Rita McGrath

Innovation, Competitive Advantage, and Rent: A Model and Test

Coauthor(s): Ming-Hone Tsai, S. Venkataraman, Ian MacMillan.

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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.

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