This research investigates the impacts on firm performance of (1)
technology versus design innovation and (2) their potentially
synergistic interaction. Synergies could arise from complementarities,
in particular the utilization of technology innovation as a platform for
design innovations. Both sales and Tobin's q are examined as dependent
performance variables, with sales tapping consumer responses and Tobin's
q reflecting investor responses. Moderation by branding strategy (i.e.,
Corporate Branding versus Mixed Branding versus House of Brands) is
analyzed because innovation may impact performance differently depending
on branding strategy. Advertising effects, the number of new product
introductions, their interaction, R&D expenditures, operating
margins, and firm size are also modeled as covariates. The results show
that all main and interaction effects are significant in at least one of
the branding groups, and that moderation of model paths by branding
strategy was pervasive. Overall, except for technology innovation →
Tobin's q, Corporate Branding coefficients for technology innovation,
design innovation, and their interaction were almost always
significantly different from Mixed Branding and House of Brands
coefficients, which were not significantly different from each other.
Since Mixed Branding and House of Brands proved very similar, these
groups were combined under ' Non- Corporate.' First, for technology
innovation, the impact on both sales and Tobin's q for Corporate
Branding was less than or equal to Noncorporate. Noteworthy was that the
technology innovation → Tobin's q relationship was equal across all
branding strategies; technology innovation appears to be key for
investors. Second, for design innovation, the impact for Corporate
Branding was positive while for Noncorporate it was null; the same
pattern was observed for sales and Tobin's q. Third, for the
interaction, the impact for Corporate Branding was significantly less
than the positive impacts for Noncorporate. For Noncorporate, the
marginal impact of design innovation on sales or Tobin's q increased
with the level of technology innovation. For Corporate Branding however,
there was no interaction in the case of sales and a negative
interaction for Tobin's q. Thus, the marginal impact of design
innovation on Tobin's q decreased with increasing levels of technology
innovation. These decreasing marginal effects could reflect limits to
corporate brand name extensions, as perceived by investors. [ABSTRACT
FROM AUTHOR]