Product-Service System and Firm Performance: The Mediating Role of Product and Process Technological Innovation

Abstract

In this study, we examine the effects of product-service system (PSS) practices on firm performance with the help of unique survey data obtained from one of the leading emerging countries. In particular, we explore the mechanisms that explain the link between PSS and firm performance. We propose that a firm’s introduction of PSS is positively associated with the performance of that company in terms of product and process technological innovation. The findings show that PSS influences a firm’s performance through process technological innovation at the company, not through product technological innovation. The results suggest that firms should focus more on developing a new business process or business system in order to leverage the power of PSS.

KEY WORDS:

• firm performance
• process innovation
• product innovation
• product-service system
• servitization
• technological innovation

Notes

1. Figure 1 illustrates the details of structured model. The numbers that are specified in individual paths mean the standardized regression weights as coefficient values in Table 4.

2. “Service-oriented PSS” may cause ambiguity and confusion to the survey respondents because all other items of PSS also have a concept of “service.”