Peer effects of digital innovation behavior: an external environment perspective
ISSN: 0025-1747
Article publication date: 27 March 2023
Issue publication date: 4 July 2023
Abstract
Purpose
The use of digital technology in firms has drawn attention of innovation management scholars and policy-makers, especially the imitation of digital technology and competition among peer firms. Drawing on dynamic competition theory, this paper examines how firms react to their peers' digital innovation behavior and the effect of external environment mechanisms on the magnitude of peer effects.
Design/methodology/approach
This paper utilizes a text mining method to construct a baseline model with a Tobit estimator using data obtained for Chinese listed firms.
Findings
The findings suggest that peer effects on digital innovation behavior are robust and significant positive in China. Moreover, peer effects on digital innovation participation are positively magnified by firms' strong social network and high Fintech development. However, peer effects are relatively higher in non-state-owned enterprises (non-SOEs), low-profitability and high R&D firms.
Research limitations/implications
The authors' findings contribute to the digital management literature by showing that firms need digital technological imitation and diffusion of innovations in the digital era.
Practical implications
Managers should provide insights into firms' imitation of their peers' acts to preserve competitive parity. Besides, firms should integrate employees within the organization and communicate digital innovation concepts and behaviors to external peer firms.
Originality/value
First, this paper contributes to explaining how firms change their digital innovation strategy through the influence of peers' digital innovation behavior. Second, this paper fills the literature gaps related to the moderating effects of external environment factors in peer effects of digital innovation behavior.
Keywords
Acknowledgements
The authors would like to thank the Editor Brandon Randolph-Seng, Poonam Sawant, Anusangeetha Palani and the anonymous reviewers for the insightful and constructive comments. This research was supported by the National Social Science Fund of China (19BGL017), Heilongjiang Province Natural Science Foundation project (LHG2021009) and Fundamental Research Funds for the Central Universities (3072022WK0902).
Citation
Li, W., Wang, F., Liu, T., Xue, Q. and Liu, N. (2023), "Peer effects of digital innovation behavior: an external environment perspective", Management Decision, Vol. 61 No. 7, pp. 2173-2200. https://doi.org/10.1108/MD-06-2022-0865
Publisher
:Emerald Publishing Limited
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