The Relative Effects of Business-to-Business (vs. Business-to-Consumer) Service Innovations on Firm Value and Firm Risk: An Empirical Analysis

2019/05/09 by Thomas Dotzel, Venkatesh Shankar · 88 citations
Decision Sciences · Economics, Econometrics and Finance · Social Sciences · #Accounting #Business #Business value #Computer science #Digital Marketing and Social Media #Econometrics #Economics #Endogeneity #Enterprise value #Firm Innovation and Growth #Industrial organization #Innovation Diffusion and Forecasting #Marketing #Microeconomics #Panel data #Product (mathematics) #Service (business) #Value (mathematics)

paper · doi:10.1177/0022242919847221

published in Journal of Marketing 83(5), 133-152 (SAGE Publishing)

openalex publication_date 2019/05/09 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28

Abstract

Many firms introduce both business-to-business service innovations (B2B-SIs) and business-to-consumer service innovations (B2C-SIs) and need to better allocate their resources. However, they are unsure about B2B-SIs’ effects on firm value or risk, especially relative to those of B2C-SIs. The authors address this problem by developing hypotheses that relate the number of B2B-SIs and B2C-SIs to firm value and firm risk together with the moderators (the number of product innovations and customer-focus innovations). To test the hypotheses, the authors develop and estimate a model using unique panel data of 2,263 SIs across 15 industries over eight years assembled from multiple data sources and controlling for firm- and market-specific factors, heterogeneity, and endogeneity. They analyze innovation announcements using natural language processing. The results show that B2B-SIs have a positive effect on firm value and an insignificant influence on firm risk. Importantly, the effect of a B2B-SI on firm value is significantly greater than that of a B2C-SI. Unlike B2C-SIs, the effect of B2B-SIs on firm value is greater when the firm has more product innovations. Surprisingly, unlike B2C-SIs, the effect of B2B-SIs on firm value is less positive when the SIs emphasize customers. These findings offer important insights about the relative value of B2B-SIs.

Citations

• The B2B Agenda: The current state of B2B marketing and a look ahead
• A Control Function Approach to Endogeneity in Consumer Choice Models
• Service Blueprinting: A Practical Technique for Service Innovation
• Corporate Social Responsibility, Customer Satisfaction, and Market Value
• Evolving to a New Dominant Logic for Marketing

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