This research analyses the relationships between resources and capabilities in IntroductionThe resource-based view of business (RBV) has been widely adopted over the past few decades to explain competitiveness and heterogeneity in the field of management (Foss & Ishikawa, 2007). The use of this perspective has largely been confined to firms operating in non-service industries, with an early influential application of RBV to services by Bharadwaj, Varadarajan, and Fahy (1993) to understand competitive advantage in service industries. The application of the RBV specifically to services, with intangible outputs and high customer involvement, has been limited and we seek to make a contribution in this area. Under consideration in the present research is the 'business incubator' which provides a service the fledgling firms by providing assistance and support to accelerate client growth (Sung, Gibson, & Kang, 2003). Success requires careful application of the possessed resources, the expansion of capabilities, and interactions within the incubator and also in the wider business network. There is a paucity of research on the use and role of resources and capabilities in incubators and how the possessed resources and capabilities impact on the service performance. Entrepreneurism is increasingly important in China, generating greater interest inThis is an electronic version of an article published as: Lin, D., . Improving business incubator service performance in China: The role of networking resources and capabilities. The Service Industries Journal, 32(13), 2091-2114. doi:10.1080/02642069.2011.582498. The article is available online at: http://www.tandfonline.com/doi/full/10. 1080/02642069.2011.582498 incubator services . As government policy is frequently used as a tool to direct developments (Chen, 2006) it is necessary to understand whether benefits from government policies playing an important role in the success of incubators. The key research question explored is: Which resources and capabilities do Chinese incubators find most useful in improving their service success? The answer will allow incubator directors to invest their energy developing requisite resources and capabilities to improve their success.The paper commences with an introduction and background for the study provided by a literature review, culminating in development of hypotheses. A short case is presented.Structural equation modelling (SEM) is used to analyse survey data and validate hypotheses.Conclusions are provided and limitations of the study are discussed before outlining areas for future research. Literature reviewRBV is presently the dominant theory that explains interfirm performance differences (Hoopes, Madsen, & Walker, 2003). Resources of a firm "include all assets, capabilities, organizational processes, firm attributes, information, knowledge, etc. controlled by a firm that enable the firm to conceive of and implement strategies" (Barney, 1991, p. 101).Organisations are repositories of capabilities, knowledge, and resources;...

The effectiveness of services provided by a business incubator is the basis and premise for promoting the incubator itself and for incubating and developing new ventures inside. Services in different forms, contents and levels may influence the performance of incubated firms such as surviving rate and growth rate. We first classify incubator services into several types including infrastructure, educating, business assistance and networking services based on business practices and a careful literature review. Then some propositions were developed to link these services to the performance of incubated firms. Finally we construct a business model to illustrate the co-evolution process between incubator and incubatees, and how new services are generated and adopted in the process. We also consider the timing effect -the difference between incubating and nurturing phases. By employing a suitable operating model, an incubator is seen not only an enabler, but also an accelerator.Keywords -incubator, incubated business, service development and innovation, business venture and performance

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