Determinants of Staged Project Management and Success in Innovation: Empirical Analysis based on the Japanese National Innovation Survey

This empirical study examines the impact of a staged approach to management of innovation projects. This approach incorporates the threat of termination at each stage of the product development process. Under these conditions, the present study identifies firms that have abandoned and/or still have ongoing projects using a unique firm-level dataset constructed from the 2015 Japanese National Innovation Survey (J-NIS2015). Combining J-NIS with a firm-level accounting and credit information dataset, the study explores the determinants and the effects of staging of innovation processes. The study results show that R&D-intensive firms with broad collaboration and a lower debt ratio are more likely to adopt a staged approach in the product development process. Success in innovation is measured by the propensity of a firm to produce innovative products (or processes) and the ratio of innovative product sales to the total sales. Additionally, the study compared firms that did not implement staging of projects to those that employed staged project management and found that staging significantly improved innovation performance and increased the degree of radicalness.