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The role of internationalization in explaining innovation performance

Kafouros, M.I., Buckley, P.J., Sharp, J.A. and Wang, C.Q. (2008) The role of internationalization in explaining innovation performance. Technovation, 28 (1-2). pp. 63-74. ISSN 0166-4972

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Abstract

Although it has been suggested that innovation has significant consequences for a firm's economic performance, the past empirical findings are mixed, not always confirming this proposition. Extending previous research, this study demonstrates that the reason for previously conflicting results may be an incomplete understanding of the factors influencing the innovation-performance relationship. We argue that not all firms can reap rewards from innovation. Rather, we suggest that firms need to have a sufficient degree of internationalization, i.e. be active in many markets, to capture successfully the fruits of innovation. Initially, the study offers a theoretical framework that explains how and why a higher degree of internationalization, by affecting both innovative capacity and a number of appropriability factors, influences the effects of innovation. Then, utilizing firm-level data, the study empirically tests this proposition. The results confirm that internationalization enhances a firm's capacity to improve performance through innovation. However, they also show that firms are unable to benefit from innovation if their international activity is below a threshold level. (C) 2007 Elsevier Ltd. All rights reserved.

Item Type: Article
Copyright, Publisher and Additional Information: © 2008 Elsevier Science B.V, Amsterdam. This is an author produced version of a paper published in Technovation. Uploaded in accordance with the publisher's self archiving policy.
Keywords: returns to innovation, internationalization, R&D, firm performance
Institution: The University of Leeds
Academic Units: The University of Leeds > Faculty of Business (Leeds) > Centre for International Business University of Leeds (CIBUL)
Depositing User: Repository Administrator York
Date Deposited: 08 Apr 2008 16:37
Last Modified: 08 Feb 2013 17:05
Published Version: http://dx.doi.org/10.1016/j.technovation.2007.07.0...
Status: Published
Publisher: Elsevier Science BV
Refereed: Yes
Identification Number: 10.1016/j.technovation.2007.07.009
Related URLs:
URI: http://eprints.whiterose.ac.uk/id/eprint/3726

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