Abstract
Facing resource constraints and fierce competition, it is relatively difficult for small firms to achieve product innovation to gain sustainable development independently. Previous studies have explored the positive relationship between social capital and product innovation, yet there is still a lack of a comprehensive understanding of the underlying mechanism and the boundary conditions. Drawing upon the dynamic capabilities framework, we expect that absorptive capacity and marketing capability will mediate the relationship between social capital and new product development. Moreover, since product innovation is considered a process of learning, we also examine the moderating effects of explorative learning, and exploitative learning within moderated mediation models. Employing a sample of 221 small firms based in China, we find that social capital is indeed positively associated with new product development and is simultaneously fully mediated by absorptive capacity and marketing capability. Furthermore, the impact of absorptive capacity on new product development is amplified when a condition of explorative learning exists. This study, therefore, advances the current understanding on the predictors of innovation and enriches the dynamic capabilities theory, and also provides empirical support for the sustainable development of small firms.
Highlights
It has long been recognized that innovation is significant to the sustainable development of firms due to its contribution to the profitability and long-term continuity of a firm [1]
Most research verifies the direct effect, and only some has attempted to discover the mediating element through a single path with no boundary condition, leading to the lack of a comprehensive understanding [13]. This current study aims to develop an integrated conceptual framework to explain how social capital improves new product development and when these relationships are strengthened so as to provide new empirical support for the sustainable innovation development of small companies
We propose the following hypothesis: Hypothesis 1 (H1): social capital is positively related to new product development
Summary
It has long been recognized that innovation is significant to the sustainable development of firms due to its contribution to the profitability and long-term continuity of a firm [1]. Small businesses have resource disadvantages in innovation and can hardly complete innovation on their own [3]. They have an incentive to seek cooperation and many of them leverage social capital to enhance their product innovation, pursuing sustainability [4,5]. The significant role of social capital in new product development has been recognized [5,9,10,11,12]. This current study aims to develop an integrated conceptual framework to explain how social capital improves new product development and when these relationships are strengthened so as to provide new empirical support for the sustainable innovation development of small companies
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