The Influence of Product Market Competition on Technological and Management Innovation: Firm‐Level Evidence from a Large‐Scale Survey

Abstract

This study contributes to both a deeper understanding of the drivers of management innovation, and the overarching debate about the relationship between competition and a firm's inclination to innovate. It distinguishes technological innovation from various types of management innovation, and investigates how a firm's competitive environment influences these types of innovation. We use firm‐level evidence from the fourth wave of the German part of the Community Innovation Survey ( CIS IV ), comprising 2,789 G erman firms, to empirically validate the discriminatory predictions we develop from the theoretical literature. Our results show significant differences in the determinants of technological and management innovation. They, therefore, underscore the need for a contingency perspective when studying the relationship between innovation and competition.