Innovation Reputation, Firm Value, and Financial Performance: The Moderating Role of Industry

This research explores the impact of firm-level innovation reputation on both firm value and financial performance, examining these relationships across highly innovative and less innovative industries. Drawing on two studies encompassing a total of 722 firm-level observations, the findings reveal a general positive association between innovation reputation and firm value. However, this relationship proves non-significant for firms operating in highly innovative industries. Intriguingly, within less innovative industries, firms with lower innovation reputations demonstrate significantly higher firm values compared to those with higher innovation reputations, contrary to expectations. The study also unveils mixed effects of innovation reputation on firm performance. While it generally exhibits a positive influence on return on sales, its impact on return on assets is only marginally significant. In highly innovative industries, innovation reputation positively affects return on assets but only marginally influences return on sales. Contrastingly, within less innovative industries, innovation reputation does not significantly influence either financial performance measure.