Positive Performance Feedback and Innovation Search: New Ideas for Sustainable Business Development

Yongbo Sun,Zichen Qiu

doi:10.3390/su14042086

Yongbo Sun, Zichen Qiu

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https://doi.org/10.3390/su14042086

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Journal: Sustainability	Publication Date: Feb 11, 2022
Citations: 8	License type: CC BY 4.0

Affiliation: Beijing Technology and Business University

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Although the literature suggests that firms tend to adopt “conservative” behavior in the face of positive performance feedback, there are also studies that take the opposite view on the impact of positive performance feedback. Based on the behavior theory of the firm and regulatory focus theory, this study explored the impact of positive performance feedback on innovation search behavior and the boundary effect of CEO regulatory focus to gain insight into the mechanisms of innovation search behavior and to promote innovation for sustainable development. Based on data from 230 biopharmaceutical companies in China, the analysis found that: (1) positive performance feedback had a significant positive effect on depth search behavior and a significant negative effect on breadth search behavior; (2) CEOs’ promotion focus had a negative moderating effect on the relationship between positive performance feedback and depth search behavior and a positive moderating effect on the relationship between positive performance feedback and breadth search behavior; and (3) CEOs’ prevention focus positively moderated the relationship between positive performance feedback in relation to depth search behavior. This study extends the behavior theory of the firm and reveals the mechanism of the differential impact of positive performance feedback on innovation search behavior, which has implications for the study of which innovation search practices should be conducted by high-performing firms to promote sustainable development.

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In the context of open innovation, enterprises’ thirst for innovation resources is increasing day by day
To resolve the paradox of previous studies, this paper reveals the impact of positive performance feedback on innovation search behavior based on the behavior theory of the firm and regulatory focus theory to gain insight into the mechanism of innovation search behavior and promote sustainable development of firms
The data were processed as follows before the specific tests to ensure the consistency and validity of the model estimates: (1) to avoid the influence of outliers on the test results, the main continuous variables were subjected to tail shrinking at the 1% level; (2) to avoid the influence of multicollinearity, the variables measured by the interaction term were centered; in addition, all explanatory and control variables entering the model were subjected to variance inflation factor (VIF)

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In the context of open innovation, enterprises’ thirst for innovation resources is increasing day by day. More and more enterprise managers find that by relying on their own resources, they cannot adapt to the changing market environment and cannot obtain sustainable innovation advantages [3]. Enterprises need to actively conduct innovative search behaviors to obtain resources according to their own state, and innovative resources need include internal resources and external resources, which are open [4]. In this context, the open innovation behavior of enterprises is promoted through innovation search behavior, and sustainable competitive advantages are obtained to ensure the sustainable development of enterprises [5].

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