Building on evolutionary perspectives, we offer a new demand-based explanation as to why the product innovation performance of firms varies across countries. We propose that certain consumer characteristics (namely, buyer sophistication, creativity, global identity and local identity) influence firms’ product innovation performance by a) affecting the creation and success of innovative products and b) strengthening (positively moderating) the effects that a firms’ R&D has on its product innovation performance. The analysis of 48,176 firm-level observations from 49 emerging economies in Central and Eastern Europe, Central Asia and Africa confirms most of the above predictions. The study complements prior perspectives on innovation performance, which largely focus either on the firm or its industry, by explaining the mechanisms through which consumer characteristics influence firms’ innovation performance, identifying which consumer characteristics matter, and advancing a demand-based perspective that has not attracted sufficient attention in the literature.
Bibliographical noteFunding Information:
The work described in this paper was supported by the Institute of International Business and Governance, which had been established and supported by a grant from the Research Grants of the Hong Kong Special Administrative Region, China (UGC/IDS/16/17).
© 2022 Elsevier Inc.
- Innovation performance
- Evolutionary theory
- National innovation systems
- Consumer characteristics
- Emerging economies