Effects of innovation types on firm performance: An empirical study on Pakistan's manufacturing sector

The main purpose of this study is to explore the effects of innovation types including product, process, marketing and organizational innovation on different aspects of firm performance such as innovative, production, marketing and financial performance in Pakistani manufacturing companies. Data were collected through survey questionnaires from 150 respondents mainly from production, R&D and marketing departments of manufacturing companies. With the help of SPSS, data were analyzed by factor, reliability, correlation, and regression analysis. The results reveal the positive effects of innovation types on firm performance. Theoretical and managerial implications along with limitations for future research have also been discussed.

[1]  D. Streiner Starting at the Beginning: An Introduction to Coefficient Alpha and Internal Consistency , 2003, Journal of personality assessment.

[2]  K. Tan,et al.  Market demand, green product innovation, and firm performance: evidence from Vietnam motorcycle industry , 2013 .

[3]  Daniel A. Levinthal,et al.  ABSORPTIVE CAPACITY: A NEW PERSPECTIVE ON LEARNING AND INNOVATION , 1990 .

[4]  R. Calantone,et al.  Learning orientation, firm innovation capability, and firm performance , 2002 .

[5]  Raphael Amit,et al.  The Dynamics of Innovative Activity and Competitive Advantage: The Case of Australian Retail Banking, 1981 to 1995 , 2003, Organ. Sci..

[6]  M. Chen,et al.  Does innovation lead to performance? An empirical study of SMEs in Taiwan , 2007 .

[7]  Stephen A.W. Drew,et al.  From knowledge to action: the impact of benchmarking on organizational performance , 1997 .

[8]  Yongmin Chen,et al.  Marketing Innovation , 2006 .

[9]  Richard S. Hillman,et al.  Bureaucracy and innovation , 1970 .

[10]  Daniel Indarto Prajogo,et al.  The relationship between innovation and business performance—a comparative study between manufacturing and service firms , 2006 .

[11]  F. Damanpour,et al.  Combinative Effects of Innovation Types and Organizational Performance: A Longitudinal Study of Service Organizations , 2009 .

[12]  R. Germain The role of context and structure in radical and incremental logistics innovation adoption , 1996 .

[13]  L. Manjarrés-Henríquez,et al.  The effect of external and internal factors on firms’ product innovation , 2008 .

[14]  Sree Nilakanta,et al.  Organizational innovativeness: Exploring the relationship between organizational determinants of innovation, types of innovations, and measures of organizational performance , 1996, Omega.

[15]  Fariba Alamdari,et al.  Impact of the adherence to the original low‐cost model on the profitability of low‐cost airlines , 2005 .

[16]  P. Duin,et al.  The evolution of innovation management towards contextual innovation , 2008 .

[17]  Henk W. Volberda,et al.  Exploratory Innovation, Exploitative Innovation and Peformance: Effects of Organizational Antecedents and Environmental Moderators , 2006, Manag. Sci..

[18]  C. Fornell,et al.  Customer Satisfaction, Market Share, and Profitability: Findings from Sweden , 1994 .

[19]  César Camisón,et al.  Organizational innovation as an enabler of technological innovation capabilities and firm performance , 2014 .

[20]  Teresa M. Amabile,et al.  Assessing the Work Environment for Creativity , 1996 .

[21]  Eulogio Cordón-Pozo,et al.  Leadership and organizational Learning's Role on innovation and Performance: Lessons From Spain , 2007 .

[22]  Shanthi Gopalakrishnan,et al.  Unraveling the links between dimensions of innovation and organizational performance , 2000 .

[23]  G. Duranton,et al.  Nursery Cities: Urban Diversity, Process Innovation and the Life-Cycle of Products , 2001 .

[24]  P. Mohnen,et al.  Product, Process and Organizational Innovation: Drivers, Complementarity and Productivity Effects , 2010 .

[25]  Min Zhang,et al.  The impact of trust and contract on innovation performance: The moderating role of environmental uncertainty , 2011 .

[26]  Aron O'Cass,et al.  Achieving superior innovation-based performance outcomes in SMEs through innovation resource–capability complementarity , 2011 .

[27]  S. Brooks,et al.  Applied Multivariate Statistics for the Social Sciences , 1993 .

[28]  D. Teece,et al.  DYNAMIC CAPABILITIES AND STRATEGIC MANAGEMENT , 1997 .

[29]  S. Zeng,et al.  Relationship between cooperation networks and innovation performance of SMEs , 2010 .

[30]  F. Damanpour Organizational Innovation: A Meta-Analysis Of Effects Of Determinants and Moderators , 1991 .

[31]  Carine Staropoli Cooperation in R&D in the pharmaceutical industry — The network as an organizational innovation governing technological innovation , 1998 .

[32]  Cheng-Jen Huang,et al.  Exploration for the Relationship between Innovation, IT and Performance , 2005 .

[33]  Ayşe Cingöz,et al.  An empirical examination of performance and image outcome expectation as determinants of innovative behavior in the workplace , 2011 .

[34]  Ljiljana Maskovi c Economic Survey of Pakistan . , 1950 .

[35]  R. Friedmann,et al.  Market orientation, knowledge-related resources and firm performance , 2008 .

[36]  K. Atuahene–Gima,et al.  Market Orientation and Innovation , 1996 .

[37]  D. Jiménez-Jiménez,et al.  Innovation, organizational learning, and performance , 2011 .

[38]  Ernesto M. Reza,et al.  Organizational Integration and Process Innovation , 1992 .

[39]  Rosanna Garcia,et al.  The Effects of Environmental Turbulence on New Product Development Strategy Planning , 2003 .

[40]  M. Porter The competitive advantage of nations : with a new introduction , 1998 .

[41]  J. Birkinshaw,et al.  The sources of management innovation: When firms introduce new management practices , 2009 .

[42]  J. Hagedoorn,et al.  Measuring innovative performance: is there an advantage in using multiple indicators? , 2003 .

[43]  V. Naidoo Firm survival through a crisis: The influence of market orientation, marketing innovation and business strategy , 2010 .

[44]  Daniel A. Levinthal,et al.  Demand Heterogeneity and Technology Evolution: Implications for Product and Process Innovation , 2001, Manag. Sci..

[45]  J. Fagerberg,et al.  The Oxford handbook of innovation , 2006 .

[46]  Rinaldo Evangelista,et al.  NATURE AND IMPACT OF INNOVATION IN MANUFACTURING INDUSTRY : SOME EVIDENCE FROM THE ITALIAN INNOVATION SURVEY , 1997 .

[47]  R. Gulati Is Slack Good or Bad for Innovation ? , 2007 .

[48]  Fariborz Damanpor,et al.  Bureaucracy and innovation revisited: Effects of contingency factors, industrial sectors, and innovation characteristics , 1996 .

[49]  Patricia J. Daugherty,et al.  The relationship between strategic orientation, service innovation, and performance , 2009 .

[50]  K. Kilic,et al.  Effects of Innovation Types on Firm Performance , 2011 .

[51]  S. Omta,et al.  Where innovation processes make a difference in products' short‐ and long‐term market success , 2011 .

[52]  P. Rajan Varadarajan,et al.  An Analysis of the Market Share-Profitability Relationship , 1993 .

[53]  F. Damanpour,et al.  Organizational innovation and performance: The problem of "organizational lag." , 1984 .

[54]  Piers Steel,et al.  Timing is everything: A meta-analysis of the relationships between organizational performance and innovation , 2010 .

[55]  César Camisón-Zornoza,et al.  A Meta-analysis of Innovation and Organizational Size , 2004 .

[56]  Kim B. Clark,et al.  Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of , 1990 .

[57]  D. B. Montgomery,et al.  First-mover (dis)advantages: Retrospective and link with the resource-based view , 1998 .

[58]  G. Hult,et al.  Innovation, Market Orientation, and Organizational Learning: An Integration and Empirical Examination , 1998 .

[59]  William T. Robinson,et al.  Product innovation and start-up business market share performance , 1990 .

[60]  M. Frese,et al.  Innovation is not enough: climates for initiative and psychological safety, process innovations, and firm performance , 2003 .

[61]  S. Gopalakrishnan,et al.  The Dynamics of the Adoption of Product and Process Innovations in Organizations , 2001 .

[62]  P. Roberts Product innovation, product–market competition and persistent profitability in the U.S. pharmaceutical industry , 1999 .

[63]  Eric M. Olson,et al.  Organizing for effective new product development: The moderating role of product innovativeness. , 1995 .

[64]  R. Walker,et al.  An Empirical Evaluation of Innovation Types and Organizational and Environmental Characteristics: Towards a Configuration Framework , 2007 .

[65]  İlker Murat Ar,et al.  Antecedents and performance impacts of product versus process innovation , 2011 .