The interaction of IT capabilities and competitive intensity had no significant direct impact on product innovation performance. Finally, adding the interaction term decreased the magnitude of the direct effect of competitive intensity on CE (path coefficient decreased from .18 to .16, both at p _ .01) after controlling for the interaction between CE and competitive intensity. We noted that adding the moderator increased the R2 for CE from 41% to 46% (DF = 8.11 at p _ .01), suggesting that it provided explanatory power to the model. Thus, all the conditions for mediated moderation were met.