Recognizing that business model innovation (BMI) is a constant source of value creation in the digital economy, we examine the nexus between absorptive capacity and strategic flexibility, and their effects on BMI. We argue that to increase strategic flexibility and innovate their business model, firms need to develop their potential absorptive capacity (acquisition and assimilation of knowledge) as well as their realized absorptive capacity (transformation and exploitation of knowledge). While potential absorptive capacity drives both BMI and strategic flexibility, realized absorptive capacity increases a firm’s strategic flexibility. Our analysis of 282 Italian small- and medium-sized firms also shows a relationship between realized absorptive capacity and BMI, but only under conditions of environmental uncertainty.
This is the author’s version of a work that was accepted for publication in Journal of Business Research. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Business Research, ?, ?, 2020 DOI: ???
