Synergistic effect between product innovation and service innovation on firm performance in the digital era

Purpose This paper examines the impacts of product innovation, service innovation and synergistic innovation on firm performance and explores the moderating effect of digitalization. Design/methodology/approach This paper employs an unbalanced panel of 2,888 listed manufacturers consisting of 19,099 firm-year observations from 2014 to 2023. Findings The empirical results show that service innovation has an inverted U-shaped effect on firm performance, while product innovation has a U-shaped effect. Synergistic innovation is positively related to firm performance. Digitalization exerts a positive moderating role on all three main effects. Originality/value This paper contributes to related literature by providing a more detailed understanding of the complementarity of service innovation and product innovation on value creation. Also, it offers both theoretical and practical insights by examining the moderating role of digitalization.