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The mediating role of innovation on the influence of industry structure and national context on firm performance

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  • Allred, Brent B.
  • Swan, K. Scott

Abstract

In this study, a model of industry structure and national context is developed and tested to better understand their influence on firm investment in innovation and performance. Archival financial data from 730 companies in 30 countries and 10 industries, along with industry- and national-level data, was collected to test the mediation model and hypotheses. The results of the analyses provide support that both industry structure and national context play an important role influencing firm investment in innovation and performance. In particular, industry dynamism and a country's patent protection were found to be positively related to firm performance. These relationships were mediated by the firm's investment in innovation. The findings of this study support the need to include both industry and national effects in international strategy research. Additionally, the role that information technology (IT) has on these variables, through the globalization issues of coordination, communication, and competition, is explored.

Suggested Citation

  • Allred, Brent B. & Swan, K. Scott, 2005. "The mediating role of innovation on the influence of industry structure and national context on firm performance," Journal of International Management, Elsevier, vol. 11(2), pages 229-252, June.
    • Handle: RePEc:eee:intman:v:11:y:2005:i:2:p:229-252
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    2. Lee, In Hyeock & Rugman, Alan M., 2012. "Firm-specific advantages, inward FDI origins, and performance of multinational enterprises," Journal of International Management, Elsevier, vol. 18(2), pages 132-146.
    3. Landon Kleis & Paul Chwelos & Ronald V. Ramirez & Iain Cockburn, 2012. "Information Technology and Intangible Output: The Impact of IT Investment on Innovation Productivity," Information Systems Research, INFORMS, vol. 23(1), pages 42-59, March.
    4. Breitschopf, Barbara, 2015. "Impacts of policies on market formation and competitiveness: The case of the PV industry in Germany," Working Papers "Sustainability and Innovation" S10/2015, Fraunhofer Institute for Systems and Innovation Research (ISI).
    5. Zhelyu Vladimirov, 2021. "Mediating Role of Innovations as a Factor of Firm’s Competitiveness," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 3, pages 407-429, September.
    6. Anchalee Kokanuch & Khwanruedee Tuntrabundit, 2014. "Knowledge Sharing Capability and Organizational Performance: A Theoretical Perspective," Proceedings of International Academic Conferences 0201412, International Institute of Social and Economic Sciences.

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