EFFECTS OF PRODUCT INNOVATION AND ORGANISATIONAL CAPABILITIES ON COMPETITIVE ADVANTAGE: EVIDENCE FROM UK SMALL AND MEDIUM MANUFACTURING ENTERPRISES

Ana Cristina O. Siqueira () and Andy D. Cosh ()
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Ana Cristina O. Siqueira: University of Cambridge Judge Business School, Trumpington Street, Cambridge CB2 1AG, UK
Andy D. Cosh: University of Cambridge Judge Business School, Trumpington Street, Cambridge CB2 1AG, UK

International Journal of Innovation Management (ijim), 2008, vol. 12, issue 02, 113-137

Abstract: We investigate the extent to which product innovation moderates the relationship between capabilities and competitive advantage among small and medium enterprises (SMEs). Using resource-based and capabilities theories, we examine capabilities as organisational routines, focusing on job rotation and multi-skilling. We examine competitive advantage by using logistic regression to assess the probability of top performance in productivity relative to most other firms in the same industry. Considering the path-dependence in developing capabilities and innovation, we use a longitudinal sample of 300 UK manufacturing SMEs in traditional and high-technology industries to evaluate the effects of innovating and using capabilities continuously over time. The results suggest that firms using job rotation or multi-skilling and introducing product innovations consistently from 2002 through 2004 are more likely to be top performers in 2004. The findings support a theoretical model according to which the association between capabilities and competitive advantage is moderated by innovation.

Keywords: Product innovation; capability; competitive advantage; SME; UK (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (7)

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DOI: 10.1142/S1363919608001972

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