How inter-firm cooperation and conflicts in industrial clusters influence new product development performance? The role of firm innovation capability

Despite ongoing cooperation among firms in industrial clusters, inter-firm conflicts are also prevalent, and little research has explored how these factors impact new product development (NPD) performance. In this study, we examine the influence of inter-firm cooperation and conflicts (i.e., constructive and destructive) on NPD performance, and explore the mediating role of innovation capability (i.e., incremental and radical) and the joint interactive effects of cooperation and conflicts on innovation capability. Based on data collected from a multi-sourced sample of 181 industrial cluster firms, our results confirm that innovation capability mediates the relationship between cooperation/constructive conflict and NPD performance. Specifically, we find that cooperation and constructive conflict positively affect both types of innovation capability, while destructive conflict negatively affects incremental innovation capability. Moreover, we identify a negative interaction effect of cooperation and constructive conflict on radical innovation capability, and a positive interactive effect of cooperation and destructive conflict on incremental innovation capability. These findings contribute to the literature on industrial clusters and provide practical implications for firm managers and government officials interested in regional development through industrial clusters.