Scandinavian Working Papers in Economics

Papers in Innovation Studies,
Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy

No 2018/4: The Role of Business Model Innovation for Product Innovation Performance

Lars Bengtsson () and Sam Tavassoli ()
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Lars Bengtsson: Faculty of Engineering, Lund University, Postal: Sweden
Sam Tavassoli: RMIT, Postal: Australia

Abstract: We analyze the effect of Business Model Innovation (BMI) on the product innovation performance of firms, based on a dynamic capabilities theoretical framework. Our empirical study is based on a large-scale representative sample of cross-industry Swedish firms participating in the last three waves of the Community Innovation Survey (CIS) from 2006–2012. Our findings provide support for the dynamics capabilities theoretical framework as well as broad evidence of a significant and positive association between BMI and product innovation performance. Our results imply that BMI in the form of product innovations combined with different complementary innovations will act as isolating mechanisms towards replication by competitors. Therefore, managers should frame product innovations as part of a business model innovation and dynamically adapt the key elements of the firm’s business model.

Keywords: Business model innovation; Business models; Dynamic capabilities; product innovation; Innovation performance; Community Innovation Survey

JEL-codes: D22; L20; O31; O32

35 pages, February 27, 2018

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