Dynamic capabilities and organizational performance: The mediating role of innovation

Abstract

How firms' dynamic capabilities lead to their competitive advantage and improved firm performance has been a core issue and full of debates. In this research, we theorize that dynamic capabilities, which could be defined by three distinct dimensions (sensing capability, integration capability, and reconfiguration capability), facilitate different types of innovation that in turn improve firm performance. Based on a sample of 204 Chinese firms, results from partial least squares structural equation modeling analyses generally support our arguments despite some nuanced differences existing among different dimensions of dynamic capabilities. This study contributes to dynamic capabilities literature by reducing the scarcity of empirical research and by uncovering the mechanisms through which dynamic capabilities influence firm performance.

The Influence of Industry Characteristics and Dynamic Capabilities on Firms’ Profitability

“…In comparing the results of this study with those that encompass the relationship between dynamic capabilities and performance of the firms operating in emerging economies, besides the above mentioned study of Nedzinskas et al (2013), it can be seen that they correspond to the results of the research of Malik and Kotabe (2009), in which organisational learning, reverse engineering and manufacturing flexibility are taken as dynamic capabilities, and Zhou et al (2017) with the difference of the inclusion of a mediating role for innovation in the relationship between dynamic capabilities (sensing and reconfiguration, but not integration capability) and the firm's financial performance.…”

Incumbents in the Transition Towards the Bioeconomy: The Role of Dynamic Capabilities and Innovation Strategies

“…For incumbents in the face of technological challenges and under sustainability challenges (as discussed in Section 2.1), identifying which innovations to develop is critical. These dynamic capabilities processes can be crucial in enabling them to develop innovation strategies [71,72]. Recent studies have proven the significant role of dynamic capabilities in developing sustainable innovations [17][18][19][20][21][22][23][24].…”

A Dynamic View of Marketing Capabilities for SMEs’ Export Performance

“…In fact, as highlighted by Xiao et al (2008), the empirical studies are often based on case studies and the application of quantitative methods is poor, hence quantitative research is less developed than qualitative (Wang & Ahmad, 2007). The few quantitative works produced in this field (Chang, 2012;Drnevich & Kriauciunas, 2011;Protogerou, Caloghirou, & Lioukas, 2012;Wang & Ahmed, 2007;Wu, 2010), although showing interesting attempts to operationalize the dynamic capabilities and offering stimulating reflections in this sense, present several limitations, highlighting how difficult empirical research is on this subject. Therefore, in our opinion, at this stage, the cognitive aim is comprehension, and not explanation, based on the criterion of substantial representation rather than statistical, through cross-sensing tools less binding than the questionnaire that allows the researcher to collect data first-hand.…”