Innovating with Limited Resources: The Antecedents and Consequences of Frugal Innovation

Quan Cai, Ying Ying, Yang Liu and Wei Wu
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Quan Cai: School of Public Affairs, Zhejiang University, and Institute of China’s Science, Technology and Education Policy, Zhejiang University, Hangzhou 310058, China
Ying Ying: School of Business Administration, Zhejiang University of Finance and Economics, Hangzhou 310000, China
Yang Liu: School of Management, Zhejiang University, Hangzhou 310058, China
Wei Wu: Institute of China’s Science, Technology and Education Policy, Zhejiang University, Hangzhou 310058, China

Sustainability, 2019, vol. 11, issue 20, 1-23

Abstract: Frugal innovation is a resource scarce solution for emerging market firms. Based upon the resource-constrained innovation perspective, this research theoretically explores and empirically examines the drivers and consequences of frugal innovation. The results of a firm-level survey show that two types of frugal innovation (cost innovation and affordable value innovation) positively affect the performance of emerging-market firms. We also address the issues of how emerging-market firms deal with institutional, technological, and market constraints in emerging markets, and we show how these constraints drive frugal innovation. We find that emerging-market firms with higher levels of capability for institutional leverage and bricolage, and firms that face perceived dysfunctional competition, tend to generate more affordable, value-added new products. Overall, these findings have important implications for emerging-market firms seeking to conduct frugal innovation in resource-constrained emerging markets.

Keywords: frugal innovation; cost innovation; cleaner production; competition; institutions (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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