Integration and knowledge sharing: transforming to long‐term competitive advantage

Purpose – The purpose of the study is to examine the influence of internal integration and external integration on three types of shared knowledge (shared knowledge of internal capabilities, customers, and suppliers) and whether more leads to superior firm innovation capability and product competitive advantage. Design/methodology/approach – The paper draws on results from a large‐scale survey. The empirical data used in the study comprises of 245 high technology firms in Taiwan. This study applies the confirmatory factor analysis to examine the reliability and validity of the measurement model, and the structural equation modeling (SEM) to investigate the hypotheses and research model. Findings – The results show that internal integration and external integration significantly influence shared knowledge of internal capabilities, customers and suppliers among new product development (NPD) team members. The results also indicate that team members' shared knowledge enable the firm to improve innovation capability and new product competitive advantage. Research limitations/implications – As the data used in the study was cross‐sectional, the causal relationships and the sustainability of firm and product innovative performance cannot be easily captured. Future research can examine how factors of individual traits, organizational characteristics, and external environmental factors may influence the shared knowledge and product competitive advantage. Practical implications – This study emphasizes the importance of the firm's integration to utilize and share knowledge of internal capabilities, customers and suppliers effectively. Besides, the relationships among internal/external integration, shared knowledge, firm innovation capability and product competitive advantage may provide a clue regarding how firms can manage integrations and promote knowledge‐sharing culture to sustain their firm innovation capability and product competitive advantage. Originality/value – As only little empirical research has been conducted on the impact of internal/external integration on the firm's innovative capability and product competitive advantage through shared knowledge, the empirical evidence reported here makes a valuable contribution in this highly important area.