Impel or impede? Revealing the effect of innovation eco-embeddedness on the digital capabilities of manufacturing firms

Purpose Drawing on resource orchestration theory, this study aims to explore the impact of innovation eco-embeddedness (IEE) on manufacturing firms’ digital decoupling capability (DDC) and digital integrative capability (DIC), and the moderating role of top management team (TMT) conflict, specifically cognitive and affective conflicts. Design/methodology/approach This study employs an empirical research method to collect questionnaire data from 476 manufacturing firms and then uses SPSS multiple regression analysis to test all hypotheses. Findings The empirical results reveal surprisingly distinct impacts of IEE on the two dimensions of digital capabilities. IEE positively influences DDC, while exhibiting an inverted U-shaped relationship with DIC. Notably, cognitive conflict strengthens the positive impact of IEE on DDC and steepens the inverted U-shaped relationship between IEE and DIC. In contrast, affective conflict weakens the positive impact of IEE on DDC and flattens the inverted U-shaped relationship between IEE and DIC. Originality/value This study advances the external network to the level of the innovation ecosystem, providing a novel perspective on the driving mechanisms of digital capabilities. While earlier studies primarily examined the positive effects of IEE on digital capabilities through case analyses, this research addresses a significant gap by empirically investigating both curvilinear and linear relationships, alongside the intricate moderating role of TMT conflict. These findings offer valuable insights for managers in manufacturing firms, guiding them in the development of digital capabilities within the context of innovation ecosystems and emphasizing the critical role of TMT conflict in this process.