Exploring the link between market orientation and innovation in the European and US insurance markets

Despite the increasing research importance of market orientation in the marketing literature, few comparative studies between the European Union and the USA have been conducted. This limits the understanding of marketing orientation strategy in global markets. Investigates the influence of competitive environments on the uses of market orientation in insurance firms in the EU and the USA and the effects of market orientation on innovations. Using Lambin’s conceptualization of market orientation, our results indicate that, although EU and US insurance firms analyze and react to their environment differently, which in turn is reflected in a differential impact on their degree of innovation, this, however, does not translate into overall market orientation differences across markets, differential relations across markets between overall market orientation and innovation degree and innovation performance. Furthermore, there is a positive impact of overall market orientation on insurance firms’ innovation degree and innovation performance in both the US and EU markets. The managerial implications of these findings seem clear: the magnitude and the effectiveness of the innovation activities of a firm can be enhanced through the adoption of market orientation principles. Introduction There is a growing interest in the concept of market orientation, as empirical evidence shows that companies with higher market orientation obtain better economic and commercial results. Researchers have extensively collected evidence of the positive effect of market orientation on business performance. We have attempted to summarize these empirical results in Table I. However, it is not yet clear why there is such effect and how it operates (Lambin, 1996). The most recent literature suggests that one of the keys to understanding this phenomenon lies in market orientation’s positive effect on businesses’ degree of innovation (Atuahene-Gima, 1995, 1996; Gatignon and Xuereb, 1997; Han et al., 1998; Hurley and Hult, 1998). Hurley and Hult (1998) have explicitly provided a theoretical framework linking market orientation, business performance and innovation, drawing on The research register for this journal is available at http://www.mcbup.com/research_registers The current issue and full text archive of this journal is available at http://www.emerald-library.com/ft The assistance of Professor Nicos Scordis (College of Insurance, New York) for the empirical research in the USA is gratefully acknowledged. This research was partially supported by DGESIC, project PB97-0084. Market orientation and innovation