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Article

How Digital Orientation Affects Innovation Performance? Exploring the Role of Digital Capabilities and Environmental Dynamism

School of Management, Huazhong University of Science and Technology, Wuhan 430074, China
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Author to whom correspondence should be addressed.
Systems 2025, 13(5), 346; https://doi.org/10.3390/systems13050346
Submission received: 1 April 2025 / Revised: 22 April 2025 / Accepted: 2 May 2025 / Published: 3 May 2025
(This article belongs to the Special Issue Innovation Management and Digitalization of Business Models)

Abstract

Digital orientation has attracted significant attention from policymakers and researchers due to its potential to drive innovation success. While prior research has largely examined the impact of digital orientation on specific types of innovation from a static lens, a holistic and dynamic perspective on its relationship with firms’ overall innovation performance remains limited. Drawing on dynamic capabilities theory, this study aims to bridge this gap by developing a moderated mediation model that incorporates the mediating role of digital capabilities and the moderating effect of environmental dynamism in the relationship between digital orientation and firms’ overall innovation performance. Using survey data from 368 Chinese firms, this study employs hierarchical regression analysis and the bootstrap method to test the hypotheses. The results indicate that digital orientation promotes digital capabilities (encompassing digital sensing, digital integrative, and digital transforming capabilities), which in turn facilitates firms’ overall innovation performance. Also, the effect of digital capabilities on innovation performance is moderated by environmental dynamism. This study contributes to the existing literature by offering a holistic and dynamic lens to elucidate the link between digital orientation and innovation performance, while also providing managerial insights for firms seeking to adopt digital orientation to boost innovation success in the evolving digital environments.
Keywords: digital orientation; digital capabilities; innovation; performance; environmental dynamism digital orientation; digital capabilities; innovation; performance; environmental dynamism

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MDPI and ACS Style

Zhang, X.; Wang, Z.; Luo, W.; Guo, F.; Wang, P. How Digital Orientation Affects Innovation Performance? Exploring the Role of Digital Capabilities and Environmental Dynamism. Systems 2025, 13, 346. https://doi.org/10.3390/systems13050346

AMA Style

Zhang X, Wang Z, Luo W, Guo F, Wang P. How Digital Orientation Affects Innovation Performance? Exploring the Role of Digital Capabilities and Environmental Dynamism. Systems. 2025; 13(5):346. https://doi.org/10.3390/systems13050346

Chicago/Turabian Style

Zhang, Xian, Zongjun Wang, Wenyi Luo, Feifei Guo, and Peng Wang. 2025. "How Digital Orientation Affects Innovation Performance? Exploring the Role of Digital Capabilities and Environmental Dynamism" Systems 13, no. 5: 346. https://doi.org/10.3390/systems13050346

APA Style

Zhang, X., Wang, Z., Luo, W., Guo, F., & Wang, P. (2025). How Digital Orientation Affects Innovation Performance? Exploring the Role of Digital Capabilities and Environmental Dynamism. Systems, 13(5), 346. https://doi.org/10.3390/systems13050346

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