Beyond complementarity: interactive and bounded effects of dynamic service innovation capabilities on firm performance

Jun Zhan, Shun Zhang (), Silvana Trimi and Duong Thuy Pham
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Jun Zhan: Shanghai Maritime University, School of Economics & Management
Shun Zhang: Shanghai Maritime University, School of Economics & Management
Silvana Trimi: University of Nebraska–Lincoln, Department of Supply Chain Management and Analytics
Duong Thuy Pham: Vietnam National University, Hanoi School of Business and Management

Service Business, 2025, vol. 19, issue 4, No 3, 33 pages

Abstract: Abstract This study examines how the five Dynamic Service Innovation Capabilities (DSICs) (sensing user needs, sensing technological options, conceptualizing, coproducing and orchestrating, and scaling and stretching) jointly impact on firm performance. Using survey data, from 318 small and medium-sized enterprises in the technology-intensive hub of Shanghai and its surrounding area of China, partial least squares structural equation modeling (PLS-SEM) was applied for analysis. The results confirm that DSICs have significant interactive (complementary and substitutional) and bounded (non-linear) effects on market and financial outcomes. The findings show DSICs indeed operate as an integrated capability system whose balance and optimal intensity determine firm performance. The study advances dynamic capabilities theory and offers managerial guidance for designing balanced service innovation portfolios.

Keywords: Dynamic service innovation capabilities (DSICs); Dynamic capabilities; Service innovation; Capability complementarity; Nonlinear effects; SMEs (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11628-025-00599-x

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