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Purpose: Building on the resource-based view theory, this paper aims to evaluate the role of innovation on competitiveness and competitive efficiency among Costa Rican small and medium-size enterprises (SMEs). Design/methodology/approach: The study uses a sample of 231 Costa Rican small and medium-size firms for 2019. The authors compute a competitiveness index that includes four pillars: innovation, strategy, markets and human capital. To estimate competitive efficiency, the authors use a non-parametric model, namely, data envelopment analysis, with a single constant input. Findings: The results confirm that competitive and efficient SMEs present a more homogenous distribution of resources and capabilities. The innovation pillar is positively correlated with competitive efficiency. A positive correlation exists between market experience (business age) and innovation and between innovation and business size in terms of the number of employees. Practical implications: The study contributes to the understanding on how SME managers' decision-making processes affect resource allocation within the business, and on how SMEs can introduce strategic actions based on improvements of those resources that will likely have a greater impact on competitive efficiency. Originality/value: This study contributes to better grasping how the configuration of resources and capabilities, in which innovation plays a decisive role, and contributes to shape the competitive efficiency of small and medium-sized businesses in a developing economy. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to show the interaction effects between clusters and cluster-specific attributes and the industrial internet of things (IoT) knowledge of a firm on the innovativeness of firms. Cluster theory and the concept of key enabling technologies are linked to test their effect on a firm's incremental and radical knowledge generation. Design/methodology/approach: Quantitative approach at the firm-level. By combining several data sources (e.g. ORBIS, PATSTAT and German subsidy catalogue) the paper relies on a unique database encompassing 8,347 firms in Germany. Ordinary least squares (OLS)-regression techniques are used for data analysis. Findings: Industrial IoT is an important driver of radical patents, mediated positively by firm size. For incremental knowledge, a substitution effect occurs between a cluster and IoT effects, which is bigger for larger firms and dependent on cluster attributes and firms' outside connections. Research limitations/implications: The paper opens up new research paths considering long-term disruptive effects of the industrial IoT compared to short-term effects on the innovativeness of firms within clusters. Additionally, it enables further research enriching the discussion about cluster attributes and how these affect ongoing processes. Practical implications: Linking cluster theory and policy with Industry 4.0 raises awareness for being considerate in terms of funding and scrutinising one-size-fits-all approaches. Originality/value: Connecting the concepts of a cluster and advanced manufacturing technologies as a proxy for industrial IoT, specifically focussing on both radical and incremental innovations is a new approach. Especially, taking into account the interaction effects between cluster attributes and the influence of industrial IoT on the innovativeness of firms. [ABSTRACT FROM AUTHOR]