Jeffrey & Gordon K. Adomdza, 2007. "Inventor Perseverance after Being Told to Quit : The Role of Cognitive Biases," Post-Print hal-00476770, HAL.
    47. Elizabeth Boyle & Zur Shapira, 2012. "The Liability of Leading: Battling Aspiration and Survival Goals in the Jeopardy! Tournament of Champions," Organization Science, INFORMS, vol. 23(4), pages 1100-1113, August.
    48. Mueller, George C. & McKinley, William & Mone, Mark A. & Barker, Vincent III, 2001. "Organizational decline--A stimulus for innovation?," Business Horizons, Elsevier, vol. 44(6), pages 25-34.
    49. Bat Batjargal & Michael Hitt & Anne Tsui & Jean-Luc Arregle & Justin Webb & Toyah Miller, 2013. "Institutional Polycentrism, Entrepreneurs' Social Networks, and New Venture Growth," Post-Print hal-02313079, HAL.
    50. Pino G. Audia & Henrich R. Greve, 2006. "Less Likely to Fail: Low Performance, Firm Size, and Factory Expansion in the Shipbuilding Industry," Management Science, INFORMS, vol. 52(1), pages 83-94, January.
    51. Joan Penner‐Hahn & J. Myles Shaver, 2005. "Does international research and development increase patent output? An analysis of Japanese pharmaceutical firms," Strategic Management Journal, Wiley Blackwell, vol. 26(2), pages 121-140, February.
    52. Stephan Billinger & Nils Stieglitz & Terry R. Schumacher, 2014. "Search on Rugged Landscapes: An Experimental Study," Organization Science, INFORMS, vol. 25(1), pages 93-108, February.
    53. Danchi Tan & Weichieh Su & Joseph T. Mahoney & Yasemin Kor, 2020. "A review of research on the growth of multinational enterprises: A Penrosean lens," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(4), pages 498-537, June.
    54. Zhong, Xi & Chen, Weihong & Ren, Ge, 2022. "The effects of performance shortfalls on firms’ exploitation and exploration R&D internationalization decisions: Does industry environmental matter?," Technovation, Elsevier, vol. 112(C).
    55. Ohad Ref & Zur Shapira, 2017. "Entering new markets: The effect of performance feedback near aspiration and well below and above it," Strategic Management Journal, Wiley Blackwell, vol. 38(7), pages 1416-1434, July.
    56. Rothaermel, Frank T. & Deeds, David L., 2006. "Alliance type, alliance experience and alliance management capability in high-technology ventures," Journal of Business Venturing, Elsevier, vol. 21(4), pages 429-460, July.
    57. Siepel, Josh & Cowling, Marc & Coad, Alex, 2017. "Non-founder human capital and the long-run growth and survival of high-tech ventures," Technovation, Elsevier, vol. 59(C), pages 34-43.
    58. Wei-Ru Chen, 2008. "Determinants of Firms' Backward- and Forward-Looking R&D Search Behavior," Organization Science, INFORMS, vol. 19(4), pages 609-622, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yu, Yiyong & Cheng, Li & Zhang, Danni, 2024. "How does market competition affect enterprise cooperative innovation? The moderating role of intellectual property protection and government subsidies," Technovation, Elsevier, vol. 137(C).
    2. Jing Xiao & Yan Zhou & Ping Zeng, 2024. "How does green strategy orientation promote substantive green innovation? Evidence from Chinese manufacturing enterprises," Economic Change and Restructuring, Springer, vol. 57(6), pages 1-31, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cheng, Lulu & Xie, En & Fang, Junyi & Mei, Nan, 2022. "Performance feedback and firms’ relative strategic emphasis: The moderating effects of board independence and media coverage," Journal of Business Research, Elsevier, vol. 139(C), pages 218-231.
    2. Moritz Hagen & Wenjia Su & Sebastian Junge, 2024. "60th birthday of ‘A Behavioral Theory of the Firm’: a review of the relational concepts and recommendations for future research," Management Review Quarterly, Springer, vol. 74(4), pages 2637-2682, December.
    3. Xiao, Shufeng & Yu, Tianjiao, 2024. "Underperformance duration and R&D internationalization: Institutional contingencies in an emerging economy," International Business Review, Elsevier, vol. 33(4).
    4. Hendriks, Guus & Slangen, Arjen H.L. & Heugens, Pursey P.M.A.R., 2024. "Country portfolio diversity and firms’ portfolio adjustment decisions: A behavioral perspective," International Business Review, Elsevier, vol. 33(4).
    5. Martínez-Noya, Andrea & García-Canal, Esteban, 2021. "Innovation performance feedback and technological alliance portfolio diversity: The moderating role of firms’ R&D intensity," Research Policy, Elsevier, vol. 50(9).
    6. Erk P. Piening & Ferdinand Thies & Michael Wessel & Alexander Benlian, 2021. "Searching for Success—Entrepreneurs’ Responses to Crowdfunding Failure," Entrepreneurship Theory and Practice, , vol. 45(3), pages 626-657, May.
    7. Verver, Hugo & van Zelst, Marino & Lucas, Gerardus Johannes Maria & Meeus, Marius, 2019. "Understanding Heterogeneity in the Performance Feedback – Organizational Responsiveness Relationship: A Meta-Analysis," OSF Preprints hq4uw, Center for Open Science.
    8. Saemundsson, Rögnvaldur & Candi, Marina & Sigurjonsson, Throstur Olaf, 2022. "The influence of performance feedback and top management team orientation on decisions about R&D in technology-based firms," Technovation, Elsevier, vol. 113(C).
    9. Christian Schumacher & Steffen Keck & Wenjie Tang, 2020. "Biased interpretation of performance feedback: The role of CEO overconfidence," Strategic Management Journal, Wiley Blackwell, vol. 41(6), pages 1139-1165, June.
    10. Songsong Cheng & Qunpeng Fan & Yang Song, 2023. "Performance Gap and Innovation Ambidexterity: A Moderated Mediation Model," Sustainability, MDPI, vol. 15(5), pages 1-22, February.
    11. Verver, Hugo & van Zelst, Marino & Lucas, Gerardus Johannes Maria & Meeus, Marius, 2019. "Understanding Heterogeneity in the Performance Feedback – Organizational Responsiveness Relationship: A Meta-Analysis," OSF Preprints hq4uw_v1, Center for Open Science.
    12. Daehun Chung & Dongyoub Shin, 2021. "When do firms invest in R&D? Two types of performance feedback and organizational search in the Korean shipbuilding industry," Asian Business & Management, Palgrave Macmillan, vol. 20(5), pages 583-617, November.
    13. Saridakis, Charalampos & Angelidou, Sofia & Woodside, Arch G., 2023. "How historical and social aspirations reshape the relationship between corporate financial performance and corporate social responsibility," Journal of Business Research, Elsevier, vol. 157(C).
    14. Xie, En & Huang, Yuanyuan & Stevens, Charles E. & Lebedev, Sergey, 2019. "Performance feedback and outward foreign direct investment by emerging economy firms," Journal of World Business, Elsevier, vol. 54(6), pages 1-1.
    15. Walrave, Bob & Gilsing, Victor A., 2023. "Game of skill or game of luck? Distant search in response to performance feedback," Technovation, Elsevier, vol. 121(C).
    16. Gao, Yongqiang & Yang, Haibin & Zhang, Miaohan, 2021. "Too bad to fear, too good to dare? Performance feedback and corporate misconduct," Journal of Business Research, Elsevier, vol. 131(C), pages 1-11.
    17. Lin-Hua Lu & Poh-Kam Wong, 2019. "Performance feedback, financial slack and the innovation behavior of firms," Asia Pacific Journal of Management, Springer, vol. 36(4), pages 1079-1109, December.
    18. Xi Zhong & Liuyang Ren & Tiebo Song, 2022. "Beyond Market Strategies: How Multiple Decision-Maker Groups Jointly Influence Underperforming Firms’ Corporate Social (Ir)responsibility," Journal of Business Ethics, Springer, vol. 178(2), pages 481-499, June.
    19. Beverly B. Tyler & Turanay Caner, 2016. "New product introductions below aspirations, slack and R&D alliances: A behavioral perspective," Strategic Management Journal, Wiley Blackwell, vol. 37(5), pages 896-910, May.
    20. David W. Lehman & Jungpil Hahn & Rangaraj Ramanujam & Bradley J. Alge, 2011. "The Dynamics of the Performance--Risk Relationship Within a Performance Period: The Moderating Role of Deadline Proximity," Organization Science, INFORMS, vol. 22(6), pages 1613-1630, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:techno:v:126:y:2023:i:c:s0166497223001281. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.sciencedirect.com/science/journal/01664972 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.