Abstract
Competitive intensity presents challenges to new ventures. Capabilities may lead to sustainable new venture performance. Yet, few studies have explored how competitive intensity moderates the effects of capabilities on sustainable new venture performance. Based on capability-based view, this study develops a research model to investigate how new ventures translate capabilities (marketing, technology, market-linking, and information technology capabilities) to achieve sustainability of new venture growth and performance under the different levels of competitive intensity. Using data collected from 146 U.S. new ventures, this study uses ordinary least squares regression analysis to test the research model and employs “pick-a-point” approach to examine how capabilities affect sustainable new venture performance at different levels of competitive intensity. The empirical results suggest that increasing competitive intensity decreases, not increases, the positive effects of marketing capabilities on performance. When competitive intensity is very high, the positive effects of marketing capabilities on performance become insignificant. In contrast, the positive effects of market-linking capabilities on performance increase, not decrease, as competitive intensity increases. For technology and information technology capabilities, there are no moderating effects of competitive intensity. The theoretical and managerial implications are suggested for sustainable entrepreneurship and sustainable development of new enterprises.
Highlights
The literature suggests that enterprises need to develop sustainable capabilities in order to achieve sustainable organizational performance [1,2]
We extended the above analyses by applying the “pick-a-point approach” to determine whether marketing capabilities and market-linking capabilities affect sustainable new venture performance at different levels of competitive intensity [61]
We find that marketing capabilities, technology capabilities, market-linking capabilities, and IT capabilities all have positive impacts on sustainable new venture performance, consistent with prior studies of new ventures, e.g., [3,7,27,29,38] and established firms, e.g., [25,38]
Summary
The literature suggests that enterprises need to develop sustainable capabilities in order to achieve sustainable organizational performance [1,2]. Previous empirical research has shown mixed results on the relationship between capabilities and sustainable organizational performance (the capabilities– performance relationship) [1,2,3,4,5,6]. The argument that effective use of capabilities to achieve sustainable organizational performance depends on environmental conditions is widely accepted in the literature [1,2,9,10]. Eisenhardt and Martin [9] argue that under some environmental conditions, capabilities may decrease, not increase, sustainable organizational performance. Given the inconsistent findings in the literature, scholars have emphasized the needs for new research to explore the environmental boundary conditions for the capabilities–performance relationship [4,5]
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