Balancing the Two Knowledge Dimensions in Innovation Efforts: An Empirical Examination among Pharmaceutical Firms
This study investigates the relationships between the two knowledge dimensions (knowledge breadth and knowledge depth) and two types of innovations (radical innovation and incremental innovation). While existing literature identifies knowledge in general as an important driver of innovation, the exa...
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| Published in | The Journal of product innovation management Vol. 32; no. 4; pp. 610 - 621 |
|---|---|
| Main Author | |
| Format | Journal Article |
| Language | English |
| Published |
Hoboken
Blackwell Publishing Ltd
01.07.2015
Blackwell Publishing |
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| Online Access | Get full text |
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| Abstract | This study investigates the relationships between the two knowledge dimensions (knowledge breadth and knowledge depth) and two types of innovations (radical innovation and incremental innovation). While existing literature identifies knowledge in general as an important driver of innovation, the exact relationships between knowledge breadth/depth and incremental/radical innovations are not clear. Drawing from the knowledge‐based view, this study advances the understanding of the relationships between knowledge dimensions and types of innovations by hypothesizing a nonlinear relationship between knowledge breadth and radical innovation as well as a nonlinear relationship between knowledge depth and incremental innovation. Furthermore, the moderating effects of the interaction between knowledge breadth and knowledge depth on the above‐mentioned relationships are also examined. Due to the different natures of the two types of innovations, it is hypothesized that knowledge depth positively moderates the relationship between knowledge breadth and radical innovation while knowledge breadth negatively moderates the relationship between knowledge depth and incremental innovation. To empirically test the hypotheses, secondary data from multiple sources were collected on 64 pharmaceutical firms over 15 years. Due to the panel data structure and observed dispersion issues in the dependent variables, negative binomial random effects models were formulated to test the hypotheses. The statistical results largely support the proposed hypotheses. The results demonstrate that while knowledge breadth positively contributes to the development of radical innovations and knowledge depth positively contributes to the development of incremental innovations, both relationships are subject to diminishing returns. Furthermore, while the finding did support the negative moderating effect of the knowledge breadth on incremental innovation, the positive moderating effect of knowledge depth on radical innovation is not supported. While the effect is not explicitly hypothesized, knowledge breadth seems to have a direct impact on incremental innovation as well. |
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| AbstractList | This study investigates the relationships between the two knowledge dimensions (knowledge breadth and knowledge depth) and two types of innovations (radical innovation and incremental innovation). While existing literature identifies knowledge in general as an important driver of innovation, the exact relationships between knowledge breadth/depth and incremental/radical innovations are not clear. Drawing from the knowledge‐based view, this study advances the understanding of the relationships between knowledge dimensions and types of innovations by hypothesizing a nonlinear relationship between knowledge breadth and radical innovation as well as a nonlinear relationship between knowledge depth and incremental innovation. Furthermore, the moderating effects of the interaction between knowledge breadth and knowledge depth on the above‐mentioned relationships are also examined. Due to the different natures of the two types of innovations, it is hypothesized that knowledge depth positively moderates the relationship between knowledge breadth and radical innovation while knowledge breadth negatively moderates the relationship between knowledge depth and incremental innovation. To empirically test the hypotheses, secondary data from multiple sources were collected on 64 pharmaceutical firms over 15 years. Due to the panel data structure and observed dispersion issues in the dependent variables, negative binomial random effects models were formulated to test the hypotheses. The statistical results largely support the proposed hypotheses. The results demonstrate that while knowledge breadth positively contributes to the development of radical innovations and knowledge depth positively contributes to the development of incremental innovations, both relationships are subject to diminishing returns. Furthermore, while the finding did support the negative moderating effect of the knowledge breadth on incremental innovation, the positive moderating effect of knowledge depth on radical innovation is not supported. While the effect is not explicitly hypothesized, knowledge breadth seems to have a direct impact on incremental innovation as well. |
| Author | Xu, Shichun |
| Author_xml | – sequence: 1 givenname: Shichun surname: Xu fullname: Xu, Shichun email: sxu3@utk.edu organization: E-mail: sxu3@utk.edu |
| BackLink | http://www.econis.eu/PPNSET?PPN=852684517$$DView this record in ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften |
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| Copyright | 2014 Product Development & Management Association Copyright Blackwell Publishing Ltd. Jul 2015 |
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| References_xml | – reference: Tsai, W. 2001. Knowledge transfer in intraorganizational networks: Effects of network position and absorptive capacity on business unit innovation and performance. Academy of Management Journal 44 (5): 996-1004. – reference: Wooldridge, J. M. 2003. Introductory econometrics. Mason, OH: South-Western. – reference: Leiponen, A., and C. Helfat. 2010. Innovation objectives, knowledge sources, and the benefit of breadth. Strategic Management Journal 31: 224-236. – reference: Madhavan, R., and R. Grover. 1998. From embedded knowledge to embodied knowledge: New product development as knowledge management. Journal of Marketing 62 (4): 1-12. – reference: Tellis, G. J., J. C. Prabhu, and R. K. Chandy. 2009. Radical innovation across nations: The preeminence of corporate culture. Journal of Marketing 73 (January): 3-23. – reference: Sorescu, A. B., R. K. Chandy, and J. C. Prabhu. 2003. Sources and financial consequences of radical innovation: Insights from pharmaceuticals. Journal of Marketing 67 (4): 82-102. – reference: Prabhu, J. C., R. K. Chandy, and M. E. Ellis. 2005. The impact of acquisitions on innovation: Poison pill, placebo, or tonic? Journal of Marketing 69 (1): 114-130. – reference: Cohen, W. M., and D. A. Levinthal. 1989. Innovation and learning: The two faces of R&D. The Economic Journal 99 (397): 569-596. – reference: Grant, R. M. 1996b. Toward a knowledge-based theory of the firm. Strategic Management Journal 17: 109-122. – reference: De Luca, L., and K. Atuahene-Gima. 2007. Market knowledge dimensions and cross-functional collaboration: Examining the different routes to product innovation performance. Journal of Marketing 71 (1): 95-112. – reference: McEvily, S., and B. Chakravarthy. 2002. The persistence of knowledge-based advantage: An empirical test for product performance and technological knowledge. 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| SubjectTerms | Hypotheses Innovations Knowledge Knowledge management Management theory Mathematical models Pharmaceutical industry Studies |
| Title | Balancing the Two Knowledge Dimensions in Innovation Efforts: An Empirical Examination among Pharmaceutical Firms |
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