FIRM INNOVATIVENESS - THE SUFFICIENT CONDITION FOR BUSINESS SUCCESS? EXAMINING ANTECEDENTS OF FIRM INNOVATIVENESS AND HOW IT AFFECTS BUSINESS SUCCESS

The continuous development and introduction of new products has been addressed by companies of all industries through continuously high investments to foster a firm's ability to successfully develop and introduce innovations and new technologies (firm innovativeness). However, it still lacks empirical evidence about the direct antecedents of firm innovativeness and how this ability contributes to firm success. Moreover, previous literature often restricts the operationalisation of firm innovativeness to quantitative indicators, like the number of patents a company possesses, as its sole indicator. The present paper tries to close this gap by measuring effects of firm innovativeness on business success using a mixed measure of patent counts and patent citations thereby accounting for not only quantitative but also qualitative requirements. Furthermore our study is the first to determine the relative effect of R&D intensity and innovation experience as direct antecedents of firm innovativeness. We use secondary data from 246 Fortune 500 and S&P 500 to test our model. The model results show that our combined measure clearly captures firm innovativeness and represent a good predictor of business success. Moreover, our results point out that firm innovativeness is primarily influenced by R&D intensity. Also notably, our results confirm the often questioned statement that smaller firms are indeed better to translate innovativeness into business success.