Social Capital and Dynamic Capability Driving Competitive Advantage: The Moderating Role of Corporate Governance

Abstract

In the search for factors that drive competitive advantage, this paper develops a framework that links a firm"s capabilities and resources to its competitive advantage. The notion of governance is used as a supervisory mechanism for an organization"s sources of competitive advantage. In light of empirical advancement, this paper examines panel data of 250 high technology firms from 2001 to 2009. The findings demonstrate that the impact of dynamic capability for production on competitive advantage is positive. However, the dynamic capability for R&D does not have a significant effect. Moreover, the social capital to build network relationships with a firm"s partners emerges as essential in achieving competitive advantage. We also find that governance moderates the impact of dynamic capability and social capital on competitive advantage. The findings of this study have important management implications. Limitations of the study are considered and future research directions are identified.

Innovation Capabilities and Market-Based Competitive Advantage of Indonesian Manufacturing Companies

“…Large expenses in R&D activities can affect creditor confidence, especially if it is seen that these expenses do not show a significant impact on increasing the company's capability. This conclusion supports the results of the study Ou et al [8] which found that innovation capabilities through investment in R&D had no significant effect on competitive advantage.…”

“…This conclusion supports the results of the study Delgado et al [9] as well as the research results of Adeniran and Johnston [18]; Aziz and Samad [11]. This conclusion is different from the results of research Ou et al [8] which found that innovation capabilities through investment in R&D had no significant effect on competitive advantage.…”

“…The relationship between innovation capabilities and competitive advantage was suggested by Ou et al [8] which states that Dynamic Capabilities in R&D activities, a proxy for innovation capabilities, contribute to a company's competitive advantage. Several previous studies have highlighted the relationship between innovation capabilities and competitive advantage.…”

Revenue Management Perspectives in Small-Farm Winery Operations

“…Finally, a third participant collaborated with a local distillery to produce a dark rum infused wine which was sold at a premium price. These findings supported the existing body of knowledge that managers must reconfigure resources and capabilities to align with the changing environment to attain innovative performance (Nieves & Haller, 2014;Ou, Hsu, & Ou, 2015).…”

The impact of social capital on competitive advantage

“…Therefore, those firms with greater access to unique network-borne resources are expected to create competitive advantages and increase profits (Andrevski et al, 2007). Thus, the greater the resources and capabilities of social capital possessed by a firm, the easier it is to attain a competitive advantage (Tuominen et al, 2013;Ou et al, 2015). Besides, firms that have better network relationships and are connected with other firms gain faster access to information about profit opportunities and have greater potential for internalizing their partners' know how (Andrevski et al, 2007).…”