IDEAS home Printed from https://ideas.repec.org/a/eee/techno/v119y2023ics0166497222000050.html
   My bibliography  Save this article

Digital innovation and performance of manufacturing firms: An affordance perspective

Author

Listed:
  • Liu, Yang
  • Dong, Jiuyu
  • Mei, Liang
  • Shen, Rui

Abstract

We explore the underlying mechanisms and institutional conditions of profiting from digital innovation in the context of manufacturing firms. Building on affordance theory, we propose that digital innovations positively affect manufacturing firms’ performance via innovation speed and operational efficiency due to the affordance of digital technology. Moreover, the interactions between digital and institutional affordances suggest that the intellectual property rights (IPR) protection system (i.e. IPR regime and its enforcement) negatively moderates the relationship between digital innovation adoption and innovation speed, as well as operational efficiency. Results from a longitudinal sample of Chinese listed firms support our hypotheses. Our findings contribute to the emerging literature on profiting from digital innovation and provide managerial implications for manufacturing firms in emerging markets.

Suggested Citation

  • Liu, Yang & Dong, Jiuyu & Mei, Liang & Shen, Rui, 2023. "Digital innovation and performance of manufacturing firms: An affordance perspective," Technovation, Elsevier, vol. 119(C).
    • Handle: RePEc:eee:techno:v:119:y:2023:i:c:s0166497222000050
    DOI: 10.1016/j.technovation.2022.102458
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0166497222000050
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.technovation.2022.102458?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Margherita Pagani, 2013. "Digital Business Strategy and Value Creation : Framing the Dynamic Cycle of Control Points," Post-Print hal-02313107, HAL.
    2. Chien-Ming Chen & Magali A. Delmas & Marvin B. Lieberman, 2015. "Production frontier methodologies and efficiency as a performance measure in strategic management research," Strategic Management Journal, Wiley Blackwell, vol. 36(1), pages 19-36, January.
    3. Forman, Chris & van Zeebroeck, Nicolas, 2019. "Digital technology adoption and knowledge flows within firms: Can the Internet overcome geographic and technological distance?," Research Policy, Elsevier, vol. 48(8), pages 1-1.
    4. Gary S. Hansen & Birger Wernerfelt, 1989. "Determinants of firm performance: The relative importance of economic and organizational factors," Strategic Management Journal, Wiley Blackwell, vol. 10(5), pages 399-411, September.
    5. David J. TEECE, 2008. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," World Scientific Book Chapters, in: The Transfer And Licensing Of Know-How And Intellectual Property Understanding the Multinational Enterprise in the Modern World, chapter 5, pages 67-87, World Scientific Publishing Co. Pte. Ltd..
    6. Wang, Heli & Chen, Wei-Ru, 2010. "Is firm-specific innovation associated with greater value appropriation? The roles of environmental dynamism and technological diversity," Research Policy, Elsevier, vol. 39(1), pages 141-154, February.
    7. Youngjin Yoo & Richard J. Boland & Kalle Lyytinen & Ann Majchrzak, 2012. "Organizing for Innovation in the Digitized World," Organization Science, INFORMS, vol. 23(5), pages 1398-1408, October.
    8. Ruomeng Cui & Meng Li & Qiang Li, 2020. "Value of High-Quality Logistics: Evidence from a Clash Between SF Express and Alibaba," Management Science, INFORMS, vol. 66(9), pages 3879-3902, September.
    9. Minyuan Zhao, 2006. "Conducting R& D in Countries with Weak Intellectual Property Rights Protection," Management Science, INFORMS, vol. 52(8), pages 1185-1199, August.
    10. Cuili Qian & Heli Wang & Xuesong Geng & Yangxin Yu, 2017. "Rent appropriation of knowledge-based assets and firm performance when institutions are weak: A study of Chinese publicly listed firms," Strategic Management Journal, Wiley Blackwell, vol. 38(4), pages 892-911, April.
    11. Vincent L. Barker , III & George C. Mueller, 2002. "CEO Characteristics and Firm R&D Spending," Management Science, INFORMS, vol. 48(6), pages 782-801, June.
    12. Richard J. Boland & Kalle Lyytinen & Youngjin Yoo, 2007. "Wakes of Innovation in Project Networks: The Case of Digital 3-D Representations in Architecture, Engineering, and Construction," Organization Science, INFORMS, vol. 18(4), pages 631-647, August.
    13. Liu, Yang & Lv, Diwei & Ying, Ying & Arndt, Felix & Wei, Jiang, 2018. "Improvisation for innovation: The contingent role of resource and structural factors in explaining innovation capability," Technovation, Elsevier, vol. 74, pages 32-41.
    14. Sestino, Andrea & Prete, Maria Irene & Piper, Luigi & Guido, Gianluigi, 2020. "Internet of Things and Big Data as enablers for business digitalization strategies," Technovation, Elsevier, vol. 98(C).
    15. James S. Ang & Yingmei Cheng & Chaopeng Wu, 2014. "Does Enforcement of Intellectual Property Rights Matter in China? Evidence from Financing and Investment Choices in the High-Tech Industry," The Review of Economics and Statistics, MIT Press, vol. 96(2), pages 332-348, May.
    16. Feng Zhu & Qihong Liu, 2018. "Competing with complementors: An empirical look at Amazon.com," Strategic Management Journal, Wiley Blackwell, vol. 39(10), pages 2618-2642, October.
    17. Godinho, Manuel Mira & Ferreira, Vítor, 2012. "Analyzing the evidence of an IPR take-off in China and India," Research Policy, Elsevier, vol. 41(3), pages 499-511.
    18. Acar, Oguz A., 2019. "Motivations and solution appropriateness in crowdsourcing challenges for innovation," Research Policy, Elsevier, vol. 48(8), pages 1-1.
    19. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    20. Zobel, Ann-Kristin & Lokshin, Boris & Hagedoorn, John, 2017. "Formal and informal appropriation mechanisms: The role of openness and innovativeness," Technovation, Elsevier, vol. 59(C), pages 44-54.
    21. Chirumalla, Koteshwar, 2021. "Building digitally-enabled process innovation in the process industries: A dynamic capabilities approach," Technovation, Elsevier, vol. 105(C).
    22. James A Brander & Victor Cui & Ilan Vertinsky, 2017. "China and intellectual property rights: A challenge to the rule of law," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(7), pages 908-921, September.
    23. Teece, David J., 2018. "Profiting from innovation in the digital economy: Enabling technologies, standards, and licensing models in the wireless world," Research Policy, Elsevier, vol. 47(8), pages 1367-1387.
    24. Helfat, Constance E. & Raubitschek, Ruth S., 2018. "Dynamic and integrative capabilities for profiting from innovation in digital platform-based ecosystems," Research Policy, Elsevier, vol. 47(8), pages 1391-1399.
    25. Ola Henfridsson & Youngjin Yoo, 2014. "The Liminality of Trajectory Shifts in Institutional Entrepreneurship," Organization Science, INFORMS, vol. 25(3), pages 932-950, June.
    26. Nelson, Richard R., 2018. "Observations and conjectures stimulated by David Teece’s “Profiting from Innovation in the Digital Economy…”," Research Policy, Elsevier, vol. 47(8), pages 1388-1390.
    27. Nicholas Argyres & Luis A. Rios & Brian S. Silverman, 2020. "Organizational change and the dynamics of innovation: Formal R&D structure and intrafirm inventor networks," Strategic Management Journal, Wiley Blackwell, vol. 41(11), pages 2015-2049, November.
    28. Nambisan, Satish & Wright, Mike & Feldman, Maryann, 2019. "The digital transformation of innovation and entrepreneurship: Progress, challenges and key themes," Research Policy, Elsevier, vol. 48(8), pages 1-1.
    29. Balci, Gökcay, 2021. "Digitalization in container shipping: Do perception and satisfaction regarding digital products in a non-technology industry affect overall customer loyalty?," Technological Forecasting and Social Change, Elsevier, vol. 172(C).
    30. Jaegul Lee & Nicholas Berente, 2012. "Digital Innovation and the Division of Innovative Labor: Digital Controls in the Automotive Industry," Organization Science, INFORMS, vol. 23(5), pages 1428-1447, October.
    31. Benamar, Lamya & Balagué, Christine & Zhong, Zeling, 2020. "Internet of Things devices appropriation process: The Dynamic Interactions Value Appropriation (DIVA) framework," Technovation, Elsevier, vol. 89(C).
    32. Steven Si & David Ahlstrom & Jiang Wei & John Cullen, 2020. "Business, Entrepreneurship and Innovation Toward Poverty Reduction," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 32(1-2), pages 1-20, January.
    33. Trocin, Cristina & Hovland, Ingrid Våge & Mikalef, Patrick & Dremel, Christian, 2021. "How Artificial Intelligence affords digital innovation: A cross-case analysis of Scandinavian companies," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    34. C. Carl Pegels & Yong I. Song & Baik Yang, 2000. "Management heterogeneity, competitive interaction groups, and firm performance," Strategic Management Journal, Wiley Blackwell, vol. 21(9), pages 911-923, September.
    35. Guo Li & Na Li & Suresh P. Sethi, 2021. "Does CSR Reduce Idiosyncratic Risk? Roles of Operational Efficiency and AI Innovation," Production and Operations Management, Production and Operations Management Society, vol. 30(7), pages 2027-2045, July.
    36. Liu, Yang & Deng, Ping & Wei, Jiang & Ying, Ying & Wu, Bing, 2021. "How to gain from international R&D alliances? A mutual dependence logic," Journal of Business Research, Elsevier, vol. 135(C), pages 800-815.
    37. Neil A. Morgan & Douglas W. Vorhies & Charlotte H. Mason, 2009. "Market orientation, marketing capabilities, and firm performance," Strategic Management Journal, Wiley Blackwell, vol. 30(8), pages 909-920, August.
    38. repec:eee:respol:v:48:y:2019:i:8:p:- is not listed on IDEAS
    39. Lamya Benamar & Christine Balagué & Zeling Zhong, 2020. "Internet of Things devices appropriation process : the Dynamic Interactions Value Appropriation (DIVA) framework," Post-Print hal-02376414, HAL.
    40. André Hanelt & René Bohnsack & David Marz & Cláudia Antunes Marante, 2021. "A Systematic Review of the Literature on Digital Transformation: Insights and Implications for Strategy and Organizational Change," Journal of Management Studies, Wiley Blackwell, vol. 58(5), pages 1159-1197, July.
    41. David Ahlstrom & Jean‐Luc Arregle & Michael A. Hitt & Gongming Qian & Xufei Ma & Dries Faems, 2020. "Managing Technological, Sociopolitical, and Institutional Change in the New Normal," Journal of Management Studies, Wiley Blackwell, vol. 57(3), pages 411-437, May.
    42. Kenneth G Huang & Jiatao Li, 2019. "Adopting knowledge from reverse innovations? Transnational patents and signaling from an emerging economy," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(7), pages 1078-1102, September.
    43. Huang, Can, 2017. "Recent Development of the Intellectual Property Rights System in China and Challenges Ahead," Management and Organization Review, Cambridge University Press, vol. 13(1), pages 39-48, March.
    44. Miric, Milan & Boudreau, Kevin J. & Jeppesen, Lars Bo, 2019. "Protecting their digital assets: The use of formal & informal appropriability strategies by App developers," Research Policy, Elsevier, vol. 48(8), pages 1-1.
    45. Tser‐Yieth Chen & Ling‐hua Chen, 2007. "DEA performance evaluation based on BSC indicators incorporated," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 56(4), pages 335-357, May.
    46. Frambach, Ruud T. & Schillewaert, Niels, 2002. "Organizational innovation adoption: a multi-level framework of determinants and opportunities for future research," Journal of Business Research, Elsevier, vol. 55(2), pages 163-176, February.
    47. Blichfeldt, Henrik & Faullant, Rita, 2021. "Performance effects of digital technology adoption and product & service innovation – A process-industry perspective," Technovation, Elsevier, vol. 105(C).
    48. Kafouros, Mario & Wang, Chengqi & Piperopoulos, Panagiotis & Zhang, Mingshen, 2015. "Academic collaborations and firm innovation performance in China: The role of region-specific institutions," Research Policy, Elsevier, vol. 44(3), pages 803-817.
    49. Garry D. Bruton & Igor Filatotchev & Salim Chahine & Mike Wright, 2010. "Governance, ownership structure, and performance of IPO firms: the impact of different types of private equity investors and institutional environments," Strategic Management Journal, Wiley Blackwell, vol. 31(5), pages 491-509, May.
    50. Mike W Peng & David Ahlstrom & Shawn M Carraher & Weilei (Stone) Shi, 2017. "An institution-based view of global IPR history," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(7), pages 893-907, September.
    51. Wang, Delu & Sutherland, Dylan & Ning, Lutao & Wang, Yuandi & Pan, Xin, 2018. "Exploring the influence of political connections and managerial overconfidence on R&D intensity in China's large-scale private sector firms," Technovation, Elsevier, vol. 69(C), pages 40-53.
    52. Ferreira, João J.M. & Fernandes, Cristina I. & Ferreira, Fernando A.F., 2019. "To be or not to be digital, that is the question: Firm innovation and performance," Journal of Business Research, Elsevier, vol. 101(C), pages 583-590.
    53. Yang Liu & Weiqi Dai & Mingqing Liao & Jiang Wei, 2021. "Social Status and Corporate Social Responsibility: Evidence from Chinese Privately Owned Firms," Journal of Business Ethics, Springer, vol. 169(4), pages 651-672, April.
    54. Guo, Feng & Bo, Qingwen & Tong, Xun & Zhang, Xiaofei, 2020. "A paradoxical view of speed and quality on operational outcome: An empirical investigation of innovation in high-tech small and medium-sized enterprises," International Journal of Production Economics, Elsevier, vol. 229(C).
    55. Prithwiraj Choudhury & Martine R. Haas, 2018. "Scope versus speed: Team diversity, leader experience, and patenting outcomes for firms," Strategic Management Journal, Wiley Blackwell, vol. 39(4), pages 977-1002, April.
    56. Shan, Peng & Song, Michael & Ju, Xiaofeng, 2016. "Entrepreneurial orientation and performance: Is innovation speed a missing link?," Journal of Business Research, Elsevier, vol. 69(2), pages 683-690.
    57. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    58. Zi‐Lin He & Tony W. Tong & Yuchen Zhang & Wenlong He, 2018. "Constructing a Chinese Patent Database of listed firms in China: Descriptions, lessons, and insights," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 27(3), pages 579-606, September.
    59. Kuhlmann, Stefan & Stegmaier, Peter & Konrad, Kornelia, 2019. "The tentative governance of emerging science and technology—A conceptual introduction," Research Policy, Elsevier, vol. 48(5), pages 1091-1097.
    60. Youngjin Yoo & Ola Henfridsson & Kalle Lyytinen, 2010. "Research Commentary ---The New Organizing Logic of Digital Innovation: An Agenda for Information Systems Research," Information Systems Research, INFORMS, vol. 21(4), pages 724-735, December.
    61. Liu, Yang & Dong, Jiuyu & Ying, Ying & Jiao, Hao, 2021. "Status and digital innovation: A middle-status conformity perspective," Technological Forecasting and Social Change, Elsevier, vol. 168(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chenglei Xu & Shuxin Zhu & Boru Yang & Bin Miao & Yi Duan, 2023. "A Review of Policy Framework Research on Promoting Sustainable Transformation of Digital Innovation," Sustainability, MDPI, vol. 15(9), pages 1-26, April.
    2. Ziyi Zhao & Yulu Yan, 2023. "The Role of Organizational Unlearning in Manufacturing Firms’ Sustainable Digital Innovation: The Mechanism of Strategic Flexibility and Organizational Slack," Sustainability, MDPI, vol. 15(13), pages 1-23, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cheng, Cong & Wang, Limin, 2022. "How companies configure digital innovation attributes for business model innovation? A configurational view," Technovation, Elsevier, vol. 112(C).
    2. Liu, Yang & Dong, Jiuyu & Ying, Ying & Jiao, Hao, 2021. "Status and digital innovation: A middle-status conformity perspective," Technological Forecasting and Social Change, Elsevier, vol. 168(C).
    3. Andreas Hein & Maximilian Schreieck & Tobias Riasanow & David Soto Setzke & Manuel Wiesche & Markus Böhm & Helmut Krcmar, 2020. "Digital platform ecosystems," Electronic Markets, Springer;IIM University of St. Gallen, vol. 30(1), pages 87-98, March.
    4. Zahid Sarwar & Jingmei Gao & Adnan Khan, 2024. "Nexus of digital platforms, innovation capability, and strategic alignment to enhance innovation performance in the Asia Pacific region: a dynamic capability perspective," Asia Pacific Journal of Management, Springer, vol. 41(2), pages 867-901, June.
    5. Zibiao Li & Han Li & Siwei Wang, 2022. "How Multidimensional Digital Empowerment Affects Technology Innovation Performance: The Moderating Effect of Adaptability to Technology Embedding," Sustainability, MDPI, vol. 14(23), pages 1-27, November.
    6. Wang, Xincheng & Li, Yuan & Tian, Longwei & Hou, Ye, 2023. "Government digital initiatives and firm digital innovation: Evidence from China," Technovation, Elsevier, vol. 119(C).
    7. Nambisan, Satish & Wright, Mike & Feldman, Maryann, 2019. "The digital transformation of innovation and entrepreneurship: Progress, challenges and key themes," Research Policy, Elsevier, vol. 48(8), pages 1-1.
    8. Guo, Bin & Zhang, Jiale & Tan, Ziyan, 2024. "Firm digitalization as strategic response: An integrated model based on the awareness-motivation-capability (AMC) framework," Technological Forecasting and Social Change, Elsevier, vol. 205(C).
    9. Ding, Yibing & Li, Jing & Song, Yang & Sahut, Jean-Michel, 2024. "How does the cross-border M&A network affect digital innovation? Empirical evidence from Chinese listed companies," Research in International Business and Finance, Elsevier, vol. 70(PB).
    10. Bohnsack, René & Rennings, Michael & Block, Carolin & Bröring, Stefanie, 2024. "Profiting from innovation when digital business ecosystems emerge: A control point perspective," Research Policy, Elsevier, vol. 53(3).
    11. Papazoglou, Michalis E. & Spanos, Yiannis E., 2021. "“Influential knowledge and financial performance: The role of time and rivals’ absorptive capacity”," Technovation, Elsevier, vol. 102(C).
    12. Hurmelinna-Laukkanen, Pia & Yang, Jialei, 2022. "Distinguishing between appropriability and appropriation: A systematic review and a renewed conceptual framing," Research Policy, Elsevier, vol. 51(1).
    13. Van Dyck, Marc & Lüttgens, Dirk & Diener, Kathleen & Piller, Frank & Pollok, Patrick, 2024. "From product to platform: How incumbents' assumptions and choices shape their platform strategy," Research Policy, Elsevier, vol. 53(1).
    14. Li, Haitong & Lu, Lanting & Lin, Ziang & Meng, Tianze, 2024. "Digital innovation and corporate social responsibility performance: Evidence from firms' digital patents," Technological Forecasting and Social Change, Elsevier, vol. 207(C).
    15. Seclen-Luna, Jean Pierre & Alvarez Salazar, Jubalt & Cancino, Christian A. & Schmitt, Valentina, 2024. "The effects of innovations on peruvian companies’ sales: The mediating role of KIBS," Technovation, Elsevier, vol. 129(C).
    16. Robert Keller & Philipp Ollig & Patrick Rövekamp, 2022. "Pathways to Developing Digital Capabilities within Entrepreneurial Initiatives in Pre-Digital Organizations," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 64(1), pages 33-46, February.
    17. Liu, Zixu & Zhou, Jianghua & Li, Jizhen, 2023. "How do family firms respond strategically to the digital transformation trend: Disclosing symbolic cues or making substantive changes?," Journal of Business Research, Elsevier, vol. 155(PA).
    18. Belitski, Maksim & Korosteleva, Julia & Piscitello, Lucia, 2023. "Digital affordances and entrepreneurial dynamics: New evidence from European regions," Technovation, Elsevier, vol. 119(C).
    19. Lihua Chen & Yilang Chen, 2023. "A Metaorganizations Perspective on Digital Innovation and Corporate Social Responsibility: Evidence from China," Sustainability, MDPI, vol. 15(14), pages 1-19, July.
    20. Zahra, Shaker A. & Liu, Wan & Si, Steven, 2023. "How digital technology promotes entrepreneurship in ecosystems," Technovation, Elsevier, vol. 119(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:techno:v:119:y:2023:i:c:s0166497222000050. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.sciencedirect.com/science/journal/01664972 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.