The form of relationship between firm-level product innovativeness and new product performance in developed and emerging markets

This study investigates whether the relationship between firm-level product innovativeness and new product performance is curvilinear, and whether the nature of this relationship is dependent on organizational and environmental factors in both developed and emerging market contexts. Using primary data from 319 UK and 221 Ghanaian companies, this study shows that in both developed and emerging markets the basic form of the relationship between firm-level product innovativeness and business success is inverted U-shape, but that the strength and/or form of this relationship changes under differing levels of market orientation, access to financial resources, and environmental dynamism. Some commonalities are identified across the two countries: market orientation helps firms leverage their product innovativeness. However, differences are also observed across the samples: in Ghana, access to financial resources enhances the relationship between product innovativeness and new product performance, unlike in the UK, where access to financial resources has no significant impact on this relationship. Furthermore, while UK firms are able to leverage product innovativeness to their advantage in more dynamic environments, Ghanaian firms are not able to benefit in this way, and find that high levels of innovation activity are less useful when markets are more dynamic.