Market orientation, knowledge competence, and innovation

• We test the market orientation=> market knowledge competence => market-based innovation => firm performance framework
• Market knowledge competence mediates the relationship between market orientation and market-based innovations
• Market-Based innovations mediate the relationship between market knowledge competence and firm performance
• U.S. firms utilize customer and competitor orientation better than Chinese firms

This study focuses on two dimensions of market orientation and the corresponding dimensions of market knowledge competence: i.e., the customer and competitor dimensions. We examine whether customer and competitor orientations are transmuted into market-based innovation either directly, or through customer and competitor knowledge competencies indirectly. The findings support that knowledge competencies are indeed mediators of the positive relationships between orientations and market-based innovation. Also, market-based innovation mediates the positive relationships between customer and competitor knowledge competencies and overall firm performance. A cross-country comparison reveals that, in the U.S. as compared to Chinese firms, customer (or competitor) orientation leads to both higher customer (or competitor) knowledge competence and enhanced market-based innovations; in other words, the model's relationship strengths are greater in U.S. firms, indicating that they are better able to leverage customer (or competitor) orientation to obtain performance consequences.