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The role of capabilities in innovation adoption decisions
Successful innovations have been assumed by prior literature to ultimately be adopted by all competitors within an industry based on social explanations or economic rationale specific to the efficiency of the innovation. However, capabilities possessed by a firm can enhance or inhibit the adoption based upon their similarity to those used in the innovation. In categorizing a firm's capabilities as complementary, substitutive, or neutralizing to the innovation, this study provides an economic explanation for the role of internal capabilities in adoption decisions. Using a sample of professional football teams adopting the West Coast Offense, I find that capabilities influence the decision process in favor of adopting for organizations with complementary and substitutive capabilities. The role of knowledge from the innovator is highlighted in adopting the innovation, but fails to moderate the relationship between adoption and firm performance. I also illustrate how adopting firms with complementary capabilities outperform those organizations with similar capabilities that elect not to adopt. Finally, I demonstrate that firms with neutralizing capabilities are better off not adopting the innovation based on comparative performance of adopters and non-adopters. The overall results suggest a greater emphasis on internal capabilities of the firm in innovation adoption and reconsideration of theories stating that innovations should be adopted throughout an industry.
Snyder, Kevin M, "The role of capabilities in innovation adoption decisions" (2013). Doctoral Dissertations Available from Proquest. AAI3556287.