Technical environment matters: The effect of dynamic network capability on innovation based on a moderated mediation analysis

Abstract

In the era of networked research and development, where the environment is continuously changing and evolving, complex product innovation requires the ongoing configuration of external partnerships. This necessity highlights the growing importance of dynamic network capability (DNC). However, the existing literature on how DNC influences innovation remains inadequate, which significantly hinders both the theoretical and practical development of DNC. Drawing on dynamic capabilities theory and social embeddedness theory, this paper investigates the effect of DNC on innovation, focusing on the mediating role of dynamic positioning and the moderating role of the technical environment. Based on data from a sample of 270 complex product firms across eight key cities in China, the results indicate that DNC is significantly and positively correlated with complex product innovation. Moreover, dynamic positioning, characterized by increased centrality (CI), acts as a mediator in this relationship. The technical environment plays a dual role in this context: externally (industry), technological turbulence (TT) amplifies the impact of DNC on CI, while internally (product), technological complexity (TC) diminishes this impact. Further moderated mediation analysis supports these findings, showing that TT enhances the mediating effect of CI on the relationship between DNC and innovation, whereas TC weakens this effect. Interestingly, TT and TC do not jointly moderate the above relationship. When both internal (product) and external (industry) technical environments are considered simultaneously, the moderating effect of external (industry) TT proves to be more significant.