A Stock Market for Innovation (SMI): Unveiling the Effects of Gambling Behavior on Innovation Performance

This study explores the effectiveness of an intra-firm online distributed innovation initiative, in the form of a Stock Market for Innovation (SMI). As in traditional stock markets, the SMI is prone to gambling activities. Controlling for a set of previously studied motivational factors affecting innovation performance, we study the impact of gambling behavior on effective innovative performance. On the one hand, our findings indicate that gambling activities are positively associated with innovation performance. On the other hand, we find that strict gambling behavior negatively impacts innovative performance. This evidence suggests that contributors speculating in the SMI innovate by doing so, but strict gambling behavior may be potentially obstructive. These findings contribute to the innovation management literature by shedding light on a stock market model of distributed innovation allowing the firm to leverage upon its entire workforce to expand its ability to innovate.