A longitudinal study of innovation competence and quality management on firm performance

Abstract

This study explores the relationship between innovation competences and quality management initiatives and considers how quality management initiatives infl uence both innovation competence and firm performance. A longitudinal survey of 607 high-technology firms indicates innovation competence is an important driver of firm performance, a key element of quality management initiatives. The effectiveness of innovation competence is contingent on quality management initiatives. Building on the existing literature, this study employs the resource-based view of firms and applies institutional theory as a theoretical framework for empirical analysis. The results show that an inverted U-shaped relationship exists between innovation competence and quality management in high-technology industries. We argue that the extent to which research and development (R&D) activity is associated with performance improvements depends on the extent to which a firm exceeds the minimum requirements for ISO 9000 quality certifi cation. These fi ndings help explain some inconsistent results in prior studies on innovation and quality management.