Complex Incremental Product Innovation in Established Service Firms: A Micro Institutional Perspective

Many product innovation studies have described key determinants that should lead to successful incremental product innovation. Despite numerous studies suggesting how incremental product innovation should be successfully undertaken, many firms still struggle with this type of innovation. In this paper, we use an institutional perspective to investigate why established firms in the financial services industry struggle with their complex incremental product innovation efforts. We argue that although the impact of micro institutional forces is often overlooked in innovation studies, these forces matter for innovation success. Our study complements the existing innovation literature and provides an additional explanation why incremental product innovation is highly complex and suffers from several liabilities in established firms. Using qualitative data from the Dutch financial services sector collected over the period 1997-2002, the paper illustrates how micro institutional forces at the business unit level affect complex incremental product innovation and how the interaction of these forces delivers their impact.complex incremental product innovation;financial services sector;micro institutional forces;neo-institutional theory

Complex Incremental Product Innovation in Established Service Firms: A Micro Institutional Perspective

Many product innovation studies have described key determinants that should lead to successful incremental product innovation. Despite numerous studies suggesting how incremental product innovation should be successfully undertaken, many firms still struggle with this type of innovation. In this paper, we use an institutional perspective to investigate why established firms in the financial services industry struggle with their complex incremental product innovation efforts. We argue that although the impact of micro institutional forces is often overlooked in innovation studies, these forces matter for innovation success. Our study complements the existing innovation literature and provides an additional explanation why incremental product innovation is highly complex and suffers from several liabilities in established firms. Using qualitative data from the Dutch financial services sector collected over the period 1997-2002, the paper illustrates how micro institutional forces at the business unit level affect complex incremental product innovation and how the interaction of these forces delivers their impact.Financial Services Sector;Micro Institutional Forces;Neo-Institutional Theory;Complex Incremental Product Innovation

Human Capital and Innovation in Developing Countries:A Firm Level Study

In this paper we test whether human capital endowments of firms and additional practices of firms, such as formal training and employee slack time, have a positive relation with the innovative output of firms. This paper contributes to the literature about factors that influence innovation at the firm level and the literature about human capital and innovation at the national level. Furthermore, we study this relation in developing countries, while most studies about innovation have been done in developed countries. We test this relation in Kenya, Tanzania and Uganda with data stemming from the Enterprise Surveys of the World Bank. Our results show that there exists a positive relation between human capital and innovation. In particular, the role of practices of firms such as offering formal training and employee slack time are conducive for innovative output

R&D, Foreign Technology and Technical Efficiency in Developing Countries

This study investigates the relationship between firms’ innovation activities and efficiency in manufacturing firms in developing countries. We examine whether innovation activities including internal research and development (R&D) and adoption of foreign technology have differential effects on technical efficiency. We hypothesize that the relation between internal R&D and technical efficiency is positive; the relation between adoption of foreign technology and technical efficiency is negative and lastly, internal R&D in combination with the adoption of foreign technology have a positive effect on technical efficiency. We use cross-sectional firm level survey data from the 2013 World Bank Enterprise Survey and the linked 2014 Innovation Follow-up Survey for examining the effect of innovation activities on firms’ technical efficiency. We test our hypothesis using cross-sectional stochastic frontier analysis. We find that internal R&D has a negative and significant effect on technical efficiency. Adoption of foreign technology on the other hand does not have a significant effect on technical efficiency. Nevertheless, the combination of internal R&D and adoption of foreign technology has a negative and significant effect on technical efficiency. We conclude that internal R&D may have dynamic effects on technical efficiency. Furthermore, efficiency may be observed in firms conducting internal R&D but results in relative inefficiency for firms not conducting R&D giving rise to overall inefficiency in the manufacturing industry. Lastly, low rates of human capital hamper R&D activity and the adoption of foreign technology in manufacturing firms in developing countries

Made in Vietnam:The Effects of Internal, Collaborative, and Regional Knowledge Sources of Product Innovation in Vietnamese Firms

This paper analyses the impact of different knowledge sources of product innovation in Vietnam using firm-level data. We analyze the separate impacts of internal knowledge, collaborative knowledge, and regional knowledge. The analysis reveals that internal knowledge sources from internal R&D have a positive influence on product innovation. However, not all kinds of collaborative knowledge sources have significant effects on innovation. Only collaborative knowledge gained from inside the supply chain affects product innovation positively. Apparently, the capacity to benefit from working with knowledge institutes and absorbing knowledge from the environment do not materialize in new products

Institutions, Resources and Innovation in Developng Countries:A Firm Level Approach

This study examines how firm-level resources interact with regional institutional quality to explain innovation in developing countries. We hypothesize that the institutional environment within which the firm operates moderates the effect of firm-level resources on innovative output. We examine the moderating role of institutions with regards to the transformation of firm-level resources including internal research and development, employee level of education and quality certification into innovative output using firm-level data from the World Bank Enterprise Survey and the Innovation Follow-up Survey that includes the innovation module for the years 2010 through 2012. We test our hypotheses using a multilevel logistic model. We find that the effects of firm-level resources vary depending on the institutional environment and that regional institutional quality positively moderates the effects of the firm-level resources. The positive effects of internal research and development on innovative output are substantially reinforced by regional institutional quality