Dynamic Capability and Firm Performance: The Role of Marketing Capability and Operations Capability

Abstract

Scholars have argued that dynamic capability can influence firm performance through a variety of means and mechanisms. However, the empirical test of the relationship between dynamic capability, marketing capability, and operations capability on firm performance has remained scant. We contribute to resolving this issue by proposing a research model that links dynamic capability with marketing and operations capabilities on new product development performance specifically and firm performance generally. First, the model suggests that marketing capability and operations capability act as mediating mechanisms that transmit the positive influences of dynamic capability to new product development performance specifically and firm performance generally. Second, the model proposes the relationship between marketing capability, operations capability, and firm performance (new product development performance) be stronger if firms have adequate dynamic capability. Drawing on a dataset of multiyear longitudinal survey data of Chinese high-tech firms, we find support for the proposed model. The findings help us better explain the different ways in which dynamic capability affect performance.