Remote Work: Driver or Deterrent of Digital Product Innovation

As firms adopt divergent policies regarding work-from-home (WFH), the implications of remote work for collaborative and interdependent outcomes such as digital product innovation remain uncertain. This study examines how remote work adoption affects continuous digital product innovation using a panel dataset of mobile applications. We identify firm-level remote work adoption from job postings data and estimate its effects on app innovation using a staggered difference-in-differences design. We find that remote work significantly increases both major releases and new feature introductions per app, indicating enhanced digital product innovation performance. To assess whether these gains come at the expense of originality, we distinguish between novel and imitative feature introductions and show that remote work does not reduce the originality of digital product innovation. Moreover, improvements in digital product innovation translate into greater market success, as reflected in increased app downloads. The positive effects of remote work are stronger for app development teams with prior modular collaboration experience through open-source participation, suggesting that teams with greater experience coordinating modular work can better leverage remote work arrangements. We also find that remote work enables teams to expand their workforce and increase their collective skill capacity, both of which are associated with improved digital product innovation outcomes. In contrast, reductions in commuting time and app maturity do not explain the observed digital product innovation gains. Overall, our findings suggest that remote work can enhance continuous digital product innovation at the team level without compromising innovation novelty.