Innovative efforts of ISO 9001-certified manufacturing firms: Evidence of links between determinants of innovation, continuous innovation and firm performance

Abstract

The innovation efforts of manufacturing firms have recently come to top the agendas of both businesses and industrial policy makers. One persistent research gap in this field relates to testing the relationship between continuous innovation (CI) and firm performance, while taking into account the role of three determinants of firms’ level of innovation as core drivers in manufacturing firms working under ISO 9001 certification. Anchored in the resource-based view theory (RBV), we shed light on these relationships using an original sample of manufacturing companies listed on the Indonesian Stock Exchange. Our research results provide several implications for ISO 9001-certified manufacturers: (i) evidence of a positive relationship between innovation policy (IP) and CI, whereby IP fosters CI; (ii) evidence of the important role of innovation strategies (INS) in relation to CI; (iii) evidence of a positive relationship between CI and firm performance, whereby CI improves both innovation and financial performance. The implications of our findings for both theory and end-users are presented, with a particular focus on emerging economies, such as Indonesia, a country which has been under-studied in the state-of-the-art literature on operations management.