Performance Implications of Pursuing Innovations Based on Digital Technologies: Evidence from SMEs

Abstract

In this paper we investigate whether the pursuit of product/service innovations based on digital technologies has an impact on firm performance, and how the performance implications are contingent on firm characteristics. We draw upon the uncertainty theory of entrepreneurial processes to develop testable hypotheses. Using a mixed method approach that combines content analysis of interviews and surveys conducted in two phases, we found that the pursuit of innovations based on digital infrastructure has a more positive impact on firm performance than the pursuit of innovations based on digital artifacts. Further, firm size positively moderates the influence of pursuing innovations based on digital artifacts, while bricolage increases the positive effect of pursuing innovations based on digital infrastructure. Together these findings contribute to the literature of digital innovation and digital entrepreneurship.