The effect of innovation types (product, process, market, and organizational) on firm performance includes increased sales growth, better return on investment, business expansion, better production performance, better marketing performance, improved finance performance, and enhanced firm learning, among others.
Following are some empirical studies on the effect of innovation types on organizational performance.
Investigating the effect of innovation activities of firms on innovation performance: does firm size matter?
The study examined the mediating role of firm size on the relationship between innovation activities and performance. Specifically, the study explored the effect of firm size on product and process innovation; the effect of the number of patents applied for on product and process innovation in firms; the effect of the number of patents issued on product and process innovation in firms; the effect of collaborative R&D on product and process innovation in firms; and the effect of R&D toward new business on product and process innovation in firms (Parast et al., 2025).
The target population included 70,000 firms listed in the Business R & D and Innovation survey (BRDIS, 2020). Data collection was done using questionnaires. The collected data was analyzed using descriptive statistics and inferential analysis. The study employed the maximum likelihood estimation (MLE) procedure for inferential analysis. The findings were presented in suitable tables as required (Parast et al., 2025).
The findings showed that firm size had a positive and significant impact on innovation activities and innovation outcomes of the firm. It was also demonstrated that firm size impacts both product and process innovation in small firms, while in large firms, it only impacts process innovation. The results also showed that large firms greatly benefit from participating in collaborative R & D projects when compared to small firms. The results also showed that patents applied for were a significant predictor of both product and process innovation for small firms. On the other hand, patents issued were a significant predictor of both product and process innovation in large firms. It was also demonstrated that large firms largely focus on process innovation while small firms focus on product innovation. The results also showed that small firms greatly benefited from product innovation rather than process innovation. The findings also showed that R & D investment has no significant impact on innovation outcomes in both small and large firms. This means that R & D investment has no impact on product innovation or process innovation in both firms (Parast et al., 2025).
Effect of technological innovation on firm’s performance: mediating effect of competitive advantage: a study on manufacturing firms operating in Ethiopian industrial parks
This study explored the effect of technological innovation on the performance of Ethiopian industrial parks operating in the manufacturing sector. The target firms were drawn from three manufacturing regions, including Ethiopian public industrial parks operating in the Oromia Region, Addis Ababa City Administration, and the Sidama Region. 382 staff members from the manufacturing firms in the three regions were selected to take part in the study. Questionnaires were the main tool for data collection. The collected data was then analyzed using descriptive statistics such as frequencies, percentages, mean, and deviation. Inferential analysis using structural equation modeling (SEM) and path analysis was employed to establish the relationship between dependent and independent variables. The results were presented using relevant tables as needed (Kumera et al., 2024).
Technological innovations were measured using 5 product innovation indicators and 5 process innovation indicators. Competitive advantage was measured in terms of cost advantage, product quality, and the firm’s responsiveness. Firm performance was measured using financial measures and marketing performance. Financial measures included sales revenue growth, profit, and sales volume. Marketing performance was measured in terms of customer satisfaction, market share, and export growth (Kumera et al., 2024).
The findings of the correlational analysis indicate that technological innovation had a positive and significant effect on firm performance and competitive advantage. The results also demonstrated a positive and significant relationship between competitive advantage and performance of Ethiopian industrial parks (Kumera et al., 2024).
The results of regression analysis indicated that without the mediating variable, technological innovations had a positive and significant effect on the performance of the industrial parks. This means that a unit increase in technological innovation leads to a corresponding increase in firm performance. The results also indicated that technological innovation has a positive and significant effect on both competitive advantage and performance of the industrial parks. In addition, the findings revealed that competitive advantage has a positive and significant influence on the performance of industrial parks. This means that technological innovations have both direct and indirect impact on the performance of the parks. Lastly, the findings revealed that the relationship between technological innovations and the performance of the industrial parks is partially mediated by competitive advantage (Kumera et al., 2024).
The effect of innovation orientation on firm performance: evidence from micro and small manufacturing firms in selected towns of Awi Zone, Ethiopia
This study explored the impact of innovation on the performance of micro and small manufacturing firms in Awi Zone, Amhara, Ethiopia. Specifically, the study explored the effect of product, process, market, and organizational innovation on the performance of micro and small manufacturing firms in the study area. The target population included 643 micro and small manufacturing firms in the study area. Out of these, 247 were selected to form the sample of the study. Descriptive variables were analyzed using descriptive statistics, including frequencies, percentages, means, and deviations. The Pearson correlation coefficient was used to establish the associations between the study variables. The linear relationship between dependent and independent variables was evaluated using regression analysis. The findings were presented in suitable tables as deemed fit (Ayinaddis, 2023).
Product innovation was measured by considering the introduction of a new product, product differentiation in the industry, and technological newness in the product. Process innovation was evaluated by considering new combinations of materials in production and the application of new technology. Market innovation was determined by considering the design or price of a product, changes in packaging, innovative marketing and promotion, the application of online transactions, and the ability to find new markets. Organizational innovation was evaluated in terms of cooperation among functions, outsourcing, use of the Internet and databases to improve knowledge sharing, and quality management systems. Firm performance was measured in terms of financial and marketing performance as proposed by Kaplan and Norton (1996) (Ayinaddis, 2023).
According to the findings, there was a positive and significant correlation between the independent variables—product, process, market, and organizational innovation with the dependent variable, firm performance. This means that an increase in innovation types leads to a corresponding increase in the performance of the firm. The result of the regression model indicated that product innovation, process innovation, marketing innovation, and organizational innovation all have a positive and significant impact on the performance of manufacturing firms in the study area (Ayinaddis, 2023).
Innovation types and SMEs’ financial performance relationship: evidence from Eritrea
This study explored the impact of innovation types on the financial performance of SMEs in Eritrea. Specifically, the study sought to establish the effect of product innovation, process innovation, marketing innovation, and organizational innovation on the financial performance of the SMEs in Eritrea. The target population included 110 SMEs operating in various industries located in Asmara, Ethiopia. The list of SMEs used was obtained from the Ministry of Trade and Industry (MTI, 2018) in Asmara. Managers/owners of these SMEs were selected to participate in the study. Data collection was done using questionnaires. The collected data was analyzed using descriptive statistics and inferential analysis. Specifically, Partial Least Squares-Structural Equation Modeling (PLS-SEM) was used to assess the relationship between the dependent and independent variables. The findings were presented in suitable tables for interpretation (Bahta et al., 2023).
Innovation types were measured using the model proposed by Gunday et al. (2011). On the other hand, financial performance was adopted from the model proposed by Gunday et al. (2011) and Martinez-Conesa et al. (2017). Firm size was arrived at by considering the number of workers employed by the SME (Bahta et al., 2023).
The findings showed that product or service innovation had a positive and significant impact on the performance of the SMEs. It was also shown that process innovation had a positive and significant impact on SME performance. In addition, the results indicated that market innovation had a positive and significant effect on SME performance. Organizational innovation was also shown to have a positive and significant impact on SME performance. Overall, firm size was found to have an insignificant impact on the relationship between organizational innovation and SME performance (Bahta et al., 2023).
The effect of innovation practices on the performance of Moroccan hotels: an empirical study
This study investigated the impact of innovation on the financial and non-financial performance of Moroccan hotels. Specifically, the study explored the influence of product innovation, process innovation, organizational innovation, marketing innovation, and environmental innovation on the performance of hotels in Morocco. The target population included 30 hotels found in the city of Tangier, Morocco. 394 respondents were selected from the target hotels to participate in the study. Data collection was done using questionnaires. Descriptive statistics were used to analyze the collected data. The Partial Least Square (PLS) model was used to explore the relationship between dependent and independent variables. The findings were presented in tables as required (Bedraoui & Lhassan, 2022).
Innovation was measured in terms of product innovation, process innovation, organizational innovation, marketing innovation, and environmental innovation. Firm performance was measured in terms of financial performance and non-financial performance (including organizational practices, social climate, and occupancy rate) (Bedraoui & Lhassan, 2022).
The findings revealed that product/service innovation had a negative impact on the performance of hotels in Morocco. The results also demonstrated that process innovation has a negative impact on the performance of hotels in Morocco. Environmental innovation was shown to have a positive impact on the performance of hotels in Morocco. Marketing innovation and organizational innovation were also shown to positively impact the performance of the target hotels (Bedraoui & Lhassan, 2022).
Impact of internal innovation on firm performance with the moderating role of collaborative innovation
This study explored the effect of internal innovation on the performance of firms in the textile industry of Pakistan. Specifically, the study sought to determine the impact of product and process innovation on the performance of firms in the textile industry in Pakistan. It also sought to investigate the mediating role of collaborative innovation on the relationship between process innovation and a firm’s performance. Lastly, it sought to find out the mediating role of collaborative innovation on the relationship between product innovation and the firm’s performance. The target population included 100 respondents (managers, assistant managers, trainee engineers, among others) drawn from the textile firms operating in Pakistan. Data collection was done using questionnaires. The collected data was analyzed using descriptive statistics for descriptive variables. Correlation analysis and regression analysis were employed to establish the relationship between the dependent and independent variables. The findings were presented in suitable tables as needed (Ullah & Arshad, 2021).
Product innovation was measured in terms of the models proposed by Covin and Slevin (1989), Wang (2008), and Kreiser et al. (2011). Process innovation was measured using the model proposed by Davenport and Short (1990) and Zeithaml et al. (1988). The collaborative variable was measured using the model designed by Robertson and Gatignon (1988). Firm performance was measured in terms of sales growth, return on investment, and business expansion (Ullah & Arshad, 2021).
The findings of the correlation analysis reported that there is a positive and significant association between product innovation and firm performance. The same analysis indicated a positive and significant association between process innovation and firm performance. The results of correlation analysis also showed that there was no multi-collinearity among the variables. The findings of regression analysis revealed that both product innovation and process innovation positively impact firms’ performance. The results also showed that collaborative innovation has a positive and significant moderating impact on the relationship between product innovation and the performance of the firm. The results also showed that collaborative innovation has a positive and significant moderating impact on the relationship between process innovation and performance of the firm (Ullah & Arshad, 2021).
The impact of innovation strategies on business performance: practices in high-technology companies in Turkey
This study investigated the impact of innovation strategies on the performance of high-technology firms in Turkey. Specifically, the study sought to establish the impact of the offensive strategy, analytical strategy, defensive strategy, future-oriented strategy, proactive strategy, and risk-oriented strategy on the performance of high-technology firms in Turkey. The target population included all high-technology firms operating in the following sectors: chemistry, telecommunication, energy, and computing in the study area. 346 managers were selected to participate in the study. Data collection was done using a questionnaire. Data analysis was done using descriptive statistics, including frequencies, percentages, mean, and deviations. Exploratory factor analysis (EFA) and confirmatory factor analysis (CFA) were also employed to establish the validity and reliability of the measuring instrument. Pearson correlation and regression analysis were used to test the relationship between the dependent and independent variables. The findings were presented in tables as required (Koyluoglu & Dogan, 2021).
According to the results, there was no positive and significant relationship between innovation strategies (analytical, offensive, defensive, risk-oriented, and proactive strategies) and process performance in the target firms. In addition, the findings revealed no positive and significant relationship between offensive strategy and product, customer-based, employee-based, financial, and process performances. Also, the results showed a positive and significant correlation between proactive, future-oriented, defensive, and analytical strategies and financial performance. This means that an increase in innovation strategies by firms led to a corresponding increase in financial performance, customer-based performance, employee-based performance, and product-based performance (Koyluoglu & Dogan, 2021).
The results also showed that the future-oriented strategy was effective on customer-based, employee-based, financial, process, and product performances. Future-oriented and risk-oriented strategies had no impact on customer-based, employee-based, financial, product, and process performances of the high technology firms in the study area. Furthermore, the study established that analytical, defensive, offensive, proactive, and risk-oriented strategies had no effect on process performance. Also, the analytical, defensive, future-oriented, and proactive strategies were shown to positively affect product, customer-based, and financial performances in the target firms. Therefore, innovation strategies mostly affected customer-based performance as well as marketing processes’ financial performance (Koyluoglu & Dogan, 2021).
Innovation capabilities, innovation types, and firm performance: evidence from the banking sector of Ghana
This study explored the relationship between innovation capabilities/types and performance of banks in Kumasi, Ghana. Specifically, the study sought to establish the effect of innovation capability on adopted innovation. It also sought to determine the effect of innovation capability on organizational innovation. The study also sought to find out the influence of innovation capability on the process of innovation. Lastly, the study set out to determine the influence of innovation capability on marketing innovation of the firm. The study also sought to determine the effect of innovation types (product, process, market, and organizational) on firm performance. (YuSheng & Ibrahim, 2020).
The target population included all the banks operating in the Kumasi metropolitan area in Ghana. Convenience sampling was used to select 500 respondents (bank employees and customers) to participate in the study. Data collection was done using questionnaires. The collected data was analyzed using descriptive statistics and inferential analysis. Descriptive statistics, including frequencies, percentages, mean, and standard deviations, were used to analyze descriptive variables. Regression analysis was done to determine the relationship between the dependent and independent variables (YuSheng & Ibrahim, 2020).
The results showed that innovation capabilities had a positive and significant impact on innovation dimensions, including product, market, and organizational innovation. However, innovation capability was shown to have a negative impact on process innovation. It was also reported that the four innovation dimensions had a positive and significant effect on the performance of banks in the study area. The results showed that service innovation had a positive and significant impact on firm performance. Organizational innovation was shown to have a positive but insignificant effect on firm performance. Product innovation was shown to have a positive and significant impact on firm performance. Process innovation was shown to have a negative but significant impact on firm performance. Market innovation was shown to have a positive and significant impact on firm performance. The results also indicated that performance had a negative but significant impact on market performance in the target firms. On the other hand, the findings revealed that performance had a negative and insignificant impact on innovation performance (YuSheng & Ibrahim, 2020).
Does innovation type influence firm performance? A dilemma of star-rated hotels in Ghana
This study explored how different innovation types affect performance (in terms of profitability, customer satisfaction, market value, and growth) of hotels in Ghana. Specifically, the study sought to achieve the following objectives: to determine the impact of product innovation on hotel performance, to examine the impact of process innovation on hotel performance, to establish the impact of marketing innovation on hotel performance, and to find out the impact of organizational innovation on firm performance. The target population included 2969 hotels in Ghana. 680 star-rated hotels were selected from the 2969 to constitute the sample size of the study. A questionnaire was used to collect primary data from the selected participants. Descriptive statistics were used to analyze variables under study. Inferential statistics, for example, Hierarchical Linear Regression models (HLRM), were used to establish the relationship between dependent and independent variables. The findings were presented in tables as required (Hu et al., 2020).
The results showed that product innovation had a positive and significant influence on hotel performance. The findings also showed that process innovation as a variable had a positive and significant impact on hotel performance. In addition, the findings revealed that marketing innovation has a positive and significant impact on hotel performance. The results also showed that organizational innovation had a positive and significant effect on hotel performance. Further analysis revealed that when all the innovation types are combined, they both have a positive and significant linear effect on the performance of hotels in Ghana (Hu et al., 2020).
The effect of innovation capability on firm performance: evidence from the software sector in Pakistan
The study investigated the effect of innovation capability on firm performance with technological innovation and non-technological innovation playing the role of mediation. Specifically, the study sought to establish the impact of innovation capability on technological and non-technological innovation. It also sought to determine the impact of innovation capability on firm performance. The study also explored the mediating role of technological innovation on the relationship between innovation capability and firm performance. Lastly, the study investigated the mediating role of non-technological innovation on the relationship between innovation capability and firm performance (Hussain et al., 2020).
The target population included 241 software firms working in different Pakistani cities. Data collection was done using questionnaires. The collected data was analyzed using descriptive statistics for the descriptive study variables. Correlation analysis was done to establish the associations between variables being investigated. Regression analysis was done to establish the relationship between the dependent and independent variables. The results of the study were presented using relevant tables as needed (Hussain et al., 2020).
Innovation capability was measured using market orientation, technological orientation, and absorptive capacity. Technological innovations and non-technological innovations were measured using the model proposed by Ahu (2015). Firm performance was measured using two dimensions, namely, firm innovation performance and firm learning and growth performance. Firm innovation performance was measured by the model proposed by Faruk and Gary (2015). Firm learning and growth performance was measured by the model developed by Ahu (2015).
Correlation analysis for the study revealed a positive and significant correlation between innovation capability and technological innovation. The analysis also revealed a positive and significant correlation between innovation capability and non-technological innovation. Also, the analysis demonstrated a positive and significant association between innovation capability and firm performance. Furthermore, the results of the analysis indicated a positive and significant association between technological innovation and non-technological innovation. The results of the analysis also showed a positive and significant association between technological innovation and firm performance. Also, the analysis showed that a positive and significant association exists between non-technological innovation and firm performance. Lastly, the results showed that both technological innovations and non-technological innovations positively mediate the relationship between innovation capability and firm performance (Hussain et al., 2020).
Effects of organizational innovation and technological innovation capabilities on firm performance: evidence from firms in China’s Pearl River Delta
This study examined the relationship between organizational innovation and technological innovation capabilities and their impact on the performance of manufacturing firms in the Pearl River Delta region, China. Specifically, the study sought to establish the impact of organizational innovation on learning, R&D, resource allocation, manufacturing, marketing, and strategy planning capabilities of firms in the study area. The study also sought to determine the impact of technological innovation capabilities on firm performance. It also explored the mediating role played by technological innovation capabilities on the relationship between organizational innovation and firm performance. The study also examined the moderating effect of organizational innovation on the relationship between organizational innovation capabilities and firm performance. Lastly, the study assessed the relationship between organizational innovation and firm performance (Quan et al., 2019).
The target population included manufacturing firms operating in China’s Pearl River Delta region. 265 respondents were selected from these firms to participate in the study. Data collection was done using questionnaires. Descriptive variables were analyzed using descriptive statistics, including frequencies, percentages, means, and standard deviations. Correlation analysis was done using the Pearson correlation coefficient. An SEM approach was employed to establish the relationship between the dependent and independent variables. The results were presented in appropriate tables as required.
Organizational innovation of the firm was measured using the models proposed by Camison and Villar-Lopez (2012), the OECD (2005), and Damanpour and Evan (1984). Technological innovation capabilities of the firm were measured on the basis of models conceptualized by Guan et al. (2006), Yam et al. (2004), and Chiesa, Coughlan, and Voss (1988). Firm performance was measured using the models conceptualized by Guan and Ma’s (2003) and Yam et al. (2004) (Quan et al., 2019).
The findings revealed that organizational innovations facilitated the development of technological capabilities of the firms; this in turn led to improved firm performance. The results also indicated that organizational innovation moderated the relationship between technological innovation capabilities and firm performance. Also, the study established a positive and significant relationship between organizational innovation and firm performance. In addition, the results also indicated that organizational innovations partially moderated the relationship between technological innovation capabilities and the performance of the firm. It was also reported that technological innovation capabilities partially mediated the relationship between organizational innovation and firm performance. The findings also showed that organizational innovations were the primary drivers of technological innovation capabilities in the target firms (Quan et al., 2019).
Does organizational innovation always lead to better performance? a study of firms in Vietnam
This study explored the relationship between organizational innovation and firm performance in Vietnam. Specifically, the study sought to establish whether innovation in business practices affects firm performance, whether innovation in workplace organization affects firm performance, and whether innovation in external relations affects firm performance. The researcher also sought to establish the combined effect of business practices innovation, workplace organization innovation, and external relations innovation on the performance of firms in Vietnam. The target population included 450 firms in Vietnam that participated in the nation-wide enterprise survey done by GSO (2012). Stratified random sampling was used to generate the list of firms to participate in the study. Firm owners and employees were then contacted for interviews. Questionnaires were the main tool of data collection. The collected data was analyzed using descriptive statistics and inferential analysis. The results were presented using relevant tables (Phan, 2019).
Organization innovation was measured in terms of new business practices for organizing work procedures (for example, business reengineering, supply chain management, lean production, knowledge management, and quality management); new methods of organizing tasks and responsibilities (that is, teamwork, first use of a new system of employee responsibilities, education/training systems, integration of departments, and decentralization); and new ways of organizing external relations with other businesses (for instance, alliances, partnerships, subcontracting, and outsourcing). Firm performance was measured using four parameters, including sales, market share, profits, and overall planned goals during the previous year. The control variables included firm age, firm employees, firm assets, firm ownership, and firm location (Phan, 2019).
According to the findings, organizational innovation was shown to be a strong predictor of firm performance. Specifically, the results showed that there is a positive and significant relationship between innovation in business practices and firm performance. The findings also revealed a positive and significant relationship between workplace innovation and firm performance. In addition, the results demonstrated a positive and significant relationship between innovation in external relations and firm performance. However, the results showed that all four organizational variables, when combined, had an insignificant effect on firm performance (Phan, 2019).
With reference to the control variables, the findings revealed that firm employees and firm assets have a positive and significant effect on firm performance. The variable location was found to have a negative effect on firm performance. Firm age and firm ownership were found to have no significant effect on the performance of Vietnamese firms (Phan, 2019).
Synergy effects of innovation on firm performance in Korea
This study examined the synergistic impact of product, process, marketing, and organizational innovation on the performance of firms in Korea. Specifically, the study examined the effect of a firm’s exploration orientation on radical product innovation activity and incremental product innovation activity. It also investigated the effect of a firm’s exploration orientation on process innovation activity. The study also examined the effect of a firm’s exploitation orientation on radical product innovation activity and incremental product innovation activity. It also investigated the effect of a firm’s exploitation orientation on process innovation activity. In addition, the study sought to determine the effect of process innovation activity on radical product innovation activity and incremental product innovation activity. Furthermore, the study sought to determine the effect of radical product innovation activity and incremental product innovation activity on a firm’s performance. The study also sought to establish the effect of process innovation activity on a firm’s performance. It also sought to examine the moderating effect of marketing innovation activity on the relationship between radical product innovation activity and a firm’s performance. It also sought to establish the moderating role of marketing innovation activity on the relationship between incremental product innovation activity and a firm’s performance. It also sought to determine the moderating role of organizational innovation activity on the relationship between incremental process innovation activity and a firm’s performance (Lee et al., 2017).
The target population included a sample of 856 firms selected from the Korean Innovation Survey (KIS) 2014. Data collection was done using questionnaires. The collected data was analyzed using descriptive statistics and inferential analysis. The findings were presented using suitable tables as required (Lee et al., 2017).
A firm’s exploration orientation was measured in terms of entering new product-market domains. A firm’s exploitation orientation was measured in terms of improving existing product-market efficiency. Types of innovation activities were measured in terms of product, process, marketing, and organizational innovation. Firm performance was measured using turnover results caused by product innovation for the previous year (Lee et al., 2017).
With regards to the high-tech industry, the results showed that a firm’s exploration orientation had a positive and significant impact on radical product innovation activity. On the other hand, a firm’s exploration orientation was shown to have no significant impact on incremental product innovation activity in the said firms. Also, the findings revealed that there was no significant relationship between exploration orientation and process innovation activity. Also, the findings showed that a firm’s exploitation orientation had no significant impact on both radical and incremental product innovation activities. However, the results showed that a firm’s exploitation orientation had a positive and significant effect on process innovation activity. It was also demonstrated that process innovation activity had a positive and significant impact on both radical and incremental product innovation activities. Furthermore, the results indicated that both radical and incremental product innovation activities have a positive and significant impact on the performance of Korean firms. In addition, the results demonstrated that process innovation has a positive and significant impact on the performance of Korean firms. Also, the results showed that marketing innovation activity positively mediates the relationship between radical product innovation activity and firm performance and also the relationship between incremental product innovation activity and firm performance. Finally, the findings established that organizational innovation activity positively mediates the relationship between process innovation activity and a firm’s performance (Lee et al., 2017).
The effects of innovation on the firm performance of supporting industries in Hanoi, Vietnam
This study explored the effect of innovation on innovation performance and the performance of supporting industries in Hanoi, Vietnam. Specifically, the study sought to determine the effect of innovation activities on innovative performance; the effect of innovative performance on production performance; the effect of innovative performance on market performance; and the effect of innovative performance on financial performance of supporting industries in Hanoi, Vietnam. The target population included 150 firms in supporting industries of automobiles, electronics, mechanics, and motorbikes. The selected companies are on the list of companies known as The Excellent Vietnamese Companies in Northern and Central Vietnam. Data collection was accomplished using questionnaires. Data analysis was done using descriptive statistics, including frequencies, percentages, and means. Regression analysis was used to explore the relationship between the dependent and independent variables. The findings were then presented using suitable tables as required (Tuan et al., 2016).
Innovation activities were measured by product innovation, process innovation, organizational innovation, and marketing innovation. Innovative performance was measured by product innovative performance, organizational innovative performance, and marketing innovative performance. Firm performance was assessed by production performance, marketing performance, and finance performance (Tuan et al., 2016).
The results revealed that process innovation, organizational innovation, and marketing innovation had a positive and significant impact on innovative performance. However, product innovation was found to have no impact on innovative performance. Next, the findings showed that process innovative performance, marketing innovative performance, and organizational innovative performance had a positive and significant effect on firm performance. On the other hand, product innovative performance was found to have no significant effect on firm performance. Lastly, the results demonstrated that organizational performance, process performance, and marketing performance all had a positive and significant impact on the financial performance of firms in the supporting industries in Hanoi (Tuan et al., 2016).
The effect of innovation on firm performance and competitive advantage
This study examined the effect of innovation on the performance of small and medium enterprises (SMEs) in Indonesia. Specifically, the study sought to establish the effect of innovation on the competitive advantage of the SME, the effect of innovation on SME performance, and the effect of competitive advantage on SME performance. The target population included 548 manufacturing SMEs in Indonesia. Data collection was done using an e-mail survey. The collected data was analyzed using descriptive statistics (frequencies, percentages, means) and the Structural Equation Model (SEM) known as the Partial Least Squares approach (PLS). The findings were presented in suitable tables as deemed fit (Zainurossalamia et al., 2016).
SME performance was measured in terms of productivity, operational reliability, sales growth, effectiveness, and efficiency. Competitive advantage was measured in terms of resources’ worth, difference, imitability, and not being easy to be replaced. Innovation was measured in terms of product innovation, process innovation, innovation paradigm, and sources of innovation (Zainurossalamia et al., 2016).
According to the findings, innovation had a positive and significant impact on the competitive advantage of SMEs in Indonesia. The results also demonstrated that innovation has a positive and significant impact on the performance of SMEs in Indonesia. In addition, it was reported that competitive advantage has a positive and significant impact on the performance of SMEs in Indonesia (Zainurossalamia et al., 2016).
Effects of innovation types on performance of manufacturing firms in Turkey
This study examined the impact of innovation types on the performance of manufacturing firms in Istanbul, Turkey. Specifically, the study explored the impact of product, process, marketing, and organizational innovation on the financial performance of the target firms. It also sought to determine the impact of product, process, marketing, and organizational innovation on customer performance in the target firms. The study investigated the impact of product, process, marketing, and organizational innovation on internal business processes’ performance. Lastly, the study investigated the impact of product, process, marketing, and organizational innovation on learning and growth performance (Karabulut, 2015).
The target population included 12500 manufacturing firms that are members of the Istanbul Chamber of Industry. Out of these, 197 firms were selected to form the sample for the study. A questionnaire was thus emailed to the general managers of the 197 target firms. The collected data were analyzed using descriptive statistics, including frequencies, percentages, and means. Multiple regression analysis was used to establish the relationship between the dependent and independent variables. The results were then presented using suitable tables as needed (Karabulut, 2015).
Innovation types were measured by considering product, process, marketing, and organizational innovation in the firm. Firm performance was measured using the Balanced Scorecard approach, including financial performance, internal business process performance, customer performance, and learning and growth performance (Karabulut, 2015).
The findings revealed that product innovation, process innovation, marketing innovation, and organizational innovation all had a positive and significant impact on the financial performance of manufacturing firms in Istanbul, Turkey. It was also established that product innovation, process innovation, marketing innovation, and organizational innovation all had a positive and significant impact on customer performance of manufacturing firms in the study area. The results also demonstrated that product innovation, process innovation, marketing innovation, and organizational innovation all had a positive and significant impact on the performance of internal business processes of manufacturing firms in the study area. It was also observed that product innovation, process innovation, marketing innovation, and organizational innovation all had a positive and significant impact on the learning and growth performance of manufacturing firms in the study area (Karabulut, 2015).
Effects of innovation types on firm performance: an empirical study on Pakistan’s manufacturing sector
This study examined the effect of process, product, marketing, and organizational innovation types on performance (innovativeness, production, marketing, and financial performance) of Pakistani manufacturing companies. The target population included 250 manufacturing firms listed in the Karachi Stock Exchange (KSE) in Pakistan. Respondents for the study included executives of the selected firms who were working in the production, marketing, general management, and R&D departments. Data collection was done using questionnaires. The collected data was analyzed using descriptive statistics, correlations, and linear regression analysis. The findings were presented in relevant tables as needed (Ul Hassan et al., 2013).
The findings revealed that each innovation type had a significant correlation with each dimension of firm performance. Firstly, organizational innovation was shown to have a positive and significant effect on product innovation, process innovation, and marketing innovation. In this regard, it was noted that the impact of organizational innovation was highest with regards to process innovation. Secondly, the findings revealed that process innovation had a positive and significant effect on product innovation. Thirdly, it was found that marketing innovation had a positive and significant impact on product innovation. Fourthly, it was reported that all innovation types had a positive and significant impact on innovative performance. Fifth, innovative performance was shown to account for major variation in production performance in comparison to marketing performance. Sixth, the findings revealed a positive and significant impact of production performance on market and financial performance. The effect was greater in the case of financial performance than that for market performance. Lastly, the findings established that market performance had a positive and significant impact on the financial performance of manufacturing firms in Pakistan (Ul Hassan et al., 2013).
Effects of innovation types on firm performance
This study investigated the influence of innovation types on the performance of manufacturing firms in Turkey. Specifically, the study examined the relationship between organizational innovation and other innovation types, the relationship between process innovation and product innovation, the relationship between marketing innovation and product innovation, the relationship between innovation types and innovative performance, the effect of innovative performance improvement on production and market performances, the effect of production performance improvement on market and financial performances, and the effect of market performance improvement on financial performance of manufacturing firms in Turkey (Gunday et al., 2011).
The target population included 1674 manufacturing firms registered by the Union of Chambers and Commodity Exchange (TOBB) and Cerkezkoy, Istanbul, Kocaeli, Sakarya, and Tekirdag Industry Chambers’ lists of various industry parks in the Northern Marmara region. 184 firms were selected from the 1674 firms in the study area. Data collection was done using questionnaires. The collected data were analyzed using descriptive statistics, including frequencies, percentages, mean, and deviation. Multivariate data analysis and structural equation modeling were used to explore relationships between the variables under study. The findings were presented in tables as required. Organizational innovations were measured using the model proposed by the OECD Oslo Manual (2005) (Gunday et al., 2011).
Financial performance was measured using return on assets (ROA), return on sales (ROS), profitability, and cash flow excluding investments. Innovative performance was measured in terms of quality of new products and services introduced, number of new product and service projects, percentage of new products developed, and number of innovations under intellectual property protection. Production performance was measured by production flexibility, production cost, conformance quality, and production and delivery speed. Market performance was measured in terms of total sales, market share, and customer satisfaction (Gunday et al., 2011).
According to the findings, organizational innovation had a negative impact on product innovativeness, a positive and significant impact on process innovation, and a positive and significant impact on marketing innovation. Secondly, process innovation was found to have a positive and significant impact on product innovation. Thirdly, it was established that marketing innovation had a positive and significant impact on product innovation. Fourth, it was revealed that organizational innovation, product innovation, and marketing innovation all had a positive impact on innovative performance, while process innovation had a negative effect on innovative performance. Fifth, it was revealed that innovative performance had a positive effect on market performance and production performance. Sixth, it was shown that production performance had a positive effect on market performance and a negative effect on financial performance. Finally, the results revealed that market performance had a positive effect on financial performance (Gunday et al., 2011).
Citation
Ayinaddis, S.G. (2023). The effect of innovation orientation on firm performance: evidence from micro and small manufacturing firms in selected towns of Awi Zone, Ethiopia. Journal of Innovation and Entrepreneurship.
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