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Today, the redefinition of competition and its ever diversifying characteristics drive enterprises to search for new remedies. Besides, the ordinary solutions that businesses learn in competition might lead them to dead ends. This could be possible through the correct exploitation of tacit knowledge by businesses and through acquiring new competencies in the performance cycle. The purpose of this study is to describe research on the relationship between tacit knowledge, innovation and performance in assuring competitive advantage, depending on an empirical study made in a business operating in the textile industry lo-cated in Istanbul, Turkey. The data obtained through the use of questionnaires, regarding the study, was analyzed with the SPSS 11.5 program by also using factor analysis, correlation analysis, regression analysis and complementary statistical methods. As a result of the study, it is evident that there is high level of correlation and significance between tacit knowledge, innovation and performance. It was observed that tacit knowledge has considerable impact on innovation and performance. Besides, innovation has substantial effect on business performance as well.

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