Abstract

Innovation is a widely accepted fundamental “specific function” of the entrepreneurial process, which is necessary for survival and success (Schumpeter, 1934; Kirzner, 1979; Drucker, 2002). In this study, we focus on the differential ability of firms to recognize opportunities and employ firm resources and capabilities to repeatedly innovate. Specifically examine the linkage between a firm’s innovation capabilities and repeat innovation activity. By doing so, we theorize that this linkage is positively moderated by firm age/experience. We theorize that at high levels of innovation capabilities, older firms are more likely to repeat innovations than younger firms are. Specifically, we expect older, more experienced firms to have a large accumulation of knowledge, resources, and capabilities, as well as the established routines necessary to support innovation (Nelson & Winter, 1982; Sørensen & Stuart, 2000). Likewise, we also expect that younger, less experienced firms may lack such essential knowledge, resources, and capabilities, as well as the established routines necessary to support innovation (Stinchcombe, 1965).

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