Product innovation, firm performance and moderating role of technology capabilities

Abstract

PurposeThis research aims to provide evidence that firms that create product innovations (PROINVs) can improve the performance of firms in Indonesia. And then this research also provides evidence that firms with high technological capabilities can moderate the impact of PROINV on firm performance in Indonesia.Design/methodology/approachBased on the firm that disclosure research and development expenditures, the number of samples in this study is 261 annual reports for the period 2015–2020. Researchers used an estimate of Moderation Regression Analysis (MRA) with STATA 14.0.FindingsThe results showed that PROINV significantly affected firm performance, while technology capabilities (TECHCAP) did not. Then TECHCAP can moderate the impact of PROINV on the performance firm. This research showed that TECHCAP are pure moderation, whereas TECHCAP can weaken the impact of PROINV on firm performance.Research limitations/implicationsThis research can provide empirical results that firms in Indonesia must adapt to meet the needs of society in creating PROINVs and technological innovations to maintain a sustainable national economy. And then, this research provides the understanding that high TECHCAP can create sustainable PROINVs that can affect firm performance.Originality/valueThe novelty in this study researchers added variable moderation of technological capabilities to the model of the effect of PROINV on firm performance. A firm with high technological capabilities will be balanced with good research and development activities to create a long-term and sustainable firm orientation.

The Influence of Firm Characteristics and Capital Structure on Sustainable Growth Rate

“…It is shown that the industry, whether from the technology sector or consumer goods, cannot strengthen the relationship between profitability and sustainable growth rate. This is in line with research findings from Agustia et al, (2022) found that firms with high technological capabilities can weaken the impact of product innovation on firm performance, which will also certainly impact sustainable A company growth. This is because companies with high technological capabilities focus more on process or system innovation than product innovation.…”

“…Although the sixth hypothesis is rejected, it shows that the technology and consumer goods industries cannot strengthen the relationship between capital structure and sustainable growth rates. However, this research aligns with the findings of Agustia (2022), who found that capital/leverage structure does not interact with product innovation and technological capabilities in moderating the effect of product innovation on company performance. This may indicate that the moderating effect of technological capability is not influenced by capital structure/leverage but rather by the characteristics and quality of the technical capability itself.…”

“…Technology can also influence product innovation because it can help companies develop core competencies of existing or new products. Finally, technology can also be a moderator between product innovation and company performance because it can strengthen or weaken the effect of product innovation depending on the characteristics and quality of the technology itself (Agustia et al, 2022).…”

“…In the analysis with industry moderation variables, researchers can test whether the effect of profitability, company size, and capital structure on sustainable growth rates differ between variables in technology companies and consumer goods with the assumption that technology companies can bring companies to sustainable growth rates. This is because it has a high innovation rate (Agustia et al, 2022).…”

Spatial innovations development to enhance the community's foundation economy by creating added value of products with cultural capital in Samut Songkhram Province

“…Such value-added products result in changing their customer purchasing behaviour and further result in enhancement of their sale. In this context: the literature also proposed that the value-added products result in the betterment of the firm performance (in terms of sales) (Agustia, Haryanto, Permatasari, & Midiantari, 2022;Ramadani et al, 2019). Another factor that does impact here is the cultural capital or the team which work behind the innovation.…”