This study empirically examines the differential impacts of government support on firms’ innovation performance. Government support is categorized into financial support (tax, funding, and finance) and non-financial support (technology and human resources), and their respective effects on market performance and innovation capability are analyzed. Using data from the 2022 Korean Innovation Survey (KIS) conducted by the Science and Technology Policy Institute (STEPI), the analysis applies propensity score matching and logistic regression, along with moderation tests using Hayes’ process macro. The results indicate that both financial and non-financial support significantly enhance market performance, while only non-financial support exerts a meaningful influence on innovation capability. Furthermore, Non-financial support exhibited a positive moderating effect on market performance when market-based information sources were utilized, while its impact on innovation capability varied with the level of utilization. In contrast, the use of science-based information sources had significant positive effects on both market performance and innovation capability, with the latter strengthened particularly at higher levels of utilization. Additional mediation analysis shows that non-financial support enhances market performance through innovation capability, whereas financial support exhibits no such effect, highlighting the need for firms to build internal capabilities for sustainable outcomes. These findings suggest that government policies should be tailored to the type of support provided and that integrated strategies combining external knowledge sources are essential. In addition, strengthening innovation capability is critical for achieving sustainable innovation outcomes in the long term.

While the necessity of closing the marketing capabilities gap is an important issue, little is known about the mechanisms that enable firms create and refine marketing capabilities to market new products. Although it is suggested that market knowledge enables firms to create and refine marketing capabilities, little is known about why some firms are better at generating market knowledge or the extent market knowledge development impacts marketing capabilities. We advance the literature by showing that the development of market knowledge through internal processes is not sole or main foundation, external ties are also required to facilitate closing the marketing capabilities gap. Building on the literature on organizational ambidexterity, relational governance, and positional advantages, we examine the extent that external ties facilitate the effect of the firm’s market knowledge development processes (MKD) on exploratory and exploitative marketing capabilities. We use the positional advantage principle (Day & Wensley, 1988) to uncover the path that exploratory and exploitative marketing capabilities drive new product success through. Data from a sample of 169 industrial firms using a multi-informant design shows that the interplay between MKD and external ties provide the foundation to build exploratory and exploitative marketing capabilities to successfully market new products. Given the differences in the nature (e.g., goal convergence, longevity) and knowledge embedded in business and political ties, we draw attention to the different impacts that business and political ties have in helping to build exploratory and exploitative marketing capabilities. Our findings reveal that business ties promote the positive effect of MKD on exploitative marketing, indicating that business ties promote a firm’s capacity to improve its existing marketing routines. Political ties, however, enhance the positive effect of MKD on exploratory marketing, indicating that political ties provide support required to create new marketing initiatives (e.g., new distribution channel). Further, we show that distinct positional advantages, differentiation and cost efficiency, help explain how exploratory and exploitative marketing capabilities may be more or less effective in driving new product success. Our results suggest that while both new product differentiation and cost efficiency are significant drivers of NPP, their antecedents are different. Hence, achieving fit between the preferred positional advantage(s) and the type of marketing capabilities represents a critical determinant of new product success.