A comparative study on the strategic roles of service customer equity and innovation protection on firm performance

The purpose of this study is to understand the strategic roles of service customer equity (SCE) and innovation protection on firm performance (FP).

Structural equation modeling (SEM) was used to test the proposed model. The authors tested the model using managerial data from two countries: USA and India.

The findings of this study indicated positive direct impacts of service innovation (SI) on FP and positive indirect impacts via SCE in both samples. SI and SCE impacts on FP were both stronger in the US samples. However, the effect of SI on SCE is stronger in India than in the USA. This study also identified moderating impacts of service innovation protection (SIP) on the relationship between SI and FP in the Indian sample and between SI and SCE in the US sample.

Although there is scholarly research in SI and its impact on FP, there are no studies the authors identified that discuss the moderating effect of SIP. The authors studied the moderating effect of SIP because (1) it is crucial for industries to maintain a competitive advantage in the marketplace, (2) it protects industries investment in research and development and (3) it also protects industries intellectual property, such as trademark, copyrights and patents. There are two key contributions of this study: (a) investigating the effect of SCE between SI and FP and (b) investigating the moderating effect of SIP using managerial data from two countries (USA vs India).