Resource constraints as triggers of radical innovation: Longitudinal evidence from the manufacturing sector

Marcus Matthias Keupp and Oliver Gassmann

Research Policy, 2013, vol. 42, issue 8, 1457-1468

Abstract: Despite the significant role of radical innovation as a driver of firm growth and performance, the consequences of resource constraints for radical innovation outcomes remain unknown. Our paper addresses this gap. We combine arguments from entrepreneurship theory and the theory of recombinative innovation to construct an overarching theoretical framework that argues why resource constraints can promote, rather than impede, radical innovation. We then build hypotheses on two specific resource constraints, knowledge and financial, and test these by a lagged-variable random-effects Tobit model with longitudinal data from an exceptionally large and detailed innovation survey. Controlling for absorptive capacity, firm age, and firm growth, we find full support for the hypothesis that knowledge constraints spur radical innovation and partial support for the hypothesis that financial constraints spur radical innovation. We discuss the theoretical significance of these findings and point to managerial implications and paths for future research.

Keywords: Radical innovation; Resource constraints; Knowledge recombination; Entrepreneurship; Panel data (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:respol:v:42:y:2013:i:8:p:1457-1468

DOI: 10.1016/j.respol.2013.04.006

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