The Effects of Technological and Non-technological Innovation on Firm Performance in Service Firms: Mediating Role of Non-technological Innovation and Moderating Role of Collaboration

This study examines the effects of technological and non-technological innovation activities on firm performance in the service sector, with a focus on the mediating role of non-technological innovation and the moderating role of collaboration. Using data from the 2023 Korean Innovation Survey (KIS) - Service Sector by STEPI, the analysis targets 710 service firms that implemented technological innovation between 2020 and 2022. Technological innovation is defined as product and service innovation, while non-technological innovation refers to business process innovation. Firm performance was measured using the natural logarithm of 2022 sales. Hierarchical regression analysis and the Sobel test were applied to test the hypotheses. The findings are as follows: Technological innovation has a significant positive effect on firm performance. Non-technological innovation partially mediates this relationship, implying that technological innovation contributes to financial outcomes both directly and through improvements in business processes. However, collaborative activities showed a negative moderating effect. Firms with low levels of collaboration showed a stronger positive relationship between technological innovation and performance, while high collaboration levels weakened or reversed this effect. This suggests that excessive collaboration may dilute strategic focus and increase coordination costs, leading to diminished performance. This study contributes to the innovation literature by integrating mediation and moderation frameworks and applying theories such as the resource-based view, dynamic capabilities, ambidexterity, and open innovation to the service industry sector. Future research should explore time-lagged effects, partner-specific collaboration attributes, and cross-industry comparisons.