The double-edged sword impact of effectuation on new product creativity: The moderating role of competitive intensity and firm size

Abstract The existing literature offers contradictory findings about the impact of effectuation decision-making logic on new product creativity (NPC). We address these contradictions by arguing that effectuation differentially affects two dimensions of NPC, that is, novelty of new product (NNP) and meaningfulness of new product (MNP). We also investigate the moderating roles of competitive intensity and firm size between effectuation and two dimensions of NPC. Survey data from 232 Chinese firms reveal that effectuation increases NNP but decreases MNP. Moreover, the competitive intensity only strengthens the relationship between effectuation and NNP, and firm size strengthens the relationships between effectuation and both dimensions of NPC. Consequently, this study highlights the dual effects of effectuation on NPC and provides important theoretical and managerial implications.