Second‐order competences and Schumpeterian rents

Second-order competences, a type of dynamic capability, enable firms to engage in a process of Schumpeterian competition. This study examines the effects of marketing and R&D second-order competences (the abilities to create new market-related and technological resources) on firm profitability. Based on multiple informant surveys and archival data from U.S. public manufacturing firms, competitive turbulence is found to present contrasting contingencies for the effects of these competences on return on assets (ROA). The effect of marketing competence on ROA was positive under stable and moderate competitive conditions, whereas the effect of R&D competence on ROA was positive under volatile competitive conditions. Copyright © 2012 Strategic Management Society.

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