The Effect of Innovation Strategy and Its Interaction on Corporate Value

The standard for evaluating a corporation is the shareholder value creation the key to which is innovation strategy. The value of a corporation is not only affected by its own strategy but is more influenced by its competitor’s reactive strategy. Therefore, the relation that is either strategic substitute or strategic complement when a corporate competes with its competitors will have a great effect on the corporate strategy. Based on the above discussions, this paper concludes that the announcement effect of new product introduction is positive for a corporation that competes in strategic substitute with its competitors, and is negative or zero for one that competes in strategic complement with its competitors, and the average announcement effect in an industry will not be significantly distinguished from zero if the proportion of strategic substitute in samples is close to that of strategic complement.