The effect of knowledge complexity on the strategic value of technological capabilities

This paper analyses the relationships between knowledge complexity and technology-based competitive advantage sustainability via barriers to imitation and substitution of capabilities. The theoretical treatment of the complexity construct and the separate analysis of imitability and substitutability of technological assets contribute to improving our understanding of these relations. The empirical evidence from a sample of Spanish biotech companies indicates that complex capabilities are better protected from imitation. But the results for barriers to substitution show that an excessive proportion of complex tacit knowledge may have a negative effect on competitive advantage sustainability, as it reduces interested agents' confidence in the technology, and hence, encourages competitors to seek more attractive alternatives.