Are all innovation modes beneficial to firms’ innovation performance? New findings from an emerging market

Abstract

Purpose This paper aims to examine the influence of individual and combined effects of the mode focused on scientific and technological-based innovation (STI) and the mode based on learning by doing, by using and by interacting (DUI) on firms’ innovation performance and whether information technology (IT) moderates the relation between different innovation modes and firms’ innovation performance. Design/methodology/approach A conceptual model linking innovation modes, IT (including IT infrastructure and the frequency of IT usage) and firms’ innovation performance was developed, and the proposed hypotheses were tested empirically using World Bank’s micro survey data collected from manufacturing firms in an emerging market (China). Findings The results show that individually both STI mode of innovation and DUI mode of innovation have a significant positive effect on firms’ innovative performance, whereas the combined STI and DUI mode of innovation has a negative impact. IT infrastructure moderates the relation between STI (or STI and DUI) mode of innovation and firms’ innovation performance, while the frequency of IT usage has no moderating effects on the relationship between any kind of innovation modes and firms’ innovation performance. Research limitations/implications Although some results are quite different from what is expected, these are insightful for both academics and policymakers. The use of cross-sectional data has its limitations. Therefore, future studies based on longitudinal data should be conducted. This study points toward the need to conduct the meta-analysis to better explain the existing inconsistencies in the findings of relevant quantitative studies. Practical implications This study provides firm managers with practical implications. The conclusions of this study imply that the impact of the combined STI and DUI mode of innovation is likely to be contextual, so firms should make contingent decisions on whether to engage in STI mode of innovation and DUI mode of innovation simultaneously according to their own organizational conditions. Moreover, face-to-face contacts are particularly important when a firm engages in DUI mode of innovation. In addition, the focus of IT strategy of firms engaged in STI mode of innovation should be on perfecting their IT infrastructure rather than increasing the frequency of IT usage. Originality/value This paper provides new evidence for the relation between business innovation modes and firms’ innovation performance, and it is one of the few empirical studies that focus on emerging markets. More importantly, this paper proposes a persuasive explanation framework for understanding the heterogeneous impacts of the combined STI and DUI mode of innovation on firms’ innovation performance. This is the first study that examines the moderating effect of IT on the relationship between business innovation modes and a firm’s innovation performance.