Environment, Resource Integration, and New Ventures’ Competitive Advantage in China

Chinese new ventures have two principal approaches to resource integration: the stabilizing approach, which makes minor changes to a firm's current resource bundles, or the pioneering approach, which creates new capabilities. Two characteristics of Chinese entrepreneurial environment are distinct: environmental dynamism (uncertain markets, unstable institutions and the rapid technology upgrading) and munificence (the degree of competitive intensity and resource abundance). This study suggests that environmental dynamism and environmental munificence moderate the relationships between resource integration approaches and competitive advantage. Results based on a study of 410 Chinese new ventures show that both stabilizing and pioneering approaches to resource integration positively influence new ventures' competitive advantage under the condition of low environmental dynamism and either high or low environmental munificence. However, neither stabilizing nor pioneering approaches have a significant effect on new ventures' competitive advantage under the condition of low environmental munificence and high environmental dynamism. Only the pioneering approach has a positive effect on new ventures' competitive advantage under the condition of high environmental munificence and high environmental dynamism.