Is there a profit premium for market-oriented firms? A panel data investigation

Maurizio Luigi Baussola, Eleonora Bartoloni

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)

Abstract

This paper provides an empirical investigation of the impact of market orientation on firms' economic performance during the period 1998–2012 using a panel of Italian manufacturing firms. We introduce a dynamic concept of market orientation, in that we define a market-oriented firm as one that persistently undertakes product and marketing innovation, while at the same time introducing organizational changes and training efforts to manage and improve its knowledge assets over the long term. This notion of market orientation is therefore crucially related to the so-called dynamic capability approach. The related empirical model shows that being a market-oriented firm significantly affects profitability, in a framework in which this latter is simultaneously estimated with productivity, thus allowing for more precise estimates of the profit premium which is earned accordingly.
Original languageEnglish
Pages (from-to)1-21
Number of pages21
JournalECONOMICS OF INNOVATION AND NEW TECHNOLOGY
DOIs
Publication statusPublished - 2019

Keywords

  • Product innovation, market orientation, dynamic capabilities, profitability, productivity

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