How digital platform capabilities improve sustainable innovation performance of firms: The mediating role of open innovation

Despite growing research interests in digital platform-based innovation, the existing literature has largely focused on the role of digital platform capabilities in improving economic outcomes, with only limited understanding of whether and how digital platform capabilities affect sustainability-oriented innovations. With the data from a sample of 347 firms, this study first shows that digital platform integration capability and digital platform reconfiguration capability enhance sustainability-oriented innovation through open innovation. Using the polynomial regression with response surface analysis, this study further shows that sustainability-oriented innovation improves more when inbound open innovation and outbound open innovation increase in a balanced way but decreases when inbound and outbound innovation increase in an unbalanced way. The findings of this study contribute to a better understanding of why companies with digital platform capabilities perform better in sustainability-oriented innovation and provide new insights on how a firm can achieve better sustainability-oriented innovation to effectively address sustainability challenges.