Innovation Performance Relationship Research Articles

Effects of regulations and competition on the innovativeness-performance relationship

PurposeThe purpose of this paper is to investigate the nature and the extent of moderation effect of the regulatory regime and competition, on the innovativeness-performance relationship among financial services firms. Based on the absorptive capacity theory, this study argues that firms must gather adequate knowledge from the external environment (specifically on regulatory systems and competitive landscape) to assist in developing competitive innovation strategies, and to realize the needed performance benefits from such strategies.Design/methodology/approachData were collected from the Ghana’s financial services sector with a focus on banking and insurance institutions. Structural equation modeling and regression models were specified to test both the direct effects of variables of interest, and the moderation effects of environmental factors on the independent and dependent variables.FindingsThe results of the study show that both process and product innovativeness enhance financial services firms’ performance. While competition was found to stifle innovativeness, regulatory regime was found to promote innovativeness in financial services. Regulatory regime was also found to positively moderate the relationship between process innovativeness and performance, while competition was found to positively moderate the relationship between product innovativeness and performance.Research limitations/implicationsThe firms sampled are from an emerging economy with a growing financial services sector, and as a result, the findings may not apply to contexts with different economic characteristics.Originality/valueThis study asserts that in enhancing innovativeness in the financial services markets, firms must recognize the value of new external information on regulatory regime and competition as key environmental factors. Financial service firms must assimilate, transform, and apply such new knowledge in their innovation efforts in order to improve performance. For firms to fully benefit from their innovation, process innovativeness must be aligned with regulatory systems while product innovation yields best returns in competitive periods.

Do Managerial Practices Matter in Innovation and Firm Performance Relations? New Evidence from the UK

AbstractThe innovation and firm performance relationship remains a puzzle, as all types of innovation are not equally beneficial. Besides, better‐managed firms can perform better. Integrating these two strands of literature, we examine whether managerial practices explain this relationship using data from UK firms during 1992–2014. We find that firms which focus on R&D activities jointly with better managerial practices benefit favourably. During the post‐crisis period, higher intangibles are only beneficial when combined with R&D activity. Also firms with better managerial practices and innovative activities exhibit a positive effect of higher leverage. Finally, an inverse U‐shaped result supports the Schumpeterian theory of creative destruction.

How internal and external factors influence the dynamics of SME technology collaboration networks over time

This paper presents a framework to assess the effects of technology collaboration networks (TCNs) on the innovation performance of small and medium-sized enterprises (SME). It includes three factors that affect firm dynamics and could influence the success of the TCN: the macroeconomic cycle (macro-level), the industry life cycle (industry-level) and the age of the firm (firm-level). Previous papers have focused on factors at one specific level, mainly the firm level, but have not looked at these all together and have also failed to take into account how they evolve gradually over time. This study closes this gap using a panel of 44,885 observations for SMEs for the period 2003–2013. The findings confirm the importance of the inclusion of these factors at the macroeconomic, industry and firm level since they influence the TCN and the innovation performance relationship. The implications for managers and policy makers are discussed.

The role of the marketing strategy process in the innovativeness-performance relationship of SMEs

PurposeThe purpose of this paper is to examine the mediating role of the marketing strategy process in the relationship between innovativeness and organizational performance in SMEs.Design/methodology/approachThe partial least squares-structural equation modeling technique was used to analyze data from Brazilian SMEs that belong to the software sector. Innovativeness was considered as a cultural aspect of the firm, which is related to being open to new ideas. The marketing strategy process was analyzed considering its two dimensions, i.e., formulation and implementation of marketing strategies. Organizational performance included variables of market, financial and innovation performance.FindingsThe results show that innovativeness positively influences organizational performance through the marketing strategy process. Specifically, the formulation of marketing strategies mediates the relationship between innovativeness and organizational performance. Implementation by itself does not mediate this relationship. When considering the path formulation→implementation as mediator, the influence is positive, i.e., formulation positively influences the implementation of marketing strategies and this path mediates the relationship between innovativeness and organizational performance. Therefore, the mediating role is stronger when considering the formulation-implementation path than when taking into account the activities of the formulation and implementation of marketing strategies separately.Originality/valueThis study contributes to the literature by discussing how innovativeness influences SMEs’ performance through subsequent stages of the marketing strategy process. This is one of the first studies to consider activities in the marketing strategy process as a mediator in the innovativeness-performance relationship and explore its sequence.

Organizational structure, innovation performance and customer relationship value in the Greek advertising and media industry

PurposeThis paper aims to explore the impact of organizational structure dimensions on innovation performance as well as its implications on business customers’ relationship value and financial performance in the business-to-business (B2B) market of the Greek advertising and media industry.Design/methodology/approachBased on a sample of 180 executives, who are at the helm of 163 Greek advertising and media organizations, the authors apply the partial least square method to test the association of organizational structure with innovation performance, business customers’ relationship value and financial outcomes.FindingsFindings have brought to light that training boosts organization’s capacity to innovate, whereas direct supervision as a coordination mechanism significantly restricts this capacity. Innovation performance in the advertising B2B market fosters business customers’ relationship value and financial performance, while financial outcomes are also beneficially affected by profitable relationships with customer relationship value.Practical implicationsBecause of the dramatic decline in their profitability caused by the economic crisis in the past five years, Greek advertising and media companies are threatened with extinction; thus, they are required to enhance their effectiveness through the adoption of a more innovation-oriented structure. Thus, managers should facilitate structures supporting training and delimiting direct supervision to foster the development of a competitive advantage built on innovation, creativity and business clients’ relationship.Originality/valueThis study contributes to the existing relationship marketing literature because it introduced Mintzberg’s typology to measure organizational structure and led to the diagnosis of the associations between different dimensions of organizational structure and various aspects of performance in the media and advertising industry, revealing the partial mediating role of customer relationship value between innovation and financial performance in the B2B market.

Does innovation influence the performance of healthcare organizations?

Innovation is a widely studied field. It is extremely important for any organization wishing to achieve and maintain a competitive advantage in the market, even though assessing the impacts of innovation represents a challenge due to the difficulty of isolating and measuring it. Furthermore, healthcare institutions are facing an increasing need for innovation in order to become competitive and offer new treatments for patients. Surprisingly, little is known about the nature of innovativeness in healthcare organizations and its relationship with performance. The aim of this research is to analyze whether the several types of innovation influence the relevant measures of performance in healthcare institutions, researching empirically the innovativeness–performance relationship. The study is based on a quantitative analysis on 34 Portuguese hospitals, collecting detailed information about the innovation portfolio of each one. Factor analysis and hypothesis testing were applied. Moreover, the hospitals were classified by type of property and geographical region they belong to, and statistical comparative tests were performed to test the existence of statistical differences. It was found that organizational innovation is correlated with process innovation and service innovation. Furthermore, service and process innovations influence operational performance. However, we cannot conclude that innovation in healthcare units has an overall impact on their financial performance. The results of this study may help hospital administrators to make better decisions with regard to their innovation policy design.

Organizational innovation, technological innovation, and export performance: The effects of innovation radicalness and extensiveness

This study focuses on the relevance of different types of innovation for firms’ export performance. Despite ample research on the innovation–performance relationship, previous studies have mainly focused on technological innovations, leaving the effects of organizational innovations relatively unexplored. Hypotheses on the relationship between organizational and technological innovations and firm export performance are tested by structural equation modelling using data from 218 Swedish export ventures. The results indicate that organizational innovation enhances export performance both directly and indirectly by sustaining technological innovation. Moreover, by fine-graining our analysis of the mediating role of technological innovation, according to its radicalness and extensiveness, for organizational innovation, we show how the latter enhances both the radicalness and extensiveness of technological innovation although, notably, only extensiveness is actually beneficial for export performance. This study helps alleviate the scarcity of research examining the links among different types of innovation in relation to export performance and contributes to international business and marketing literature by generating new evidence regarding the mechanisms through which organizational and technological innovations may improve export performance.

Schumpeterian innovation patterns and firm-performance of global technology companies

Purpose – The purpose of this paper is to determine how different innovation patterns affect the financial performance of global technological firms. Design/methodology/approach – The authors integrate the theories of innovation performance with those of Schumpeter’s innovation patterns, namely, creative destruction and creative accumulation. Data spread over 20 years is used to investigate the influence of innovation on the firm performance. Findings – Panel regression results indicate that, as compared to creative-destruction innovation, creative-accumulation patterns have a better firm performance, have a moderating effect on innovation-performance relationships, and have a better propensity to deal with difficult economic periods. Research limitations/implications – There is a scarcity of research that considers the effects of Schumpeterian patterns on innovation performance, especially ones dealing with the technology sector. Future work could consider other innovation variables (besides innovation patterns), as well as whether the results hold in other sectors. Practical implications – The findings indicate that in the tech-sector firms must continue to innovate. Originality/value – From the research perspective, the work integrates two streams of literature into a comprehensive model, and provides a holistic test for it. For tech-sector managers, the research provides one point of motivation for carrying out innovation even during a troubled economy.

EFFECT OF ORGANISATIONAL AND ENVIRONMENTAL FACTORS ON INNOVATIVENESS AND BUSINESS PERFORMANCE RELATIONSHIP

We have investigated the role played by organisational and environmental factors in innovativeness and business performance relationship. The study is based on a purposive sample of 168 key informants (senior level managers in decision-making roles) from Indian firms. For data collection, we developed scales to measure innovativeness and business performance. The results show that innovativeness is a significant determinant of business performance. We also find that influence of innovativeness on external business performance is moderated by organisational and environmental variables. The organisational decision makers in India can draw insights from these results and better decide their strategic postures for designing organisational structure (OS) and for coping better with the external business environment. The study contributes to the literature by providing empirical evidence in support of organic structure and innovativeness for Indian firms to achieve superior business performance in the face of turbulent external business environment.

Users and radical innovation performance: the moderating role of the organisational context

ABSTRACTThis study investigates four key factors of the internal organisational context that moderate the relationship between connecting with users and radical innovation performance: performance management, autonomy, internal networking and organisation and culture to support innovation. These components define a firm's organisational context. A sample of Austrian- and Italian-based firms shows that the connecting with users–radical innovation performance relationship is amplified at higher levels of all the investigated elements of the organisational context. The authors discuss the study's implications as well as future research directions.

Evaluating firms' innovation decision and innovation intensity in EU-13: differences between high-tech and low-tech firms

We study differences in the innovation-performance relationship between high-tech, medium and low-tech firms, based on modified Crepo, Duguet and Mairesse (CDM) model. We investigate determinants of innovation incidence and intensity based on survey of 49,760 firms from EU-13. Results show that having a higher share of employees with university education increases probability of investing in innovation. The important strategic and aesthetic changes on products have positive impact innovation decisions. Organisational rigidities, lack of information on technology, and insufficient flexibility of regulations or standards, have a negative impact on probability to innovate. Firm perceiving economic risk to be excessive invest less in innovation. Among spill-over effects, only the variable national competitors and other firms from the same industry has a significant and positive impact on both innovation decision and innovation intensity. Findings suggest that innovation is equally important for firms' performance in both high-tech and low-tech firms. The study concludes with some managerial implications.

Management innovation enters the game: Re-considering the link between technological innovation and financial performance

The aim of this study is to investigate the innovation–performance relationship at the organizational level by empirically examining the role of management innovation in the link between technological innovation and financial performance. We adopt a view that is less present in the innovation literature and examine how technological innovations spur the need for new managerial solutions, which in turn result in improved firm performance. We apply a research methodology of testing our model via structural equation modeling on data gathered from 604 firms in three countries: Slovenia, Spain, and South Korea. The findings indicate that management innovation is the mechanism that enables firms to fully benefit from their technological discoveries in order to result in superior financial performance. The conclusions of the paper are related to shifting the view that presumes the crucial and almost exclusive importance of technological innovation for enhancing firm performance.

Determinants of innovation Performance: A Resource-based Study

This study aims to investigate the determinants of innovation performance in firms. Hence, the relationship between several constructs that are innovation strategy, formal structure, customer and supplier relationships, innovation culture, and technological capabilities and innovation performance were tested. A survey that was conducted on a total of 194 firms revealed that innovation strategy and technological capabilities contributed more greatly to innovation performance. However, in contrast to the proposition of innovation literature that suggests a positive and significant relationship between formal organizational structure and innovation performance, a significant and negative relationship was found. The implication is that firms are likely to improve their innovation performance as they increasingly reconfigure their resource-base with regard to strategy development and technological investments.

The Role of Reward Systems in Product Innovations: An Examination of New Product Development Projects

Focusing on new product development projects, this study suggests that the effect of a market orientation on innovation performance relationships may differ depending on whether the market orientation is responsive or proactive. This study also argues that process-based and outcome-based rewards moderate the effect. Based on a survey of 186 new product development projects in 122 high-tech firms, this study found that responsive and proactive market orientations have positive influences on incremental innovation performance and radical innovation performance, respectively. In addition, the positive effect of a proactive market orientation on performance is strengthened by process-based rewards, whereas the positive effect of a responsive market orientation on performance is positively moderated by outcome-based rewards. This study provides practical implications and directions for future research.

Battle royal in biotechnology: R&D vs. product vs. process innovations

Companies regard innovation as a central element of their business. However, as not all innovation types are the same, the central question is: should their announcements bring about the same effect on performance? This article analyses potential differences in firm value derived from the innovation-type announcements ‘R&D’, ‘product’, and ‘process’, made by intensive news-generating firms such as biotech companies. The empirical application shows a significantly positive reaction to innovation announcements, with the prospect of future innovation (‘R&D’ investment announcements) having greater impact on firm value than ‘product’ and ‘process’ innovations. Firm experience also acts as a moderator in this innovation–performance relationship, which is particularly relevant for entrepreneurs who need to develop and send credible signals indicating the value of the firm's intangible assets to the market.

Whose Innovation Performance Benefits More from External Networks: Entrepreneurial or Conservative Firms?

The primary contribution of this research is positing and empirically supporting the proposition that learning through external networks disproportionately benefits conservative, risk‐averse firms. The construct, entrepreneurial orientation (EO), is used to discriminate conservative, risk‐averse firms from proactive, risk‐seeking firms. Organizational learning theory and social capital theory are employed to support our hypotheses. Based on a study of 1978 U.S. firms, the paper suggests that the utilization of external networks (i.e., the process of learning from information, perspectives, and insights embedded in external networks) may act as a primary driver for innovation for those firms that are either not inclined and/or do not have the capabilities to adopt entrepreneurial culture. Specifically, weak EO firms' innovation performance benefits from utilizing external networks more than strong EO firms'. This research also tests for the moderating role of firm size and finds that the negative moderating effect of EO on the external network utilization–innovation performance relationship is more pronounced in small and medium sized enterprises (SMEs) than large firms.

Democracy and innovation: from institutions to agency and leadership

Democracies are, by definition, marked by a strong normative commitment to innovation and change, and all democratic regimes must seek to generate innovations both to keep their fundamental promise and to secure their own survival. In response to the latent crisis of representative democracy, recent political research has devoted eager attention to innovating democratic institutions, yet with conspicuously little regard for the likely effects of such reform proposals on the innovation-related performance and innovation capacity of democratic regimes. Indeed, some reform proposals, if implemented, would appear to reduce rather than increase the innovation capacity of representative democracies. Innovation-focused leadership may be able to fill that gap and provide what even the best institutions alone are unable to accomplish. In contrast to recent research on leadership and innovation in the public sector, which tends to centre on forms of collaborative leadership within networks, this article emphasizes the importance of individual leaders, and more specifically of political chief executives whose status and position in the governance process have been significantly enhanced by a combination of different factors. However, while leadership might be the key to democratic political innovation, innovative leadership and institutional engineering remain closely related to one another.

The differentiating effects of workforce aging on exploitative and exploratory innovation: The moderating role of workforce diversity

Despite negative predictions about the effects of workforce aging on organizational innovation performance, little systematic research has been conducted on this question. We investigate the differentiating effects of workforce aging by classifying organizational innovation as either exploitation or exploration. More specifically, we suggest that workforce aging positively affects exploitative innovation performance, whereas it negatively influences exploratory innovation performance. Moreover, building on the double-edged effects of diversity, this study examines the moderating role of age diversity in the workforce aging–innovation performance relationship. We predict that the diverse composition in the labor structure contributes only to exploration, not to exploitation. We tested hypotheses using data gathered from a government-sponsored survey of Korean companies—234 firms for exploitative innovation and 166 firms for exploratory innovation. Results revealed that workforce aging had a positive influence on exploitative innovation performance and had an inverted U-shaped relationship with exploratory innovation performance. In addition, age diversity only attenuated the positive workforce aging–exploitative innovation performance relationship. Theoretical and practical implications are also discussed.

Evaluating innovation performance and quality practices relationship: A review from different industries

This study explores previous research studies in the area of quality management and innovation performance. The study explains why different quality practices like leadership, process management, supplier relationship, customer focus and strategic planning are used for better innovation performance in firms and also explains different scenarios in which the quality practices have a positive or negative influence on innovation performance. The paper firstly categorized these studies according to the journal in which these studies are published then further divide them according to their research design into quantitative, qualitative and review types. The studies are analyzed on set criteria of industry, quality indicators, outcome indicators and results. The trends identified in this paper shows that irrespective of type of industry most studies have found a positive relationship between quality practices and firms innovation performance and in cases where the relationship is weak or negative is because of various contextual factors like uncertainty in business environment, firm size, financial resources and firms culture that has modified this relationship.

Impact of FDI on Economic Growth: Evidence from V4 Countries

There is no way to adequately evaluate the economic development of the V4 countries over recent decades without taking into account the role played in it by foreign direct investment (FDI). Albeit the exact gains obtained from FDI are difficult to measure, their benefitial developmental impact has been evidenced by both the ensuing accelerated structural adaptation and higher levels of technological performance achieved across the V4 countries. FDI has ameliorated the areas of total factor productivity growth and export performance, rendering as well the market environment of the economies observed much more regular. FDI as a vehicle of acceleration of economic growth has contributed to the narrowing of the performance gap between the V4 grouping and the old EU member states. The first part of the article is, therefore, focused on the creation of conditions making for FDI inflow to the V4 countries. At the beginning of the economic transition, the FDI inflow to the V4 economies was predominantly dependent on their ability to secure favourable business environment and conditions required for the free movement of international capital.The second part of the paper seeks to compare FDI inflows to the V4 countries during the pre- and post-crisis periods. The upward impact of FDI stock on the economic growth throughout the V4 countries is then estimated by means of a growth accounting method. Lastly, we address the relationship between the technological level and absorptive capacity of the economies under scrutiny, with an eye to the potential impact of FDI on innovation-related performance growth.