Abstract
The aim of this paper is to examine the role of an individual firm's technology capability, marketing capability and network capability in driving its innovation in an industrial cluster. Building a bridge between the collective efficiency approach together with regional innovation system perspective and competence-based view, this paper develops a model showing the linkages between the dimensions of capabilities and innovation. Drawing upon a sample of 137 small- and medium-sized manufacturing firms in Wuhan optoelectronic cluster, a model using Linear Structural Relations (LISREL) is developed to illustrate these interactions. The corresponding empirical test results reveal that technology capability, marketing capability and network capability have a positive influence on a firm's product and process innovation success. Furthermore, our research shows that network capability is positively related to technology capability and marketing capability. The results illustrate that network capability plays an important role in enhancing technology capability and marketing capability.
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