Abstract: At a time when intellectual capital and product innovation management are both considered to be critical for companies to gain a competitive edge (and even survive) in todays unstable business environment, this paper discusses the influence o
f relational capital on product innovation performance at innovative small and medium enterprises (SMEs). Building upon the intellectual capital and new product development perspectives, an empirical research was conducted, using a questionnaire adminis
tered to a network of Portuguese innovative SMEs. The findings suggest that relational capital does have a positive effect on product innovation performance. In particular, Vertical relationships emerges as the main relational capital element significan
tly affecting product innovation at the innovative SMEs level. The existence and proactive management of relationships with customers and suppliers emerge as critical factors to product innovation success. We find our results to be useful for both researc
hers and practitioners: we contribute to the ongoing understanding of relational capitals impact on critical business phenomena, while also identifying additional critical factors for new product development success.