Innovation strategies and financial performance: a resource dependence perspective for Fintech management decision-making

Abstract

Purpose

The study examines how process/organizational innovation and R&D spending mediate the relationship between financial performance and the resource dependence theory in Fintech, providing insights into effective innovation strategies for achieving sustainable financial performance.

Design/methodology/approach

Data from 191 financial firms in Taiwan was collected from annual reports using the Taiwan Economic Journal (TEJ), a financial information provider. Content analysis was used to measure innovation activities and financial performance, with process and organizational innovation defined. R&D expenditures were also collected and used in statistical analysis to explore the relationship between variables.

Findings

This study on the financial services industry shows that process innovation and R&D expenditure positively impact firm performance, while organizational innovation may have a negative short-term effect but could have long-term benefits.

Research limitations/implications

Limitations of this study include vulnerability to spurious effects and the use of data from only listed financial service firms. Future research should use more short-term performance data and include unlisted firms in the financial services industry to extend the study’s coverage.

Originality/value

This study extends resource dependence theory to financial services and explores the effects of process and organizational innovation on firm performance. Results show that internal process management boosts performance, while external collaboration with startups enhances Fintech innovation and efficiency, with positive short-term effects. The study highlights the importance of interacting with external organizations to access resources and improve performance in financial services.

Citation

Wang, J.-H., Dai, X., Wu, Y.-H. and Chen, H.L. (2024), "Innovation strategies and financial performance: a resource dependence perspective for Fintech management decision-making", Journal of Organizational Change Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JOCM-03-2023-0054