Could more innovation output bring better financial performance?The role of financial constraints

Innovation scholars highlight the economic benefits to firms,while research findings on the relationship between innovation output and economic returns remain mixed.In this study,we develop the profiting from innovation(PFI)framework and address the crucial role of financial constraints in the relationship between innovation output and financial performance.We argue that the liability of newness differentiates firms’financial performance during the commercialization of innovation,leading to a U-shaped relationship between firms’innovation output and financial performance.We further document the moderating impact of individual financial constraints(IFC)and market-based financial constraints(MFC)on this curvilinear relationship.Empirical tests based on the 142,972 firm-year observations of the multi-source dataset of Chinese manufacturing firms from 1999–2009 support our hypotheses.The additional analysis shows that non-state-owned enterprises and small and medium enterprises benefit more from the synergistic effect of reductions of IFC and MFC than state-owned enterprises and large firms.Our study enriches the literature of the PFI framework by uncovering the mechanism between innovation output and economic returns where financial constraints play an essential role.To the best of our knowledge,we are among the first to investigate the processes and mechanisms between innovation output and financial performance,generating novel insights for business practitioners and policymakers.

Influence of organization learning on innovation output in manufacturing firms in Kenya

Knowledge entrepreneurship is increasingly becoming important in driving innovation for high levels of competitiveness.The purpose of this study was to investigate the relationship between Organization Learning(OL)and Innovation Output(IO)for improved performance in manufacturing firms in Kenya.The theoretical underpinnings on this study are the Schumpeter’s(1934)innovation theory of and the Gleick(1987)complexity theory.The methodology used was mixed method research because it provides a more holistic understanding of a thematic area.The research design that was used is cross-sectional design because it allows for making observations on different characteristics that exist within a group at a particular time.The target population was manufacturing firms across the country.Multi-stage sampling strategy was used to sample 303 respondents from 101 firms.Primary and secondary data were used to collect both qualitative and quantitative data.The questionnaire,interview schedule and a checklist of key informants were used to collect data.Content validity was used to ascertain the credibility of the research procedure and internal consistency technique was used to test for reliability.Correlation and linear regression were used to determine the relationship between OL and IO.Work disruptions were avoided by making prior arrangements and appointments.The findings indicate that OL has a significant influence on IO.It is recommended that lifelong learning,management support and risk tolerance should be encouraged to improve creativity.High creativity is important in raising the capacity to integrate internal and external knowledge for greater levels of IO.Further research should be carried out to find how customers and suppliers information can be utilized to enriched OL.