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INNOVATION HIT RATE, PRODUCT ADVANTAGE, INNOVATIVENESS, AND FIRM PERFORMANCE

KIMBERLY GREEN

Richards College of Business, University of West Georgia, 1601 Maple Street Carrollton, GA, USA 30118-3030, USA

Corresponding author.

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and

ROOPA RAMAN

College of Business and Behavioral Science, 100 Sirrine Hall, Clemson University, Clemson, SC, USA 29634-1305, USA

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https://doi.org/10.1142/S1363919614500388Cited by:1 (Source: Crossref)

Abstract

This study investigates the average levels of product advantage and innovativeness across the products in the firm's new product development (NPD) portfolio. Launch rate is defined as the percentage of products with a "launch" versus a "discontinued" outcome. A dataset of drug development activity for 73 pharmaceutical companies for the period 1995–2006 supports a positive relationship between average advantage and launch rate and between average innovativeness and launch rate. The interaction of high advantage and high innovativeness reduces launch rate. The distribution of activity across knowledge categories in the development portfolio strengthens the positive relationship between advantage and firm profitability.

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