Innovation, ownership and profitability

There is lots of evidence that innovating firms are persistently more profitable than non-innovators, but little agreement on why this is the case. It may be because innovators are somehow able to protect their new products from the competition which normally erodes profits, or because innovating firms have superior capabilities and are able to introduce multiple innovations over time. And very little is known about the relationship between innovation, external ownership and profitability, despite the fact that foreign-owned firms are frequently highly innovative and very profitable. This paper considers the relationship between innovation, ownership and profitability for a panel of manufacturing plants in Ireland and Northern Ireland. We consider the link between innovation and profits separately for innovators and non-innovators, and for indigenous innovators and non-innovators and externally-owned plants. We also consider the determinants of innovation over the distribution of plant-level profitability, and find that the determinants of profitability – including innovation and external ownership – are quite different for low and high-profitability plants. We find support for the view that innovators and non-innovators have different profitability determinants, and that externally-owned plants have their profitability determined in a quite different way from indigenous enterprises. For indigenous non-innovators only the sector matters. Profitability in these enterprises is dictated largely by the industry they are in, with plants having virtually no means of differentiating their profitability from the norms of the industry. By contrast, indigenously-owned innovators are able to differentiate their profit performance from industry norms to some extent. Absolute size matters (negatively) and they get a strong boost from product innovation, but having a high market share does not matter for the profitability of indigenously-owned innovators. Externally-owned plants have a quite different set of profitability determinants from both of these groups. What matters for these plants is not the boost they get from innovating (there is none) but instead their position in the domestic market – a high market share boosts profitability. In policy terms our results suggest both optimistic and cautionary messages. On the positive side our results suggest that efforts to promote innovation activity among indigenously-owned plants are likely to have significant longer term benefits through their capability effects. For the development agencies in Ireland this is a reassuring result. On the more negative side, the lack of any relationship in our models between the innovation activities of externally-owned plants and their (profitability) performance raises potential concerns. This finding may reflect the lack of linkages between externally-owned plants and their Irish resource base, in turn raising some worrying issues about the ‘embeddedness’ of much FDI into Ireland and therefore its ‘stickiness’ in the face of Ireland’s increasing high relative cost base.

The limits of open innovation:openness and (quasi-)markets in the organization of innovation

Recent studies have stressed the importance of ‘open innovation’ as a means of enhancing innovation performance. The essence of the open innovation model is to take advantage of external as well as internal knowledge sources in developing and commercialising innovation, so avoiding an excessively narrow internal focus in a key area of corporate activity. Although the external aspect of open innovation is often stressed, another key aspect involves maximising the flow of ideas and knowledge from different sources within the firm, for example through knowledge sharing via the use of cross-functional teams. A fully open innovation approach would therefore combine both aspects i.e. cross-functional teams with boundary-spanning knowledge linkages. This suggests that there should be complementarities between the use cross-functional teams with boundary-spanning knowledge linkages i.e. the returns to implementing open innovation in one innovation activity is should be greater if open innovation is already in place in another innovation activity. However, our findings – based on a large sample of UK and German manufacturing plants – do not support this view. Our results suggest that in practice the benefits envisaged in the open innovation model are not generally achievable by the majority of plants, and that instead the adoption of open innovation across the whole innovation process is likely to reduce innovation outputs. Our results provide some guidance on the type of activities where the adoption of a market-based governance structure such as open innovation may be most valuable. This is likely to be in innovation activities where search is deterministic, activities are separable, and where the required level of knowledge sharing is correspondingly moderate – in other words those activities which are more routinized. For this type of activity market-based governance mechanisms (i.e. open innovation) may well be more efficient than hierarchical governance structures. For other innovation activities where outcomes are more uncertain and unpredictable and the risks of knowledge exchange hazards are greater, quasi-market based governance structures such as open innovation are likely to be subject to rapidly diminishing returns in terms of innovation outputs.

Organic synthesis and fungicidal activity of oxylipin-based compounds

Previous research has shown that the naturally occurring reactive electrophilic species (RES), 12-oxophytodienoic acid (OPDA), not only serves as a precursor for jasmonic acid but is also a potent antifungal compound. However, both the low amount present in plants and the multistep synthesis required to produce this compound on a scale viable for agrochemical use currently limits its practical value. The aim of this research was to generate a range of molecular mimics of OPDA with a minimum number of synthetic steps and screen for antifungal activity. Synthetic 4-octyl-cyclopentenone containing the cyclopentenone ring and an eight carbon alkyl chain was found to show the highest in vitro antifungal activity against C. herbarum and B. cinerea with minimum inhibition concentration (MIC) of 100-200µM. This indicates that structurally simplified 4-octyl-cyclopentenone can be successfully synthesised to mimic the antifungal activity of OPDA against specific fungal strains. Application of 4-octyl-cyclopentenone could act as surfactant by disrupting and disorganising the lipid membrane non-specifically, resulting in the leakage of potassium ions, which was the proposed mode of action of this compound. However, the sensitivity of fungi to this compound is not correlated to the lipid composition of fungal spores. (E)-2-alkenals were also studied for their antimicrobial activity and (E)-2-undecenal was found to have the highest antimicrobial activity against a range of pathogens. The hydrophilic moiety (the a,ß-unsaturated carbonyl group), common to both (E)-2-undecenal and 4-octyl-cyclentenone is essential to their bioactivity, and the hydrophobic moiety plays an important role in their antimicrobial activities. 4-Octyl-cyclopentenone showed no visible toxicity to the test plant, Arabidopsis thaliana, suggesting that its high antifungal activity against Botrytis and Cladosporium could be exploited for commercialisation as a new generation of agrochemical.

Productivity analysis and measurement

The state of the art in productivity measurement and analysis shows a gap between simple methods having little relevance in practice and sophisticated mathematical theory which is unwieldy for strategic and tactical planning purposes, -particularly at company level. An extension is made in this thesis to the method of productivity measurement and analysis based on the concept of added value, appropriate to those companies in which the materials, bought-in parts and services change substantially and a number of plants and inter-related units are involved in providing components for final assembly. Reviews and comparisons of productivity measurement dealing with alternative indices and their problems have been made and appropriate solutions put forward to productivity analysis in general and the added value method in particular. Based on this concept and method, three kinds of computerised models two of them deterministic, called sensitivity analysis and deterministic appraisal, and the third one, stochastic, called risk simulation, have been developed to cope with the planning of productivity and productivity growth with reference to the changes in their component variables, ranging from a single value 'to• a class interval of values of a productivity distribution. The models are designed to be flexible and can be adjusted according to the available computer capacity expected accuracy and 'presentation of the output. The stochastic model is based on the assumption of statistical independence between individual variables and the existence of normality in their probability distributions. The component variables have been forecasted using polynomials of degree four. This model is tested by comparisons of its behaviour with that of mathematical model using real historical data from British Leyland, and the results were satisfactory within acceptable levels of accuracy. Modifications to the model and its statistical treatment have been made as required. The results of applying these measurements and planning models to the British motor vehicle manufacturing companies are presented and discussed.

The investigation of vegetation change using remote sensing to detect and monitor migration of landfill gas

Decomposition of domestic wastes in an anaerobic environment results in the production of landfill gas. Public concern about landfill disposal and particularly the production of landfill gas has been heightened over the past decade. This has been due in large to the increased quantities of gas being generated as a result of modern disposal techniques, and also to their increasing effect on modern urban developments. In order to avert diasters, effective means of preventing gas migration are required. This, in turn requires accurate detection and monitoring of gas in the subsurface. Point sampling techniques have many drawbacks, and accurate measurement of gas is difficult. Some of the disadvantages of these techniques could be overcome by assessing the impact of gas on biological systems. This research explores the effects of landfill gas on plants, and hence on the spectral response of vegetation canopies. Examination of the landfill gas/vegetation relationship is covered, both by review of the literature and statistical analysis of field data. The work showed that, although vegetation health was related to landfill gas, it was not possible to define a simple correlation. In the landfill environment, contribution from other variables, such as soil characteristics, frequently confused the relationship. Two sites are investigated in detail, the sites contrasting in terms of the data available, site conditions, and the degree of damage to vegetation. Gas migration at the Panshanger site was dominantly upwards, affecting crops being grown on the landfill cap. The injury was expressed as an overall decline in plant health. Discriminant analysis was used to account for the variations in plant health, and hence the differences in spectral response of the crop canopy, using a combination of soil and gas variables. Damage to both woodland and crops at the Ware site was severe, and could be easily related to the presence of gas. Air photographs, aerial video, and airborne thematic mapper data were used to identify damage to vegetation, and relate this to soil type. The utility of different sensors for this type of application is assessed, and possible improvements that could lead to more widespread use are identified. The situations in which remote sensing data could be combined with ground survey are identified. In addition, a possible methodology for integrating the two approaches is suggested.

Grant support and exporting activity

This paper investigates whether government support can act to increase exporting activity. We use a uniquely rich data set on Irish manufacturing plants and employ an empirical strategy that combines a nonparametric matching procedure with a difference-in-differences estimator in order to deal with the potential selection problem inherent in the analysis. Our results suggest that if grants are large enough, they can encourage already exporting firms to compete more effectively on the international market. However, there is little evidence that grants encourage nonexporters to start exporting.

Estimation of productivity in Korean electric power plants:a semiparametric smooth coefficient model

This paper analyzes the impact of load factor, facility and generator types on the productivity of Korean electric power plants. In order to capture important differences in the effect of load policy on power output, we use a semiparametric smooth coefficient (SPSC) model that allows us to model heterogeneous performances across power plants and over time by allowing underlying technologies to be heterogeneous. The SPSC model accommodates both continuous and discrete covariates. Various specification tests are conducted to compare performance of the SPSC model. Using a unique generator level panel dataset spanning the period 1995-2006, we find that the impact of load factor, generator and facility types on power generation varies substantially in terms of magnitude and significance across different plant characteristics. The results have strong implication for generation policy in Korea as outlined in this study.

Estimation of productivity in Korean electric power plants:a semiparametric smooth coefficient model

This paper analyzes the impact of load factor, facility and generator types on the productivity of Korean electric power plants. In order to capture important differences in the effect of load policy on power output, we use a semiparametric smooth coefficient (SPSC) model that allows us to model heterogeneous performances across power plants and over time by allowing underlying technologies to be heterogeneous. The SPSC model accommodates both continuous and discrete covariates. Various specification tests are conducted to assess the performance of the SPSC model. Using a unique generator level panel dataset spanning the period 1995-2006, we find that the impact of load factor, generator and facility types on power generation varies substantially in terms of magnitude and significance across different plant characteristics. The results have strong implications for generation policy in Korea as outlined in this study.

Dissociation of detection and evaluation of facial expressions in adolescence

Holistic face perception, i.e. the mandatory integration of featural information across the face, hasbeen considered to play a key role when recognizing emotional face expressions (e.g., Tanaka et al.,2002). However, despite their early onset holistic processing skills continue to improvethroughout adolescence (e.g., Schwarzer et al., 2010) and therefore might modulate theevaluation of facial expressions. We tested this hypothesis using an attentional blink (AB)paradigm to compare the impact of happy, fearful and neutral faces in adolescents (10–13 years)and adults on subsequently presented neutral target stimuli (animals, plants and objects) in a rapidserial visual presentation stream. Adolescents and adults were found to be equally reliable whenreporting the emotional expression of the face stimuli. However, the detection of emotional butnot neutral faces imposed a significantly stronger AB effect on the detection of the neutral targetsin adults compared to adolescents. In a control experiment we confirmed that adolescents ratedemotional faces lower in terms of valence and arousal than adults. The results suggest a protracteddevelopment of the ability to evaluate facial expressions that might be attributed to the latematuration of holistic processing skills.