Incremental versus Radical Innovation and Sustainable Competitive Advantage: A Moderated Mediation Model

Abstract

Innovation is critical for organizations seeking to build and maintain a sustainable advantage in the competitive market. This study aims to construct a moderated mediation model to examine the effects of incremental and radical innovations on competitive advantage, which considers the mediating role of innovation speed and the moderating role of a supportive culture. Data from 201 Chinese firms were collected through questionnaires and the research hypotheses were tested using multiple regression analysis and bootstrapping techniques. The empirical results show that incremental and radical innovations have a significant positive effect on competitive advantage. Radical innovation has a greater impact on competitive advantage compared to incremental innovation. Innovation speed mediates the relationship between incremental and radical innovations and competitive advantage. Supportive culture positively moderates the relationship between incremental and radical innovations and innovation speed. Moreover, supportive culture positively moderates the conditional indirect effect of incremental and radical innovation on competitive advantage through innovation speed. Theoretical and practical implications are further discussed.