Knowledge‐based dynamic capabilities and innovation in networked environments

Purpose – The purpose of this paper is to clarify the concept of dynamic capabilities from the knowledge‐based perspective and investigate the mechanisms of dynamic capabilities on innovation performance in networked environments. Design/methodology/approach – This paper designed a seven‐point Likert questionnaire measuring the dynamic capabilities, innovation performance and network embeddedness and a sample of 218 Chinese manufacturing firms were surveyed. Structural equation modeling method was used to statistically test the theoretical hypothesis. Findings – Significant relationships were found between dynamic capabilities and innovation performance and knowledge combination capability played a mediating role in this relationship. For the links between network embeddedness and dynamic capabilities, knowledge acquisition capability was affected mainly by relational embeddedness and the diversity of network and joint problem solving contributed much to knowledge combination capability. Research limitations/implications – This paper deepened the understanding on dynamic capabilities and the mechanism between network embeddedness, knowledge‐based dynamic capabilities and innovation performance. In the future, the construct of knowledge‐based dynamic capabilities calls for more examination and verification. Originality/value – Drawing on the literature of dynamic capabilities framework, knowledge‐based view and the network model, this study extends the literature of dynamic capabilities and its link with innovation performance in networked environments. Using survey data and structural equation modeling, this study offers rich evidence on the contribution of dynamic capabilities on innovation performance and the antecedents of dynamic capabilities.