Service innovation capability is crucial for an international hotel to acquire a competitive advantage, which enables the hotel to respond to or exceed customer expectations for novel and unique services. Service innovation capability is deemed contributive to hotels’ competitive advantages, however, research exploring the ways of improving service innovation capability is scant. In addition, while social capital cultivates the power of innovation, research on the process of transforming available resources embedded in social interaction into actual service innovation capability is limited as well. Thus, the purpose of this study is to investigate the effect of social capital on service innovation capability through knowledge sharing in the hotel industry. Using samples from the international tourist hotels in Taiwan, results of this study show that knowledge sharing mediates the effects of social capital on service innovation capability. Knowledge sharing is a mechanism for transforming the innovation potential of social capital into actual service innovation capability. Based on the findings, the implications and research directions are then discussed.
