Abstract
We empirically explore the innovation and corporate sustainability link using a large sample of worldwide banks for the period 2003–2016. Our results suggest that service innovation performance enhances the banking industry’s corporate sustainability. In addition, we contribute by proposing a conceptual framework for understanding the link between innovation performance and corporate sustainability in the banking industry. The framework consists of three underlying dimensions—the antecedents of innovation performance, the specific innovation performance initiatives, and how these initiatives are converted into improved corporate sustainability. Our findings provide insights for academics and practitioners on the dynamics between service innovation performance and corporate sustainability in the banking sector. Further, due to the intermediation role of banks in the economy, their evolution towards sustainable banking constitutes a lever for sustainability across other industries and overall sustainable development.
Highlights
In the banking sector, service innovation performance and corporate sustainability constitute two key elements that shape the industry’s evolution
While the antecedents of innovation in finance have been well examined by the literature (e.g., [9,10,11]), this paper aims to address a particular output of the innovation process, i.e., the influence of service innovation performance on corporate sustainability
For a sample of 168 banks over the period 2003–2016, show how innovation performance in the international banking sector can result in enhanced contribution to corporate sustainability
Summary
Service innovation performance and corporate sustainability constitute two key elements that shape the industry’s evolution. Innovations allow the introduction of a new product, service or process to the market [6,7]. A service innovation is understood as a novel service concept that offers new value-added to customers [8]. While the antecedents of innovation in finance have been well examined by the literature (e.g., [9,10,11]), this paper aims to address a particular output of the innovation process, i.e., the influence of service innovation performance on corporate sustainability. Our goal is to advance the understanding of the interrelation between service innovation performance and corporate sustainability in the banking sector
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