The effects of innovation–cost strategy, knowledge, and action in the supply chain on firm performance

Abstract Despite the importance of supply chains within today's economy, we know little about how the knowledge of supply chains can contribute to superior performance at the firm level. Building on the resource‐based view, knowledge‐based view and strategic choice theory, we develop hypotheses linking two knowledge‐driven supply chain phenomena (i.e., knowledge development capacity and intellectual capital), innovation–cost strategy, and action to firm‐level performance. Using survey and archival data from 489 firms, we found that performance is influenced by how well knowledge development capacity and intellectual capital efforts complement alternative chain strategies. More specifically, each strategy type requires different constellations of knowledge development capacity and intellectual capital to enhance action and create superior firm performance. These results highlight the importance of supply chain phenomena for firm‐level performance, and more broadly, the value of supply chains as a competitive weapon in contemporary firms.