Abstract
Purpose This paper aims to investigate the antecedents of process innovation to provide more alternates for Vietnamese firms as they are still struggling to find an appropriate innovation strategy. Design/methodology/approach The research analyzes the separate impacts of each innovation strategy on process innovation using logistic regression models. Data were collected using a stratified random sampling method. Findings The results show that having an innovation strategy is good for innovation, regardless of whether the strategy is internal or external. Internal and external strategies are proved not complements but substitutes. However, the internal strategy seems to be most beneficial. Weak institutional settings further strengthen the importance of internal strategies, whereas strong institutional settings favor external strategies. Originality/value This paper analyzes the impact of different innovation strategies on process innovation in Vietnamese firms using firm-level data. The findings strongly recommend that in weak institutional settings such as Vietnam, firms should focus on an internal strategy because the emphasis on external innovation strategies might be a western bias stemming from research in mostly strong institutional contexts.
Highlights
A growing body of literature recognizes the pivotal role of innovation (Kim et al, 2018; Raghuvanshi and Garg, 2018)
As Vietnam firms are still struggling to find their way to be competitive in the changing environment, this research aims to contribute to the literature with another perspective on how firms in Vietnam should choose their strategy when pursuing innovation under institutional conditions
The findings show that regional institutional quality (RIQ) plays a vital role in moderating innovation strategies on process innovation
Summary
A growing body of literature recognizes the pivotal role of innovation (Kim et al, 2018; Raghuvanshi and Garg, 2018). Process innovation changes the way firms manufacture their products or positively deliver their service. A considerable amount of literature has been published on process innovation, suggesting that there should be further studies on the antecedents of process innovation, especially organizational factors in developing countries, which still have limited resources and weak institutions (Goel and Nelson, 2018; Van et al, 2018). Vietnam is one of the developing countries, with more than 90% of firms being small and medium-sized enterprises with constrained resources (Tran and Jeppesen, 2016). With those conditions, firms in Vietnam are likely to favor process innovation over another type of innovation. It is critical to understand, which strategies Vietnamese firms should follow to strengthen their process innovation potential
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