The moderating role of innovation capability in the relationship between the liability of smallness and innovative outputs

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Abstract
Both small and large companies aim to develop innovative outputs to gain competitive advantages. However, large companies have advantages over small companies because of their human and financial resources, while small companies may suffer from the liability of smallness. At the same time, there are many examples when small companies successfully produce innovations using their innovation capability, which allows them to develop more innovative outputs. In this article, I explore how innovation capability influences companies’ ability to produce innovative outputs depending on their size. The findings suggest that small companies could have a higher pay off from innovation capability, which stimulates higher innovative outputs and allows small companies to overcome the liability of smallness.
Funding Information
  • Research Council of Norway, RFF Nord (269740)

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