Analyzing the Impact of Innovation on Firm Performance in a Changing Institutional Landscape

We analyze how innovation influences firm performance ¨C both in terms of its level and its variability ¨C when undertaken in an environment characterized by significant institutional change: the Chinese pharmaceutical industry. We argue that, in such a context, developing new product innovations, given their long lead time, will frequently backfire for a firm, because by the time it launches the new product the performance landscape will often...