Digital platform capability and organizational agility of emerging market manufacturing SMEs: The mediating role of intellectual capital and the moderating role of environmental dynamism

Abstract

• Digital platform capability and organizational agility in manufacturing SMEs with the mediating role of intellectual capital and moderating role of environmental dynamism. • Time-lagged two-wave survey of 227 firms to test the proposed hypotheses using structural equational modeling (SEM). • Digital platform capability is positively associated with the agility of SMEs, and all three intellectual capital dimensions (i.e., human, organizational, and relational capital) mediate this relationship. • Environmental dynamism curbs SMEs’ ability to turn their digital platform capability into increased intellectual capital. • Managers must focus on intellectual capital to make their organizations more flexible in responding better to environmental changes. In this study, we untangle the relationship between digital platform capability and organizational agility in the manufacturing sector small and medium-sized enterprises (SMEs) by investigating the mediating role of intellectual capital and the moderating role of environmental dynamism. Using a time-lagged two-wave survey of 227 manufacturing SMEs, we tested our proposed hypotheses using structural equational modeling (SEM). Our results reveal that digital platform capability is positively associated with the agility of SMEs and that all three intellectual capital dimensions (i.e., human, organizational, and relational capital) mediate this relationship. We also found that environmental dynamism has a negative moderating role on digital platform capability and intellectual capital. Environmental dynamism curbs SMEs’ abilities to turn their digital platform capabilities into increased intellectual capital. Our results shed light on the importance of intellectual capital in creating improved organizational agility for manufacturing SMEs through digital platform capability within the boundary conditions of environmental dynamism.