The moderation effect of innovation capabilities on the relationship between operational capabilities and competitive advantage (a sample of manufacturing firms in Egypt)

Purpose This research aims to examine the role of operational capability as a source of competitive advantage (CA) for manufacturing firms from a resource-based view perspective. Moreover, the research deployed the capability hierarchy theory to propose the moderation effect of innovation capability (IC) on this relationship. Design/methodology/approach The study developed and validated measurement scales for operational capabilities (OCs), innovation capabilities (ICs) and competitive advantages. A survey-based approach was adopted to measure these constructs from a sample of Egyptian manufacturing organizations. Data were analyzed by conducting regression analyses to examine the direct effects of each operational capability type on each dimension of CA. Then, hierarchical moderated regression analysis was used to test the proposed moderation effects of ICs on these relationships. Findings The results provided empirical evidence that each operational capability type has a different effect on the different dimensions of organization CA. Furthermore, the results supported the synergetic effects of OCs and ICs on enhancing the organizations’ CA. The findings empirically validated that the relationship between the different types of OCs and the different dimensions of competitiveness are moderated by a specific type of ICs. Research limitations/implications The context of the examined sample and the low response rate might limit the ability to generalize the research findings outside the research context. Practical implications The research findings provide practitioners with useful insights to magnify the benefits of their OCs through directing their resources towards certain ICs to create a sustainable CA. Originality/value This paper contributes to knowledge by proposing and empirically testing the moderating effect of the different types of ICs on the relationship between the types of OC and CA dimensions.