IMPACTS OF ENVIRONMENTAL UNCERTAINTY ON FIRMS’ INNOVATION CAPABILITY AND STAKEHOLDER VALUE: EVIDENCE FROM THE AUSTRALIAN COURIER INDUSTRY

Abstract

COVID-19 pandemic has drawn great attention to environmental uncertainty. The current paper attempts to conceptually develop and empirically validate a research framework that explains how the firms’ environmental uncertainty influences their innovation capability and stakeholder value. Drawing on contingency theory, resource dependence theory, and stakeholder theory, this study develops a conceptual framework for the related constructs and employs a partial least squares structural equation modelling (PLS-SEM) to test the suggested framework. The empirical results validate both measurement (outer) and structural (inner) models. They indicate that environmental uncertainty is negatively associated with the innovation capability and stakeholder value while innovation capability is positively related to both internal and external stakeholder value. The results also show that internal stakeholder value positively affects external stakeholder value. Providing valuable insights into logistics and supply chain management, our study contributes to research in environmental uncertainty and innovation management based on the stakeholder theory.