Ecosystem-related digital capabilities and radical service innovation: evidence from the Chinese manufacturing industry

Purpose This study aims to explore the impact of ecosystem-related digital decoupling capability (DDC) and digital integrative capability (DIC) on manufacturing firms’ radical service innovation (RSI) and the moderating effect of strategic flexibility, specifically resource flexibility (RF) and culture flexibility (CF). Design/methodology/approach This study employed empirical survey data collected from 238 Chinese manufacturing firms to test all hypotheses through hierarchical multiple regression analyses. Findings DDC and DIC have positive effects on RSI, with DDC exerting a stronger impact. RF and CF strengthen the positive effect of DIC on RSI, whereas CF diminishes DDC’s positive effect on RSI, and RF does not moderate this effect. Practical implications Manufacturing firms should prioritize developing ecosystem-related DDC and DIC to drive RSI, especially DDC. Managers should improve firms’ RF and CF when leveraging DIC to drive RSI. However, they should minimize the negative impact of CF when leveraging DDC to drive RSI. Originality/value This study shifts the service innovation capabilities from the firm to the ecosystem level, opening a new perspective for exploring RSI’s driving mechanism. With RF and CF as the moderators, the findings reveal the contingent impact mechanism of ecosystem-related digital capabilities on RSI, which provides profound insights into the complex role of strategic flexibility in the new contexts.