Advertisement

Market orientation and technological innovation: the moderating role of entrepreneurial support policies

  • Li Cai
  • Qing Liu
  • Xiumei Zhu
  • Shengliang DengEmail author
Article

Abstract

Advancing the extant research on the nexus between market orientation and technological innovation, this study introduces and tests the moderating effects of entrepreneurial support policies on this important relationship using China’s transitional economy as the empirical setting. With a sample of 248 new venture firms respectively from the Southeast and Northeast cities of China, the empirical results confirm that entrepreneurial support policies will strengthen the relationship between responsive market orientation and radical innovation. In addition, our subgroup analyses of the manufacturing industry and information technology industry shed new insights into the proposed relations. We explore in this paper the theoretical contributions, practical implications, study limitations, and future extensions.

Keywords

Responsive Market Orientation Proactive Market Orientation Incremental Innovation Radical Innovation Entrepreneurial Support Policies Transitional Economy China 

Notes

Acknowledgments

The research is supported by the National Natural Science Foundation of China (Key Project Grant No. 71232011) and (General Project Grant No. 71272001).

References

  1. Abernathy, W. J., & Clark, K. (1985). Mapping the winds of creative destruction. Research Policy, 14(1), 3–22.CrossRefGoogle Scholar
  2. Ambler, T., & Styles, C. (2000). The future of relational research in international marketing: Constructs and conduits. International Marketing Review, 17(6), 492–508.CrossRefGoogle Scholar
  3. Anderson, J. C., & Gerbing, D. D. (1988). Structuring equation modeling in practice: A review and recommended two-step approach. Psychological Bulletin, 103(3), 411–423.CrossRefGoogle Scholar
  4. Argyris, C. (1977). Double loop learning in organization. Harvard Business Review, 55(5), 15–125.Google Scholar
  5. Atuahene-Gima, K. (1995). An explanatory analysis of the impact of MO on new product performance. Journal of Product Innovation Management, 12(4), 275–293.CrossRefGoogle Scholar
  6. Augusto, M., & Coelho, F. (2009). Market orientation and new-to-the-world products: Exploring the moderating effects of innovativeness, competitive strength, and environmental forces. Industrial Marketing Management, 38(1), 94–108.CrossRefGoogle Scholar
  7. Bagozzi, R. P. (1980). Performance and satisfaction in an industrial sales force: An examination of their antecedents and simultaneity. Journal of Marketing, 44(2), 65–77.CrossRefGoogle Scholar
  8. Baker, W. E., & Sinkula, J. M. (2007). Does market orientation facilitate balanced innovation programs? An organizational learning perspective. Journal of Product Innovation Management, 24(4), 316–334.CrossRefGoogle Scholar
  9. Benner, M. J., & Tushman, M. L. (2003). Exploitation, exploration, and process management: The productivity dilemma revisited. Academy of Management Review, 28(2), 238–256.Google Scholar
  10. Bennett, R. C., & Cooper, R. G. (1979). Beyond the marketing concept. Business Horizons, 22(7), 76–83.CrossRefGoogle Scholar
  11. Berthon, P., Hulbert, J. M., & Pitt, L. F. (1999). To server or create? Strategic orientations toward customers and innovation. California Management Review, 42(1), 37–59.CrossRefGoogle Scholar
  12. Boddewyn, J. (1993). Political resources and markets in international business: Beyond Porter’s generic strategies. In A. Rugman & A. Verbeke (Eds.), Research in global strategic management (Vol. 4, pp. 162–184). Greenwich: JAI Press.Google Scholar
  13. Brush, C. G., & Vanderwerf, P. A. (1992). A comparison of methods and sources for obtaining estimates of new venture performance. Journal of Business Venturing, 7(2), 157–170.CrossRefGoogle Scholar
  14. Busenitz, L. W., & Lau, C. (2001). Growth intentions of entrepreneurs in a transitional economy: The People’s Republic of China. Entrepreneurship: Theory & Practice, 26(1), 5–20.Google Scholar
  15. Busenitz, L. W., Gomez, C., & Spencer, J. W. (2000). Country institutional profiles: Unlocking entrepreneurial phenomena. Academy of Management Journal, 43(5), 994–1003.CrossRefGoogle Scholar
  16. Cheng, S. R., & Shiu, C. Y. (2007). Investor protection and capital structure: International evidence. Journal of Multinational Financial Management, 17(1), 30–44.CrossRefGoogle Scholar
  17. Christensen, C. M., & Bower, J. L. (1996). Customer power, strategic investments, and the failure of leading firms. Strategic Management Journal, 17(3), 197–218.CrossRefGoogle Scholar
  18. Churchill, G. A., Jr. (1979). A paradigm for developing better measures of marketing constructs. Journal of Marketing Research, 16(1), 64–73.CrossRefGoogle Scholar
  19. Davies, H., & Walters, P. (2004). Emergent patterns of strategy, environment and performance in a transition economy. Strategic Management Journal, 25(4), 347–364.CrossRefGoogle Scholar
  20. Davis, D. C. (1993). Marketing in high-technology industries: The biotechnology example, Ph.D. dissertation. Ohio: Kent State University.Google Scholar
  21. Deng, S., & Dart, J. (1999). Market orientation of Chinese enterprises during a time of transition. European Journal of Marketing, 33, 631–654.CrossRefGoogle Scholar
  22. Dewar, R. D., & Dutton, J. E. (1986). The adoption of radical and incremental innovations: An empirical analysis. Management Science, 32(11), 1422–1433.CrossRefGoogle Scholar
  23. Dibrell, C., Craig, J. B., & Hansen, E. N. (2011). How managerial attitudes toward the natural environment affect market orientation and innovation. Journal of Business Research, 64, 401–407.Google Scholar
  24. Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50.CrossRefGoogle Scholar
  25. Frosch, R. A. (1996). The customer for R&D is always wrong! Research Technology Management, 39(6), 22–25.Google Scholar
  26. Garcia, R., & Calantone, R. (2002). A critical look at technological innovation typology and innovativeness terminology: A literature review. Journal of Product Innovation Management, 19(1), 110–132.CrossRefGoogle Scholar
  27. Gatignon, H., Tushman, M. L., Smith, W., & Anderson, P. (2002). A structural approach to assessing innovation: Construct development of innovation locus, type, and characteristics. Management Science, 48(9), 1103–1122.CrossRefGoogle Scholar
  28. Gemser, G., Leenders, M., & Wijnberg, N. (1996). The dynamics of inter-firm networks in the course of the industry life cycle: The role of appropriability. Technology Analysis and Strategic Management, 8(4), 439–453.CrossRefGoogle Scholar
  29. Ghertman, M., & Hadida, A. L. (2005). Institutional asset and competitive advantages of French over U.S. cinema, 1895–1914. International Studies of Management and Organization, 35(3), 50–81.Google Scholar
  30. Hamel, G. & Prahalad, C.K. (1994). Competing for the Future, Boston: Harvard Business School Press.Google Scholar
  31. Hisrich, R. D. (1995). Entrepreneurship: Past, present, and future. Journal of Small Business Management, 26(4), 1–4.Google Scholar
  32. Johnson, W. H. (2006). Transitions in innovation: Musings on the propensity and factors towards proactive innovation in China. In S. C. Jain (Ed.), Emerging economies and the transformation of international business: Brazil, Russia, India and China. Cheltenham: Edward Elgar.Google Scholar
  33. Johnson, W. H. (2008). Roles, resources and benefits of intermediate organizations supporting triple helix collaborative R&D: The case of Precarn. Technovation, 28(8), 495–505.CrossRefGoogle Scholar
  34. Johnson, W. H., & Weiss, J. W. (2008). A stage model of education and innovation type in China: The paradox of the dragon. Journal of Technology Management in China, 3(1), 66–81.CrossRefGoogle Scholar
  35. Kohli, A. K., & Jaworski, B. J. (1990). Market orientation: The construct, research propositions, and managerial implications. Journal of Marketing, 54, 1–18.CrossRefGoogle Scholar
  36. Lado, N., & Maydeu-Olivares, A. (2001). Exploring the link between market orientation and innovation in the European and US insurance markets. International Marketing Review, 18(2), 130–145.CrossRefGoogle Scholar
  37. Laforet, S. (2008). Size, strategic, and market orientation affects on innovation. Journal of Business Research, 61(7), 753–764.Google Scholar
  38. Lee, T., & Tsai, H. (2005). The effects of business operation mode on market orientation, learning orientation and innovativeness. Industrial Management & Data Systems, 105(3), 325–348.Google Scholar
  39. Leonard-Barton, D., & Doyle, J. L. (1996). Commercializing Technology: Imaginative Understanding of User Needs. Harvard Business School Press.Google Scholar
  40. Lettl, C., Herstatt, C., & Gemuenden, H. G. (2006). Users’ contributions to radical innovation: Evidence from four cases in the field of medical equipment technology. R&D Management, 36(3), 251–272.CrossRefGoogle Scholar
  41. Li, Y., Zhao, Y., Tan, J., Liu, Y. (2008). Moderating effects of entrepreneurial orientation on market orientation-performance linkage: evidence from chinese small firms. Journal of Small Business Management, 46(1), 113–133.Google Scholar
  42. Liu, Y., Li, Y., & Zhao, Y. (2006). The role of market and entrepreneurship orientation and internal control in the new product development activities of Chinese firms. Industrial Marketing Management, 35(3), 336–347.Google Scholar
  43. Lukas, B. A., & Ferrell, O. C. (2000). The effect of market orientation on product innovation. Journal of the Academy of Marketing Science, 28(2), 239–247.CrossRefGoogle Scholar
  44. Luo, Y. (1999). Environment-strategy-performance relations in small businesses in China: A case of township and village enterprises in southern China. Journal of Small Business Management, 37(1), 37–52.Google Scholar
  45. Maatoofi, A. R., & Tajeddini, K. (2011). Effect of market orientation and entrepreneurial orientation on innovation evidence from auto parts manufacturing in Iran. Journal of Management Research, 11(1), 20–30.Google Scholar
  46. Manolova, T. S., Eunni, R. V., & Gyoshev, B. S. (2008). Institutional environments for entrepreneurship: Evidence from emerging economies in Eastern Europe. Entrepreneurship: Theory & Practice, 32(1), 203–218.Google Scholar
  47. Martin, S., & Scott, J. T. (2000). The nature of innovation market failure and the design of public support for private innovation. Research Policy, 29(4–5), 437–447.CrossRefGoogle Scholar
  48. Moorman, C. (1995). Organizational market information process: Culture antecedents and new product outcomes. Journal of Marketing Research, 32, 318–335.CrossRefGoogle Scholar
  49. Morgan, R. E., & Berthon, P. (2008). Market orientation, generative learning, innovation strategy and business performance inter-relationships in bioscience firms. Journal of Management Studies, 45(8), 1329–1353.Google Scholar
  50. Naidoo, V. (2010). Firm survival through a crisis: The influence of market orientation, marketing innovation and business strategy. Industial Marketing Management, 39, 1311–1320.Google Scholar
  51. Narver, J. C., & Slater, S. F. (1990). The effect of a market orientation on business profitability. Journal of Marketing, 54(4), 20–35.CrossRefGoogle Scholar
  52. Narver, J. C., & Slater, S. F. (1998). Customer-led and market-oriented: Let’s not confuse the two. Strategic Management Journal, 19(10), 1001–1006.CrossRefGoogle Scholar
  53. Narver, J. C., Slater, S. F., & Maclachlan, D. L. (2004). Responsive and proactive market orientation and new-product success. Journal of Product Innovation Management, 21(5), 334–347.CrossRefGoogle Scholar
  54. Nasution, H. N., Mavondo, F. T., Matanda, M. J., & Ndubisi, N. O. (2011). Entrepreneurship: its relationship with market orientation and learning orientation and as antecedents to innovation and customer value. Industrial Marketing Management, 40, 336–345.Google Scholar
  55. Nelson, R. (1982). Government stimulus of technological progress: Lessons from American history. In R. Nelson (Ed.), Government and technical progress: a cross industry analysis (pp. 451–482). New York: Pergamon.Google Scholar
  56. Nunnally, J. C. (1978). Pyschometric theory (2nd ed.). New York: McGraw-Hill.Google Scholar
  57. Park, S. H., & Luo, Y. (2001). Guanxi and organizational dynamics: Organizational networking in Chinese firms. Strategic Management Journal, 22(5), 455–477.CrossRefGoogle Scholar
  58. People’s Daily (2013), 6 MarchGoogle Scholar
  59. Reuters, T. (2011). China poised to become global innovation leader, at http://thomsonreuters.com/content/press_room/legal/626670 (accessed March 1, 2013).
  60. Rondinelli, D. A., & Kasarda, J. D. (1992). Foreign trade potential, small enterprise development and job creation in developing countries. Small Business Economics, 4(4), 253–265.CrossRefGoogle Scholar
  61. Salomo, S., Steinhoff, F., & Trommsdorff, V. (2003). Customer orientation in innovation projects and new product development success – The moderating effect of product innovativeness. International Journal of Technology Management, 26(5–6), 442–463.CrossRefGoogle Scholar
  62. Sandvik, K. G., & Ogaard, H. (2000). The impact of Market Orientation on innovation and profitability. Rotterdam: 29th EMAC Conference.Google Scholar
  63. Senge, P. (1990). The fifth discipline: the Art and purpose of the learning organization. New York: Doubleday/Currency.Google Scholar
  64. Shortell, S. M., & Zajac, E. J. (1990). Perceptual and archival measures of miles and Snow’s strategic types: a comprehensive assessment of reliability and validity. Academy of Management Journal, 33(4), 817–832.CrossRefGoogle Scholar
  65. Slater, S. F., & Narver, J. C. (1995). Market orientation and the learning organization. Journal of Marketing, 59(3), 63–74.CrossRefGoogle Scholar
  66. Slater, S. F., & Narver, J. C. (1998). Market orientation and organizational learning: An integration and empirical examination. Journal of Marketing, 62(3), 42–24.CrossRefGoogle Scholar
  67. Song, X. M., & Montoya-Weiss, M. M. (1998). Critical development activities for really new versus incremental products. Journal of Product Innovation Management, 15(22), 124–135.CrossRefGoogle Scholar
  68. Sweeney, G. P. (1983). New entrepreneurship and the smaller firm. Dublin: Institute for Industrial Research and Standards.Google Scholar
  69. Tajeddini, K., Trueman, M., & Larsen, G. (2006). Examining the effect of market orientation on innovativeness. Journal of Marketing Management, 22(5–6), 529–551.Google Scholar
  70. Tan, J. J. (2001). Innovation and risk-taking in a transitional economy: A comparative study of Chinese managers and entrepreneurs. Journal of Business Venturing, 16(4), 359–376.CrossRefGoogle Scholar
  71. Tiessen, J. H. (1997). Individualism, collectivism, and entrepreneurship: A framework for international comparative research. Journal of Business Venturing, 12(5), 367–384.CrossRefGoogle Scholar
  72. Verhees, F., & Meulenberg, M. (2004). Market orientation, innovativeness, product innovation, and performance in small firms. Journal of Small Business Management, 42(2), 134–154.Google Scholar
  73. Zhou, K. Z., Yim, C. K., & Tse, D. K. (2005). The effects of strategic orientations on technology– and market–based breakthrough innovations. Journal of Marketing, 69(2), 42–60.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  • Li Cai
    • 1
  • Qing Liu
    • 1
  • Xiumei Zhu
    • 1
  • Shengliang Deng
    • 1
    • 2
    Email author
  1. 1.School of ManagementJilin UniversityJilinChina
  2. 2.Goodman School of BusinessBrock UniversitySt. CatharinesCanada

Personalised recommendations