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Listen to the market: Do its complexity and signals make companies more innovative


  • Ana Pérez-Luño

    (Department of Business Administration, Universidad Pablo de Olavide)

  • Jesus Cambra-Fierro

    (Department of Business Administration, Universidad Pablo de Olavide)


This paper analyzes four modes of innovation that differ in their scope of newness – innovation generation and adoption–, and in their degree of change –radical and incremental innovations. Building a theoretical model based on the Market Orientation (MO) and contingency theory literatures and utilizing a unique sample of innovating firms, we find that MO positively influence the number incremental generation and adoption of innovations. We also find that environmental complexity moderates the relationship between MO and radical and incremental innovation generation and adoption. That is, we have found that high environmental complexity enhances the introduction of radical and incremental internally generated innovations and harms the introduction of incremental innovation adoptions for market oriented firm. These findings add to the innovation and MO literatures. Our results also have important implications for both commercial activities and R&D policies adopted by firms.taking place in this sector enhances its potential as a showcase for processes of anticipation and adaptation to the environment. In addition, the paper aims to shed some light on the question of whether strategy potentially moderates the MO-performance link. Finally, the principal implications of our findings are discussed.

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  • Ana Pérez-Luño & Jesus Cambra-Fierro, 2010. "Listen to the market: Do its complexity and signals make companies more innovative," Working Papers 10.04, Universidad Pablo de Olavide, Department of Business Administration.
  • Handle: RePEc:pab:wpbsad:10.04

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    References listed on IDEAS

    1. Carmen Camelo-Ordaz & Ana Perez-Luno & Elena Sousa-Ginel, 2009. "The impact of market and entrepreneurial orientation on innovativeness: an empirical assessment," International Journal of Entrepreneurship and Innovation Management, Inderscience Enterprises Ltd, vol. 10(3/4), pages 243-265.
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      Market orientation; environmental complexity; innovation;
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