Collaborative innovation capability in IT-enabled inter-firm collaboration

TLDR

Digital platforms are increasingly used to support inter‑firm collaboration, but their role in building collaborative innovation capability under different governance regimes is not well understood. This study investigates how digital platforms affect collaborative innovation capability under relational and formal governance, and how CIC’s competitive benefits vary with environmental uncertainty. Using dynamic capabilities theory, the authors develop a model linking IT‑enabled organizational capability and governance mechanisms to CIC, and test it with partial least squares on data from 200 Chinese firms collaborating digitally with channel distributors. Results show that relational governance amplifies, while formal governance dampens, the positive effect of digital platforms on CIC; CIC mediates the link to competitive performance, especially under high uncertainty, thereby clarifying the business value of IT capability.

Abstract

Purpose With the increasingly collaborative nature of innovation and the expanding role of digital platforms on inter-firm collaboration, the purpose of this paper is to investigate the impacts of digital platforms on collaborative innovation capability (CIC) under conditions of two distinctive governance mechanisms. Furthermore, the competitive benefits of CIC at different levels of environmental uncertainty are examined to clarify the performance of collaborative innovation. Design/methodology/approach The research model is proposed based on dynamic capabilities theory, information technology (IT)-enabled organizational capability and governance mechanisms literature, and then validated by using partial least squares with data collected from 200 Chinese firms that engage in digital collaboration with their major channel distributors. Findings Empirical results show that the enabling effect of digital platforms capability on CIC is positively moderated by relational governance while negatively moderated by formal governance, and both governance mechanisms directly and positively influence CIC; the positive relationship between CIC and competitive performance is stronger for higher level of environmental uncertainty; and CIC is the key mediator converting digital platforms capability into competitive performance. Originality/value This study enriches the existing literatures in IT-innovation relationship by not only surfacing the interplay of digital platforms capability with two distinctive governance mechanisms in building CIC, but also clarifying the competitive benefits of CIC in an uncertain environment. Moreover, this study helps explain the controversial issue of the business value of IT capability by discovering the mediating role of CIC.