How customer involvement enhances innovation performance: The moderating effect of appropriability

Abstract

Customer involvement has been recognized as an importance to facilitate service innovation. However, little study shows how customer involvement enhances the innovation performance and how service firms use appropriability to leverage its innovation performance. Through a postal questionnaire exercise, this paper investigates 311 samples out of 1,103 top Taiwanese service firms. Four main research hypotheses are developed to test among all variables and regression models are further applied. The result reveals that: 1) intensity of customer involvement is positively related to its innovation performance. 2) the formal appropriable mechanism is positively related to its innovation performance. 3) The firm's appropriability as a moderating effect determines the relationship between customer involvement and its innovation performance. The paper concludes that customer involvement can be viewed as a combination of innovation commitments to successfully enhance innovation performance. A service firm with innovation protection mechanisms may focus on considerable high intensity of customer involvement while developing new products. Finally, some managerial implications to improve service innovation are offered.