The effects of innovation on firm performance of supporting industries in Hanoi, Vietnam
Abstract: Innovation,
including product, process, marketing, and organizational innovation within a
firm, is considered as one of essential component for surviving and growing.
These innovation activities create value and competitive advantages for
successful organizations; therefore, understanding the organization’s overall
innovation is the first and foremost to understand the role of innovation on
firm performance. The objective of this research is to explore two parts: the
impacts of innovation on the different aspect of innovation performance, then
their effects to firm performance (production, market, and financial
performance).
Design/methodology/approach: This study uses primary data from
questionnaire survey. The questionnaire involves 4 parts including general
information, innovation activities; innovative performance, and firm
performance. This research focuses on firms in supporting industries of mechanics,
electronics, motorbike and automobile. These firms are in a list of companies
(known as The Excellent Vietnamese Companies in Northern and Central Vietnam)
established by JETRO and VCCI. There are 150 firms in this list. The
questionnaire survey was administered to directors, CEO of those firms during
April and May, 2014. Out of the 150 questionnaires sent out, 118 were valid,
accounting for 78.7% of the true response rate. Analysis methodologies of
reliability, factor analysis and regression are utilized in this paper.
Findings: The result demonstrated there are positive effects of process,
marketing, and organizational innovations on firm performance in supporting
firms. More specifically, the higher the level of innovation activities is, the
greater the innovative performance is, which means the larger level of Process,
organization and marketing innovation activities are, the higher level of
innovative performance are likely to be. Secondly, the higher level of Process,
organization and marketing innovative performance, the better level of firm
performances is likely to be. To sum up, in order to improve the innovative and
firm performance, those firms in supporting industry should highly concentrate
on process, marketing, and organizational innovation activities, rather than
product innovation activities.
Originality/value: Initially, this study applies successfully the model
which supposing innovation is a process, then clarifying innovation definition
through the impact of innovation activities on innovative performances.
Secondly, this research confirmed the positive impact of innovative
performances on firm performances. It provided one more empirical evidence of
the relationship between innovation and firm performance. For practitioners,
organizational innovation and process innovation are more important factors
affecting innovative performance and firm performance than product and
marketing innovation. Therefore, enterprises should focus and mobilize
resources to create improvement in organizational structure and manufacturing
processes.
Author: Nham Tuan, Nguyen
Nhan, Pham Giang, Nguyen Ngoc
Journal Code: jptindustrigg160020
