Though innovation constraints have been studied for decades, the effect of innovation constraints on innovation performance has been controversial. As an extension of previous literature, this research subdivides and reclassifies innovation constraints into three: fund-, capability-, and market-related constraints, and investigates not only the direct effects of constraints on innovation performance, but also the moderating effects of innovation constraints on the relationship between innovation supportive factors (R&D intensity, collaboration, and international market orientation) and innovation performance in the service industry. The results show that 1) fund-related constraints are negatively related, and market-related constraints are positively related, while capability-related constraints are not significantly related to radical innovation performance, 2) none of the innovation constraints are significantly related to incremental innovation performance, 3) capability-related constraints and market-related constraints negatively moderate the positive effects of collaboration and market orientation on radical innovation performance, respectively, and 4) fund-related constraints negatively moderate the positive effect of R&D intensity on incremental innovation performance.
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