Unlocking Innovation: A Regional fsQCA Study of Firm Performance

The interplay between regional context, innovation strategies, and firm performance is critical, yet understanding how these factors combine to affect financial outcomes (total net turnover) and national innovation capability (EIScore) remains limited. Existing research often overlooks the configurational effects and specific pathways to superior performance, representing a significant research gap.This study utilized a mixed-methods approach on European country data from the Community Innovation Survey (CIS2022) and the EU Innovation Scoreboard (2022). Following descriptive analysis, Fuzzy-Set Qualitative Comparative Analysis (fsQCA) was employed to identify configurations of innovation strategies (general activity, product focus, process focus) sufficient for high turnover and high EIScores.The fsQCA identified multiple pathways to high performance. Crucially, configurations combining broad innovation activity with simultaneous engagement in both product and business process innovation consistently proved sufficient for achieving both high total net turnover and high national EIScores. This highlights the significant positive impact of integrating diverse innovation types over a singular focus for enhancing performance across European regions.Using fsQCA, this research provides compelling evidence of complex configurational links between innovation strategies, regional context, and performance. The findings underscore the strategic importance for firms of cultivating combined product and process innovation capabilities. For policymakers, results highlight the value of fostering ecosystems supporting such integrated approaches. This study contributes a nuanced understanding of pathways to innovation success, offering insights for strategy and policy.