Effect of risk management strategy on NPD performance

New product development (NPD) is a major driver of firm growth and sustainable competitive advantage, yet risks are intrinsic in NPD in all industries. Thus understanding, identifying, managing, and reducing risk is of strategic importance for firms. In this research, we synthesize and build on previous research, and propose a three-dimensional risk management framework for NPD. We empirically test whether risk management strategy affects the performance of NPD using survey data from Chinese firms. The results show that risk management strategies targeted at specific risk factors, i.e., technological, organizational, and marketing, contribute both individually and interactively in affecting the performance of NPD. Appropriate risk management strategies can significantly improve the odds of NPD success.