How digital collaboration capability affects incremental and radical service innovation in manufacturing firms: the mediating role of organizational agility

Purpose Despite a growing number of manufacturing firms actively collaborating with ecosystem members aiming for advanced service solutions, it remains unclear how digital collaboration capability (DCC) affects incremental service innovation (ISI) and radical service innovation (RSI) in the context of ecosystems. Drawing on dynamic capabilities theory and resource orchestration theory, this study aims to investigate the impacts of DCC on ISI/RSI and examine the mediating role of organizational agility (OA). Design/methodology/approach In this empirical paper, the authors obtained questionnaire data from 238 Chinese manufacturing firms embedded in the ecosystems. Then, the authors examined all the hypotheses through hierarchical regression analyses. Findings The empirical evidence indicates that DCC has a distinct effect on ISI and RSI. DCC positively affects ISI, whereas DCC shows an inverted U-shaped effect on RSI. In addition, OA mediates the positive effect of DCC on ISI within a certain range, whereas OA always mediates the inverted U-shaped effect of DCC on RSI. Originality/value This study enriches and extends existing research on DCC and service innovation by elucidating the heterogeneous effects of DCC on ISI/RSI and the complicated mediating role of OA. This study also has practical implications for manufacturing firms to revisit their collaboration capability and agility to boost ISI/RSI in the context of ecosystems.