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Innovation strategies and firm performance: Simple or complex strategies?

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  • Sam Tavassoli
  • Charlie Karlsson

Abstract

This paper analyzes the effect of various innovation strategies (ISs) of firms on their future performance, captured by labor productivity. Using five waves of the Community Innovation Survey in Sweden, we have traced the innovative behavior of firms over a decade, that is, from 2002 to 2012. We defined ISs to be either simple or complex (in various degrees). We call an IS a simple IS when firms engage in only one of the four types of Schumpeterian innovations, that is, product, process, marketing, or organizational, while a complex IS is when firms simultaneously engage in more than one type. The main findings indicate that those firms that choose and afford to have complex ISs are better off in terms of their future productivity in comparison with those firms that choose not to innovative (base group) and also in comparison with those firms that choose simple ISs. The results are mostly robust for those complex innovators that have a higher degree of complexity and also keep the balance between technological (product and process) and non-technological (organizational and marketing) innovations.

Suggested Citation

  • Sam Tavassoli & Charlie Karlsson, 2016. "Innovation strategies and firm performance: Simple or complex strategies?," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 25(7), pages 631-650, October.
    • Handle: RePEc:taf:ecinnt:v:25:y:2016:i:7:p:631-650
    DOI: 10.1080/10438599.2015.1108109
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    References listed on IDEAS

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    1. Jeroen de Jong & Ron Kemp & Mickey Folkeringa & Wubben, 2003. "Innovation and firm performance," Scales Research Reports H200207, EIM Business and Policy Research.
    2. Sofia Wixe, 2015. "The Impact of Spatial Externalities: Skills, Education and Plant Productivity," Regional Studies, Taylor & Francis Journals, vol. 49(12), pages 2053-2069, December.
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    Cited by:

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    2. Markus Grillitsch & Sam Tavassoli, 2018. "Cultural diversity and employment growth: Moderating effect of the recent global financial crisis," Australian Journal of Management, Australian School of Business, vol. 43(4), pages 632-652, November.
    3. Tatiana Marceda Bach & Luciano Luiz Dalazen & Wesley Vieira da Silva & Alex Antonio Ferraresi & Claudimar Pereira da Veiga, 2019. "Relationship Between Innovation and Performance in Private Companies: Systematic Literature Review," SAGE Open, , vol. 9(2), pages 21582440198, June.
    4. Vladimír Baláž & Tomáš Jeck & Miroslav Balog, 2023. "Firm performance over innovation cycle: evidence from a small European economy," Journal of Innovation and Entrepreneurship, Springer, vol. 12(1), pages 1-23, December.
    5. Elisenda Jové-Llopis & Agustí Segarra-Blasco, 2018. "Eco-Efficiency Actions and Firm Growth in European SMEs," Sustainability, MDPI, vol. 10(1), pages 1-26, January.
    6. Sam Tavassoli & Lars Bengtsson, 2018. "The Role Of Business Model Innovation For Product Innovation Performance," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 22(07), pages 1-28, October.
    7. Antonioli, Davide & Ghisetti, Claudia & Pareglio, Stefano & Quatrosi, Marco, 2022. "Innovation, Circular economy practices and organisational settings: empirical evidence from Italy," FEEM Working Papers 319763, Fondazione Eni Enrico Mattei (FEEM).
    8. Alfonso Expósito & Juan A. Sanchis-Llopis, 2019. "The relationship between types of innovation and SMEs’ performance: a multi-dimensional empirical assessment," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 9(2), pages 115-135, June.
    9. Sam Tavassoli & Charlie Karlsson, 2018. "The role of regional context on innovation persistency of firms," Papers in Regional Science, Wiley Blackwell, vol. 97(4), pages 931-955, November.
    10. Keshab Ray & Meenakshi Sharma, 2021. "Antecedents and Outcomes of Brand Strength: A Study of Asian IT Organizations Towards Brand Sustainability," Corporate Reputation Review, Palgrave Macmillan, vol. 24(3), pages 128-142, August.
    11. Arranz, N. & Arroyabe, M.F. & Li, Jun & de Arroyabe, J.C. Fernandez, 2019. "An integrated model of organisational innovation and firm performance: Generation, persistence and complementarity," Journal of Business Research, Elsevier, vol. 105(C), pages 270-282.

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