Abstract
<p>We investigate whether and how process innovation of small enterprises is influenced by allying with another firm. Drawing on resource-based view of the firm and integrating findings from studies on the liabilities of age and newness, we argue: 1) for a direct association between strategic alliances and process innovation, and 2) in favor of a moderating role of firm age on this relationship. The results from a representative sample of 159 Italian small firms shed new light on the role of strategic alliances in explaining process innovation, and support this proposal. We find a significant and positive relationship between strategic alliances and process innovation, and a moderating effect of firm age on this relationship. This suggests that a younger firm benefits more than an older one from the increase in process innovation activities occurring as a result of alliances with other firms. The age of the firm appears to dictate the nature of relationship between strategic alliances and process innovation. Significant and novel theoretical and managerial implications are discussed.</p>
Highlights
IntroductionInnovation, and entrepreneurship researchers studying firm level innovativeness as a behavior and an outcome, process innovation (hereafter Process Innovation (PI)) has emerged as an important construct for explaining performance differences across firms (Christensen & Raynor, 2003; Damanpour, 1991; Piening & Salge, 2015; Zahra, 1996)
Among strategic management, innovation, and entrepreneurship researchers studying firm level innovativeness as a behavior and an outcome, process innovation has emerged as an important construct for explaining performance differences across firms (Christensen & Raynor, 2003; Damanpour, 1991; Piening & Salge, 2015; Zahra, 1996)
Building on resource-based view (RBV), and integrating literatures on liabilities of age (Aldrich & Auster, 1986; Aldrich & Fiol, 1994; Stinchcombe, 1965) we argue for a direct association between a strategic alliance and process innovation [framed in this this research as an outcome] (Crossan & Apaydin, 2010; Damanpour, 1991)
Summary
Innovation, and entrepreneurship researchers studying firm level innovativeness as a behavior and an outcome, process innovation (hereafter PI) has emerged as an important construct for explaining performance differences across firms (Christensen & Raynor, 2003; Damanpour, 1991; Piening & Salge, 2015; Zahra, 1996). Research generally builds on the assertion that due to heterogeneity of resources (Penrose, 1958) and diversity of their endowments among firms (Wernerfelt, 1984), some firms are more motivated, compared to others, to ally with another one, despite inherent risk and uncertainty involved (Li, Qian, & Qian, 2013), to access lacking desired resources and assets in order to adapt and change to meet new market imperatives Consistent with this view, Das and Teng (2000) note that, according to RBV, strategic alliances can be viewed as ‘voluntary cooperative inter-firm agreements aimed at achieving competitive advantage for the partners” (2000:33), entailing the development of critical while shedding old and redundant processes and system not in match with new market needs (Haeussler et al, 2012; Huergo and Jaumandreu, 2004a; McGrath et al, 1996). Researchers broadly acknowledge performance effect of strategic alliances (e.g. Gulati, 1995; Lahiri & Narayanan, 2013; Rothaermel & Deeds, 2006) and many studies have specified the contingencies that interplay in shaping this effect (Aldrich & Auster, 1986; Eisenhardt & Schoonhoven, 1996; Joshi & Nerkar, 2011; Lahiri & Narayanan, 2013; Stinchcombe, 1965)
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