Does innovation strategy affect financial, social and environmental performance?


  • Ferdaws Ezzi PHD, student in Financial and Accounting Methods: LARTIGE Sfax, University of Gabes, Gabes, Tunisia
  • Anis Jarboui Doctor and HDR Financial and Accounting associate professor of Universities Higher Institute of Business Administration (ISAAS), University of Sfax, Tunisia


Innovation strategy, Social performance, Financial performance, Environmental performance


In the very study, the emphasis lays on the specific problem of analyzing the impact of the innovation strategy (in particular investment in research and development) on the financial, social and environmental performance. After discussing this subject theoretically, we propose our research hypotheses which, in turn, will be corroborated by an empirical study of 96 Tunisian companies. Indeed, the results are noteworthy and important to the extent that one can say that the innovation strategy has a crucial impact on the performance of the companies.



Download data is not yet available.


Abdullah, F., Weiyu, G., & Vivek, M. (2002). The relation of managerial holdings with Tobin’s Q and R&D expenditures: Evidence from Japanese firms. Multinational Business Review, 10, 66–71.

Adjaoud, F., Zeghal, D., & Andaleeb, S. (2007). The effect of Board’s quality on performance: A study of Canadian firms. Journal compilation., 15(4, July)

Albouy, M. (2006). Théorie, applications et limites de la mesure de la création de valeur. Revue franc¸ aise de gestion, 1(160), 139–157.

Andres, P., Azofra, V., & López, F. (2005). Corporate boards in OECD countries: Size, composition, functioning and effectiveness. Blackwell Publishing Ltd., 13(2, March).

Azouzi, M. A., & Jarboui, A. (2012). CEO emotional bias and dividend policy Bayesian network method. Business and Economics Horizons., 7(1), 1–18.

Bae, S., & Kim, D.(2003). The effect of R&D investments on market value of firms: Evidence from the U.S., Germany, and Japan. Multinational Business Review., 11(3), 51–75.F. Ezzi, A. Jarboui / Journal of Economics, Finance and Administrative Science 21 (2016) 14–24 23

Bahagat, S., & Black. (2001). The non-correlation between board independence and long term firm performance. Journal of Corporation Law, 231–274.

Bain, J. S. (1951). Relation of profit rate to industry concentration: American Manufacturing, 1963, 1940. Quarterly Journal of Economics, 65(August), 293–324.

Baker, W. E., & Sinkula, J. M. (2002). Market orientation, learning orientation and product innovation: Delving into the organization’s black box. Market Focus Manage;, 5(1), 5–23.

Balkin, D. B., Markaman, G. D., & Gómez-Mejía, L. R. (2000). Is CEO pay in high-technology firms related to innovation? Academic Management;, 43(6), 1118–1129.

Barker, V. L., & Mueller, G. C. (2002). CEO characteristic and firm R&D spending. Management Science, 48(1), 782–801.

Barney, J. (1991). Firm resources and sustained competitive advantages. Journal of Management, 17, 99–120.

Barney, J. B. (1985). Strategic factor markets: Expectations, luck, and business strategy. Management Science, 32, 1231 1241.

Bauer, R., Frijns, B., Otten, R., & Tourani-Rad, A. (2008). The impact of corporate governance on corporate performance: evidence from Japan. Pacific-Basin. Finance Journal, 16, 236–251.

Ben Cheikh, S., & Zarai, M. A. (2008). Importance des facteurs organisationnels sur le pouvoirmanagérial etlaperformance de lafirme.Colloque internationalfiscalité droit gestion, 8, 9 et 10 Mai 2008.

Ben Kraiem, R.(2008). The influence of institutional investors on opportunistic earnings management. International Journal of Accounting Auditing and Performance Evaluation, 5(1), 89–106.

Ben-Zion, U. (1984). The R&D and investment decision and its relationship to the firm’s market value: Some preliminary results. In Griliches Zvi(Ed.), R&D, patents and productivity (pp. 299–312). University of Chicago Press.

Berle, A. A., & Means, G. C. (1932). The modern corporation and private property. New York: Macmillan Publishing Co.

Berrone, P., Surroca, J., & Tribo, J. A. (2007). Do the type and number of block holders influence R&D investments? New evidence from Spain. Corporate Governance: An international Review, 15(5), 828–842.

Bloch, C. (2003). The effect of R&D expenditures on stock market returns for Danish firms.. Working paper, 2003/6. ( 6.pdf)

Blundell, R., Griffith, R., & Van Reenen, J. (1999). Market share, market value and innovation in a panel of British manufacturing firms. Review of Economic Studies, 66(3), 529–554.

Booth, L., Aivazian, V., Demirguc-Kunt, A., & Maksimovic, V. (2001). Capital structure in developing countries. Journal of Finance, 56, 87–130.

Börjesson, S., & Löfsten, H.(2012). Capabilities for innovation in small firms – A study of 131 high-tech firms and their relation to performance. International Journal of Business Innovation and Research, 6(2), 149–176.

Bosworth, D., & Rogers, M.(1998). Research and development, intangible assets and the performance of large Australian companies. Meulbourne Institute Working Paper, n◦ 2/98, janvier.

Bowen, H. R. (1953). Social responsibilities of the business man. pp. 25. New York: Harper & Row.

Brouillat, E., (2008). Firm strategy for innovation and end of life products: Towards a greening of product design. 1st DIME Scientific Conference: Knowledge in space and time: economic and policy implications of the Knowledge-based economy,

-9 avril 2008, BETA, Université Louis Pasteur, Strasbourg, France.

Brousseau, E. (1993). L’économie des contrats. PUF.

Brown, L., & Caylor, M. (2004). Corporate governance and firm performance Working paper.

Brown, S. L., & Eisenhard, K. M. (1995). Product development: Past research, present findings, and future directions. Acad Manage Rev, 20(2), 343–378.

Bujadi, M. L., & Richardson, A. J. (1997). Acitation trail review of the uses of firme size in Accounting Research. Journal of Accounting Literature, 16, 1–27.

Caroll, A. B. (1979). A three dimensional conceptual model of corporate social performance. Academy of Management Review, 4(4), 657–668.

Casta J. F., Escaffre, L., & Ramond, O. (2007). Investissement immatériel et utilité de l’information comptable: Etude empirique sur les marchés financiers européens.

Actes du 28ème Congrès de l’Association Francophone de Comptabilité AFC (cédérom), 23-25 mai 2007, Poitiers.

Caves, R. E., & Porter, M. E. (1977). From entry barries to mobility barriers. Quarterly Journal of Economics, 91, 241–261.

Chan, H. W. H., Faff, R. W., Gharghori, P., & Ho, Y. K. (2007). The relation between R&D intensity and future market returns: Does expensing versus capitalization matter? Review of Quantitative Finance and Accounting, 29(1), 25–51.

Charreaux, G. (1993). Théorie financière et stratégie financière. Revue Franc¸ aise de Gestion, 46–63, janvier février.

Charreaux, G. (2000). Le conseil d’administration dans les théories de la gouvernance. Working paper. Université de Bourgogne.

Charreaux, G. (2004). Les théories de la gouvernance: de la gouvernance des entreprises à la gouvernance des systèmes nationaux. Cahier du FARGO 1040101.

Charreaux, G. (2008). À la recherche du lien perdu entre caractéristiques des dirigeants et performance de la firme: gouvernance et latitude managériale.

Économie et Sociétés, (10), 1831–1868. Série Économie de l’entreprise.

Charreaux, G. (2008). La recherche du lien perdu entre caractéristiques des dirigeant performance de la firme: gouvernance et latitude managériale. Working Papers

FARGO 1080502, Université de Bourgogne - Latec/Fargo.(Research center in Finance,organizational Architecture and Governance).

Charreaux, G. (2011). Quelle théorie pour la gouvernance? De la gouvernance actionnariale à la gouvernance cognitive et comportementale. Cahier du FARGO 1110402.

Chen, H. L., Hsu,W. T. and Huang, Y. S.(2008). Top managementteam characteristics, R&D investment and capital structure in the IT industry. Small Business Economics. Available at pdf

Cho, M. H. (1998). Ownership structure, investment,and the corporate value: An empirical analysis. Journal of Financial Economics, 47, 103–121.

Chung, K. H., & Jo, H.(1996). The impact of security analysts’ monitoring and marketing functions on the market value of firms. Journal of Financial and Quantitative Analysis, 31(4), 493–512.

Coase, R. H. (1937). The nature of the firm. Economica,

Cockburn, I., & Griliches, Z. (1988). Industry effects and apropriability measures in the stock market’s valuation of R&D and patents. American Economic Association Papers and Proceedings, 78(2), 419–423.

Colombo, M. G., Laursen, K., Magnusson, M., & Rossi-Lamastra, C. (2012). Introduction: Small business and networked innovation: Organizational and managerial challenges. Journal of Small Business Management, 50(2), 181–190.

Connolly, R. A., & Hirschey, M. (1984). R&D, market structure and profits: A valuebased approach. Review of Economics and Statistics, 66(4), 682–686.

Daily,C., Dalton, D., & Cannella,A.(2003).Corporate governance: Decades ofdialogue and data. The Academy of Management Review, 28(3), 371–382.

Darroch, J., & McNaugton, R. (2002). Examining the link between knowledge management practices and types of innovation. J. Intellect Cap, 3(3), 210–222.

Davis, J. H., Schoorman, D. F., & Donaldson, L. (1997). Toward a stewardship theory of management. The Academy of Management Review, 22(1), 20–47.

Del Monte, A., & Papagni, E. (2003). R&D and the growth of firms: Empirical analysis of a panel of Italian firms. Research Policy, 32(6), 1003–1014.

Demaria, S., & Dufour, D. (2007). Les choix d’options comptables lors de la transition aux normes AS/IFRS: quel rôle pour la prudence? Comptabilité-Contrôle-Audit, (195), 195–218.

Demsetz, H. (1975). Two systems of belief about monopoly. In H. Goldschmid, H. Goldschmid, et al.(Eds.), Industrial Concentration: The New Learing (pp. 164–184). Little Brown.

Donaldson, L. (1990). The ethereal hand: Organizational economics and management theory. Academy of Management Review, 15(3), 369–381.

Donaldson, L., & Davis, J. H. (1991). Stewardship theory or agency theory: CEO governance and shareholder returns. Australian Journal of Management, 16(1),49–56.

Dufour, D., & Molay, E. (2010). La structure financière des pme franc¸ aises: une analyse sectorielle sur données de panel, Manuscrit auteur, publié dans crises et nouvelles problématique de la valeur, Nice, hal-00479529, version 1.

Durant, T. (1997). Savoir, savoir-faire et savoir être. Repenser les compétences de l’entreprise. Actes de la conférence de Montréal.

Durnev, A., & Kim, E. H. (2003). To steal or not to steal: Firm attributes, legal environment, and valuation. Current Draft, (September 22), 2003.

Encaoua, D., Hall, B. H., Laisney, F., & Mairesse, J. (1998). Economie et économétrie de l’innovation. Un tour d’horizon. Annales d’Economie et de Statistique, (49/50).

Erickson, G., & Jacobson, R. (1992). Gaining comparative advantage through discretionary expenditures: The returns to R&D and advertising. Management Science, 38(9), 1264–1279.

Florida, R. (1996). The globalization of R&D: Results of a survey of foreign-affiliated R&D laboratories in the USA. Research Policy, 26, 85–103.

Francis,J., & Smith,A.(1995).Agency costs and innovation: Some empirical evidence. Journal of Accounting and Economics, 19, 383–409.

Freeman, R. E. (1984). Strategic management: Astakeholder approach. Boston: Pitman. Développement, Croissance et Progrès, 36(1), 213–229.

Gallaud, D., Martin, M., Reboud, S., & Tanguy, C. (2012). La relation entre innovation environnementale et réglementation: une application au secteur agroalimentaire franc¸ ais. Innovations, 155–175.

Gellatly, G., & Peters, V. (1999). Understanding the innovation process: Innovation in dynamics service industries Working paper. pp. 2–3. ,

Geroski, P. A., Machin, J., & Walters, C. (1997). Corporate growth and profitability. Journal of Industrial Economics, 45(2), 171–189.

Ghesbrough, H., Vanhaverbeke, W., & West, J. (Eds.). (2006). Open innovation: Researching a new paradigm.. New York: Oxford University Press.

Grabmeier, K. (2002). I don’t mind the critics: Diversified firms show innovative spirit.. P:1.

Grant, R. M. (1991). The Resource-based theory of competitive advantage: Implications for strategy formulation. California Management Review. pp. 114–135. Spring.

Griliches, Z.(1981). Market value, R&D and patents. Economics Letters, 7(2), 183–187.

Groff, J., & Nguyen, T. T. U. (2012). Motivations à l’éco-innovation:une comparaison sectorielle sur les enterprises au Luxembourg. Working paper n ◦ 2012-11.

Hage, J., & Aiken, M. (1970). Social change in complex organisations. Random House.

Hall, B. H. (2000). Innovation and market value. In R. Barrell, G. Mason, & M. O’Mahoney (Eds.), Productivity, innovation and economic performance (pp. 177–198). Cambridge, UK: Cambridge University, Press.

Hambrick, D., & Mason, P. (1984). Upper echelons: The organization as a reflection of its top managers. The Academy of Management Review, 9(2), 193–206.

Hamza, F., & Jarboui, A. (2012). Investor’s commitment bias and escalation of firm’s investment decision. Corporate Ownership and Controle, 9, 369–380.

Hergli, M., Bellalah, M., & Abdennadher, N. (2007). Gouvernance d’entreprise et valeurs de marché en Tunisie. 4th International Finance conference. 15-17 Mars, 2007, Hammamat, Tunis.24

Hirschey, M., & Weygett, J. J. (1985). Amortization policy for advertising, research and development expenditures. Journal of Accounting Research, 23(1), 326–335.

Hoffman, A. J., & Bansal, P. (2012). Retrospective, perspective et prospective Introduction. pp. 28. The oxford Hetbook on Business et the Natural Environment (vol3) Oxford, UK: Oxford University Press.

Horbach, J. (2008). Determinants of environmental innovation – New evidence from Germanpanel data. Research Policy, 37, 163–173.

Hovakimian, A., Hovakimian, G., & Tehranian, H. (2004). Determinants of target capital structure: The case of dual debt and equity issues. Journal of Financial Economics, 71, 517–540.

Hung, S. C., Lee, Y., & Lin, B. W. (2006). R&D intensity and commercialization orientation effects on financial performance. Journal of Business Research, 59(6), 679–685.

Hung, H.(1998).Atypology ofthe theories ofthe roles of governing boards. Corporate Governance: An International Review, 6(2), 101–111.

Hunt, S. D.(2000). A general theory of competition resources, competences, productivity 1’economic growth? Sage Publications.

Hunt, S. D., & Morgan, R. M. (1995). The comparative advantage theory of competition. Journal of Marketing, 59(2), 1–15.

Jarboui, A., & Olivero, B. (2008). Le couple risque/horizon temporel des investissements est il gouverné par les institutionnels et les actionnaires dominants? Banque et Marchés, (93, Mars–Avril), 20–34.

Jarrell, G., Lehn, K., & Marr, W.(1985). Investment horizon and the marketfor corporate control: The defensive role of long-term investments. Working paper. University of Michigan Business School.

Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360.

John, K., John, T. A., & Sundaram, A. K. (1996). An empirical analysis of strategic competition and firm values: The case of R&D competition. Journal of Financial Economics, 40(3), 459–486.

Johnson, L. D., & Pazderka, B. (1993). Firm value and investment in R&D. Managerial and Decision Economics, 14(1), 15–24.

Kemp, R., Miles, I., & Smith, K. (1994). Technology and the transition to environmental stability. Continuity and change in complex technology systems. Final report from project technological Paradigms and Energy Technologies.for SEER

research programme of the CEC.(DG XII).

Klein, S. J., & Rosenberg, N. (1986). An overview of innovation. In R. Landau, & N. Rosenberg (Eds.), The positive sum strategy: Harnessing technology for economic growth. Washington, DC: National Academies Press.

Kochhar, R., & David, P. (1996). Institutional investors and firm innovation: A test of competing hypotheses. Strategic Management Journal, 17(1), 73–84.

Koh, P. S.(2003). On the association between institutional ownership and aggressive corporate earnings management in Australia. The British Accounting Review., 35, 105–128.

Kothari, S. P., Laguerre, T. E., & Leone, A. J. (1998). Capitalization versus expensing: Evidence on the uncertainty of future earnings from current investments in PP&E and R&D. Unpublished Working paper. University of Rochester.

Lane, J. D., Kasian, S. J., Owens, J. E., & Marsh, G. R. (1998). Binaural auditing beats affect vigilance performance and mood. Physiology of Behavior, 63(2), 245–252.

Lantz, J. S., & Sahut, J. M. (2005). R&D investment and the financial performance of technological firms. International Journal of Business, 10(3), 251–270.

Lee, P. G., & O’Neil, H. M. (2003). Ownership structures and R&D investments of U.S. and Japanese firms: Agency and stewardship perspectives. Academy of Management Journal, 46(2), 212–225.

Lev, B., & Sougiannis, T.(1996). The capitalization, amortization, and value-relevance of R&D. Journal of Accounting and Economics, 21(1), 107–138.

Lichtenberg, F., & Siegel, D. (1991). The Impact of R&D investment on productivity: New evidence using linked R&D-LRD data. Economic Inquiry, 29(2), 203–228.

Lyon, D., & Ferrier, W. (2002). Enhancing performance with product–market innovation: The influence of the top management team. J. Manage Issues, 14(14), 452–469.

Mason, E. S. (1939). Price and production policies of large scale enterprise. American

Economic Review, 29, 61–74.

Merino, M., Srinivasan, R., & Srivastava, R. K. (2006). Advertising, research and development and variability of cash flow and shareholder value Working paper. Zips technical report, Zyman Institute of Brand Science.

Miles, R. E., & Snow, C. (1978). Organizational strategy, structure and process. New York: McGraw Hill.

Miller, D. J. (2006). Technological diversity, related diversification, and firm performance. Strategic Management Journal, 27, 601–619.

Muth, M., & Donaldson, L. (1998). Stewardship theory and board structure: A contingency approach. Corporate Governance: An International Review, 6(1), 5–28.

Myers, S. C. (2001). Capital structure. Journal of Economic Perspectives, 15, 81–102. O’Brien, J. P. (2003). The capital structure implications of pursuing a strategy of innovation. Strategy Management Journal, 24(5), 415–431.

Oltra, V., & Saint Jean, M. (2011). Sectoral systems of environmental innovation: An application to the French automotive industry. Technological Forecasting and Social Change, 76(4), 567–583.

Oltra,V.(2008).Variety oftechnologicaltrajectories in low emission vehicles (LEVs): Apatent data analysis. Journal of Cleaner Production, 3, 534.

Pakes, A. (1985). On patents, R&D and stock market rate of return. Journal of Political Economy, 93(2), 390-409.

Parida, V., Westerberg, M., & Frishammar, J. (2012). Inbound open innovation activities in high-tech SMEs: The impact on innovation performance. Journal of Small Business Management, 50(2), 283–309.

Penrose, E.(1959). The theory of the growth of the firm (3ème édition). Oxford: Oxford University Press.

Porter, M. (1986). L’avantage concurrentiel. pp. 7–200. InterEditions.

Porter, M. E. (1992). Capital disadvantage: American’s failing capital investment system. Harvard Business Review, 70(5), 65–85.

Quairel, F. (2006). Contrôle de la performance globale et RSE. Actes du congrès de l’association Francopohone de comptabilité.

Rindova, V. (1999). What corporate boards have to do with strategy: A cognitive perspective? Journal of management studies, 36, 953–977.

Rumelt, R. (1984). Strategy, structure, and economic performance. Cambridge: M. Harvard University Press.

Sahut, J. M., & Gharbi, O. (2008). Investisseurs institutionnels et valeur de la firme. pp. 1–28. Papier de travail, Université de Poitiers et Université Paul Cézannehal-00645361.

Scherer, E. M. (1992). Schumpeter and plausible capitalism. Econ Lit, 30, 1416–1433.

Schroll, A., & Mild, A. (2011). Open innovation modes and the role of internal R&D. An empirical study on open innovation adoption in Europe. European Journal of Innovation Management, 14(4), 475–495.

Simon, H. A. (1957). Models of man: Social and rational. New York: John Wiley and Sons.

Simpson, P. M., Siguaw, J. A., & Enz Cathy, A. (2006). Innovation orientation outcomes: The good and the bad. J Bus Res;, 59, 1133–1141.

Sougiannis, T.(1994). The accounting based valuation of corporate R&D. The Accounting Review, 69(1), 44–68.

Stigler, G. J. (1964). A theory of oligopoly. Journal of Political Economy, 72(1), 44–61.

Stiles, P. (2001). The impact of the board on strategy: An empirical examination. Journal of Management Studies, 38(5), 627–650.

Sumeonidis, G. (1996). Innovation, firm size and market structure: Schumpeterian hypotheses and some new themes. Journal of Financial Economics, 37, 69-65.

Szewczyk, S. H., Tsetsekos, G. P., & Zantout, Z. (1996). The valuation of corporate R&D expenditures: Evidence from investment opportunities and free cash flow. Financial Management, 25(1), 105–110.

Toivanen, O., Stonenman, P., & Bosworth, D. (2002). Innovation and market value of UK firms, 1989-1995. Oxford Bulletin of Economics and Statistics, 64(1), 39–61.

Utterback, J. M. (1994). Mastering the dynamics of innovation: How companies can seize opportunities in the face of technological change. Boston: Harvard Business School Press.

Van de Vrande, V., DeJong, J. P. J., Vanhaverbeke, W., & Rochemont, M. (2009). Open innovation in SME’s: Trends, motives and management challenges. Technovation, 29, 423–437.

Vrakking, W. J.(1990). The innovative organization. Long Range Plann, 23(2), 94–102.

Wartick, S. L., & Cochran, P. L. (1985). The evolution of the corporate social performance model. Academy of Management Review, 10(4), 758–769.

Wernerfelt, B. (1984). A Resource-based view of the firm. Strategic Management Journal, 5(2), 171–180.

Williamson, O. E. (1975). Markets and hierarchies: Analysis and antitrust implications. New York: Free Press.

Williamson, O. E. (1985). The economics of institutions of capitalism: Firms, markets and relational contracting. New York: MacMillan Free Press.

Williamson, O. E. (1994). Transaction cost economics and organization theory. In N. J. Smelser, & R. Swedberg (Eds.), The Handbook of Economic Sociology. (pp.77–107). Princeton, NJ: Princeon University Press.

Williamson, O. E. (1993). Calculativeness, trust and economic organization. Journal of Law and Economics, 36(1), 453–562.

Wirtz, P. (2006). Compétences, conflits et création de valeur: vers une approche intégrée de la gouvernance. Revue Finance, Contrôle, Stratégie, 9(2), 187–201.

Wolfe, R. A. (1994). Organizational innovation: review, critique and suggested research directions. Manage Stud, 31(3), 405–431.

Wood, R. E., J. George-Falvy, & S. Debowski (1991). Motivation and information search on complex tasks. In Work motivation in the global context of a 56 Globalizing Economy, sous la direction de M. Erez, U. Klienbeck et H. Thierry, Mahwah, NJ: Erlbaum, p. 27-48.

Woolridge, J. R., & Snow, C. C. (1990). Stock market reaction to strategic investment decisions. Strategic Management Journal, 11(5), 353–363.

Woolridge, J. R. (1988). Competitive decline: Is a myopic stock exchange. Review of financial studies, 1.

Wright, R. E., Palmer, J. C., & Perkings, D. (2005). Types of product innovations and small business performance in hostile and benign environments. Small Bus Strat, 15(2), 33–44.

Yew, K. H., Mira, T., & Chee, M. Y. (2006). Size, leverage, concentration and R&D investment in generating growth opportunities. The Journal of Business, 79(2), 851–876.

Zantout, Z. Z., & Tsetskos, G. P. (1994). The wealth effect of announcements of R&D expenditures increases. The Journal of Financial Research, 17(2), 205–216




How to Cite

Ezzi, F., & Jarboui, A. . (2016). Does innovation strategy affect financial, social and environmental performance?. Journal of Economics, Finance and Administrative Science, 21(40), 14–24. Retrieved from