The nexus between dynamic capabilities and competitive firm performance: the mediating role of open innovation
Open Access
- 12 April 2021
- journal article
- research article
- Published by Emerald in European Journal of Innovation Management
- Vol. 25 (6), 152-177
- https://doi.org/10.1108/ejim-09-2020-0356
Abstract
Prior research has reported the indirect implications of firm's dynamic capabilities on their competitive firm performance. Our attention now turns to open innovation since it has been confirmed to be an influential factor contributing to the superior performance of technological firms. So far there has been little research on assessing the relationship between a firm's dynamic capabilities as an antecedent of the competitive performance of the firm or investigations into the mediating role of open innovation in this relationship. Drawing on the theory of dynamic capabilities, we developed a framework as a way to better understand the role of open innovation, which could then help to better explain the relationship between firms' dynamics capabilities and their competitive firm performance. Based on the empirical data of 465 firms operating in innovative and non-innovative industries, we employed structural equation modelling (SEM) to examine the research hypotheses and the path relationships in the proposed model. The SEM analysis revealed that a firm's dynamic capabilities significantly impact its open innovation performance and that open innovation, consequently, impacts the competitive performance of the firm. Moreover, the results show that the path between dynamic capabilities and competitive firm performance is partially mediated through open innovation. The findings provide practical implications and draw managerial attention to the importance of: (1) investing in innovation, (2) engaging customers in the innovation process and (3) maintaining innovation management excellence as significant antecedent factors in increasing competitive firm performance. Considering the lack of empirical research in the literature on the links between dynamic capabilities and open innovation, this paper contributes to the dynamic capabilities and open innovation literature by confirming that open innovation not only mediates the relationship between these two aspects but also strengthens the effect the dynamic capabilities have on competitive firm performance. Besides, due to the significant impact of dynamic capabilities on open innovation, dynamic capabilities might be regarded as an antecedent of open innovation.Keywords
This publication has 84 references indexed in Scilit:
- Microfoundations for Strategy: A Goal-Framing Perspective on the Drivers of Value CreationAcademy of Management Perspectives, 2013
- The Use of Partial Least Squares Structural Equation Modeling in Strategic Management Research: A Review of Past Practices and Recommendations for Future ApplicationsLong Range Planning, 2012
- Open Innovation: Where We've Been and Where We're GoingResearch-Technology Management, 2012
- PLS-SEM: Indeed a Silver BulletJournal of Marketing Theory and Practice, 2011
- The impact of entrepreneurial orientation on firm performance: the role of CEO position tenure and industry tenureThe International Journal of Human Resource Management, 2009
- Dynamic Capabilities, Government Policies, and Performance in Firms from Emerging Economies: Evidence from India and PakistanJournal of Management Studies, 2009
- Building micro‐foundations for the routines, capabilities, and performance linksManagerial and Decision Economics, 2008
- Chapter 7 Competitive advantage in technology intensive industriesPublished by Emerald ,2008
- Entrepreneurial resources, dynamic capabilities and start-up performance of Taiwan's high-tech firmsJournal of Business Research, 2007
- Fit indices in covariance structure modeling: Sensitivity to underparameterized model misspecification.Psychological Methods, 1998