The effects of firm capabilities on external collaboration and performance: The moderating role of market turbulence

Although inter-firm collaboration has become an important form of organizing and leveraging marketing resources for greater competitive advantage, and firm capabilities are recognized as marketers' major resources, research has paid little attention to the role of firm capabilities in enhancing inter-firm collaboration. This study addresses this deficiency by examining three internal capabilities (i.e., innovation, information, and relational capabilities) as critical enablers of the firm's external collaboration strategy. The findings show that these capabilities positively affect the effectiveness of external collaboration, which in turn contributes to the firm's market and financial performance. Further, the enabling effects of innovation and information capabilities are found to be positively moderated by market turbulence, while relational capability has a consistently positive effect on collaboration effectiveness regardless of the market turbulence level. Implications for marketing strategy research and practice are discussed.