When innovativeness determines market orientation: the forest sector and the Great Recession

Eric Hansen, Erlend Nybakk

Abstract


The forest sector and the Great Recession provide a unique setting for investigating the relationships among market orientation, innovativeness and firm performance. While most of the extant literature suggests that market orientation helps a firm build its innovativeness, we suggest that in the production oriented forest sector, especially when reacting to the Great Recession, being innovative is the ingredient that allows a production oriented firm to develop a market orientation. Using data from 142 forest sector manufacturing firms we find that different types of innovativeness positively impact the dimensions of market orientation. In this industry sector and time, market orientation does not positively impact firm performance. Finally, firms with better post-recession performance were able to increase their innovativeness, likely as a result of the slack resources from improved performance.


Keywords


market orientation, innovativeness, firm performance, recession, manufacturing firms

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References


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