Daoud, Israa (2021) The Impact of Innovation Capabilities and Institutional Distance on Competitive Advantage and New Export Product Performance. Doctoral thesis, Durham University

Abstract

New Export Product Performance is an unexplored dimension of export performance given the rapid change in technology and markets that the firm face. Drawing on export performance and innovation literature, this study focusses on how firms can employ innovation capabilities, that is, the technological capability and new product development capability, which can best improve competitive advantage and new export product performance. Despite the exponential growth of studies focusing on export performance, the literature has not focused on new export product performance. In the current study, new export product performance conceptualized as the performance of new or/and significantly improved product(s) created for export only.
Based on The Resource-Based View and Institutional Theory, we develop a model to investigate the role of innovation capabilities on the firm’s new export product performance. Accurately, this model depicts the consequence of innovation capabilities and focuses on the relationship among innovation capabilities, competitive advantage, and new export product performance. In addition, how institutional distance moderates the relationship between innovation capabilities and competitive advantage. Based on a survey of 218 UK-Based exporting organizations.
The findings indicate that some UK exporting firms tend to develop new export products with a tremendous competitive advantage. The study further focuses on how institutional distance and competitive advantage constructs interact to create new export product performance. Findings also suggest that institutional distance has a negative and a positive moderating impact on competitive advantage. By further examining the moderating effects of institutional distance on the link between innovation capabilities and competitive advantage, the analyses reveal the different scenarios in which the benefits of innovation capability firms may outweigh its implementation cost.
This study makes important contributions. 1. Highlights the important new export product performance construct. 2. Extends the RBV discuss by revealing the exact mediating effect of cost and differentiation competitive advantage on the innovation capabilities – new export product performance relationship. 3. Reveals the moderating effects of regulatory, normative, and cognitive institutional distance on the link between innovation capabilities and competitive advantage. 4. The analysis in this study reveals the different scenarios in which export related innovation capabilities benefits exporting firms that create new products for exports only, and this has practical implication.