Impact of innovation on manufacturing firm performance: a study on Victoria

• Main Author: Alex Anderson @ Alexander Angelopoulos
• Format: Thesis
• Language: English
• Published: 2008
• Subjects: HC Economic history and conditions
• Online Access: https://eprints.ums.edu.my/id/eprint/7793/1/Impact%20of%20innovation%20on%20manufacturing.pdf; https://eprints.ums.edu.my/id/eprint/7793/
• Institution: Universiti Malaysia Sabah

Why do firms innovate? Is it important that a firm innovates? In this borderless world where boundaries are no longer relevant, where accessibility to knowledge, expertise and technology is far advanced, innovation has become a necessity rather than a luxury (Kaplan & Warren, 2007). Innovation is thus important for the survival of all manufacturing firms, especially the small and medium ones. This statement is supported by Temperley et al. (2004). The study aims to determine the impact of the innovation factors on manufacturing firm performance and to identify variables that are based on the three theories of innovation, namely: (i) Schumpeterian Theory, (ii) Organisation Theory and (iii) Environmental Theory. These theories have an influence on the performance of manufacturing firms in Victoria. From the model of firm performance developed in the study, it is found that all three theories have explained the impact on firm performance. Nevertheless, some theories explained more of the impact than others. The results show that a firm performance is significantly and positively affected by a firm's size, ownership structure, and organisation structure. Knowledge is found to be a significantly positive, indicating that the more knowledge acquired by the firm workers, the more would be the ability of the firm to perform. This is in accordance to priori. Firm size is also significantly positively related to performance, implying that bigger firms may have the advantages of having more resources and knowledge to be innovative, thus be able to influence firm performance. Three factors, namely: new technology, new market and industry concentration derived from the both Schumpeterian and Environmental Theories were found have positive influence on firm performance.