How does a firm’s digital business strategy affect its innovation performance? An investigation based on knowledge-based dynamic capability
Abstract
Purpose
While previous research has demonstrated the positive effects of digital business strategies on operational efficiency, financial performance and value creation, little is known about how such strategies influence innovation performance. To address the gap, this paper aims to investigate the impact of a firm’s digital business strategy on its innovation performance.
Design/methodology/approach
Drawing on the dynamic capability view, this study examines the mechanism through which a digital business strategy affects innovation performance. Data were collected from 215 firms in China and analyzed using multiple regression and structural equation modeling.
Findings
The empirical analysis reveals that a firm’s digital business strategy has positive impacts on both product and process innovation performance. These impacts are partially mediated by knowledge-based dynamic capability. Additionally, a firm’s digital business strategy interacts positively with its entrepreneurial orientation in facilitating knowledge-based dynamic capability. Moreover, market turbulence enhances the strength of this interaction effect. Therefore, entrepreneurial-oriented firms operating in turbulent markets can benefit more from digital business strategies to enhance their knowledge-based dynamic capabilities and consequently improve their innovation performance.
Originality/value
This study contributes to the understanding of how a firm’s digital business strategy interacts with entrepreneurial orientation in turbulent markets to shape knowledge-based dynamic capability, which in turn enhances the firm’s innovation performance.
Keywords
Acknowledgements
This study is supported by the “Research on the Mechanism through Which Digital Business Strategy Impacts Firms’ Innovation Performance: From the Perspective of Dynamic Capabilities (21YJA630123),” The Humanities and Social Sciences Research Planning Fund Project of the Ministry of Education.
Declaration of conflicting interests: The author declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.
Citation
Zheng, X. (2024), "How does a firm’s digital business strategy affect its innovation performance? An investigation based on knowledge-based dynamic capability", Journal of Knowledge Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JKM-05-2023-0410
Publisher
:Emerald Publishing Limited
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