Exploring the impact of project team’s digital capability on innovation performance: an integrated analysis using PLS-SEM and fsQCA

Purpose Digital transformation has dramatically changed the way project teams create value. However, it remains unclear how project teams leverage their digital capability for value co-creation, which can improve their innovation performance. This paper proposes a theoretical framework exploring how digital capability affects the innovation performance of project teams. Design/methodology/approach Based on a representative online survey, this paper investigates the impact of project team digital capability and value co-creation on innovation performance using PLS-SEM, and validates the mediating role of value co-creation. Different configurations of the dimensions of digital capability and value co-creation for innovation are further analyzed by using fsQCA. Findings The results suggest that the digital capability of the project teams positively affects innovation performance. Value co-creation plays a mediating role in facilitating the impact of digital capability on innovation performance. The analysis of fsQCA identifies five configurations that trigger innovation performance. Originality/value This study defines the digital capability of project teams, constructs the path of “digital capability-value co-creation-innovation performance”, explains the mechanism between digital capability and innovation performance and expands the theory of value co-creation. Meanwhile, this study utilizes fsQCA to validate the effects of different configurations of conditions on innovation performance, which cross-validates the results of PLS-SEM and enriches empirical findings. Project managers should cultivate the digital capability of their teams from multiple dimensions. They should open access to information and communicate frequently within the project team, promote risk sharing and facilitate the transformation of digital capability into innovation through value co-creation.