Do innovations improve firm performance in the Indian manufacturing sector? A mediation and synergy effect analysis

Farha Fatema and Mohammad Monirul Islam

International Journal of Emerging Markets, 2021, vol. 18, issue 9, 2620-2642

Abstract: Purpose - This study examines the effects of both technological and non-technological innovations on the overall performance of Indian manufacturing firms, and identifies the mediation and synergy effects in the relationship between innovation and performance. Design/methodology/approach - The study applies the partial least squares structural equation modelling (PLS-SEM) technique using Smart PLS3 on a combined data set from the World Bank Enterprise Survey and the follow-up Innovation Survey for India in 2014. Different newly developed statistical tests [PLS predict, importance performance map analysis (IPMA), multi-group analysis (MGA) and confirmatory tetrad analysis PLS (CTA-PLS)] have been used to check the robustness of the empirical results. Findings - The results of the study suggest that technological innovations (product and process innovation) significantly affect a firm's overall performance, and that innovation strategy significantly mediates the effects, whereas the effects of non-technological innovations (marketing and organisational innovation) on a firm's performance are fully mediated by innovative performance. IPMA results suggest that technological innovations and their respective strategies are very important in improving a firm's performance, whereas non-technological innovations have great importance for increasing the innovative performance of the firms. The MGA results suggest that there are several distinctions in the path relationship and mediation effect among a firm's segment based on technology intensity and firm size. The study results do not find that innovation types have significant synergy effects on a firm's performance. Originality/value - The study results suggest that managers should focus on technological innovations, along with their respective strategies to improve the overall performance of a firm, whereas non-technological innovations should be given priority for increasing the firm's innovative performance. Moreover, while making policy regarding innovation the people concerned should bear in mind which segment of the firms they are dealing with, as the effects differ across a firm's technology-intensity and size.

Keywords: Innovations; Firm performance; Mediation effects; Synergy effects; Manufacturing firms; India; L1; O31; O32 (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:ijoemp:ijoem-05-2020-0495

DOI: 10.1108/IJOEM-05-2020-0495

Access Statistics for this article

International Journal of Emerging Markets is currently edited by Prof Ilan Alon

More articles in International Journal of Emerging Markets from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().