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The distinct features of hidden champions in Germany: A dynamic capabilities view

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  • Rammer, Christian
  • Spielkamp, Alfred

Abstract

Hidden Champions (HCs) are firms unknown to the wider public, but global leaders in the niche markets they serve. This paper looks at distinctive features of these firms, focusing on their dynamic capabilities. Employing a unique data base on German firms, we identify a representative sample of German HCs. Based on a matching technique, we examine differences to other firms in terms of the firms' processes, position, and path. We find that HCs' competitive strategy rests on technology leadership and customisation. HCs are more open in their knowledge management, but without compromising control over the new product development process. HCs do not invest more into innovation, but achieve higher innovation success. The higher efficiency can be linked to their superior technological capabilities and to higher investment in human capital and HR management practices that mobilise the creative potential of their employees.

Suggested Citation

  • Rammer, Christian & Spielkamp, Alfred, 2019. "The distinct features of hidden champions in Germany: A dynamic capabilities view," ZEW Discussion Papers 19-012, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:19012
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    Cited by:

    1. Michael Fritsch & Michael Wyrwich, 2021. "Does Successful Innovation Require Large Urban Areas? Germany as a Counterexample," Economic Geography, Taylor & Francis Journals, vol. 97(3), pages 284-308, May.
    2. Etienne Schneider, 2023. "NextGenerationEU and the Future of the European Monetary Union: Shifting Interests and New Fractures in the German Power Bloc," Journal of Common Market Studies, Wiley Blackwell, vol. 61(5), pages 1298-1317, September.
    3. Suwala Lech & Ahrens Jan-Philipp & Basco Rodrigo, 2024. "Family firms, hidden champions and regional development," ZFW – Advances in Economic Geography, De Gruyter, vol. 68(1), pages 1-8.
    4. Heider, Anne & Gerken, Maike & van Dinther, Nicolas & Hülsbeck, Marcel, 2021. "Business model innovation through dynamic capabilities in small and medium enterprises – Evidence from the German Mittelstand," Journal of Business Research, Elsevier, vol. 130(C), pages 635-645.
    5. Minseo Kim & Seongbae Lim & Yeong-wha Sawng, 2022. "A Study on Growth Engines of Middle Market Enterprise (MME) of Korea Using Meta-Analysis," Sustainability, MDPI, vol. 14(3), pages 1-22, January.
    6. Kraus, Patrick & Stokes, Peter & Tarba, Shlomo Y. & Rodgers, Peter & Dekel-Dachs, Ofer & Britzelmaier, Bernd & Moore, Neil, 2022. "The ambidextrous interaction of RBV-KBV and regional social capital and their impact on SME management," Journal of Business Research, Elsevier, vol. 142(C), pages 762-774.

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    More about this item

    Keywords

    Hidden Champions; Germany; Competitive Strategy; Knowledge Management; Innovation; Dynamic Firm Capabilities;
    All these keywords.

    JEL classification:

    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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