Reflecting the dimensions of transformation and exploitation, RACAP is the firm's ability to leverage newly acquired and assimilated knowledge.
As the dynamic capabilities of transformation and exploitation are path dependent, firms with higher development levels of RACAP exhibit higher performance levels.
Compared to the relationship between PACAP and performance, the interdependencies between RACAP and performance have no decreasing marginal utility.
Due to the fact that the utility of RACAP outweighs the costs after a certain degree of development, the following can be stated:
Both the linear and the quadratic regression analysis revealed significant positive relationships between PACAP and the two performance measures as well as between RACAP and the two performance measures.
The relationships of RACAP with both market and financial performance reveal significant increases in adjusted [R.
Second, that the relationship between RACAP and performance is significant is empirically validated by means of linear regression, but it is also shown that linear regression depicts only a good approximation.
On the other hand, firms with high ACAP development should invest in RACAP activities; with the U-shaped relationship between RACAP and performance, further development of RACAP will raise performance disproportionately to cost.
Because of the cumulative character of ACAP, it is first and foremost important for an investment in ACAP that the firm invests in its PACAP before investing in its RACAP (Cohen and Levinthal, 1990).