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Innovation Capability And Market Performance: The Moderating Effect Of Industry Dynamism

Author

Listed:
  • JING A. ZHANG

    (Department of Management, University of Otago, PO Box 56, Dunedin 9054, New Zealand;
    Department of Business Administration, Hong Kong Shue Yan University, 10 Wai Tsui Crescent, Braemar Hill Road, Hong Kong)

  • SAM GARRETT-JONES

    (School of Management & Marketing, Faculty of Commerce, University of Wollongong, NSW 2522, Australia)

  • RICKY SZETO

    (Department of Business Administration, Hong Kong Shue Yan University, 10 Wai Tsui Crescent, Braemar Hill Road, Hong Kong)

Abstract

Based on the resource-based view of the firm (RBV) and the resource/capability perspective of innovation, this study explores the independent and complementary effects of two types of innovation capability (namely product development capability and operational capability) on market performance in a sample of 2971 Chinese industrial firms. Product development capability and operational capability have different degrees of firm specificity in terms of the technological complexity of underlying resources. We further explore industry dynamism as an important moderating effect on the relationship between different types of innovation capability and market performance. Our findings suggest that,in the Chinese firms surveyed, both product development and operational capability in innovation positively contribute to market performance. The effect of operational capability is notably stronger than that of product development capability. We also confirm the complementary effect of operational capability with product development capability in enhancing market performance. Our findings further suggest that product development capability tends to have a stronger effect on market performance when the level of industry dynamism is low, while the impact of operational capability on market performance is stronger in industries with a relatively high level of dynamism.

Suggested Citation

  • Jing A. Zhang & Sam Garrett-Jones & Ricky Szeto, 2013. "Innovation Capability And Market Performance: The Moderating Effect Of Industry Dynamism," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 17(02), pages 1-35.
    • Handle: RePEc:wsi:ijimxx:v:17:y:2013:i:02:n:s1363919613500047
    DOI: 10.1142/S1363919613500047
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    References listed on IDEAS

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    1. Ionara Costa, 2001. "Ownership and Technological Capabilities in Brazil," DRUID Working Papers 01-06, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    2. Kim,Linsu & Nelson,Richard R. (ed.), 2000. "Technology, Learning, and Innovation," Cambridge Books, Cambridge University Press, number 9780521770033, September.
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    Cited by:

    1. Waleczek, Peter & von den Driesch, Till & Flatten, Tessa C. & Brettel, Malte, 2019. "On the dynamic bundles behind operations management and research and development," European Management Journal, Elsevier, vol. 37(2), pages 175-187.
    2. Jiatong Yu & Taesoo Moon, 2021. "Impact of Digital Strategic Orientation on Organizational Performance through Digital Competence," Sustainability, MDPI, vol. 13(17), pages 1-15, August.
    3. Mayanyn Larrañaga Moreno & María Teresa Ortega Flores, 2016. "Identification Of Innovation Capabilities For Micro And Small Enterprises In Morelos, Mexico," Review of Business and Finance Studies, The Institute for Business and Finance Research, vol. 7(1), pages 79-92.

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