Determinants of Product Innovation Activities

An empirical analysis is presented of the effects of selected contingency variables on the product innovation activities of firms in entertainment electronics and major household appliance industries in West Germany. The following contingency variables were analysed: the size and industry affiliation of the firm, the top management function executed either by owners or salaried managers, and the competitive pressure that a firm has to face. The empirical findings indicate that smaller enterprises, owner‐run firms and those facing comparatively less competitive pressure are especially active in product innovation, while product innovation plays a less significant role in large and manager‐run firms, as well as in enterprises facing intensive competitive pressure. Conclusions are drawn for competitor analysis and business strategies of firms with regard to the German industries considered.