Environmental Forces underneath the Innovativeness of Manufacturing Firms - Theoretical Economics Letters

TEL > Vol.9 No.5, June 2019

Environmental Forces underneath the Innovativeness of Manufacturing Firms ()

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Download as PDF (Size: 588KB) PP. 1353-1382

DOI: 10.4236/tel.2019.95088 733 Downloads 1,492 Views Citations

Author(s)

Jeffrey Yi-Lin Forrest¹, Canchu Lin², Sunita Mondal¹, Reginald Tucker³

Affiliation(s)

¹School of Business, Slippery Rock University, Slippery Rock, PA, USA.
²School of Business, Carroll University, Waukesha, WI, USA.
³Stephenson Department of Entrepreneurship and Information Systems, Louisiana State University, Baton Rouge, LA, USA.

ABSTRACT

This paper examines holistically how the competitive dynamics of the market invites and stimulates manufacturing firms to take innovative actions and which of the nearly twenty environmental factors empirically identified in the literature actually dominates the firms’ innovation. After developing a general definition of innovation in the manufacturing sector, two main results are established with the thinking logic of systems science and the rigor of game theory. One result is on when the market signals its invitation for innovation; and the second result is about why innovation is the only way for firms’ survival. By using these results and the systemic yoyo model, we identify four dominating environmental determinants on innovation of manufacturing firms—demand growth, proximity, networking, and government and public sector policies. Our results allow us to offer both theoretical and practical implications for managers and policy makers.

KEYWORDS

Consumer Loyalty, Market Invitation, Nash Equilibrium, Systems Thinking, Yoyo Model

Share and Cite:

Forrest, J. , Lin, C. , Mondal, S. and Tucker, R. (2019) Environmental Forces underneath the Innovativeness of Manufacturing Firms. Theoretical Economics Letters, 9, 1353-1382. doi: 10.4236/tel.2019.95088.

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