Microfoundations of innovation: A dynamic CEO capabilities perspective

Although sustainable competitive advantages in today's hypercompetitive economy call for strong management skills, the literature lacks a holistic understanding of the specific capabilities chief executive officers (CEOs) utilize to drive innovation. This article derives the dynamic CEO capabilities (DCCs) concept to examine whether CEOs' individual‐level DCCs facilitate firm‐level innovation and proposes that CEO power moderates this relationship. Results from a longitudinal sample of S&P 900 manufacturing firms confirm that strong DCCs drive innovation. Further, powerful CEOs can exert a more significant influence on firms' innovativeness through their DCCs, yet this effect is contingent on the type of CEO power.