Peter Taylor

R&D and technology purchase through licence agreements: complementary strategies and complementary assets

This paper reports on a major UK-wide investigation into the role of inward technology licensing and in-house R&D as alternative and complementary strategies in new product and process development.The role of licensing in the technology strategy of the firm can be viewed as the ‘buy’ in the context of ‘make or buy’ technology decisions. Such technology purchases may be made for a number of reasons including insufficient in-house resources or gaps in R&D provision stemming from small scale, risk, low investment in research or diversification away from existing research competencies. However, technology markets might have substantial information imperfections and transaction costs. The tasks of finding a technology provider, transferring the technology inwards and absorbing it into commercially successful new products and processes, can inhibit the use of licensing agreements for technology acquisition. This research, using a sample of 128 manufacturing companies (including both licensees and non-licensees), examines some key propositions around the use of technology licensing. Data was collected on technology strategies, complementary assets, internal organisation and market structure. Analysis of the data suggests that strategies of ‘buy and make’ are complements rather than alternatives, and that extensive use of licensing requires substantial complementary assets to be in place. The nature of product-market positioning was found to be a significant driver of technology strategy, with firms that pursue product differentiation being the most likely to license. Whilsta priori it might be expected that internal organisation would influence technology strategy, this study was only able to provide weak support for this.

The Relationship between Capital Structure and Ownership Structure: New Evidence from Jordanian Panel Data

Purpose - The study aims to investigate the comparatively under-researched relationship between ownership structure and capital structure in an emerging market. It is also one of the first studies to apply both single and reduced-form equation methods using a panel data approach. Findings - The results demonstrate that Jordanian firms follow the same determinants of capital structure as occur in developed markets, namely: profitability, firm size, growth rate, market-to-book ratio, asset structure and liquidity. In addition, institutional ownership structure is found to be determined by: assets structure, business risk (BR), growth opportunities and firm size. Finally, the results reveal that assets tangibility, firm size, growth opportunities and BR are considered to be joint determinants of ownership structure and capital structure. Practical implications - The practical implication of the study is that investors and managers should consider both capital structure and ownership structure when they take their investment decisions. Originality/value - This is the first study of the interaction between institutional ownership and capital structure in Jordan where there are differences, as regards institutional and financial structures, relative to those in developed markets.

Oligopoly or contestable markets in the UK package tour industry

This article examines the Ricardian model of the industry developed by Baum and Mudambi [1994]. It suggests that several of the explicit and implicit assumptions may not be reasonable. All of their examples of a duopoly in which equilibrium fails to exist depend crucially on each firm having the naive belief that the other firm will not react to its strategic moves. When the reactions of the other firm are considered by each firm, the main model has an equilibrium sustained by firms withholding units. The analysis is extended regarding equilibrium and concentration of unit ownership to show that only large firms find it in their interest to withhold units at the margin, whilst large firms selling units with qualities well above marginal qualities may not find it in their interest to withhold units. Strategic withholding and industry structure are thus interdependent.

Are functional assets or knowledge assets the basis of new product development performance

According to a recent survey, a major focus of new product development research links peformance to mainly contextual, product-specific and internal organzzational factors. Interestingly, and despite the development of models of appropriability little of this research has assessed the impact of complementary assets and knowledge on peformance. The research reported in this paper, using a sample of a 128 UK manufacturing firms examines the role that knowledge and other complementary assets play in achieving new product success. Data from firms in different technological environments relating to strengths and weaknesses were combined into conceptual groupings,first on the basis of complementary assets embodying functional activities, and second on the basis of tangible and intangible assets and technical and non-technical knowledge. Although the functional assets grouping provided a better explanation of performance as regards new product development, the knowledge asset grouping provided a significant expl...

Changing credit rating standards in the UK: empirical evidence from 1999 to 2004

In recent years, the number of downgrades in UK corporate credit ratings has exceeded the number of upgrades, leading some to conclude that the credit quality of UK companies has deteriorated. However, another explanation is that the credit rating agencies have become more stringent in the credit rating process. Summary statistics, a transition matrix and an ordered probit analysis of 69 UK credit rated firms for the years 1999–2004 suggests that the evidence supports both the explanations. In addition, the analysis shows that there is a clear pattern of UK credit ratings converging towards the investment-grade threshold category (BBB). †Peter sadly passed away. This article serves as a tribute to his person and his significant contribution to academia and research.

The economic benefits, organisational structure and governance of the Motability Scheme: A consumption opportunity set model

This paper examines the Motability scheme which enables disabled people to obtain cars on a leasing basis in the UK. The scheme is centred around Motability, a charity, which has an arms-length relationship with a government department, and a close relationship with a non-profit making private sector organisation, Motability Finance Limited. The workings of the Motability scheme and its constituent organisations are discussed, the benefits it delivers and how they are generated over and above the transfer payments from the government are analysed using a consumption opportunity set model, and the market and hierarchical governance structures are considered for sufficiency and diversity. The relationships within the scheme have been subject to criticism in the media, although official investigations have found such criticisms to be without basis. The problem may have been a lack of transparency, but generally the scheme is found to work well and approach optimality.