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Innovation patterns and their effects on firm performance

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  • Hyun-Sun Ryu
  • Jae-Nam Lee

Abstract

This study aims to identify various innovation patterns and understand their effects on firm performance across business service sectors. By collecting empirical data from 198 Korean business services firms, we explore these firms’ major innovation patterns, conceptualized as combinations of different service innovation dimensions: service concept, service delivery, customer interaction, and technology. Then, in accordance with the innovation patterns they display, we group these firms into four clusters: ‘service delivery-based high-technology', ‘service delivery and customer interaction-integrated', ‘customer interaction-based high-technology', and ‘strongly balanced’ innovators. Last, we investigate whether these patterns influence firm performance. Our findings are three-fold: (1) the innovation patterns in business service firms result from the creation of new combinations of major service innovation dimensions, (2) four independent innovation patterns emerge in business service firms, and (3) these patterns lead to different levels of firm performance . Practically, our findings highlight the importance of highly qualified employees, customer interaction, and technology in improving financial performance.

Suggested Citation

  • Hyun-Sun Ryu & Jae-Nam Lee, 2016. "Innovation patterns and their effects on firm performance," The Service Industries Journal, Taylor & Francis Journals, vol. 36(3-4), pages 81-101, February.
    • Handle: RePEc:taf:servic:v:36:y:2016:i:3-4:p:81-101
    DOI: 10.1080/02642069.2016.1155114
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    References listed on IDEAS

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    1. Chris Freeman & Luc Soete, 1997. "The Economics of Industrial Innovation, 3rd Edition," MIT Press Books, The MIT Press, edition 3, volume 1, number 0262061953, December.
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    Cited by:

    1. Stefanie Baumgartner & Marc K Peter, 2022. "Strategic Foresight and Innovation Management: A Comparative Study across International Swiss Banks," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 8(4), pages 309-328, October.
    2. Michalô °€ Brzozowski, 2020. "Impact of Credit Market Development and Stability on Productivity: New Evidence from the Industry Level," Annals of Economics and Finance, Society for AEF, vol. 21(1), pages 111-129, May.
    3. Castillo Apraiz, Julen & Matey de Antonio, Jesús, 2020. "The mediating role of personnel training between innovation and performance: Evidence from the German pharmaceutical industry," Cuadernos de Gestión, Universidad del País Vasco - Instituto de Economía Aplicada a la Empresa (IEAE).
    4. Furrer, Olivier & Sudharshan, Devanathan & Tsiotsou, Rodoula H. & Liu, Ben S., 2016. "A framework for innovative service design," FSES Working Papers 476, Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland.
    5. Santos, David Ferreira Lopes & Basso, Leonardo Fernando Cruz & Kimura, Herbert, 2018. "The trajectory of the ability to innovate and the financial performance of the Brazilian industry," Technological Forecasting and Social Change, Elsevier, vol. 127(C), pages 258-270.

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