Does incremental and radical innovation performance depend on different types of knowledge accumulation capabilities and organizational size?

Abstract

While prior studies recognize the importance of knowledge accumulation capabilities in innovation performance, current research has still failed to empirically identify its role with regard to different types of innovation performance. The objective of this paper is to address this knowledge gap and to explore the relationships between internal knowledge creation and absorptive capabilities, and incremental and radical innovation performance. The study also contributes to analyzing the complex effect that organizational size has in the whole innovation process, influencing its antecedents (internal knowledge creation capability and absorptive capability) as well as its outputs (incremental and radical innovation performance), as the literature has produced inconsistent results and the issue is subject to continuing debate. This study demonstrates that incremental innovation performance is positively affected by both knowledge accumulation capabilities and size. However, results show that only absorptive capability has a positive direct effect on radical innovation performance, whereas size has a negative non-significant effect on it. The effect of size on knowledge accumulation capabilities also turns out to be mixed. It appears to increase internal knowledge creation capability, but it does not affect the absorption of new external knowledge.