Unleashing the Power of Innovation: How Innovation Capacity and Product and Process Objectives Drive Competitive Performance

Although significant research has been directed at resources and capabilities that impact innovation performance, there has been insufficient focus on the core innovation capacity that significantly affects it. This study examines the intricate relationships between innovation capacity, innovation performance, and competitive performance, emphasizing the firm’s process and product objectives as pivotal elements that inform its innovation efforts. The study sample encompasses 238 firms, including local Turkish companies and multinational subsidiaries operating in Turkey. Our research provides compelling evidence of the positive relationships among innovation capacity, innovation performance, and competitive performance. Furthermore, we identify the mediating role of innovation performance and the moderating influence of product and process objectives in these dynamics. These findings enhance our understanding of how product and process objectives influence the relationship between innovation capacity and innovation performance. Additionally, this study elucidates the boundary conditions that influence the relationship between innovation capacity and performance, thereby deepening our grasp of their intricacies.