Business ecosystem embeddedness to enhance supply chain competence: the key role of external knowledge capacities

Abstract Interest in business ecosystems has grown exponentially over the last decade. This article focuses on the operational benefits of business ecosystems by investigating how embeddedness in business ecosystems influences supply chain competence. Specifically, it considers the mediating effect of external knowledge capacities (i.e. absorptive, desorptive and connective capacity). Data from 271 European firms in business ecosystems was collected to test the paper’s hypotheses using regression analysis with bootstrapping. Results indicate that business ecosystem embeddedness does not in itself improve supply chain competence. Rather, the relationship is explained through (i) absorptive and desorptive capacity as direct mediators; and (ii) connective capacity, which enhances supply chain competence indirectly by improving external knowledge retention for absorptive and desorptive capacity. To the best of our knowledge, this is the first paper to demonstrate benefits of being embedded in business ecosystems other than in terms of innovation. Newly validated scales for business ecosystem embeddedness and connective capacity are provided.