Product-service innovation and performance: Unveiling the complexities

Abstract

The purpose of this paper is to unveil the existing complexities in the relationship between product-service innovation (PSI) - or servitisation - and firm performance that arise from the mismatch between theoretical predictions and empirical evidence. Whilst theoretical work suggests that there are a number of advantages for implementing PSI, quantitative firm-level evidence is not conclusive about the positive effects of this type of innovation on firm performance. By reviewing the relevant publications dealing with the PSI-performance relationship, their methodological approach, the novel constructs validated and the role of mediators/moderators found in the servitisation literature, we argue that further contextualisation is needed to solve this puzzle. Additionally, this work systematically organises the different methods and variables used to assess the PSI-performance link, guiding scholars on the choice between different methods and measures. This work enumerates various streams of future research to discover unexplored fields to better ground this relationship, including the development of solid configurational theories, appropriate fit between theory and measurement techniques and new sampling strategies for performing longitudinal studies.