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"Service innovativeness and firm value," Journal of Marketing Research

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Published: 10 May 2013

Authors: Dotzel, Thomas; Shankar, Venkatesh; Berry, Leonard L.

Publication: Journal of Marketing Research, April 2013

Abstract:

Service innovativeness, or the propensity to introduce service innovations to satisfy customers and improve firm value at acceptable risk, has become a critical organizational capability. Service innovations are enabled primarily by the Internet or people, corresponding to two types of innovativeness: E- and p-innovativeness. The authors examine the determinants of service innovativeness and its interrelationships with firm-level customer satisfaction, firm value, and firm risk and investigate the differences between e- and p-innovativeness in these relationships. They develop a conceptual model and estimate a system of equations on a unique panel data set of 1049 innovations over five years, using zeroinflated negative binomial regression and seemingly unrelated regression approaches. The results reveal important asymmetries between e- and p-innovativeness. Whereas e-innovativeness has a positive and significant direct effect on firm value, p-innovativeness has an overall significantly positive effect on firm value through its positive effect on customer satisfaction but only in human-dominated industries. Both e- and p-innovativeness are positively associated with idiosyncratic risk, but customer satisfaction partially mediates this relationship for pinnovativeness to lower this risk in human-dominated industries. The findings suggest that firms should nurture e-innovativeness in most industries and p-innovativeness in human-dominated industries. © 2013, American Marketing Association.

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