An　analytical　framework　for　conceptualizing　the　issue　of　international　competitiveness　at　the　firm　level　is　presented　taking　into　account　that　the　firms　are　increasingly　being　exposed　to　international　competition.　The　model　identifies　three　interdependent　innovative　capability　dimensions,　which　offer　insight　into　the　sources　of　sustainable　international　competitive　advantages　over　time:　Technological　capability,　managerial　capability　and　resource　exploiting　capability.　The　paper　presents　the　challenges　of　these　three　components　of　innovative　capability　in　an　international　context,　and　describes　how　a　firm　can　develop　and　sustain　competitiveness　through　the　operation　in　the　environment　of　globalization.　Finally,　based　on　data　from　213　firms　in　the　Beijing　area,　the　paper　proves　that　these　three　innovative　capability　components　are　closely　related　to　international　competitiveness.　The　study　reinforces　the　importance　of　innovative　capability　composition　in　internationalization　decision-making　and　suggests　further　research　in　this　context.　©　World　Scientific　Publishing　Company.