New Product Program and Firm Performance: The Moderating Roles of Strategic Emphasis: An Abstract

At any given time period, firm management actively engages in allocating resources primarily to develop the pipeline of products in their new product portfolio (e.g., patents) as well as mitigate some of the negative consequences associated with the development and production of new products (e.g., product recalls). We call the former innovation enhancers and the latter innovation inhibitors. Firms’ investment in innovation enhancers can increase firm value, especially in the long run. Innovation inhibitors demand immediate resource allocation, increase consumers’ perceived risk, and potentially delay purchases. The effects can reflect in the short-term accounting measures. As innovation inhibitors can jeopardize consumer confidences and trust, the dilution of brand equity could be expected in the long term. Specifically, drawing from myopic management theory (Mizik 2010), we hypothesize that firms’ strategic decisions regarding optimal resource allocation for innovation enhancing- and inhibiting-related activities (i.e., strategic emphasis) are critical and can impact firm performance in the short and long run.