The interplay between digital manufacturing and dynamic capabilities: an empirical examination of direct and indirect effects on firm performance

Purpose The purpose of this paper is to identify and empirically examine the dynamic capabilities (DC) that drive the development of digital manufacturing capabilities (DMC) and the role of DMC in mediating their influence on firm performance. Design/methodology/approach Based on the dynamic capabilities view (DCV) of the firm, the authors develop a set of hypotheses that are tested through a survey of 110 managers in the manufacturing sector. The hypothesized model is tested through structural equation modeling. Findings The results indicate that although higher-order DC (HODC) have a strong influence on firm performance, their effects are partially mediated by the DMC that they generate, by positively affecting the extended production process. Practical implications The analysis contributes to a better understanding of the interplay between levels of the DC hierarchy by finding that DMC play an important role in translating HODC into enhanced firm performance. Originality/value By complementing the DCV with the disruptive innovation theory in a specific fast changing context, this study introduces a new construct (DMC) providing an original and considerable contribution to the literature. To the best of the authors’ knowledge, it is the first empirical study that includes and assesses all these elements together in the context of the manufacturing industry.