Innovation and survival of exporters: A contingency perspective

•Innovation negatively affects exporter survival.•Profitability positively moderates the relationship between innovation and exporter survival.•Provision of trade credit negatively moderates the relationship between innovation and exporter survival.•Foreign ownership positively moderates the relatio...

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Bibliographic Details
Published in:International business review 2014-04, Vol.23 (2), p.396-406
Main Authors: Deng, Ziliang, Guo, Honglin, Zhang, Weifu, Wang, Chengqi
Format: Article
Language:English
Subjects:
Business organization
Contingency
Corporate planning
Exit
Export
Export composition
Export demand
Export performance
Financial performance
Firm heterogeneity
Innovation
Innovation policy
Organizational analysis
Organizational behaviour
Organizational structure
Survival
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Summary:•Innovation negatively affects exporter survival.•Profitability positively moderates the relationship between innovation and exporter survival.•Provision of trade credit negatively moderates the relationship between innovation and exporter survival.•Foreign ownership positively moderates the relationship between innovation and exporter survival. We challenge the traditional view that innovations always help exporters prosper in competitive international market, by developing and testing the premise that the relationship between innovation and export performance is contingent on some important firm-specific idiosyncrasies. With a large dataset of Chinese firms, the empirical results demonstrate that innovation could be detrimental to exporter survival. Such negative effect is more pronounced for firms that have weak profitability and high outstanding receivables, and also for those without foreign ownership. Nonetheless, we also observe a positive relationship between innovation and survival in highly profitable exporters. By identifying the negative rather than conventionally assumed positive effect of innovation, and the conditions under which innovation facilitates or impedes exporter survival, this paper contributes to the literature on the relationship between innovation and export in the context of emerging markets. Our findings have important implications for how managers develop innovation strategy to compete in the export market.
ISSN:0969-5931
1873-6149
DOI:10.1016/j.ibusrev.2013.06.003