Keep it simple: External resource utilisation and incremental product innovation in resource-challenged South African manufacturing firms

Leon Oerlemans, K.Y. Chan*, J. Knoben, Patrick Vermeulen

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

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Abstract

This paper examines how firms in an emerging economy cope with resource challenges by implementing compensation strategies for incremental product innovations. The model is empirically tested using firm-level survey data from 497 South African manufacturing firms. Results show that higher diversity among a specific set of external knowledge sources is associated with a higher likelihood of incremental product innovation. Stronger embeddedness in non-domestic inter-organisational networks increases this likelihood as well. The positive effect of external knowledge diversity is more positive for higher levels of localised ties. Recommendations to enhance incremental product innovation concern the development of external relationships with domestic and international partners while limiting knowledge source diversity to a specific actor set. This paper shows that in an emerging economy firms have agency with which they can use contact learning leading to product innovations tailored to local market needs and opportunities.

Original languageEnglish
Pages (from-to)102-130
JournalIndustry and Innovation
Volume29
Issue number1
DOIs
Publication statusPublished - 2022

Keywords

  • ALLIANCE PORTFOLIO DIVERSITY
  • DEVELOPMENT ZONES
  • EXPLOITATIVE INNOVATION
  • EXPLORATORY INNOVATION
  • FACE-TO-FACE
  • FOREIGN-INVESTMENT
  • INTERORGANIZATIONAL IMITATION
  • NETWORK RANGE
  • Product innovation
  • RESEARCH-AND-DEVELOPMENT
  • TACIT KNOWLEDGE
  • compensation strategy
  • geography
  • network
  • resource constraints
  • south africa

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