Many firms introduce both business-to-business service innovations (B2B-SIs) and business-to-consumer service innovations (B2C-SIs) and need to better allocate their resources. However, they are unsure about B2B-SIs’ effects on firm value or risk, especially relative to those of B2C-SIs. The authors address this problem by developing hypotheses that relate the number of B2B-SIs and B2C-SIs to firm value and firm risk together with the moderators (the number of product innovations and customer-focus innovations). To test the hypotheses, the authors develop and estimate a model using unique panel data of 2,263 SIs across 15 industries over eight years assembled from multiple data sources and controlling for firm- and market-specific factors, heterogeneity, and endogeneity. They analyze innovation announcements using natural language processing. The results show that B2B-SIs have a positive effect on firm value and an insignificant influence on firm risk. Importantly, the effect of a B2B-SI on firm value is significantly greater than that of a B2C-SI. Unlike B2C-SIs, the effect of B2B-SIs on firm value is greater when the firm has more product innovations. Surprisingly, unlike B2C-SIs, the effect of B2B-SIs on firm value is less positive when the SIs emphasize customers. These findings offer important insights about the relative value of B2B-SIs.
AndersonJames C.KumarNirmalyaNarusJames A. (2007), Value Merchants: Demonstrating and Documenting Superior Value in Business Markets. Boston: Harvard Business School Press.
2.
AsparaJaakoKleinJan F.LuoXuemingTikkanenHenrikki (2018), “The Dilemma of Service Productivity and Service Innovation: An Empirical Exploration in Financial Services,” Journal of Services Research, 21 (2), 249–61.
BarneyJay (1991), “Firm Resources and Sustained Competitive Advantage,” Journal of Management, 17 (1), 99–120.
5.
BayusBarryEricksonGaryJacobsonR. (2003), “The Financial Rewards of New Product Introductions in the Personal Computer Industry,” Management Science, 49 (2), 197–210.
6.
BerryLenShankarVenkateshParishJanet TurnerCadwalladerSusanDotzelThomas (2006), “Creating New Markets Through Service Innovation,” MIT Sloan Management Review, 47 (1), 56–63.
7.
BettencourtLance (2010), Service Innovation: How to Go from Customer Needs to Breakthrough Services. New York: McGraw-Hill.
8.
BharadwajAnandhi S.BharadwajSundarKonsynskiBenn R. (1999), “Information Technology Effects on Firm Performance as Measured by Tobin’s Q,” Management Science, 45 (7), 1008–24.
9.
BiemansWim G.GriffinAbbieMoenaertRudy K. (2015), “New Service Development: How the Field Developed, Its Current Status and Recommendations for Moving the Field Forward,” Journal of Product Innovation Management, 33 (4), 382–97.
10.
BitnerMary JoOstromAmy L.MorganFelicia N. (2008), “Service Blueprinting: A Practical Technique for Service Innovation,” California Management Review, 50 (3), 66–94.
11.
BleiDavid M.NgAndrew Y.JordanMichael I. (2003), “Latent Dirichlet Allocation,” Journal of Machine Learning Research, 3, 993–1022.
12.
BleiDavid M.LaffertyJohn D. (2007), “A Correlated Topic Model of Science,” Annals of Applied Statistics, 1 (1), 17–35.
13.
BowmanDoug (2012), “Evolution of Buyer-Seller Relationships,” in Handbook on Business to Business Marketing, LilienGaryGrewalRajdeep, eds. Northampton, MA: Edward Elgar, 277–92.
14.
ChakravartyAninditaKumarAlokGrewalRajdeep (2014), “Customer Orientation Structure for Internet-Based Business-to-Business Platform Firms,” Journal of Marketing, 78 (5), 1–23.
ChaneyPaulDevinneyTimothy M.WinerRussell S. (1991), “The Impact of New Product Introductions on the Market Value of Firms,” Journal of Business, 64 (4), 573–610.
17.
ChungKee H.PruittStephen W. (1994), “A Simple Approximation of Tobin’s q,” Financial Management, 23 (3), 70–74.
18.
CovielloNicoleJosephRichard M. (2012), “Creating Major Innovations with Customers: Insights from Small and Young Technology Firms,” Journal of Marketing, 76 (6), 87–104.
19.
DamanpourFariborz (1991), “Organizational Innovation: A Meta-Analysis of Effects of Determinants and Moderators,” Academy of Management Journal, 34 (3), 555–90.
20.
DavidParthibanHittMichael A.GimenoJavier (2001), “The Influence of Activism by Institutional Investors on R&D,” Academy of Management Journal, 44 (1), 144–57.
21.
DotzelThomasShankarVenkateshBerryLeonard L. (2013), “Service Innovativeness and Firm Value,” Journal of Marketing Research, 50 (2), 259–76.
22.
DumitrescuElena-IvonaHurlinChristophe (2012), “Testing for Granger Non-Causality in Heterogeneous Panels,” Economic Modelling, 29 (4), 1450–60.
23.
EddyAlbert R.SaundersGeorge B. (1980), “New Product Announcements and Stock Prices,” Decision Sciences, 11 (1), 90–97.
24.
EricFang (Er)PalmatierRobert W.GrewalRajdeep (2011), “Effects of Customer and Innovation Asset Configuration Strategies on Firm Performance,” Journal of Marketing Research, 48 (3), 587–602.
25.
EricFang (Er)PalmatierRobert W.SteenkampJan-Benedict E.M. (2008), “Effect of Service Transition Strategies on Firm Value,” Journal of Marketing, 72 (5), 1–14.
26.
GasparJoes-MiguelMassaMassimo (2006), “Idiosyncratic Volatility and Product Market Competition,” Journal of Business, 79 (6), 3125–52.
27.
GrewalRajdeepLilienGary L. (2012), “Business-to-Business Marketing: Looking Back, Looking Forward,” in Handbook of Business-to-Business Marketing, LilienGary L.GrewalRajdeep, eds. Cheltenham, UK: Edward Elgar, 15–40.
28.
GustafssonAndersKristenssonPerWitellLars (2012), “Customer Co-Creation in Service Innovation: A Matter of Communication?” Journal of Service Management, 23 (3), 311–27.
29.
ISBM (2008), “B-to-B Marketing Trends 2010,” in Institute for the Study of Business Markets Research Report, 6th ed., Presented by HSR Business to Business, 1–56.
30.
KimKihyunKumarV. (2018), “Relative Influence of Economic and Relational Direct Marketing Communications on Buying Behavior in B2B Market,” Journal of Marketing Research, 45 (1), 48–68.
31.
KrasnikovAlexanderJayachandranSatish (2008), “The Relative Impact of Marketing, R&D, and Operations Capabilities on Firm Performance,” Journal of Marketing, 72 (4), 1–11.
32.
LarivièreBartKeininghamTimothy L.AksoyLerzanYalçinAtakanMorgesonForrest V.IIIMithasSunil (2016), “Modeling Heterogeneity in the Satisfaction, Loyalty Intention and Shareholder Value Linkage: A Cross-Industry Analysis at the Customer and Firm Level,” Journal of Marketing Research, 48 (2), 91–109.
33.
LawrenceJustin T.CreceliusAndrew J.ScheerLisaPatilAshutosh (2019), “Multichannel Strategies for Managing the Profitability of Business-to-Business Customers,” Journal of Marketing Research, 56 (3), DOI: 10.1177/0022243718816952.
34.
LeeRuby P.GrewalRajdeep (2004), “Strategic Responses to New Technologies and Their Impact on Firm Performance,” Journal of Marketing, 68 (4), 157–71.
LongScott J.FreeseJeremy (2003), Regression Models for Categorical Dependent Variables Using Stata. College Station, TX: Stata Press.
37.
LuoXuemingBhattacharyaC.B. (2006), “Corporate Social Responsibility, Customer Satisfaction, and Market Value,” Journal of Marketing, 70 (4), 1–18.
38.
MenorLarry J.TatikondaMohan V.SampsonScott E. (2002), “New Service Development: Areas for Exploitation and Exploration,” Journal of Operations Management, 20 (2), 135–57.
39.
MeuterMatthew L.BitnerMary JoOstromAmy L.BrownStephen W. (2005), “Choosing Among Alternative Service Delivery Modes: An Investigation of Customer Trial of Self-Service Technologies,” Journal of Marketing, 69 (2), 61–83.
40.
MeyerJeffreyShankarVenkateshBerryLen (2018), “Pricing Hybrid Bundles by Understanding the Drivers of Willingness to Pay,” Journal of Academy of Marketing Science, 46 (3), 497–515.
41.
MeyerMarc H.DeToreArthur (2001), “PERSPECTIVE: Creating a Platform-Based Approach for Developing New Services,” Journal of Product Innovation Management, 18 (3), 188–204.
42.
MithasSunilKrishnanM.S.FornellClaes (2005), “Why Do Customer Relationship Management Applications Affect Customer Satisfaction?” Journal of Marketing, 69 (4), 201–09.
43.
MoormanChristineSlotegraafRebecca J. (1999), “Contingency Value of Complementary Capabilities in Product Development,” Journal of Marketing Research, 36 (2), 239–57.
44.
MorganNeil A.RegoLopo L. (2006), “The Value of Different Customer Satisfaction and Loyalty Metrics in Predicting Business Performance,” Marketing Science, 25 (5), 426–39.
45.
MorrisMichael H.PittLeyland F.JrEarl D. Honeycutt (2001), Business-to-Business Marketing: A Strategic Approach, 3rd ed. Thousand Oaks, CA: Sage Publications.
46.
NezamiMehdiWormStefanPalmatierRobert W. (2018), “Disentangling the Effect of Services on Firm Value: Tradeoffs of Sales, Profits, and Earnings Volatility,” International Journal of Research in Marketing, 35 (2), 205–23.
47.
NijssenEdwin J.HillebrandBasVermeulenPatrick A.M.KempRon G.M. (2006), “Exploring Product and Service Innovation Similarities and Differences,” International Journal of Research in Marketing, 23 (3), 241–51.
48.
NingJieBabichVolodymyrHandleyJohnKeppoJussi (2018), “Risk-Aversion and B2B Contracting Under Asymmetric Information: Evidence from Managed Print Services,” Operations Research, 66 (2), 392–408.
49.
NoordhoffCorine S.KyriakopoulosKyriakosMoormanChristinePauwelsPieterDellaertBenedict G.C. (2011), “The Bright Side and Dark Side of Embedded Ties in Business-to-Business Innovation,” Journal of Marketing, 75 (5), 34–52.
50.
OlivaRalph (2012), “A High-level Overview: A Value Perspective on the Practice of Business-to-Business Marketing,” in Handbook of Business-to-Business Marketing, LilienGary L.GrewalRajdeep, eds. Cheltenham, UK: Edward Elgar, 15–40.
51.
PauwelsKoenSilva-RissoJorgeSrinivasanShubaHanssensDominique M. (2004), “New Products, Sales Promotions, and Firm Value: The Case of the Automobile Industry,” Journal of Marketing, 68 (4), 142–56.
52.
PetrinAmilTrainKenneth (2010), “A Control Function Approach to Endogeneity in Consumer Choice Models,” Journal of Marketing Research, 47 (1), 3–13.
53.
RaoVithala R.AgarwalManoj K.DahlhoffDenise (2004), “How Is Manifest Branding Strategy Related to the Intangible Value of a Corporation?” Journal of Marketing, 68 (4), 126–41.
54.
RindfleischAricAntiaKersi D. (2012), “Survey Research in B2B Marketing: Current Challenges and Emerging Opportunities,” in Handbook of Business-to-Business Marketing,LilienGary L.GrewalRajdeep, eds. Cheltenham, UK:Edward Elgar, 699–714.
55.
RoodmanDavid (2011), “Fitting Fully Observed Recursive Mixed-Process Models with CMP,” The Stata Journal, 11 (2), 159–206.
56.
RumeltRichard P. (1991), “How Much Does Industry Matter?” Strategic Management Journal, 12 (3), 167–85.
ShaneScottShankarVenkateshAravindakshanAshwin (2006), “The Effects of New Franchisor Partnering Strategies on Franchise System Size,” Management Science, 52 (5), 773–87.
SharpeWilliam F. (1964), “Capital Asset Prices: A Theory of Market Equilibrium Under Conditions of Risk,” Journal of Finance, 19 (3), 425–42.
61.
SoodAshishTellisGerard J. (2009), “Do Innovations Really Payoff? Total Stock Market Returns to Innovation,” Marketing Science, 28 (3), 442–56.
62.
SorescuAlina B.ChandyRajeshPrabhuJaideep C. (2003), “Sources and Financial Consequences of Radical Innovation: Insights from Pharmaceuticals,” Journal of Marketing, 67 (4), 82–102.
63.
SorescuAlina B.SpanjolJelena (2008), “Innovation’s Effect on Firm Value and Risk: Insights from Consumer Package Goods,” Journal of Marketing, 72, 114–32.
64.
SrinivasanRajiHaunschildPamelaGrewalRajdeep (2007), “Vicarious Learning in New Product Introductions in the Early Years of a Converging Market,” Management Science, 53 (1), 16–28.
65.
SrinivasanShubaPauwelsKoenSilva-RissoJorgeHanssensDominique (2009), “Product Innovations, Advertising, and Stock Returns,” Journal of Marketing, 73 (1), 24–43.
SteyversMarkGriffithsTom (2007), “Probabilistic Topic Models,” in Handbook of Latent Semantic Analysis. Mahwah, NJ: Lawrence Erlbaum Associates, 427 (7), 424–40.
68.
TuliKapilBharadwajSundar G. (2009), “Customer Satisfaction and Stock Returns Risk,” Journal of Marketing, 73 (6), 184–97.
69.
UlagaWolfgangReinartzWerner J. (2011), “Hybrid Offerings: How Manufacturing Firms Combine Goods and Services Successfully,” Journal of Marketing, 75 (6), 5–23.
70.
VargoStephen L.LuschRobert F. (2004), “Evolving to a New Dominant Logic for Marketing,” Journal of Marketing, 68 (1), 1–17.
71.
VisnjicIvankaRingovDimoArtsSam (2019), “Which Service? How Industry Conditions Shape Firms’ Service-Type Choices,” Journal of Product Innovation Management, 36 (3), 381–407.
72.
WangYashengZhangYangLiuBing (2017). “Sentiment Lexicon Expansion Based on Neural PU Learning, Double Dictionary Lookup, and Polarity Association,” in Proceedings of 2017 Conference on Empirical Methods in Natural Language Processing (EMNLP-2017), Copenhagen, Denmark.
73.
WiersemaFred (2013), “The B2B Agenda: The Current State of B2B Marketing and a Look Ahead,” Industrial Marketing Management, 42 (4), 470–88.
74.
WuytsStefanGeyskensInge (2005), “The Formation of Buyer–Supplier Relationships: Detailed Contract Drafting and Close Partner Selection,” Journal of Marketing, 69 (4), 103–17.
75.
ZellnerArnold (1962), “An Efficient Method of Estimating Seemingly Unrelated Regressions and Tests of Aggregation Bias,” Journal of the American Statistical Association, 57 (298), 348–68.
Supplementary Material
Please find the following supplemental material available below.
For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.
For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.
