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Understanding the links among innovation performance, market performance and financial performance

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Abstract

Innovation and its impacts on business performance are strategically vital deliberations for modern business organizations. In this study, we examine how innovation performance affects two different facets of firm performance: market performance and financial performance. Many studies address the relationship between innovation and business performance, but few empirical studies analyze the interplay between those variables. Research results reveal a suppression effect of market performance on the innovation–financial performance relationship. We find a negative direct relationship between innovation and financial performance; however, market performance reverses this negative effect to a positive total influence through its suppression effect. This result indicates the vital role of market performance in converting innovation to positive financial outcomes. The proposed mediation model is relevant regardless of the set of firm-level and environmental contingency variables.

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Acknowledgments

Survey data used in this research is a section of “Marketing Department-Turkey Research Project (MARDEP)” and the project is partly funded by Yasar University R&D and Application Center-YAGEM. Grant No.: BAP2014/002.

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Authors and Affiliations

  1. Department of Business, Yasar University, Universite Cad., No: 35, Bornova, 35500, Izmir, Turkey

    Osman Gök

  2. Department of Statistics, Yasar University, Universite Cad., No: 35, Bornova, 35500, Izmir, Turkey

    Sinem Peker

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  1. Osman Gök
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Correspondence to Osman Gök.

Appendix

Appendix

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Table 3 Correlations and descriptive statistics
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Table 4 Scales
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Gök, O., Peker, S. Understanding the links among innovation performance, market performance and financial performance. Rev Manag Sci 11, 605–631 (2017). https://doi.org/10.1007/s11846-016-0198-8

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