Innovative routes: The impact of strategic deviance on corporate success

Chien Chiang Lee, Chih Wei Wang, Hsuan Hsu

Research output: Contribution to journalArticlepeer-review

Abstract

In this study, we examine the influence of strategic deviance (STD) on U.S. firms' innovation from 2011 to 2019. Our primary findings indicate that STD has a positive effect on a firm's innovation. Furthermore, chain mediation analysis reveals that managerial ability, industry competition, and cash holding partially mediate the impact of STD on U.S. firms' innovation. The robustness of our results is confirmed through the application of two-stage least squares (2SLS) and propensity score matching with difference-in-differences (PSM-DID) to address endogeneity concerns, along with the use of alternative measures of STD. We also find that the impact of STD on innovation is more pronounced in the eastern U.S. and varies across different industries. Our study suggests a positive correlation between STD and corporate innovation, indicating that firms should consider adopting deviant strategies to enhance innovation, thereby benefiting both themselves and the entire industry.

Original languageEnglish
Article number103660
JournalInternational Review of Financial Analysis
Volume96
DOIs
StatePublished - Nov 2024

Keywords

  • Cash holding
  • Industry competition
  • Innovation
  • Managerial ability
  • Strategic deviance

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