THE EFFECTS OF DYNAMIC CAPABILITIES IN THE ENTREPRENEURIAL FIRMS

Three entrepreneurial case studies in Romania show that changes in the environment-such as changes in customers needs changes in competitive products-are the major sources of opportunities. To recognize and exploit these opportunities, the firm needs entrepreneurial capabilities. At the same time, to gain long-run competitive advantage, the firm needs dynamic capabilities. The case findings show that entrepreneurial capabilities have circular and iterative relationship with dynamic capabilities-each reinforces other's. More often the iteration takes place, the stronger entrepreneurial capabilities and dynamic capabilities are. Further, the study builds on the extant literature and develops a new method to capture dynamic capabilities through capturing changes in ordinary capabilities