Network activities as critical sources of creating capability and competitive advantage: The mediating role of innovation capability and human capital

Abstract

Purpose

The purpose of this paper is to propose a new integrated model that combines the concepts of network ties (e.g. political ties and business ties), the organization of internal critical attributes (such as social capital, human capital and innovation capability) and analyses of how those critical attributes influence organization performance and competitive advantage.

Design/methodology/approach

A structural equation model and three-way interactions in moderated multiple regressions was used to test the hypotheses on a sample of 621 cultural and creative industry (CCI) managers in Taiwan.

Findings

The results indicate that human capital mediates the relationship between social capital and innovation capability. Furthermore, innovation capability also plays a mediating role in connecting the relationships between human capital, competitive advantage and organizational performance. The findings indicate that business ties strengthen the relationship between social and human capital. The level of human capital is at its peak when social capital, business ties, and political ties considerably interact with one another.

Research limitations/implications

The present study conceptualized the topic and systematized the questionnaire design and data collection, statistical analysis, and report writing. This study performs a systematic analysis to present the research but does not employ in-depth qualitative interviews to analyse the essential attributes of the different entrepreneurial styles. In-depth interviews enable the interviewees to completely depict their feelings, experiences, motivations, emotions and attitudes. Thus, this method can provide an in-depth analysis. Studies can be conducted to analyse the complexity of the processes involved.

Practical implications

This study determines and emphasizes that networking with various factors to create innovation is the key to enhancing competitive advantage and organizational performance. Innovation is a unique characteristic and a basic kinetic energy that affects various strategic organizational behaviours that positively influence competitive advantage and facilitate organizational performance. Hence, CCI firms need to consider market orientation and innovation in this highly competitive environment.

Originality/value

To the best of the knowledge, how CCI firms use networking sources to create competitive advantage and organizational performance, thereby promoting the development of the CCIs of Taiwan, has not been analysed in the tourism-related literature. Thus, the present study provides a significant contribution to the human capital literature, in which empirical research analyses the three-way interaction and demonstrates the empirical insights that may be used to study human capital. The findings reported in this study will encourage future researchers to employ multilevel human capital perspectives.

Citation

Liu, C.-H., Chang, A.Y.-P. and Fang, Y.-P. (2020), "Network activities as critical sources of creating capability and competitive advantage: The mediating role of innovation capability and human capital", Management Decision, Vol. 58 No. 3, pp. 544-568. https://doi.org/10.1108/MD-08-2017-0733