Social capital and innovation performance of digital firms: Serial mediation effect of cross-border knowledge search and absorptive capacity

Abstract

This study aims to explore the relationship between social capital and the innovation performance of digital firms. In addition, we examine the mediation effect of cross-border knowledge search on this relationship and investigate the serial mediation effect of cross-border knowledge search and absorptive capacity between social capital and innovation performance. Using data collected from 217 Chinese digital companies, we tested the proposed hypotheses by constructing structural equation models through SPSS 22.0 and AMOS 24.0. Based on the results of theoretical deductions and empirical tests, some conclusions can be drawn. First, for digital firms, social capital remains significantly and positively associated with innovation performance during the COVID-19 pandemic. Meanwhile, digital firms with higher social capital are likely to generate higher innovation performance even if they experience a more severe impact of the COVID-19 pandemic. Second, cross-border knowledge search effectively mediates the relationship between social structural capital, social relational capital, and innovation performance, whereas this mediation effect is not significant between social cognitive capital and innovation performance. Finally, the serial mediation effect of cross-border knowledge search and absorptive capacity on the relationship between social capital and innovation performance is confirmed. Some managerial implications are summarized based on our findings. On the one hand, digital firms should still actively build social capital to enhance innovation performance during the pandemic. On the other hand, social capital can help digital firms implement cross-border knowledge search and develop absorptive capacity. Thus, digital firms can effectively utilize heterogeneous knowledge to enhance their innovation performance.