This research carefully defines concurrent engineering (CE) and creates a valid and reliable instrument to assess it. It reports on the development and testing of a model that relates CE to some of its most salient consequences. Half of the sample of 244 firms is used for exploratory purposes and half for confirmatory work and hypotheses testing. Results indicate that firms that experience a high technological and product change in their environment are using more CE practices. In addition, results suggest that CE practices have significant direct effects on product innovation. However, only the indirect effects of CE on quality and premium pricing are significant. Firms with higher levels of product innovation have higher levels of quality. Firms with higher levels of product innovation do exhibit premium pricing capabilities but only if they affect quality capabilities. Firms that display elevated quality levels in their premium pricing capabilities.