IDEAS home Printed from https://ideas.repec.org/a/gam/jbusin/v3y2023i3p28-474d1234908.html
   My bibliography  Save this article

Cultural Intelligence, Firm Capabilities, and Performance: The Case of German Subsidiaries in Malaysia

Author

Listed:
  • Bienvenido S. Cortes

    (Kelce College of Business, Pittsburg State University, Pittsburg, KS 66762, USA)

  • Zhengyao Ooi

    (World Check Department, London Stock Exchange Group, Penang 11950, Malaysia)

Abstract

The extant literature shows that firm capabilities such as knowledge transfer and innovation are highly related to firm performance. How these relationships express themselves for foreign-based firms operating in global environments is less understood. The objectives of this study are as follows: (1) to examine the differential effects of knowledge transfer and innovation on the performance of German-based companies operating in Malaysia; (2) to determine if these relationships and effects operate via an “intervening variable” or mediator, in this case, competitive advantage; and (3) to determine if another latent variable (cultural intelligence) has an altering or “moderating” influence on the effects of innovation and knowledge transfer on competitive advantage. Analyses of the causal relationships are tested using a sample of 475 respondents working in German subsidiaries in Malaysia and applying a structural equation model. The empirical findings indicate that innovation and knowledge transfer are positively and significantly related to German companies’ overall performance, that these effects are mediated by competitive advantage, and that cultural intelligence interacts with innovation and knowledge transfer to affect the strength of the relationships between innovation (knowledge transfer) and competitive advantage.

Suggested Citation

  • Bienvenido S. Cortes & Zhengyao Ooi, 2023. "Cultural Intelligence, Firm Capabilities, and Performance: The Case of German Subsidiaries in Malaysia," Businesses, MDPI, vol. 3(3), pages 1-15, September.
    • Handle: RePEc:gam:jbusin:v:3:y:2023:i:3:p:28-474:d:1234908
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2673-7116/3/3/28/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2673-7116/3/3/28/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Sughra Bibi & Asif Khan & Hongdao Qian & Achille Claudio Garavelli & Angelo Natalicchio & Paolo Capolupo, 2020. "Innovative Climate, a Determinant of Competitiveness and Business Performance in Chinese Law Firms: The Role of Firm Size and Age," Sustainability, MDPI, vol. 12(12), pages 1-24, June.
    2. Saeed Nosratabadi & Parvaneh Bahrami & Khodayar Palouzian & Amir Mosavi, 2020. "Leader Cultural Intelligence and Organizational Performance," Papers 2010.02678, arXiv.org.
    3. Judita Narkunienė & Aurelija Ulbinaitė, 2018. "Comparative analysis of company performance evaluation methods," Post-Print hal-02121048, HAL.
    4. Liao, Tung-Shan & Rice, John, 2010. "Innovation investments, market engagement and financial performance: A study among Australian manufacturing SMEs," Research Policy, Elsevier, vol. 39(1), pages 117-125, February.
    5. Ethan Mollick, 2012. "People and process, suits and innovators: the role of individuals in firm performance," Strategic Management Journal, Wiley Blackwell, vol. 33(9), pages 1001-1015, September.
    6. Latifi, Mohammad-Ali & Nikou, Shahrokh & Bouwman, Harry, 2021. "Business model innovation and firm performance: Exploring causal mechanisms in SMEs," Technovation, Elsevier, vol. 107(C).
    7. Ana Azevedo, 2018. "Cultural Intelligence: Key Benefits to Individuals, Teams and Organizations," American Journal of Economics and Business Administration, Science Publications, vol. 10(1), pages 52-56, December.
    8. Gunday, Gurhan & Ulusoy, Gunduz & Kilic, Kemal & Alpkan, Lutfihak, 2011. "Effects of innovation types on firm performance," International Journal of Production Economics, Elsevier, vol. 133(2), pages 662-676, October.
    9. Guofeng Shi & Zhiyun Ma & Jiao Feng & Fujin Zhu & Xu Bai & Bingxiu Gui, 2020. "The impact of knowledge transfer performance on the artificial intelligence industry innovation network: An empirical study of Chinese firms," PLOS ONE, Public Library of Science, vol. 15(5), pages 1-22, May.
    Full references (including those not matched with items on IDEAS)

    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. Alam, Ashraful & Uddin, Moshfique & Yazdifar, Hassan & Shafique, Sujana & Lartey, Theophilus, 2020. "R&D investment, firm performance and moderating role of system and safeguard: Evidence from emerging markets," Journal of Business Research, Elsevier, vol. 106(C), pages 94-105.
    2. Khorshed Alam & Adewuyi A. Adeyinka, 2021. "Does innovation stimulate performance? The case of small and medium enterprises in regional Australia," Australian Economic Papers, Wiley Blackwell, vol. 60(3), pages 496-519, September.
    3. Muhammad Arif Khan & Meng Bin & Chunlin Wang & Hazrat Bilal & Arshad Ali Khan & Irfan Ullah & Amjad Iqbal & Mohib Ur Rahman, 2023. "Impact of R&D on Firm Performance: Do Ownership Structure and Product Market Competition Matter?," SAGE Open, , vol. 13(4), pages 21582440231, November.
    4. Santos, David Ferreira Lopes & Basso, Leonardo Fernando Cruz & Kimura, Herbert, 2018. "The trajectory of the ability to innovate and the financial performance of the Brazilian industry," Technological Forecasting and Social Change, Elsevier, vol. 127(C), pages 258-270.
    5. Gomes, Giancarlo & Seman, Laio Oriel & De Montreuil Carmona, Linda Jessica, 2022. "Industry does matter: Analysing innovation, firm performance and organisational learning heterogeneities on Brazilian manufacturing sectors," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 544-555.
    6. Carmen González-Velasco & Marcos González-Fernández & José-Luis Fanjul-Suárez, 2019. "Does innovative effort matter for corporate performance in Spanish companies in a context of financial crisis? A fuzzy-set QCA approach," Empirical Economics, Springer, vol. 56(5), pages 1707-1727, May.
    7. Oluseyi Moses Ajayi & Susan C. Morton, 2015. "Exploring the Enablers of Organizational and Marketing Innovations in SMEs," SAGE Open, , vol. 5(1), pages 21582440155, February.
    8. González-Fernández, Marcos & González-Velasco, Carmen, 2018. "Innovation and corporate performance in the Spanish regions," Journal of Policy Modeling, Elsevier, vol. 40(5), pages 998-1021.
    9. Naradda Gamage, Sisira Kumara & Ekanayake, EMS & Abeyrathne, GAKNJ & Prasanna, RPIR & Jayasundara, JMSB & Rajapakshe, PSK, 2019. "Global Challenges and Survival Strategies of the SMEs in the Era of Economic Globalization: A Systematic Review," MPRA Paper 98419, University Library of Munich, Germany.
    10. Tedjo Soelaksono & Achmad Sudiro & Mintarti Rahayu & Sudjatno Sudjatno, 2018. "The Influence of Capability Managerial on Competitiveness of the Company through the Planning Strategy, Investment, Innovation and Performance of the Company (a Study on Corporate Manufacturing Indust," International Review of Management and Marketing, Econjournals, vol. 8(2), pages 22-32.
    11. Tohru Yoshioka-Kobayashi & Tomofumi Miyanoshita & Daisuke Kanama, 2020. "Revisiting incremental product innovations in the food-manufacturing industry: an empirical study on the effect of intellectual property rights," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 9(1), pages 1-19, December.
    12. Frida Thomas Pacho, 2018. "Diversified Network Effects on Innovation Performance in Tanzania: Innovation Strategy in Service Firms," Journal of Entrepreneurship and Business Innovation, Macrothink Institute, Journal of Entrepreneurship and Business Innovation, vol. 5(1), pages 1-1, December.
    13. Rubio-Andrés, Mercedes & Ramos-González, Mª del Mar & Sastre-Castillo, Miguel Ángel & Gutiérrez-Broncano, Santiago, 2023. "Stakeholder pressure and innovation capacity of SMEs in the COVID-19 pandemic: Mediating and multigroup analysis," Technological Forecasting and Social Change, Elsevier, vol. 190(C).
    14. Hassan Arabshahi & Hamed Fazlollahtabar, 2018. "Classifying Innovative Activities Using Decision Tree and Gini Index," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 15(03), pages 1-14, June.
    15. Dimitrios Kafetzopoulos & Evangelos Psomas, 2016. "ORGANISATIONAL LEARNING, NON-TECHNICAL INNOVATION AND CUSTOMER SATISFACTION OF SMEs," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 20(03), pages 1-28, April.
    16. Meena Madhavan & Mohammed Ali Sharafuddin & Thanapong Chaichana, 2022. "Impact of Business Model Innovation on Sustainable Performance of Processed Marine Food Product SMEs in Thailand—A PLS-SEM Approach," Sustainability, MDPI, vol. 14(15), pages 1-33, August.
    17. Mário Franco & Lurdes Esteves & Margarida Rodrigues, 2024. "Clusters as a Mechanism of Sharing Knowledge and Innovation: Case Study from a Network Approach," Global Business Review, International Management Institute, vol. 25(2), pages 377-400, April.
    18. Wondifraw Mihret Dessie & Gojjam Ademe Mengistu & Tigist Abera Mulualem, 2022. "Communication and innovation in the performance of weaving and pottery crafts in Gojjam, Ethiopia," Journal of Innovation and Entrepreneurship, Springer, vol. 11(1), pages 1-22, December.
    19. Başak Dalgıç & Burcu Fazlıoğlu, 2021. "Innovation and firm growth: Turkish manufacturing and services SMEs," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 11(3), pages 395-419, September.
    20. Kong YuSheng & Masud Ibrahim, 2020. "Innovation Capabilities, Innovation Types, and Firm Performance: Evidence From the Banking Sector of Ghana," SAGE Open, , vol. 10(2), pages 21582440209, May.

    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:gam:jbusin:v:3:y:2023:i:3:p:28-474:d:1234908. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.