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Innovation, Competitive Advantage and Rent: A Model and Test

Author

Listed:
  • Rita Gunther McGrath

    (Columbia University, Graduate School of Business, 703 Uris Hall, New York, New York 10027)

  • Ming-Hone Tsai

    (National Central University, Taiwan, Republic of China)

  • S. Venkataraman

    (The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania 19104)

  • I. C. MacMillan

    (The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania 19104)

Abstract

Four antecedents, it is argued, are necessary precursors for a firm to capture rents from innovation. The antecedents are causal understanding; innovation team proficiency; emergence and mobilization of new competences; and creation of competitive advantages, each of which are conceptually distinct and precisely defined in the paper. These constructs are linked together in a stage model and subsequently operationalized and tested using LISREL. Substantial support is found for the central thesis, that achieving each of the four antecedent processes increases the predicted rents from an innovation project.

Suggested Citation

  • Rita Gunther McGrath & Ming-Hone Tsai & S. Venkataraman & I. C. MacMillan, 1996. "Innovation, Competitive Advantage and Rent: A Model and Test," Management Science, INFORMS, vol. 42(3), pages 389-403, March.
    • Handle: RePEc:inm:ormnsc:v:42:y:1996:i:3:p:389-403
    DOI: 10.1287/mnsc.42.3.389
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