Wolfgang Sofka
Copenhagen Business School
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Publication
Featured researches published by Wolfgang Sofka.
Research Policy | 2009
Birgit Aschhoff; Wolfgang Sofka
Public procurement has been at the centre of recent discussions on innovation policy on both European and national levels (e.g., Aho-Report, Barcelona Strategy). It has a large potential to stimulate innovation since it accounts for 16% of combined EU-15 GDP. We embed public procurement for innovation into the broader framework of public policies to stimulate innovation: regulations, R&D subsidies and knowledge infrastructure (i.e. basic research at universities). We synthesize the characteristics of all four instruments based on existing literature and quantitatively compare their effects on innovation success. Our empirical investigation rests upon a survey of more than 1,100 innovative firms in Germany. Our survey puts us in the position to trace all sources of valuable innovation impulses, namely public customers, law and regulations, universities and public funding for R&D. We relate these sources back to innovation success. We find that (non-defense related) public procurement and knowledge spillovers from universities propel innovation success equally. In a second step, we explore whether these effects vary across firms (e.g. size, location, industry). The benefits of university knowledge apply uniformly to all firms. However, public procurement is especially effective for smaller firms in regions under economic stress as well as in distributive and technological services. Based on these findings targeted policy recommendations can be developed.
R & D Management | 2010
Wolfgang Sofka; Christoph Grimpe
Searching for external knowledge has frequently been characterized as crucial for firm success. However, little is known about how the direction of search strategies influences innovation performance. In this paper, we argue that firms need to specialize their search strategy and that its effectiveness is moderated by R&D investments and potential knowledge spillovers from a firms environment. Based on a sample of more than 5,000 firms from five European countries, our results show that being open for innovation generally pays off. However, both moderating factors have a crucial role to play: On the one hand, in-house R&D investments are most effective when combined with a market-oriented search strategy. On the other hand, a technologically advanced environment requires firms to reach out to scientific knowledge sources in order to access novel knowledge and to enhance innovation performance. We develop targeted management recommendations based on these results.
R & D Management | 2015
Ihsen Ketata; Wolfgang Sofka; Christoph Grimpe
Over the past decade, sustainable innovation has occupied a top‐ranking position on the agenda of many firms. Sustainable innovation can be broadly defined as an innovation that has to consider environmental and social issues as well as the needs of future generations. Although sustainable innovation provides considerable new opportunities for companies it goes along with an increased complexity. This in turn requires certain organizational routines and capabilities to deal with the upcoming challenges. We explore what the specific driving forces are that increase the degree of sustainable innovation within a firms innovation activities. We test them empirically for more than 1,100 firms in Germany and find that firms need to invest in internal absorptive capacities and to draw both broadly and deeply from external sources for innovation. In that sense, investments in employee training turn out to be more important than technological R&D expenditures.
Industrial Organization | 2004
Wolfgang Sofka; Tobias Schmidt
There appears to be an ambivalent dimension in innovation strategies: timing. When is an innovation ready for the market or when is the market ready for the innovation? This paper empirically investigates the determinants of a firms decision to become a first mover or a follower in innovation strategies. Much of theoretical and empirical work has focused on whether first mover strategies pay off or not. Here we take a different approach by analysing the determinants that lead companies to opt for either a first mover or a follower strategy. One of this papers major goals is to distinguish between firm and industry specific effects on this particular strategic choice. We estimate our model using the most recent data from the German innovation survey of 2003. This dataset allows us to identify deliberate followers rather than outstripped first movers. One of our main findings is that firms choosing a first mover strategy operate in industries with intensive knowledge exchange and further leverage this advantage through excellent internal absorptive capacities. Followers, though, compete by way of their operational excellence for streamlining processes and cutting costs. Hence, we argue that neither of these two innovation strategies is per se superior to the other.
Archive | 2006
Wolfgang Sofka
The innovation activities of foreign subsidiaries have been identified as an important source of competitive advantage for multinational corporations. The success of these engagements depends heavily on tapping host country pools of localized expertise. To achieve this foreign subsidiaries have to overcome cultural and social barriers (liability of foreignness). We derive potential stumbling blocks in the innovation process theoretically and argue that these materialize as neglected projects, cancellations or budget overruns. We test these hypotheses empirically for more than 1,000 firms with innovation activities in Germany from various sectors. We find that foreign-controlled firms are not challenged by liability of foreignness at the project mobilization stage. The lack of local embeddedness becomes more binding as projects have to be prioritized and managed which we identify as more frequent mistakes and delays. We argue that this is the result of shared practices within the multinational firm that do not readily fit into the local context. Finally, we derive management recommendations how foreign innovation engagements can achieve similar levels of effectiveness and efficiency as host country competitors.
Archive | 2007
Anja Schmiele; Wolfgang Sofka
Competitors can be valuable sources and partners for innovation activities. Against the background of international expansion of firms and increased international competition, the R&D collaborations with international competitors (international co-opetition) is becoming an increasingly interesting way to gain access to well guarded knowledge from abroad. However, to be able to benefit from these paradox alliances, a certain level of international co-opetition readiness is required. On the one hand, this readiness is important to protect the companies? intellectual property that should not be leaked to competitors. On the other hand, the firm has to be able to absorb and utilize the knowledge and capabilities of the collaborating competitor. Hence, we envision co-opetition as a balancing act between appropriability practices and absorptive capacities in a cross-border context. We test these dual hypotheses for a broad sample of roughly 1,000 innovative firms in the German manufacturing sector. We find that co-opetition with international competitors requires a shift in appropriability practices from informal methods (secrecy, lead time) towards formal ones (like patents and copyrights). Besides, we discover that the readiness for international co-opetition can be achieved by developing international collaboration experience through collaborations with international customers or suppliers.
Archive | 2006
Ulrich Kaiser; Wolfgang Sofka
Globalization has provided many companies with new opportunities for growth and efficiency. This requires them to operate successfully across cultural and social borders. These can be stumbling blocks to internationalization and have been found to cause frequent errors and delays for multinational companies. Such liabilities of foreignness are persistent in nature. We investigate the causes behind these detrimental effects. We identify two major factors conceptually: a lack of legitimacy in the host country on the demand side and a lack of responsiveness on the side of the multinational corporation. We test these hypotheses empirically using a comprehensive sample of the German car market, which is especially suitable due to its established domestic producers and international competitors. Our results suggest that the two factors interact. For less experienced customer groups, we find that legitimacy is the dominant factor behind the effects of liability of foreignness. As customer experience increases, liability of foreignness caused by a lack of responsiveness becomes more of an issue.
Industrial Organization | 2006
Tobias Schmidt; Wolfgang Sofka
Entering host country networks of knowledge flows (new competencies, innovative technologies, and lead-market knowledge) is a major rationale of multinational firms for investing abroad. Foreign firms find it difficult to overcome cultural and social barriers which make their foreign engagements more strenuous and error prone (liability of foreignness). In our analysis we break down the complex mechanisms behind knowledge spillovers and identify conceptual links with liability of foreignness. We hypothesise that liability of foreignness acts as a filter for foreign firms, restricting their access to host country knowledge. We use a broad sample of roughly 1,000 firms in Germany to empirically test the existence of liabilities of foreignness in leveraging knowledge spillovers. Our particular setting allows us to distinguish between upstream (suppliers, academia) and downstream (customers) liabilities of foreignness. We find that multinational firms can compete on an equal footing with host country rivals when it comes to generating impulses for innovations from suppliers and academia. They are significantly challenged by liabilities of foreignness, though, where customers are involved. We suggest that the frictional losses from a lack of social and cultural embeddedness (liability of foreignness) in the host country are especially relevant when promising lead customers have to be identified and their tacit and often unarticulated impulses have to be transferred, understood and prioritised.
Archive | 2008
Birgit Aschhoff; Wolfgang Sofka
Valuable knowledge emerges increasingly outside of firm boundaries, in particular in public research institutions and universities. The question is how firms organize their interactions with universities effectively to acquire knowledge and apply it successfully. Literature has so far largely ignored that firms may combine different types of interactions with universities for optimizing their collaboration strategies. We argue conceptually that firms need diverse (broad) and highly developed (deep) combinations of various interactions with universities to maximize returns from these collaborations. Our empirical investigation rests upon a survey of more than 800 firms in Germany. We find that both the diversity and intensity of collaborative engagements with universities propel innovation success. However, broadening the spectrum of interactions is more beneficial with regard to innovation success. Applying latent class cluster analysis we identify four distinct patterns of interaction. Our findings show that formal forms of interaction (joint/contract) research provide the best balance between joint knowledge development and value capture.
Industrial Organization | 2005
Wolfgang Sofka
Globalization has set new paradigms, especially in the business world. Breakthroughs in technology (telecommunications, logistics, the internet) and ideology (most notably economic and political trends in China and India) are creating exciting opportunities as well as crucial challenges. This paper analyses one of the core aspects of competitiveness: a firms ability to innovate in a globalized environment. We question whether it is universally advantageous to directly invest abroad and argue instead that a company may use its international value chain (customers, suppliers and competitors) to utilize foreign sources for innovation at home. We suggest a combination of three factors to identify and explain such innovation strategies: access, need and absorptive capacities. Our empirical analysis rests upon a broad data sample of almost 2,300 German companies for which we devised a trivariate probit model. In essence, we find a market-seeking strategy for using foreign customers as a source for innovation that is more beneficial to standardized products and becomes more feasible if the lead status of domestic customers is limited. What is more, internalizing this link with foreign customers becomes preferable as their importance as a driver of sales increases. For foreign suppliers we identify a risk-sharing and technologyseeking strategy as a reaction to more dynamic domestic markets and a less favorable domestic environment in both research and regulation. Hence, companies optimize or augment their innovation activities by invoking ideas from foreign suppliers. Then again, companies rely on foreign competitors for technology-seeking as those sources become more readily available and crucial in international competition.