Effects of Social Capital and Knowledge on Small US Firm New Product Development Innovations

Studies have highlighted the benefits of external knowledge building as a means of heightening a firm’s innovation activities. Simultaneously supply chain scholars have highlighted the lack of focus on social facets at the micro behavioral level, as well as the limited endeavors to build upon existing theories for new perspectives. Taking an exploratory approach to addressing literature gaps, the objectives of this research involve integrating constructs from social capital theory and the knowledge-based view of the firm to examine associations and interactions among network ties, social interactions, knowledge absorptive capacity, and knowledge acquisition in the development of new product innovations by US apparel and sewn products manufacturers (N=125). Quantitative data were collected via an online survey of both a national and state sample of small sized manufacturers. Findings regarding new product development indicated: positive associations for network ties, social interactions, knowledge absorptive capacity, and knowledge acquisition; network ties and knowledge acquisition; mediated relationships with social interaction and absorptive capacity; and moderated social interaction relationships with absorptive capacity and network ties­. These empirical insights highlight the importance of building external relationships for generating knowledge in amplifying innovation. Theoretical contributions, managerial implications, limitations and suggestions for future research are presented.