Technological Capabilities and Firm Performance: The Case of Small Manufacturing Firms in Japan
AbstractThe purpose of this study is to investigate the relationship between technological capabilities and firm performance. We divide technological capabilities into two types--refinement capability, which involves the improvement of the existing asset portfolio, and reconfiguration capability, which involves the restructuring of the asset portfolio through the integration of new assets. The results of an analysis of a sample of 302 small and medium-sized manufacturing firms in Japan suggest that refinement capability relates more positively to operational efficiency than does reconfiguration capability, and that reconfiguration capability relates more positively to strategic performance than does refinement capability. The results also suggest that firms with superior refinement capability tend to possess superior reconfiguration capability. Our findings show that both external and internal factors, such as technological volatility, inter-firm collaboration, and firm age and size, are significantly associated with the level of refinement and reconfiguration capabilities possessed by a firm.
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Bibliographic InfoPaper provided by Stanford University, Graduate School of Business in its series Research Papers with number 1980.
Date of creation: Dec 2007
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Postal: Stanford University, Stanford, CA 94305-5015
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-08-31 (All new papers)
- NEP-BEC-2008-08-31 (Business Economics)
- NEP-CSE-2008-08-31 (Economics of Strategic Management)
- NEP-EFF-2008-08-31 (Efficiency & Productivity)
- NEP-KNM-2008-08-31 (Knowledge Management & Knowledge Economy)
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