Within the capabilities-based view of the firm, there is debate about the relative importance of ordinary and dynamic capabilities for firm performance and about the extent to which their performance effects are contingent on environmental conditions. We meta-analyze 115 studies to investigate the relationship between both ordinary and dynamic capabilities and the financial performance of firms in relatively stable versus changing environments. The results suggest that the performance effects of both types of capabilities are positive and similar in magnitude. Environmental dynamism reinforces the effects of both ordinary and dynamic capabilities. Furthermore, the two types of capabilities are closely associated. Our findings provide support for a moderate capabilities-based view of the firm, rather than one that considers dynamic capabilities as superior to ordinary ones. Additional supporting information may be found in the online version of this article:Appendix S1. Papers by journal. Appendix S2. Papers by author(s). Appendix S3. Capability coding. Appendix S4. Environmental conditions and capabilities. Appendix S5. Firm performance categorization. Appendix S6. HOMA Procedure. Appendix S7. Results of MASEM -Harmonic means. Appendix S8. Results of HOMA -Pearson correlation coefficients; complete set of measurements. Appendix S9. Results of HOMA -Cross-sectional and panel data; Pearson correlation coefficients.

Emerging markets offer a wide range of opportunities for firms from developed markets, especially in terms of high growth potential. However, business models that enable firms to achieve competitive advantage in their home markets are often challenged by the different nature of emerging markets. Firms, therefore, have to innovate and adapt their business models to better fit the specific context of these international markets. Based on a longitudinal case study of a German luxury automobile manufacturer's internationalization to India, we develop a phase model of the business model adaptation process to emerging markets. We find that firms adapt their business models in four phases: international extension, local emergence, local expansion, and local consolidation. Firms step‐wise adjust business model components along this process to develop a local emerging market business model. In each phase of the business model adaptation process, firms emphasize different components of the business model, before they enter into continuous adjustments of all business model components. Furthermore, we find that firms overall adjust some components of their business model more significantly than others. Our findings are of particular relevance to the literature on business model internationalization and the literature that points out the evolutionary, step‐wise nature of business model innovation.

We study the relationship between diversification and firm performance in the context of the decline in levels of diversification over time. We argue that the pressure to reduce diversification may have more strongly affected those firms whose diversification strategies were most detrimental to firm performance. We employ meta‐analytical regression (MARA) in order to test our hypotheses, using a total of 267 primary studies containing 387 effect sizes based on 150,000 firm‐level observations from over 60 years of research on the diversification–firm performance relationship. The findings suggest that levels of unrelated diversification have decreased, whereas levels of related diversification have increased since the mid‐1990s, following an initial decrease in the 1970s and 1980s. Furthermore, we find that the relationship between unrelated diversification and firm performance has improved significantly over time, whereas the relationship between related diversification and performance has remained relatively stable.