Digital Business Capability and its Effects on Firm Performance
(A2019-9536)

AUTHORS

Dominik Wielgos, University of Mannheim; Christina Kuehnl, Reutlingen University

KEYWORDS

digital business transformation; dynamic capabilities; strategic marketing

ABSTRACT

Digital business transformation forces firms to develop distinctive digital capabilities to gain and sustain competitive advantage. However, despite considerable academic and managerial interest, little research has investigated the nature of a firm-level capability that reflects a superior digital business. Drawing on in-depth interviews and an interdisciplinary literature review, the authors introduce the digital business capability (DBC) concept. Based on survey and archival data, they examine the effects of DBC on firm performance. Remarkably, results reveal that DBC affects return on sales and return on assets directly and indirectly via innovation advantage. Furthermore, the authors investigate external dynamism and internal dynamism as important environmental boundary conditions of the relationship DBC-firm performance.