Based on the competitive advantage theory and resource-based theory of the firm, this paper examines the impact of innovation capacity on innovation performance of the tourism industry. Innovation capability is defined as the firm's ability to reconfigure and develop their resources and organizational capabilities to innovate. | 64 Trinh Thuy Anh & Nguyen Ngoc Thong / Journal of Economic Development, 24(4), 64–84 Innovation of the firm: How to create performance from capability TRINH THUY ANH HCMC Open University – thuyanh@ NGUYEN NGOC THONG HCMC Open University – ARTICLE INFO ABSTRACT Article history: Based on the competitive advantage theory and resource-based theory of the firm, this paper examines the impact of innovation capacity on innovation performance of the tourism industry. Innovation capability is defined as the firm's ability to reconfigure and develop their resources and organizational capabilities to innovate. Innovation capability is measured by four components: sensing capability (SC), combination capability (CC), networking capability (NC), and learning capability (LC). Innovation performance is achievement or success of innovation made by a firm in accordance with the target, described by the three components: internal performance (IP), commercial performance (CP), and social performance (SP). The results of Multiple Regression Analysis (MRA) applied to a sample of 242 directors and CEOs of travel agents in a list of Ho Chi Minh City Tourism Association (HTA) and Ho Chi Minh City Department of Tourism show that three (SC, CC, NC) among four components (SC, CC, NC, LC) of innovation capabilities have effects on innovation performance. However, the application of fuzzy set theory in the fuzzy-set qualitative comparative analysis indicates that learning capability does not have any impact on firms’ innovation performance. A combination of learning capability and networking capability, nevertheless, creates sufficient conditions for innovation performance. Received: Sep. 12, 2017 Received in revised form: Oct. 09, 2017 Accepted: Oct. 25, 2017 Keywords: Innovation capability Innovation performance Multiple regression analysis Learning capability Networking capability Trinh Thuy Anh & Nguyen Ngoc Thong / Journal of Economic Development, .
