Innovation patterns and firm performance under industry maturity: manufacturing industries in South Korea

AbstractAlthough innovation patterns under industry life cycle have been investigated for decades, the impact of change in innovation patterns on firm performance has yet to be fully uncovered. This study empirically verifies the impact of product and process innovation on firm performance by considering industry maturity through hierarchical regression analysis using data from the Korean manufacturing industry. Two different measures for firm performance are utilised: innovative product sales and total sales. The results show that both product and process innovation have positive effects on innovative product sales, and industry maturity negatively moderates the positive effect of product innovation on innovative product sales. However, the moderating effect of industry maturity on the relationship between process innovation and innovative product sales is not significantly verified. Moreover, although the direct effect of product and process innovation on total sales is not significantly verified, total sales tend to decrease as the industry matures. Industry maturity positively moderates the effect of process innovation on total sales, while the moderating effect of industry maturity on the relationship between product innovation and total sales is not significantly verified.KEYWORDS: Innovation patternproduct innovationprocess innovationfirm performanceindustry maturity Disclosure statementNo potential conflict of interest was reported by the author(s).Additional informationFundingThis work was supported by the Ministry of Education of the Republic of Korea and the National Research Foundation of Korea (NRF-2022S1A5A8052363).