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Is exploring dynamic capabilities important for the performance of emerging market firms? The moderating effects of entrepreneurial orientation and environmental dynamism

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  • Byung Il Park
  • Shufeng (Simon) Xiao

Abstract

In spite of the prominence of dynamic capabilities (DCs) perspective it is still unclear whether and under what conditions DCs contribute to firm performance. This study develops and tests an interactive view emphasizing the moderating effects of internal entrepreneurial orientation and external environmental dynamism on the contribution of the exploration of emerging market firms’ (EMFs) DCs to their performance. Using a unique sample of manufacturing firms in China’s emerging market, the study provides general support for such moderating effects. We find that exploring the DCs of EMFs is positively associated with their performance. The results indicate that although exploring DCs fosters the performance of EMFs, the benefits are conditional on the internal and external conditions of the firms. That is, entrepreneurial orientation strengthens, whereas environmental dynamism impedes, the positive effect of exploring DCs on the performance of EMFs.

Suggested Citation

  • Byung Il Park & Shufeng (Simon) Xiao, 2020. "Is exploring dynamic capabilities important for the performance of emerging market firms? The moderating effects of entrepreneurial orientation and environmental dynamism," International Studies of Management & Organization, Taylor & Francis Journals, vol. 50(1), pages 57-73, January.
    • Handle: RePEc:taf:mimoxx:v:50:y:2020:i:1:p:57-73
    DOI: 10.1080/00208825.2019.1703378
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    Cited by:

    1. Roh, Taewoo & Xiao, Shufeng (Simon) & Park, Byung Il, 2024. "MNEs' capabilities and their sustainable business in emerging markets: Evidence from MNE subsidiaries in China," Journal of International Management, Elsevier, vol. 30(1).
    2. Kwon, He-Boong & Lee, Jooh & Choi, Laee, 2022. "Dynamic interplay of operations and R&D capabilities in U.S. high-tech firms: Predictive impact analysis," International Journal of Production Economics, Elsevier, vol. 247(C).
    3. Dr. Muhammad Ahsan Mukhtar & Dr. Farah Nasreen & Dr. Waleed Khalid, 2023. "Dynamic Capabilities and Firm Performance: Moderating Effect of Environmental Dynamism," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 12(4), pages 597-601.

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