Clustering and internal resources: moderation and mediation effects

Abstract

PurposeThis paper aims to address a central question in strategy: how do internal resources firms mediate the effect of the external resources on the firms' performance?Design/methodology/approachThe research was conducted in a sample of 173 Spanish innovative firms located in the Valencia region. Following the literature, the growth of the firm has been used as the main performance indicator. The paper considers the application in this context of the particular and new analysis techniques to combine mediator and moderator effects.FindingsThe research shows firms with higher internal resources exploit better external resources. The results confirm that knowledge intensive business services providers, as a form of external resources, exercise a positive influence on innovative firms' performance through the mediating effect of firms' internal assets.Research limitations/implicationsFirst, the study uses only two well‐known internal resources and capabilities indicators. Second, the paper applies a strict and simple measure to the growth of innovative firms. Third, another limitation of this research relates to the sample and population of companies.Practical implicationsThe study shows that the partial mediating effect exercised by internal resources and capabilities on growth, becomes more intense when new firms benefit from cluster location.Originality/valueThis study represents a new step toward closing the analytical gap in the existing literature on the potential interactions between external resources and new firm's internal attributes, and their combined effects on performance.