Abstract:

Due to the rise of globalization, dynamics of national and international market evolve towards higher competition and uncertainty, necessitating firms to undertake multiple tasks that occur simultaneously. In this difficult to predict atmosphere, using technological opportunities and innovations bring firms a competitive advantage over their rivals. In recent years, one of the significant strategies of gaining and sustaining a competitive advantage in the market is the capability of firms to introduce innovations and adopting these innovations as quickly as possible. Firms mostly use internal capabilities and external sources of knowledge in developing this innovation capability. In the literature, numerous earlier studies have concentrated on the relationship between innovativeness and internal capabilities and external sources of knowledge. However, there are still very few researches on emerging countries which covers all of these dimensions.  Therefore, the motivation of this study is to focus on the relationships among internal capabilities of firms, external sources of knowledge, and types of innovations in the case of Turkey as an important emerging country. This study uses a comprehensive model empirically based upon the data gathered from Business Environment and Enterprise Performance Survey (BEEPS) that was carried out by the World Bank in Turkey in 2013. The results show that firms which benefit from internal capabilities are likely to make innovations and firms which use external sources of knowledge are likely to make innovations. But among the types of innovations, only product innovations could be achieved when firms are benefited from the joint effect of internal capabilities and external sources of knowledge.

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