The impact of digital capabilities and dynamic capabilities on business model innovation: the moderating effect of organizational inertia

Abstract

Abstract This study aims to investigate the impact of digital capabilities on business model innovation, and emphasizes the pivotal mediating role of dynamic capabilities, comprising sensing, seizing, and reconfiguring resources, in translating digital strengths into innovative business models. And also uncovers a nuanced perspective on organizational inertia, showcasing its potential to positively moderate the relationship between digital capabilities and business model innovation. A questionnaire-based, time-lagged study with a 1-week interval. From January 2023 to March 2023, we collected a total of 262 questionnaires from entrepreneurs located in the Pearl River-West River Economic Belt, such as Guangzhou and Nanning, China. To analyse the moderation and mediation model, we utilized The PROCESS Model 5. Digital capabilities have a positive impact on the innovation of enterprises’ business models. Moreover, the connection between digital capabilities and business model innovation is mediated by dynamic capability. The findings also illustrate that organisational inertia moderates the relationship between digital capabilities and business model innovation. This study contributes to the existing literature on enterprise sustainable development by shedding light on the mediating and moderating mechanisms through which digital capabilities enhance business model innovation in enterprises. These findings offer valuable insights for enterprises aiming to thrive in dynamic markets, emphasizing the importance of a balanced approach to digital innovation, and instrumental for entrepreneurs seeking to refine their organisational strategies, particularly by bolstering their digital capabilities.