The interplay between firms’ internal and external capabilities in exploration and exploitation
Abstract
Purpose
The purpose of this paper is to enrich the explanation of the interplay between internal and external – or district shared – exploration and exploitation capabilities as antecedents of a firm’s radical and incremental innovation. Previous studies do not differentiate between exploration and exploitation in district shared capabilities and how they interact with internal capabilities.
Design/methodology/approach
The paper uses hierarchical regression analysis to test the quadratic and moderating effects in a sample of 1,019 Spanish firms.
Findings
Results show an increasingly positive effect on radical innovation of exploration capabilities, enhanced by shared capabilities in exploration. In the case of incremental innovation, the study finds evidence of an increasingly positive influence of exploitation capabilities and a concave relationship of exploration capabilities. Moreover, shared exploitation capabilities weaken the effect of internal exploitation capabilities and also have a direct effect on incremental innovation. Therefore, the two capabilities are interchangeable in the effect they have on incremental innovation.
Practical implications
Depending on the firm’s innovation strategy, intra-district firms should develop specific capabilities and/or concentrate on adopting the shared capabilities in the destination.
Originality/value
The study furthers the understanding of the relationship between exploration and radical innovation, and between exploitation and incremental innovation, which is more complex than previously depicted. The study also differentiates between exploration and exploitation in shared capabilities, enriching understanding of the competitiveness of district firms.
Keywords
Acknowledgements
This work was supported by the National Plan for R&D of the Spanish Ministry of Economy and Competitiveness (ECO2012-36780 and ECO2016-76796-P); and by Universitat Jaume I Annual Research Plan (P1-1A2011-15 and UJI-A2017-04).
Citation
Camisón, C., Boronat-Navarro, M. and Forés, B. (2018), "The interplay between firms’ internal and external capabilities in exploration and exploitation", Management Decision, Vol. 56 No. 7, pp. 1559-1580. https://doi.org/10.1108/MD-07-2016-0502
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited