#4775. The role of flexibility and complexity in response to regulatory change: A case study of innovation in a major Danish financial institution

July 2026publication date
Proposal available till 26-05-2025
4 total number of authors per manuscript0 $

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Journal’s subject area:
Business, Management and Accounting (miscellaneous);
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Abstract:
The link between regulations and innovation is puzzling. Some studies point to higher innovation performance as an effect of regulation, whereas other researchers disagree. A literature review shows empirical inquiries into various industries, with the financial sector attracting significant attention. The review also points to a company’s responses’ flexibility and complexity as variables mediating the relationship between regulation and innovation performance. These variables remain underexplored as empirical objects of analysis on a company level in the financial sector. By applying a case study research strategy, 100 launched financial service innovations’ performance is compared with qualitative data assessing flexibility and complexity in the project work, leading to the launch of these products into the marketplace by a major financial company. Finally, these data are quantitatively tested with a multinomial logit model. Increased complexity, in turn, impedes performance. Hence, specific innovation efforts from management are critical for striking the right balance between flexibility and complexity to achieve success in connection with regulatory changes.
Keywords:
complexity; flexibility; innovation; innovation management; regulation

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