How Management Innovation Affects Product and Process Innovation in Turkey: The Moderating Role of Industry and Firm Size

Abstract

In the last decade, studies on how firms introduce management innovations to drive product and process innovation have proliferated. It has long been assumed that management innovation enhances product and process innovation by increasing firms’ exposure to new knowledge sources and improving their efficiency in the production processes. However, there is still an important conceptual debate and contradictory empirical results about the actual benefits of management innovation and the contextual conditions under which those benefits are likely to transpire. To address this gap, we aim to investigate the benefits of management innovation on product and process innovation in the context of emerging economy firms, in Turkey, and how industry affiliation and firm size influence those benefits. Using responses from 1,065 Turkish firms, we find that the benefits of management innovation on product and process innovation is greater for both service firms and small firms compared to manufacturing firms and large firms. The paper has important theoretical implications to management innovation literature by showing that the benefits of management innovation on product and process innovation show variance depending on different contextual conditions.