Dynamic capabilities and firm performance

D. Ringov*

*Corresponding author for this work

Research output: Indexed journal article Articlepeer-review

56 Citations (Scopus)

Abstract

This paper juxtaposes conflicting claims about the relationship between codified dynamic capabilities and firm performance at different levels of environmental dynamism. Furthermore, it argues that the contradictory propositions and findings in prior research are due to said relationship being contingent on key, yet thus far overlooked and unaccounted for, factors internal to the firm such as dynamism exposure and asset base complexity. Empirical tests in the context of the mutual funds industry provide evidence that the performance contribution of codified dynamic capabilities does decline as environmental dynamism increases, yet for any given level of environmental dynamism the magnitude and even the sign of the performance contribution of codified dynamic capabilities are significantly influenced by firms’ dynamism exposure and asset base complexity. Going beyond received wisdom, this study advances a more nuanced contingency approach to dynamic capabilities which contributes to a better understanding of how the value of dynamic capabilities is shaped by a complex interplay of environmental and internal factors.

Original languageEnglish
Pages (from-to)653-664
Number of pages12
JournalLong Range Planning
Volume50
Issue number5
DOIs
Publication statusPublished - Oct 2017
Externally publishedYes

Keywords

  • Codification
  • Dynamic capabilities
  • Environmental dynamism
  • Firm performance

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