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New product development in new ventures: the quest for resources

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  • Yemisi A. Bolumole
  • Roger J. Calantone
  • C. Anthony Di Benedetto
  • Steven A. Melnyk

Abstract

Innovation and new product development (NPD) are becoming more important as strategic initiatives. Yet, innovation creates challenges for most existing organisations, thus leading to the emergence of new ventures (NVs) as vehicles to deliver innovation. NVs present owners and management with unique opportunities and challenges. On one hand, the NV can focus its attention on specific innovation(s) without having to compete with other goals and departments for resource access. Resources are critical to the successful development and launch of new products and can come from financial lenders and/or suppliers. However, because they are new and because their only asset of worth is the highly risky innovation, NVs are at a strong disadvantage in securing access to these resources. This study explores the effectiveness of using personal equity investments as a strategy for securing access and for enhancing NPD success. Using signalling theory as the theoretical framework and data from 745 NPD projects representing manufacturing innovations, this study finds that equity investment is particularly successful in its NPD impact although not impactful with suppliers. As a signal, it can be argued that equity is a strong, high-quality signal. Reasons for these findings and directions for future research are provided.

Suggested Citation

  • Yemisi A. Bolumole & Roger J. Calantone & C. Anthony Di Benedetto & Steven A. Melnyk, 2015. "New product development in new ventures: the quest for resources," International Journal of Production Research, Taylor & Francis Journals, vol. 53(8), pages 2506-2523, April.
    • Handle: RePEc:taf:tprsxx:v:53:y:2015:i:8:p:2506-2523
    DOI: 10.1080/00207543.2014.975858
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    Cited by:

    1. Anthony F. Branda & Vishal Lala & Pradeep Gopalakrishna, 2018. "The marketing analytics orientation (MAO) of firms: identifying factors that create highly analytical marketing practices," Journal of Marketing Analytics, Palgrave Macmillan, vol. 6(3), pages 84-94, September.
    2. Conrad Wiedeler & Nadine Kammerlander, 2021. "Learning the ropes of entrepreneurship: understanding internal corporate venturing for family firms from an entrepreneurial learning perspective," Review of Managerial Science, Springer, vol. 15(3), pages 669-703, April.
    3. Malacina, Iryna & Teplov, Roman, 2022. "Supply chain innovation research: A bibliometric network analysis and literature review," International Journal of Production Economics, Elsevier, vol. 251(C).

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