Abstract
Through innovation, firms can reform relatively conservative and inflexible operational procedures, thus improving service quality to fulfil customer needs. However, few studies have investigated how team members’ motivations are transformed into innovation performance by using multilevel research. By collecting data from 418 employees in 38 research and development teams, this study uses hierarchical linear modelling and hierarchical regression analyses to investigate the influences of efficacy beliefs on innovation effectiveness in the service industry at the team (group efficacy) and individual (self-efficacy) levels. The findings show that at the individual level, self-efficacy positively affected knowledge-sharing behaviour. At the team level, team entrepreneurship mediated the relationship between group efficacy and innovation effectiveness, and team knowledge sharing moderated the relationship between team entrepreneurship and innovation effectiveness. At the interaction of individual and team levels, group efficacy influenced knowledge-sharing behaviour. The results may provide valuable information for both academics and practitioners seeking to increase group efficacy beliefs and enhance innovation effectiveness for customer loyalty.