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Abstract Research shows that innovation mediates the relationship between market orientation and firm performance. However, researchers disagree on whether market orientation leads to differential emphases on radical or incremental innovation, and how each type of innovation influences performance. Drawing on organizational learning theory, this study clarifies these relationships through structural analysis of meta-analytic correlations from 441 samples. The findings indicate that market orientation has similar effects on firm performance for both manufacturers and service firms, but that radical and incremental innovation play differential mediating roles across product types on the market orientation-performance relationship. The findings offer new insights for both marketing theory and practice.
Chang et al. (Mon,) studied this question.