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Firm Innovativeness — The Sufficient Condition For Business Success? Examining Antecedents Of Firm Innovativeness And How It Affects Business Success

Author

Listed:
  • MATTHIAS HANDRICH

    (Department of Innovation Management of Entrepreneurship, EBS Business School, Wiesbaden, Germany)

  • FRANZISKA HANDRICH

    (Sick AG, Waldkirch, Germany)

  • SVEN HEIDENREICH

    (Faculty of Law and Economics, Saarland University, Saarbrücken, Germany)

Abstract

The continuous development and introduction of new products has been addressed by companies of all industries through continuously high investments to foster a firm's ability to successfully develop and introduce innovations and new technologies (firm innovativeness). However, it still lacks empirical evidence about the direct antecedents of firm innovativeness and how this ability contributes to firm success. Moreover, previous literature often restricts the operationalisation of firm innovativeness to quantitative indicators, like the number of patents a company possesses, as its sole indicator. The present paper tries to close this gap by measuring effects of firm innovativeness on business success using a mixed measure of patent counts and patent citations thereby accounting for not only quantitative but also qualitative requirements. Furthermore our study is the first to determine the relative effect of R&D intensity and innovation experience as direct antecedents of firm innovativeness. We use secondary data from 246 Fortune 500 and S&P 500 to test our model. The model results show that our combined measure clearly captures firm innovativeness and represent a good predictor of business success. Moreover, our results point out that firm innovativeness is primarily influenced by R&D intensity. Also notably, our results confirm the often questioned statement that smaller firms are indeed better to translate innovativeness into business success.

Suggested Citation

  • Matthias Handrich & Franziska Handrich & Sven Heidenreich, 2015. "Firm Innovativeness — The Sufficient Condition For Business Success? Examining Antecedents Of Firm Innovativeness And How It Affects Business Success," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 19(05), pages 1-26.
    • Handle: RePEc:wsi:ijimxx:v:19:y:2015:i:05:n:s136391961550053x
    DOI: 10.1142/S136391961550053X
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    References listed on IDEAS

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    1. Hall, B.H., 1999. "Innovation and Market Value," Economics Papers 1999-w3, Economics Group, Nuffield College, University of Oxford.
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    7. Richard C. Levin & Alvin K. Klevorick & Richard R. Nelson & Sidney G. Winter, 1987. "Appropriating the Returns from Industrial Research and Development," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(3, Specia), pages 783-832.
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    Cited by:

    1. Peter T. Gianiodis & Matthias Thürer, 2018. "The Impact Of Government Intervention On Technological Regimes: The Sourcing Of Financial Innovation," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 22(03), pages 1-28, April.
    2. Fiona Maria Schweitzer & Matthias Handrich & Sven Heidenreich, 2019. "Digital Transformation In The New Product Development Process: The Role Of It-Enabled Plm Systems For Relational, Structural, And Npd Performance," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 23(07), pages 1-34, October.
    3. Franziska Handrich & Sven Heidenreich & Tobias Kraemer, 2022. "Innovate or game over? Examining effects of product innovativeness on video game success," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(2), pages 987-1002, June.

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