Dynamic capabilities and new product development performance: Korean SMEs

This study analyses the dynamic capabilities and new product development performance for high-tech small and medium enterprises (SMEs) in Korea. This study reveals the resources and activities that underlie dynamic capabilities. We apply the concept of dynamic capabilities (sensing, seizing and managing threats/transforming capabilities) based primarily on the model of Teece. Based upon a literature review, resources and activities (such as organizational slack, knowledge reconstruction, and exploration) were identified as contributing to reinforce the dynamic capabilities of firms. Data were obtained from survey results collected from 241 Korean SMEs. Empirical results show that knowledge reconstruction activities that discard existing and established technological assets influence dynamic capabilities; however, organizational slack exhibits no significant relationship with dynamic capabilities. Exploration activities such as building network, exploration of external information, and academic activities show a negative influence on dynamic capabilities. Sensing capability, opportunity seizing capability and transforming capability that underlie dynamic capabilities show a positive effect on new product development performance on a collective and aggregate level versus an individual basis.