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Do the Performances of Innovative Firms Differ Depending on Market-oriented or Technology-oriented Strategies?

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  • Namgyoo K. Park
  • Uisung D. Park
  • Jeonghwan Lee

Abstract

Despite a perception to the contrary, the performances and values of innovative firms can differ. While people are preconditioned to believe that these firms perform well and have high valuations, this is not always the case. In order to explain this phenomenon, we adopt a lens of strategic orientations that influence innovation: market orientation and technology orientation. By using 10-year panel data, and a content analysis examining the relative orientations of our sample firms, we find that the market-oriented and technology-oriented tendencies of innovative firms influence firm performance and value. Relatively market-oriented innovative firms can guarantee instant performance by offering customers new products and services that they want. However, customers may not be loyal to one particular innovative firm. By contrast, relatively technology-oriented innovative firms are not subject to customers' fastidious choices and have higher firm values. Furthermore, environmental uncertainty negatively influences the relatively market-oriented innovative firms' value as well as sales performance.

Suggested Citation

  • Namgyoo K. Park & Uisung D. Park & Jeonghwan Lee, 2012. "Do the Performances of Innovative Firms Differ Depending on Market-oriented or Technology-oriented Strategies?," Industry and Innovation, Taylor & Francis Journals, vol. 19(5), pages 391-414, July.
  • Handle: RePEc:taf:indinn:v:19:y:2012:i:5:p:391-414
    DOI: 10.1080/13662716.2012.711024
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