Examining the Network Competence - Innovation Success Relationship and Its Moderating Influence: An Empirical Study in China

Abstract

With the development of economic globalization, more and more Chinese firms have recognized the importance of establishing and utilizing relationships with outside organizations under the circumstance of network competition. While, how and why are firms able to set up and use these relationships to cultivate their competitive advantage and make them a good development? We use the concept of network competence, a kind of capability about developing and managing outside network relationships, to search the reason. Through an empirical analysis on the firms in Zhejiang, an east province of China, we find that network competence has a strong positive influence on a firm's product and process innovation success, which are key aspects of cultivating firm's competitive advantage. In addition, market turbulence, technological turbulence, and competitive intensity, the three environmental variables, having a moderating influence on the relationship between network competence and innovation success is identified too.