Innovative routes: The impact of strategic deviance on corporate success

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.