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Innovating with Limited Resources: The Antecedents and Consequences of Frugal Innovation

Author

Listed:
  • Quan Cai

    (School of Public Affairs, Zhejiang University, and Institute of China’s Science, Technology and Education Policy, Zhejiang University, Hangzhou 310058, China
    The first three authors contribute equally to this paper.)

  • Ying Ying

    (School of Business Administration, Zhejiang University of Finance and Economics, Hangzhou 310000, China
    The first three authors contribute equally to this paper.)

  • Yang Liu

    (School of Management, Zhejiang University, Hangzhou 310058, China
    The first three authors contribute equally to this paper.)

  • Wei Wu

    (Institute of China’s Science, Technology and Education Policy, Zhejiang University, Hangzhou 310058, China)

Abstract

Frugal innovation is a resource scarce solution for emerging market firms. Based upon the resource-constrained innovation perspective, this research theoretically explores and empirically examines the drivers and consequences of frugal innovation. The results of a firm-level survey show that two types of frugal innovation (cost innovation and affordable value innovation) positively affect the performance of emerging-market firms. We also address the issues of how emerging-market firms deal with institutional, technological, and market constraints in emerging markets, and we show how these constraints drive frugal innovation. We find that emerging-market firms with higher levels of capability for institutional leverage and bricolage, and firms that face perceived dysfunctional competition, tend to generate more affordable, value-added new products. Overall, these findings have important implications for emerging-market firms seeking to conduct frugal innovation in resource-constrained emerging markets.

Suggested Citation

  • Quan Cai & Ying Ying & Yang Liu & Wei Wu, 2019. "Innovating with Limited Resources: The Antecedents and Consequences of Frugal Innovation," Sustainability, MDPI, vol. 11(20), pages 1-23, October.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:20:p:5789-:d:278007
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    9. Dabić, Marina & Obradović, Tena & Vlačić, Božidar & Sahasranamam, Sreevas & Paul, Justin, 2022. "Frugal innovations: A multidisciplinary review & agenda for future research," Journal of Business Research, Elsevier, vol. 142(C), pages 914-929.
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