Impact of Technological Innovation Capabilities on the Market Value of Firms

摘要

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 the Resource Based View of the firm and its more recent extensions such as the Knowledge Based View and Dynamic Capabilities Theory have 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\u27s 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\u27s innovative capability using R\u26D of a firm only. The measurement of the construct has thus reflected this narrow conceptualisation with a single measure of R\u26D expenditure being the most often used proxy. This study utilises a broader de¯nition 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\u27s innovation pro¯le along with lagged measures of market value using fixed effects panel data analysis.