The Relationships Between Environmental Dynamism, Absorptive Capacity, Organizational Ambidexterity, and Innovation Performance from the Dynamic Capabilities Perspective

Focusing on the fit between external environmental demands and internal capabilities (external fit), as well as the fit among internal capabilities (internal fit) from a dynamic capabilities perspective, this study explores the mechanisms through which environmental dynamism enhances firm innovation performance. By employing a unified moderated mediation model based on data from 254 small- and medium-sized manufacturing firms in Korea, this research reveals that explorative learning mediates the relationship between environmental dynamism and firm innovation performance. This study further reveals, however, that this mediating effect varies depending on the levels of absorptive capacity and exploitative learning. Specifically, the mediating effect of explorative learning on the relationship between environmental dynamism and innovation performance is stronger in firms with high levels of both absorptive capacity and exploitative learning. These results show that the positive impact of environmental dynamism on innovation performance is not consistently observed across all firms. For instance, when operating in dynamic environments, firms lacking absorptive capacity tend to face challenges in achieving explorative learning successfully, and those with high absorptive capacity but weak exploitative learning are also likely to struggle to achieve high innovation performance. These findings highlight the critical roles of dynamic capabilities in cultivating and harmonizing various internal organizational factors to respond to environmental changes more effectively and enhance innovation performance.