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Investigating Value Co-Creation in Innovation of IT-enabled Services: An Empirical Study of Mobile Data Services

Service innovation is increasingly being recognized as an important strategy for firms to sustain competitive advantage. The interconnectivity and interactivity afforded through information technologies (IT) has transformed how new services are created, delivered, and experienced. With the newness of the phenomenon and the lack of understanding, information systems (IS) research examining the influence of innovativeness of IT-enabled service on its performance has been limited. Further, customers are considered as important value co-creators and increasingly included in organizational innovation efforts. However, it is unclear how customer participation affects the performance of new IT-enabled services. Also, the interaction effect of service innovativeness and customer participation on new service performance remains unexplored. Motivated thus, this paper aims to address the knowledge gap by drawing on the value co-creation perspective and service innovation literatures. We construct a model to explain the effects of service innovativeness and customer participation on new IT-enabled service performance. A preliminary test of the model was performed using initial data on mobile data service (MDS) applications obtained from the Androidzoom platform. The results reveal that both service innovativeness and customer participation positively impact new IT-enabled service performance in terms of the number of downloads of the applications. Also, customer participation is found to positively moderate the relationship between service innovativeness and new IT-enabled service performance. The potential contributions and plans for further testing and enhancing the model are described.