While the cost advantages associated with outsourcing are accepted, the impact that outsourcing may have on innovation performance is ambiguous. One perspective suggests that firms outsourcing low value-adding activities will achieve higher innovation performance (that is, better designed or more technologically advanced products or more substantive process improvements) than firms that perform these activities in-house. Another view holds that firms that outsource high value-adding activities may have lower innovation performance than those firms that perform these activities in-house. While these two positions are not contradictory, neither are they complimentary. Moreover, superior innovation performance can be achieved through the effective use of innovation, or dynamic, capabilities