Inter-organizational social capital of firms in developing economies and industry 4.0 readiness: the role of innovative capability and absorptive capacity

Abstract

The globalization of markets provides opportunities for firms to collaborate on various activities. These collaborations are the resource of social capital for firms to achieve sustainable competitiveness. This study aims to investigate how social capital (i.e., structural, relational, and cognitive social capital) between firms in a developing economy and developed economy strengthens their innovation capability and enhance their industry 4.0 readiness. Using Smart PLS-SEM to analyse the data collected from 320 managers representing 81 manufacturing firms in Pakistan, we found that social capital is positively associated with industry 4.0 readiness, and innovative capability mediates this relationship. The study contributes to the existing knowledge of understanding industry 4.0 readiness and provides useful insights for firms in developing economy to improves their innovation capability during the industry 4.0 era. This study likewise reveals the significance of three dimensions of social capital, which can facilitate to bring in digital knowledge from developed economies to developed economies to get ready for the fourth industrial revolution.

Understanding the role of organizational intellectual capital on developing absorptive capacity to strategize innovation ambidexterity

“…Organizations may mobilize resources, align interests and facilitate the co-creation and execution of creative solutions by using strong relationships and networks. Relational capital also cultivates an environment of transparency and reciprocity, which promotes ongoing learning and development and, in the end, facilitates the effective implementation and utilisation of new knowledge in practice that helps to achieve realized absorptive capacity (Fayad and El Ebrashi, 2022;Zia et al, 2023). Given the above, the following hypotheses appear plausible:…”

“…International business and supply chain partners of multinational enterprises in emerging economies dealt with disruptions and risks which can probably jeopardize their capability to function effectively and efficiently as 787 Dreamliner was introduced by Boeing and overtaken its rivals' groups was racked by extreme and unpredictable international business disruptions, which originated massive production cost hikes and delays as well as making a big question mark on the supply chain of Boeing company (Müller et al, 2021;Melnyk et al, 2014). It has been researched that innovation management is an inevitable reality for firms to build an uninterrupted upgrading process of knowledge and resources to manage complex international business operations that drive process efficiency and reduce production costs (Zia et al, 2023;Ahmed et al, 2023;Khalil and Ahmed, 2024).…”

“…, 2014). It has been researched that innovation management is an inevitable reality for firms to build an uninterrupted upgrading process of knowledge and resources to manage complex international business operations that drive process efficiency and reduce production costs (Zia et al. , 2023; Ahmed et al.…”

Enabling the circular economy in the digital transformation era: evidence from an emerging country

“…Empirical studies considered the readiness to implement Industry 4.0 extremely important before starting to use this technology at work because the practice of use rises significantly when the organization is ready to use Industry 4.0 technologies. From the point of view of NRBV, it is important and necessary for firms to assess Industry 4.0 readiness and identify the key success factors that enable firms to implement Industry 4.0 applications (Zia et al, 2021). The CE requires a high level of cooperation and integration between firms and stakeholders .…”