The Effects of Social Ties on Innovation Behavior and New Product Performance: The Moderating Role of Market and Institutional Environments

31 Pages Posted: 19 Dec 2018

See all articles by Volkan Yeniaras

Volkan Yeniaras

American University of Sharjah

Ilker Kaya

American University of Sharjah - School of Business and Management

Nicholas Ashill

American University of Sharjah

Date Written: April 30, 2018

Abstract

This paper offers a theoretical and empirical understanding of how social ties affect innovation behaviour and new product performance in emerging economies. We examine whether innovation behavior binds the political and business ties of the firm to new product performance. We also examine if these effects are contingent on variations in the institutional environment and market environment. Structural equation modeling and mediation analyses were used on a sample of 344 small and medium size enterprises in Istanbul. Business ties are positively related to exploratory innovation behavior and political ties hamper such behavior. We also show that government support hinders firms’ disruptive innovation while encouraging incremental innovation behavior. We further demonstrate that the positive and indirect relation of business ties to new product performance through exploratory and exploitative innovation is largely insensitive to changes in market and institutional environments. Political ties are negatively (positively) and indirectly related to new product performance through exploratory (exploitative) innovation.

Keywords: exploratory innovation, exploitative innovation, demand uncertainty, technological turbulence, competitive intensity, government support, institutional environment, new product performance

Suggested Citation

Yeniaras, Volkan and Kaya, Ilker and Ashill, Nicholas, The Effects of Social Ties on Innovation Behavior and New Product Performance: The Moderating Role of Market and Institutional Environments (April 30, 2018). Available at SSRN: https://ssrn.com/abstract=3293941 or http://dx.doi.org/10.2139/ssrn.3293941

Volkan Yeniaras

American University of Sharjah ( email )

P.O. Box 26666
Sharjah
United Arab Emirates

Ilker Kaya (Contact Author)

American University of Sharjah - School of Business and Management ( email )

P.O. Box 26666
Sharjah
United Arab Emirates

Nicholas Ashill

American University of Sharjah

P.O. Box 26666
Sharjah
United Arab Emirates

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