Co-creating e-service innovations: Theory, practice, and impact on firm performance

•Profound technological changes and enhanced customer demand have triggered a recent new wave of e-service innovation.•We investigate the antecedents and consequences of e-service innovation.•The complementarity between e-service capability and cooperation capability has a positive effect on e-service innovation.•E-service innovation exerts a positive effect on value cocreation, thereby improving firm value.

Recently, profound technological changes and greater customer demand have triggered a sudden increase in e-service innovations. However, little research so far has explored the capabilities needed in order to innovate and implement e-service solutions. The purpose of this study is to investigate the antecedents of e-service innovation and its impact on a firm's performance outcomes of value cocreation and firm value. The main research method of this study is a quantitative survey and analysis. Our analysis of 119 financial service firms in Taiwan shows that the impact of e-service innovation on firm outcomes begins with e-service and cooperation capabilities, and that the complementarity between these factors positively influences e-service innovation. Furthermore, e-service innovation exerts a positive effect on value cocreation, thereby improving firm value.