Radical innovation, incremental innovation, and competitive advantage, the moderating role of technological intensity: evidence from the manufacturing sector in Jordan

Abstract

Purpose The purpose of this paper is to identify the effect of radical innovation and incremental innovation on the competitive advantage of Jordanian industrial companies and identify the moderating role of technological intensity. Design/methodology/approach For this study’s purposes, 303 questionnaires from employees of 30 manufacturing firms were analysed. Convergent validity and discriminant validity tests were performed through structural equation modelling in the Smart-PLS programme. Data reliability was confirmed. A bootstrapping technique was used to analyse the data. Multi-group analysis was performed to investigate the moderating role of technological intensity. Findings Empirical results showed that both radical innovation and incremental innovation explain 60.2% of the variance in competitive advantage and that both constructs have a statistically significant effect on competitive advantage. The results also revealed that the relationship between radical innovation and competitive advantage is modified through the high-tech industries. Meanwhile, the relationship between incremental innovation and competitive advantage is modified through the low-tech industries. Research limitations/implications This cross-sectional study provides a snapshot at a given moment in time, a methodological limitation that affects the generalization of its results and the results are limited to one country, Jordan. Practical implications This study promotes the idea of focusing on radical and incremental innovation to enhance competitive advantage in the Jordanian manufacturing sector and knowing the effect of technological intensity in this relationship. Originality/value This study has important implications for leaders in the Jordanian manufacturing sector in general, as the study highlights the importance of radical innovation and incremental innovation to enhance the competitive advantage, especially in light of the technological intensity in this sector, and thus, increase the innovative capabilities of this firms, which leads to an increase in the level of competitive advantage.