THE EFFECT OF INNOVATION PRACTICES ON SUSTAINABLE COMPETITIVE ADVANTAGE OF YOUNG FIRMS

Abstract

The purpose of this paper is to explain how young firms in an emerging market create sustainable competitive advantage through innovation. The study through the Resource-Based View theory examines the effect of innovation practices on sustainable competitive advantage of young firms in Vietnam.  Data were collected from 289 young firms in Vietnam. PLS SEM using Smart PLS 3.0 software were used to analyze and examine the hypotheses. The results indicated that three direct effects between innovation practices which are strategy innovation, process innovation, system innovation and sustainable competitive advantage were significant while the effect of organization innovation and technology innovation on sustainable competitive advantage were not significant in this study. This finding not only created important empirical evidence contributing to the current stock of knowledge but also opens up the important direction for young firms who are striving to achieve sustainable competitive advantage in the current context.