Schumpeterian innovation patterns and firm-performance of global technology companies

Abstract

Purpose – The purpose of this paper is to determine how different innovation patterns affect the financial performance of global technological firms. Design/methodology/approach – The authors integrate the theories of innovation performance with those of Schumpeter’s innovation patterns, namely, creative destruction and creative accumulation. Data spread over 20 years is used to investigate the influence of innovation on the firm performance. Findings – Panel regression results indicate that, as compared to creative-destruction innovation, creative-accumulation patterns have a better firm performance, have a moderating effect on innovation-performance relationships, and have a better propensity to deal with difficult economic periods. Research limitations/implications – There is a scarcity of research that considers the effects of Schumpeterian patterns on innovation performance, especially ones dealing with the technology sector. Future work could consider other innovation variables (besides innovation patterns), as well as whether the results hold in other sectors. Practical implications – The findings indicate that in the tech-sector firms must continue to innovate. Originality/value – From the research perspective, the work integrates two streams of literature into a comprehensive model, and provides a holistic test for it. For tech-sector managers, the research provides one point of motivation for carrying out innovation even during a troubled economy.