Organizational determinants of innovations in the service sector of Taiwan

Due to the increasing importance of service industries, a growing number of innovation researchers turn their focus from the manufacturing sector to the service sector. However, the studies particularly examining organizational determinants for various types of innovations and the complementarities between the innovations in the service sector by using large scale samples are very rare. We initiate an empirical study to comprehensively identify the organizational determinants and complementarities for various types of innovations in the service sector by applying a multivariate Probit regression model and the data from the Taiwan Community Innovation Survey. The study mainly finds that: (1) larger service firms have a higher propensity to innovate but with decreasing margin (inverse-U function); (2) service firms with larger market reach have a higher propensity to innovate; (3) types of main customers influence the innovations of service firms; and (5) the organizational determinants and complementarities differ by service industries. These findings fill the research gap on the organizational determinants and the complementarities for service innovations in previous empirical studies.