Innovativeness includes new creation, new ideas, new processes, new products and new services that bring new development to firms. Previous studies found that partner diversity influences firm innovativeness and concluded that partner diversity is a double-edged sword for firm innovativeness. However, the previous studies generally focus on innovativeness in the manufacturing sector. Limited research has discussed the relationship between partner diversity and service innovativeness. Service innovativeness emphasizes on capability to generate new service or improve extant service to contribute to firm performance. To fill this gap, this thesis focuses on innovativeness in service sector and the impact of partner domain diversity and partner geographical diversity on service innovativeness. The main objective of this thesis is to investigate on the influence of partner domain diversity and partner geographical diversity on service innovativeness and the moderating roles of absorptive capacity and scope of firm internationalization.
This thesis uses data from Taiwanese Technology Innovation Survey (TTIS) database, which was established by the Ministry of Economic Affairs (MOEA) and the National Science Council (NSC). The study sampled 709 firms from the database.
This thesis used SPSS version 25 to analyze the data. The moderated regression analysis is an appropriate technique for testing contingency hypotheses. The results show that both partner domain diversity and partner geographical diversity have no significant effect on service innovativeness. Absorptive capacity significantly moderates the relationship between partner domain diversity and service innovativeness, as well as between partner geographical diversity and service innovativeness. Furthermore, scope of firm internationalization significantly moderates the relationship between partner geographical diversity and service innovativeness.
Results of this thesis contribute to increased attention on service innovativeness. This thesis enhances empirical development of partner diversity. Extensive research has been conducted to examine how partner diversity influences product innovation. Service innovation is distinctive from product innovation in that service innovation involves engagement with customers and provides real-time delivery to customers. Besides, service innovation involves changes in systems that are socially complex. Although this study does not provide clear evidence on the direct impact of partner diversity on service innovativeness. The result suggests the importance of investigating moderating effect on the partner-diversity-service innovativeness relationship.

1. Introduction
1.1 Research Background and Motivation 1
1.1.1 Practical background 1
1.1.2 Theoretical background 3
1.2 Research Objectives and Research Questions 5
1.3 Outline of the Thesis 8
2. Literature Review and Hypothesis Development 11
2.1 Service Innovativeness 11
2.1.1 Definition of service innovativeness 11
2.1.2 Service innovation versus product innovation 12
2.1.3. Empirical research on service innovativeness 13
2.2 Partner Diversity 17
2.2.1 Empirical research on partner diversity and innovation 18
2.3 Partner Diversity and Service Innovativeness 20
2.3.1 Partner domain diversity and service innovativeness 20
2.3.2 Partner geographical diversity and service innovativeness 21
2.3.3 Moderating effect of absorptive capacity 22
2.3.4 Moderating effect of the scope of firm internationalization 24
3. Methodology 26
3.1 Sources of data and sample 26
3.2 Variables and Measurements 29
3.2.1 Dependent variable 29
3.2.2 Independent variables 29
3.2.2.1 Partner domain diversity (PDD) 29
3.2.2.2 Partner geographical diversity (PGD) 30
3.2.3 Moderator variables 30
3.2.3.1 Absorptive Capacity (AC) 30
3.2.3.2 Scope of firm internationalization 31
3.2.4 Control variables 31
3.2.4.1 Government subsidy/government support 31
3.2.4.2 Firm size 32
3.2.4.3 Employees education level 32
3.3 Analytical Approach 32
3.3.1 Moderated regression analysis 33
4. Results 34
4.1 Descriptive statistics and correlations 34
4.2 Moderated regression analysis 36
5. Discussion 45
5.1 Key research findings 45
5.2 Contribution 47
5.2.1 Theoretical contribution 47
5.2.2 Practical contribution 49
5.3 Limitation and future research 50
5.3.1 Limitation 50
5.3.2 Future research 51
References 52
Appendix 74

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