The effects of innovation speed and quality on differentiation and low-cost competitive advantage

Purpose: This paper aims to verify the effect of organizational learning (OL) and two specific aspects of innovation, innovation speed and innovation quality, on competitive advantage. Design/methodology/approach: Structural equation modeling has been applied to test the degree of influence of OL and innovation on two types of competitive advantage (differentiation and low-cost advantage) using data collected from 279 Chinese firms. Findings: The findings show that innovation speed and quality play mediating roles in the relationship between OL and competitive advantage. In general, while innovation speed has greater effects on low-cost competitive advantage, OL and innovation quality have greater effects on differentiation competitive advantage. Research limitations/implications: This paper offers directors/managers a deeper understanding of the factors necessary to promote competitive advantage in their firms. Practical implications: This paper offers CEOs/managers a deeper understanding of the necessary factors needed to promote competitive advantage in their firms. Originality/value: This paper provides practical and theoretical initiatives on innovation and competitive advantage that can be used to promote specific aspects of innovation and build up competitive advantage for relevant organizations.