Doing More with Less: The Disordinal Implications of Firm Age for Leveraging Capabilities for Innovation Activity

Michael C. Withers, Paul Louis Drnevich and Louis Marino

Journal of Small Business Management, 2011, vol. 49, issue 4, 515-536

Abstract: Innovation requires the entrepreneurial capabilities of opportunity recognition and opportunity exploitation. Such capabilities generally accrue over time from a firm's cumulative learning and experience. In this study, we theorize that firm age should therefore moderate the firm's ability to leverage these capabilities for innovation activity, such that older firms can obtain higher outputs from their capabilities than younger firms can. We examine this relationship using a sample of 676 small and medium enterprises. We find that when both younger and older firms have highly developed innovation capabilities, older firms appear to enjoy higher levels of innovation activity than younger firms do. However, younger firms generally appear more likely to have higher levels of innovation activity than older firms do, when neither firm has highly developed innovation capabilities. We conclude with a discussion of the implications of these findings for research and practice.

Date: 2011
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DOI: 10.1111/j.1540-627X.2011.00334.x

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