Impact of Technological Innovation Capabilities on the Market Value of Firms

Madan Annavarjula () and Ramesh Mohan ()
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Madan Annavarjula: Department of Management, Bryant University Smithfield, RI 02917, USA
Ramesh Mohan: Department of Economics, Bryant University Smithfield, RI 02917, USA

Journal of Information & Knowledge Management (JIKM), 2009, vol. 08, issue 03, 241-250

Abstract: In the era of globalisation and with the advent of knowledge economies, organisational innovation has assumed a critical role in enhancing economic performance of firms. Proponents of theResource Based Viewof the firm and its more recent extensions such as theKnowledge Based ViewandDynamic Capabilities Theoryhave suggested that generation, diffusion and application of organisational knowledge could be the source of sustained competitive advantage and superior performance of firms. While there is near unanimity in accepting the vital role of innovation in a firm's performance, consensus on what constitutes organisational innovation and how to measure it has proven to be elusive so far. Most previous research in this area has conceptualised innovation through one or more dimensions of a firm's innovative capability using R&D of a firm only. The measurement of the construct has thus reflected this narrow conceptualisation with a single measure of R&D expenditure being the most often used proxy. This study utilises a broader definition of organisational innovation capabilities that includes the generation, dissemination and strength of innovative activity in a firm. The unique features of this study is that it uses multiple indicators of a firm's innovation profile along with lagged measures of market value using fixed effects panel data analysis.

Keywords: Innovation; R&D; firm value; panel data (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (1)

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DOI: 10.1142/S0219649209002361

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