How does dynamic network capability operate? A moderated mediation analysis with NPD speed and firm age

Abstract

Purpose Systematic research examining the mechanisms that mediate the dynamic capability–performance relationship remains scarce. So too is research on the conditions under which these mechanisms might be influential. Accordingly, this study aims to build upon business network research to examine how a firm’s dynamic network capability (DNC) impacts firm performance, mediated by the speed of product reconfiguration (i.e. new product development [NPD] speed) and bounded by firm age. Design/methodology/approach The authors conduct moderated mediation analysis on survey data from small- and medium-sized manufacturing and technology firms in the USA. This study uses an initial survey and then a follow-up survey. Findings The findings support the general view that DNC is instrumental to firm performance, regardless of firm age. However, DNC operates differently for younger vs older firms. That is, DNC’s impact on the performance of younger firms is enabled by speeding up NPD, while much of the performance impact for older firms appears to be through alternative resource reconfiguration route(s). This study identifies the need to include a mediating variable such as resource reconfiguration to detect how DNC impacts performance. Research limitations/implications The model could include different dimensions of mediating resource reconfigurations, alternative boundary conditions and longer-term data. Practical implications This study provides managers with insight on how speed of product reconfiguration (in terms of NPD) operates in the DNC–performance relationship. It also helps them understand how this relationship changes in younger vs older firms. Originality/value To the best of the authors’ knowledge, this study is the first to provide empirical evidence on how DNC operates to influence performance in firms that are younger vs older.

Network capabilities and firm performance: a meta-analytical study

“…The extant literature recognizes that firms should develop NCs to identify potential partners, start interorganizational relationships (Anser et al. , 2020; Chen et al. , 2020) and develop these relationships (Mitrega et al.…”

“…Over the last decades, interorganizational relationships and networking have increasingly been considered important strategies to foster firm performance and generate relational rents (Dyer et al, 2018;Lin, 2019;Zhang et al, 2017). The extant literature recognizes that firms should develop NCs to identify potential partners, start interorganizational relationships (Anser et al, 2020;Chen et al, 2020) and develop these relationships (Mitrega et al, 2012). However, studies on the topic are defragmented and show different results regarding the effects of NCs on firm performance (Firman et al, 2018;Zhang and Zhang, 2012;Song et al, 2016;Zhang et al, 2015;Partanen et al, 2020;Raymond et al, 2018).…”

Networking as an entrepreneurial marketing tool: the link between effectuation and word of mouth

“…This is surprising as it offers a new networking outcome from a customer perspective. For example, networking has occurred in EM as a general activity to encounter financial resources (Kyrgidou et al , 2021), clients (Sigué and Biboum, 2020) or increase innovation (Chen et al , 2020). However, only one of these elements is worth researching in EM.…”

“…For example, O’Donnell (2014) points out the relevance of networking as a means to market products, and Carson et al (2004) show its strategic impact on firm performance. However, no clear relationship exists between networking and word-of-mouth (WOM) marketing (Eggers et al , 2013), which broadens the view of new factors that might influence the implementation of entrepreneurial networking activities (Chen et al , 2020; Fillis, 2002).…”

Linking Financial Resources Ability and R & D Resources on New Product Performance. The Mediating role of Innovation Orientation and Competitive Position

“…The successful long-term business through new product development is also considered a determinant of a company's long-term excellence through innovation creation [3]. Moreover, changes and increasingly fast business dynamics also require companies to adapt quickly through active responses to customer complaints [4], building business networks [5], innovation-oriented [6], and company investment in R&D activities [7].…”