nach oben

Erschienen in:

2014 | OriginalPaper | Buchkapitel

3. Slack Resources, Innovation and Growth: Evidence from the US Energy Sector

verfasst von : Abol Jalilvand, Sung Min Kim

Erschienen in: Perspectives on Energy Risk

Verlag: Springer Berlin Heidelberg

Einloggen

Aktivieren Sie unsere intelligente Suche, um passende Fachinhalte oder Patente zu finden.

search-config

KI-gestützte Suche

Aus

Abstract

Recent studies show that the US energy sector’s investment (particularly by the private sector) in technology development and innovation has been declining, lagging behind other sectors in the economy, and mainly focused on the fossil fuel-based areas related to the needs of the oil and gas industry. In this paper, we offer new insights on whether the U.S. energy sector has optimally managed the deployment of different types of slack (unused) resources in pursuing investment in R&D and new technologies vs. existing assets and core efficiencies. Using a multi-industry sample of technology-intensive firms provided by the Boston Consulting Group (BCG), our results show that the energy sector’s slack resources and R&D investment profile were, on average, markedly different from those in other sectors. The energy sector did not pursue a balanced investment strategy by simultaneously exploiting existing assets and exploring new opportunities – being ambidextrous. Energy was the most “exploitative” and the least “explorative” sector with the highest (the lowest) average capital expenditures (R&D) intensities among the remaining sectors in the sample. The results also show that, in terms of longer-term profitability, the majority of other technology-intensive sectors have significantly outperformed the energy sector.

From a public policy perspective, our results call for more effective regulatory and tax policies focused on enhancing private-sector investment in energy innovation. We further believe as more adaptable technology intensive companies achieve higher profitability over time, energy firms will be pressured to better manage the balance between their slack resources and investment strategies to achieve higher performance through innovation.

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

über 102.000 Bücher
über 537 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Finance + Banking
Management + Führung
Marketing + Vertrieb
Maschinenbau + Werkstoffe
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Springer Professional "Technik"

Online-Abonnement

Mit Springer Professional "Technik" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 390 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Maschinenbau + Werkstoffe

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 340 Zeitschriften

aus folgenden Fachgebieten:

Bauwesen + Immobilien
Business IT + Informatik
Finance + Banking
Management + Führung
Marketing + Vertrieb
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Vorheriges Kapitel Changing Dynamics and Risks in World Energy: The Way Forward

Nächstes Kapitel Measuring Risk in Energy Markets

Nur mit Berechtigung zugänglich

These estimates do not include any fossil fuel or energy efficiency R&D.

Starting with the 2006 survey year, however, the NSF and the Bureau of the Census implemented a new survey instrument that did not contain any questions about energy R&D investment (NSF 2010a). Hence, the NSF data used by Dooley (2011) covers only the period 1973–2005.

A list of the firms surveyed can be found at http://www.eia.doe.gov/emeu/perfpro/CoList.html

These four strategy types reflect a continuum of increasing adaptive capability ranging from the reactor (with relatively little adaptive capability) to the prospector (with the highest level of adaptive capability).

Energy sector combines Energy Equipment and Services with Oil, Gas, and Consumable Fuels. Information Technology Services combine the IT Services with Internet Software and Services.

The list of sample firms of nine technology-intensive sectors used in this study is available from the authors upon request.

In the BCG approach, periods of turbulence for a given industry refer to environments when large changes in aggregate demand, competition, operating margins and market expectations occur. In a recent study, Reeves et al. (2012) also use the BCG sample to study corporate sustainability as a dynamic capability.

While Brown and Petersen (2011) use changes in variables, Brown et al. (2009) use levels in their study. The use of changes in variables may be more relevant in a multivariate analysis setting.

In our sample, firms in the energy sector have, on average, maintained significantly lower equity ratios than firms in the comparison group. This pattern of financing is consistent with the differential nature of the investment strategies pursued by the energy sector vs. those in the comparison group (i.e., assets in place vs. growth opportunities, Brown et al. (2009)). The differences in long-term debt behavior are less significant.

In the energy sector, annual number of firm/year observations is evenly distributed throughout the period of 1990–2011 (22 years). Further, the yearly means and standard deviations of energy companies are stable. Accordingly, we did not find any evidence that data availability or variation would affect our findings and conclusion in the paper.

Typically, energy firms possess a higher level of tangible assets than those in the comparison group. However, the impact of asset tangibility on innovation (R&D intensities) is not entirely obvious. Firms with higher levels of tangible assets may choose to focus their investments more on their existing assets. On the other hand, firms with higher tangible assets may face more moderate external financing restrictions due to their lower expected costs of default. In turn, these firms may opt to use their increased external financing advantages to invest more heavily in future growth opportunities and innovation.

Figure 3.4 only shows a mild reduction in the energy sector’s R&D intensity. However, the true reduction in the energy sector’s R&D intensity is masked due to scaling required to include all trend-lines (energy and the control group sectors) in one graph. Using a narrower scaling range, we observe that the energy sector’s R&D intensity did actually decline over the entire period, 1990–2011.

Anadon LD, Bunn M, Chan G, Chan M, Jones C, Kempener R, Lee A, Logar N, Narayanamurti V (2011) Transforming U.S. energy innovation. Belfer Center for Science and international Affairs, Harvard Kennedy School, pp 19–336

Andriopoulos C, Lewis MW (2009) Exploitation-exploration tensions and organizational ambidexterity: managing paradoxes of innovation. Organ Sci 20(4):696–717CrossRef

Bourgeois LJ III (1980) Strategy and environment: a conceptual integration. Acad Manage Rev 5(1):25–39

Brown JR, Petersen BC (2011) Cash holdings and R&D smoothing. J Corp Finance 17(3):694–709CrossRef

Brown JR, Fazzari SM, Petersen BC (2009) Financing innovation and growth: cash flow, external equity, and the 1990s R&D boom. J Finance 64(1):151–185CrossRef

Byoun S (2008) How and when do firms adjust their capital structures toward targets? J Finance 63(6):3069–3096CrossRef

Cao Q, Gedajlovic E, Zhang H (2009) Unpacking organizational ambidexterity: dimensions, contingencies, and synergistic effects. Organ Sci 20(4):781–796CrossRef

Dooley J (2010) The rise and decline of U.S. Private sector investment in energy R&D since the Arab oil Embargo of 1973. Prepared for the US Department of Energy under Contract DE-AC05-76RL01830

Energy Information Administration (EIA) (2010) International energy outlook 2010. DOE/EIA-0484(2010). EIA, Washington, DC

Gamba A, Triantis A (2008) The value of financial flexibility. J Finance 63(5):2263–2296CrossRef

Gibson CB, Birkinshaw J (2004) The antecedents, consequences, and mediating role of organizational ambidexterity. Acad Manage J 47(2):209–226CrossRef

Graham JR, Harvey CR (2001) The theory and practice of corporate finance: evidence from the field. J Finance Econ 60(2):187–243CrossRef

Henderson R, Newell R (2010) Accelerating energy innovation: insights from multiple sectors. Working paper, Harvard Business School

International Energy Agency (IEA) (2009) World energy outlook 2009. OECD/IEA, Paris

Jalilvand A, Harris S (1984) Corporate behavior in adjusting to capital structure and dividend targets: an econometric study. J Finance 39(1):127–145CrossRef

Jalilvand A, Kim SM (2012) Corporate flexibility, investment strategies and performance under turbulent environment: new perspectives. Working paper, Quinlan School of Business, Loyola University Chicago

Kraatz MS, Zajac EJ (2001) How organizational resources affect strategic change and performance in turbulent environments: theory and evidence. Organ Sci 12(5):632–657CrossRef

Lee S (2011) How financial slack affects firm performance: evidence from U.S. industrial firms. J Econ Res 16(1):1–27

March JG (1991) Exploration and exploitation in organizational learning. Organ Sci 2(1):71–87CrossRefMathSciNet

McKee DO, Varadarajan PR, Pride WM (1989) Strategic adaptability and firm performance: a market-contingent perspective. J Mark 53(3):21–35CrossRef

Miles RE, Snow CC (1978) Organizational strategy, structure, and process. McGraw-Hill, New York

Morris JR (2009) Life and death of businesses: a review of research on firm mortality. J Bus Val Econ Loss Anal 4(1):1–39

Myers SC (1977) Determinants of corporate borrowing. J Finance Econ 5(2):147–175CrossRef

Myers SC, Majluf NS (1984) Corporate financing and investment decisions when firms have information that investors do not have. J Finance Econ 13(2):187–221CrossRef

Nemet GF, Kammen DM (2007) U.S. energy research and development: declining investment, increasing need, and the feasibility of expansion. Energy Policy 35(1):746–755CrossRef

National Science Foundation (NSF) (2010a) NSF releases new statistics on business innovation. National Science Foundation, Division of Science Resources Statistics, Arlington

National Science Foundation (NSF) (2010b) Research and development in industry: 2005 detailed statistical tables. Arlington

Penrose E (1958) Theory of growth of the firm. Wiley, New York

Rajagapolan N, Spreitzer GM (1987) Toward a theory of strategic change: a multi-lens perspective and integrative framework. Acad Manage Rev 22(1):48–79

Reeves M, Deimler M (2011) Adaptability: the new competitive advantage. Harv Bus Rev 89(7/8):134–141

Reeves M, Haanaes K, Love C (2012) Sustainability as adaptability. J Appl Corp Finance 24(2):14–22CrossRef

Schumpeter JA (1942) Capitalism, socialism and democracy. Harper and Brothers, New York

Sharfman MP, Wolf G, Chase RB, Tansik DA (1988) Antecedents of organizational slack. Acad Manage Rev 13(4):601–614

Stubbart CI, Knight MB (2006) The case of the disappearing firms: empirical evidence and implications. J Organ Behav 27(1):79–100CrossRef

Tushman ML, O’Reilly CA (1996) Ambidextrous organizations: managing evolutionary and revolutionary change. Calif Manage Rev 38(4):8–30CrossRef

Voss GB, Sirdeshmukh D, Voss ZG (2008) The effects of slack resources and environmental threat on product exploration and exploitation. Acad Manage J 51(1):147–164CrossRef

Wiesenthal T, Leduc G, Schwarz H, Haegeman K (2009) R&D investment in the priority technologies of the European strategic energy technology plan. Joint Research Centre of the European Commission, Seville

Titel: Slack Resources, Innovation and Growth: Evidence from the US Energy Sector
verfasst von: Abol Jalilvand
Sung Min Kim
Verlag: Springer Berlin Heidelberg
Buch: Perspectives on Energy Risk
Print ISBN: 978-3-642-41595-1

Electronic ISBN: 978-3-642-41596-8

Copyright-Jahr: 2014
DOI: https://doi.org/10.1007/978-3-642-41596-8_3

Springer Professional

Abstract

Bitte loggen Sie sich ein, um Zugang zu Ihrer Lizenz zu erhalten.

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft+Technik"

Springer Professional "Technik"

Springer Professional "Wirtschaft"