Innovation Theory: A Theory of Innovation Resource Synergy

The present paper aims to develop a new theory to explain the iceberg phenomenon that has emerged in recent years, in which some small firms prosper while large ones fade away ; this has especially occurred with those firms in the mature stage of the industry life cycle and is in contrast to a well-known phenomenon, the Matthew effect. In this paper, several concepts and theories are taken into account to construct a theoretical framework, including the resource-based theory, the resource-dependency theory, and theories of the diffusion of innovation, and dynamic capability. A n experimental research design is developed to verify four hypotheses. Based on the results, a theory of innovation resource synergy is confirmed , which sheds light on phenomenon mentioned above. Implications for managers of both large and small firms are provided, as are suggestions for future research .