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Unpacking the sustainable performance in the business ecosystem: Coopetition strategy, open innovation, and digitalization capability

May 2023
Journal of Cleaner Production 412:137433

May 2023
412:137433

DOI:10.1016/j.jclepro.2023.137433

Authors:

Min-Jae Lee

Mokwon University

Taewoo Roh

Hanyang University

This study aims to examine the mediating role of open innovation and the moderating effect of digitalization capabilities in the relationship between coopetition strategy and sustainable performance in the Belt and Road Initiative (BRI), which offers a coopetitive climate and is the most widely recognized business ecosystem. We conducted an empirical analysis using the partial least squares (PLS) structural equation model (SEM) based on 520 firm datasets from multiple hubs of BRI. The results show that open innovation partially mediates the relationship between coopetition strategy and sustainable performance. The results also indicate that digitalization capability significantly moderates the relationship between coopetition strategy and open innovation. However, there was insignificant moderating effect between coopetition strategy and sustainable performance of digitization capability. We believe that our research, which is based on the dynamic capability perspective, provides a structured perspective and understanding of how and why coopetition strategy, open innovation, and digitalization capabilities can be leveraged to achieve a firm's sustainable performance in the BRI.

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Unpacking the sustainable performance in the business ecosystem: Coopetition strategy,

open innovation, and digitalization capability

Min-Jae Lee*

Assistant Professor

International Trade & Logistics

Mokwon University

Daejeon 35349, South Korea

E-mail: mjlee@mokwon.ac.kr

Tel: +82-42-829-7741

Taewoo Roh**

Associate Professor

School of International Studies

Hanyang University

222 Wangsimni-ro, Seongdong-gu, Seou 04763, South Korea

E-mail: twroh@hanyang.ac.kr

Tel: +82-2-2220-1734

* First author

**Corresponding author

The manuscript was accepted by Journal of Cleaner Production on August 8, 2023.

Data Availability Statements: Data available on request from the authors

Funding: This research received no external funding.

Acknowledgments: This work was supported by the research fund of Hanyang University

(HY-202300000001148) and Mokwon University Research Grants.

Conflicts of Interest: The authors declare no conflict of interest.

Unpacking the sustainable performance in the Belt and Road Initiative: Coopetition

strategy, open innovation, and digitalization capability

Abstract

This study aims to examine the mediating role of open innovation and the moderating effect of

digitalization capabilities in the relationship between coopetition strategy and sustainable

performance in the Belt and Road Initiative (BRI), which offers a coopetitive climate and is

the most widely recognized business ecosystem. We conducted an empirical analysis using the

partial least squares (PLS) structural equation model (SEM) based on 520 firm datasets from

multiple hubs of BRI. The results show that open innovation partially mediates the relationship

between coopetition strategy and sustainable performance. The results also indicate that

digitalization capability significantly moderates the relationship between coopetition strategy

and open innovation. However, there was insignificant moderating effect between coopetition

strategy and sustainable performance of digitization capability. We believe that our research,

which is based on the dynamic capability perspective, provides a structured perspective and

understanding of how and why coopetition strategy, open innovation, and digitalization

capabilities can be leveraged to achieve a firm’s sustainable performance in the BRI.

Keywords: business ecosystem, coopetition strategy, open innovation, digitalization capability,

sustainable performance, belt and road initiative

1. Introduction

The Belt and Road Initiative (BRI) is a business ecosystem that has been designed to

strengthen partnerships among participants and accelerate sustainable development along the

historic Silk Road route. The BRI countries are primarily in the middle or lower stages of global

value chains, and they often face challenges related to inefficient resources, environmental

pollution, biodiversity loss, and eco-degradation (Pagliuca et al., 2022). There is a need for

initiatives encouraging sustainable consumption and production to satisfy the global climate

governance and objectives for carbon neutrality in BRI countries (Chen et al., 2020; Jo et al.,

2015). Therefore, firms participating in BRI are inevitably induced to enhance sustainable

performance, including cleaner production and social values as well as economic growth, and

to form a coopetitive climate regardless of the host country (Liu et al., 2020; Sheraz et al.,

2022). In this context, firms in the BRI are expected to pursue a coopetition strategy to

harmoniously enhance sustainable performance not only in terms of economic growth but also

in terms of creating social values, including improvements to environmental problems (Niesten

et al., 2017; Spreitzer and Porath, 2012).

Coopetition refers to a competitive strategy wherein growth and profits are pursued by

simultaneously combining the advantages of cooperation and competition: “War and Peace-

simultaneously” (Nalebuff and Brandenburger, 1997, p. 28). This strategy is based on the idea

that total value can be created and shared by competitors engaging in cooperation, finding new

ways to expand overall market opportunities, and reducing the threats faced by all firms

involved (Christ et al., 2017; Nalebuff and Brandenburger, 1997). In the contemporary business

environment, competition and cooperation are blended among firms, even rivals (Arthur, 1996;

Nalebuff and Brandenburger, 1997; Roh et al., 2022). From a business ecosystem perspective,

firms can increase their competitive advantages by sharing resources with various partners

while still competing to create superior value (Moore, 1993). Here, firms design coopetition

strategies to encourage interaction among ecosystem participants, thus driving sustainable

innovation (Kang et al., 2022; Madsen, 2020). To create an innovative business ecosystem that

satisfies sustainable development (Liu et al., 2020), the BRI is particularly focused on the role

of the Chinese government in preparing for the future of the innovation system (Chesbrough et

al., 2021); the outbreak of COVID-19 and the subsequent economic crisis revealed the need

for a BRI that is robust, green, and inclusive. Countries along the BRI are under enormous

carbon emission pressures, and controlling carbon emissions in those countries is considered

to be more crucial than doing so in developed countries (Roh et al., 2014; Sheraz et al., 2022).

Amidst these obstacles, the BRI offers a chance to encourage renewable energy and green

industry growth (e.g., the Green Silk Road Fund and the Belt and Road Green Investment Fund)

(Liu et al., 2022). Still, there is a need to further elucidate how firms facing the coopetitive

climate could share coopetition strategies to achieve better sustainable performance. Therefore,

we contend that the BRI is an innovative business ecosystem with significant potential to

advance global economic integration while addressing infrastructural gaps, social inequity, and

climate change, and this study investigates how firms participating in BRI can achieve

sustainable performance by pursuing coopetitive strategies.

Existing research has emphasized firms’ capabilities to achieve competitive advantages in

this business ecosystem by seeking hints from an RBV (Mishra and Yadav, 2021; Savino and

Shafiq, 2018). However, some argue that domestic and multinational firms investing in BRI—

a venue for cooperation and competition—may need to understand open innovation strategy

using multiple sources of knowledge in the context of coopetition. Open innovation refers to a

strategy in which firms effectively utilize external resources and paths as well as internal

resources in the business innovation process (Chesbrough, 2010). In a business ecosystem,

firms consider the innovative path to achieving sustainable goals in the context of intricate

relationship networks with participants of divergent identities (Gawer, 2022; Gawer and

Cusumano, 2014). Chesbrough and Appleyard (2007) stated that firms with open innovation

capability could access external innovation sources without investing in expensive processes;

thus, open innovation draws increased attention to achieving sustainable performance by

linking the knowledge reservoirs of ecosystem participants (Roh et al., 2021). Based on these

discussions, Chesbrough (2010) suggested that, by allowing a firm to accommodate ideas from

external partners and deliver R&D results to other firms, open innovation could enhance

sustainable competitive advantage among all participating firms. Jacobides (2019) emphasized

that the firms’ economic sustainability in the business ecosystem requires open innovation

strategies. As such, the open innovation approach suggests that, since the intensified

complexity of the business environment puts pressure on firms to secure capabilities and

resources for sustainable competitive advantage, they inevitably leverage external knowledge

sources through a collaborative technology network (Yang and Roh, 2019). However, since

there is little research on how open innovation strategies operate sustainably in a BRI context,

there is a need to further understand the roles of coopetition and open innovation between

participating firms.

Meanwhile, as digital technology plays an increasingly important role in improving

business efficiency and reducing carbon emissions with the recent spread of digitalization, its

capabilities are attracting the attention of practitioners and policymakers as a driving force in

the sustainability of firms in the BRI. We describe digitalization capability as improving or

building the competencies required to respond to rapidly changing environments by employing

digital technologies and resources. This digitalization capability has piqued the curiosity of

both academics and practitioners (Ritter and Pedersen, 2020) because it allows firms to

improve process efficiency and resource management (Pagani and Pardo, 2017) and enables

both economically and ecologically sustainable performance (ElMassah and Mohieldin, 2020).

Digitalization capabilities have also unquestionably emerged as a major factor in attaining

sustainable performance, as demonstrated by the fact that various firms are leveraging digital

technology and associated research to enhance their competitive advantage. For instance, Raut

et al. (2019) emphasized the importance of digital technology to achieve sustainable

performance as big data analysis encourages the use of preservatives as a standard and helps

reduce pollution, and can ensure better economic performance by increasing revenue,

increasing market share, and reducing compensation/penalty for ecological accidents. Kamble

et al. (2020) points out that digital technologies (internet of things, blockchain and big data

technologies) around the agricultural supply chain contribute to sustainable development by

leading to a data-driven digital supply chain environment and increasing economic, social, and

environmental performance. Gregori and Holzmann (2020) argued that digital technology

should be leveraged to innovate business models to achieve social and environmental values to

enhance the sustainability of a firm. In this context, we propose that digitalization capability

can accelerate sustainable performance, while suggesting that each unit increase in digital

transformation is associated with higher economic and environmental performance (Chen et

al., 2015; Dubey et al., 2020; Li et al., 2020). In other words, digitalization capabilities can

serve as a remedy to achieve sustainable growth in the countries and regions along the BRI

where economic growth and environmental conservation conflicts are emerging. This issue is

even more critical today, when innovative sustainable processes have become increasingly

more open and come to require greater resources in various implementation phases to capture

and transfer knowledge within and outside a firm’s boundaries (Urbinati et al., 2020).

Nevertheless, the current literature in these fields does not provide a structured view of how

and why digitalization capabilities are used to achieve sustainable growth from an open

innovation perspective. It is therefore essential to identify the interactive relationship between

coopetition strategy, open innovation, digitalization capability, and sustainable performance in

the BRI.

RQ1. Does open innovation play a mediating role in the influence of coopetition strategy

on sustainable performance in BRI?

RQ2. How does corporate digitalization capability increase sustainable performance by

bolstering coopetition strategy and open innovation?

To address the research gaps mentioned above, this study aims to propose how coopetition

strategy and open innovation affect sustainable performance and whether digitalization

capability can affect overall sustainability in the BRI context. Put another way, the greater the

digital capabilities of firms in the business ecosystem, the more coopetition strategies may ease

the knowledge sourcing necessary in open innovation while also addressing the information

asymmetry problem of Sustainable Development Goals (SDGs), which is critical to sustainable

performance (Roh et al., 2021; Yang and Roh, 2019). To explore the relationship between firms’

capabilities within the business ecosystem and sustainable performance, we surveyed firms

participating in the BRI on their capabilities regarding competition, cooperation, openness, and

digital while examining how those capabilities affect sustainable and cleaner performance.

By filling in the research gaps addressed in the research questions above, this study can

make the following three contributions: First, from a business ecosystem perspective, we will

suggest not only ways to improve economic performance but also an integrated framework

with which to resolve social problems (e.g., famine, polluted water, and inequality) and realize

environmental values (Wilson and Post, 2013). Second, we put forth the importance of an open

innovation strategy for a firm’s sustainable growth in the face of social demands to achieve

shared value with ecosystem participants. Third, since these participants have faced the rapid

digitization that emerged with the COVID-19 pandemic, finding a solution may contribute to

the sustainability of the BRI. Ultimately, this study can contribute to filling the gap between

existing theoretical discussions and reality as well as designing strategies and ecosystem

structures to improve corporate sustainability.

2. Literature review

2.1. Development of dynamic capabilities in BRI

The dynamic capabilities (DCs) perspective serves as the theoretical foundation for our

research. DCs are considered to be the ability of an enterprise to consolidate and change its

resource base to react to changing environments (Teece et al., 1997). The DCs theory provides

an understanding of the importance of a firm’s capabilities in shaping its strategic behavior and

performance (Teece, 2007; Teece et al., 1997). The DCs theory states that, when developing

core competencies in pursuit of a competitive advantage in rapidly changing business

environments, firms should integrate, nurture, and reorganize internal and external resources

in response to environmental changes. DCs theorists (Eisenhardt and Martin, 2000; Teece et

al., 1997) argue that the more complex and changing business ecosystems are, the more

important these frameworks are in understanding the importance of innovation and achieving

sustainable growth. Therefore, some studies based on DCs theory review sustainable growth

methods based on a firm’s competence and strategic behavior, and these include innovation—

i.e., not accepting the status quo—in the business ecosystem (Liang et al., 2022). For instance,

Brush et al. (2001) pointed to the establishment of appropriate resource-based strategies in

changing business environments as a key aspect of sustainable growth, and Bogers et al. (2019)

found that firms that lack DCs are more likely to avoid establishing innovation-related

strategies. Moreover, a number of empirical studies have found positive relationships between

firms’ DCs and their economic and social performance (Eikelenboom and de Jong, 2019; Hong

et al., 2018; Mohaghegh et al., 2021). This suggests that the development of DCs is a likely

mechanism for achieving a sustainable performance effect in the business ecosystem.

In this vein, for firms to create sustainable performance in the BRI, they can secure a

competitive advantage from a DCs perspective (Bogers et al., 2019). Christ et al. (2017)

assumed that fiercer competition gave firms more opportunities to foster innovation and

achieve long-term performance by developing and modifying their competition strategy.

According to Kennedy et al. (2017), it is more effective for a firm to share and combine

resources with other participants to create value (or performance) rather than work alone as a

strategic actor to achieve a competitive advantage. To elaborate, in a dynamic and evolving

business ecosystem involving various participants, firms may generate and capture new value

with a much more complex model of cooperation and competition (Wu et al., 2020). The BRI

is a battlefield wherein participants of various nationalities compete, and we argue that the

coopetition strategy and open innovation will play a vital role in this respect. Moreover,

drawing upon the characteristics of the DCs perspective, we propose that the digitalization

capability can generally be viewed as a prototypical DC. Raut et al. (2019) found that

comprehension of digitalization capabilities may support sustainable performance (Chaudhuri

et al., 2022; Kamble et al., 2020). Therefore, we propose that firms can trigger innovation and

achieve a sustainable competitive advantage by establishing strategies that are compatible with

the business ecosystem and fostering DCs.

2.2. Coopetition strategy and sustainable performance

To successfully realize coopetition in the business ecosystem, it is important for firms to

establish an appropriate strategy for how the ecosystem’s competitive structure will evolve and

whether the firm’s competitive advantage can be maintained (Brandenburger and Nalebuff,

2021). Since the BRI is a dynamic and evolving community with diverse participants, it

requires firms to create and capture values through a more sophisticated coopetition

configuration. Therefore, firms need to design coopetition strategies that can match the

fundamental goal and orientation of the BRI (Cuiyun and Chazhong, 2020). Firms in the BRI

ultimately compete with each other for profits but still work together to increase economic

sustainability and improve social outcomes, such as environmental protection. Further,

institutional actors (e.g., the Asian Development Bank and the World Bank) advise BRI

participants to adhere to more rigorous environmental and social compliance criteria defined

worldwide (Sheraz et al., 2022). Under these circumstances, some scholars (Bacon et al., 2020;

Hannah and Eisenhardt, 2018; Xin et al., 2022) emphasize the importance of cooperative

strategies for firms to achieve sustainable performance in dynamic ecosystems such as the BRI.

Prior studies have pointed out how important it is to establish a coopetition strategy for

firms to achieve sustainable performance in the business ecosystem (Bouncken et al., 2018;

Christ et al., 2017; Manzhynski and Figge, 2020; Stadtler, 2018). According to Christ et al.

(2017), “sustainability-related coopetitive strategies” provide synergy by which firms can

achieve better economic and social value. Munten et al. (2021) highlighted the importance of

the coopetition strategy in strengthening a firm’s sustainability. Mirzabeiki et al. (2021) pointed

out that coopetition can promote sustainable innovation, as firms share complementary

capabilities to develop friendly environmental technologies. Limoubpratum et al. (2015)

confirmed that the sharing of distribution or transportation facilities among competitors reduces

greenhouse gas emissions. (Gernsheimer et al., 2021) also argued that coopetition through

double sourcing reduces greenhouse gas emissions, thus improving sustainable performance.

Further, some empirical research has shown that coopetition has positive impacts on

competitive advantage (Bouncken and Fredrich, 2012), financial performance (Gnyawali and

Park, 2011; Mantena and Saha, 2012), leveraging economies of scale (Bengtsson and Kock,

2000), green innovation (Xin et al., 2022), growth and efficiency (Peng et al., 2012), and energy

saving levels (Hafezalkotob, 2017).

As such, the relevant literature shows that a coopetition strategy can improve a firm’s

sustainable performance by increasing their overall market opportunities and providing new

opportunities to reduce the threats faced by all firms involved (He, 2008; Walley, 2007). To

achieve sustainable performance, which includes not only economic growth but also social

value, a coopetition strategy that will adapt and lead to changing management trends in a

business ecosystem can be a decisive factor. Based on the above discussions, we put forward

the following hypothesis.

H1. The coopetition strategy of a firm in the BRI positively affects sustainable performance.

2.3. Coopetition strategy and open innovation

Existing studies have found that a firm’s innovation is related to its economic and

environmental sustainability, and they have emphasized these dynamics in cooperation and

competition intensity (Gnyawali and Park, 2011; Park et al., 2014; Yami and Nemeh, 2014).

Accordingly, some studies have begun to link coopetition with innovation (Bouncken et al.,

2016; Bouncken et al., 2018; Ritala and Sainio, 2014). Gnyawali and Park (2011) suggested

that high levels of competition and cooperation (i.e., coopetition) increase firm innovation.

Bouncken et al. (2015) found that coopetition shares positive relationships with open

innovations that provide mechanisms for organizational learning, as corporate innovation is

more rooted in an organization’s capability to access external knowledge sources. Studies have

also shown that coopetition has a significant effect on incremental and radical innovation

(Bouncken and Fredrich, 2012; Yami and Nemeh, 2014), technological innovation (Ritala and

Sainio, 2014), and open innovation (Bacon et al., 2020; Enkel et al., 2009). Coopetition is a

critical determinant of open innovation in the multi-sector (Mention, 2011).

Pursuing a strategy of coopetition in the BRI can spark open innovation based on two

fundamental reasonings: First, a coopetition strategy provides complementary resources to

multiple participants in a business ecosystem to bolster open innovation (Lew and Sinkovics,

2013). Participants can obtain access to a greater variety of resources and knowledge in the

ecosystem. In this vein, participants can learn from each other by sharing multilateral

knowledge to receive BRI benefits (Qi et al., 2019). In other words, firms pursuing a

coopetition strategy in the BRI can promote open innovation by exchanging resources and

knowledge with ecosystem participants and supplementing their insufficient capabilities.

Second, a firm can induce open innovation by reducing uncertainty about their business

practices by interacting with ecosystem participants in terms of a coopetition strategy (Masucci

et al., 2020). In a business environment, firms may find it difficult to achieve business progress

due to political, economic, and legal differences. In unfamiliar environments, firms attempt to

manage risks and secure legitimacy in terms of institutional aspects by pursuing coopetition

between ecosystem participants (Roh et al., 2021). In this sense, firms can grow their business

by increasing openness with ecosystem participants who can influence institutionalization to

achieve legitimacy. Through the above discussion, we expect firms to pursue a coopetition

strategy to encourage open innovation in a business ecosystem.

H2. The coopetition strategy of a firm in the BRI positively affects open innovation.

2.4. Open innovation and sustainable performance

Open innovation can be generated through linkages with various knowledge sources,

which are essential for achieving a firm’s sustainable performance (Bogers et al., 2018; Roh et

al., 2021). Opportunities for new innovations can increase the number of participants attracted

to the business ecosystem, and various innovations can accordingly be created (Chesbrough

and Bogers, 2014). To create sustainable value in the BRI, firms should gather and share the

capabilities and resources of various stakeholders, such as firms, citizens, and the government

(Chesbrough et al., 2021). By enabling firms to accurately identify the BRI and encourage

participants in the ecosystem to participate in problem-solving, they can achieve sustainable

performance. Chesbrough (2010) argued that firms participate in the open innovation process

with the goal of economic compensation and realize public interest values such as solving

social problems and civic awareness (West et al., 2014). In other words, open innovation is a

valuable tool for ecosystem management.

Existing studies have shown that participants in the business ecosystem could achieve

more sustainable performance through open innovation (Gassmann et al., 2010; Greco et al.,

2015; West et al., 2014). For example, Wilson and Post (2013) explained that firms

participating in open innovation activities could directly or indirectly impact the creation of

social values. According to West et al. (2014), open innovation can create business value

beyond interactions with external actors and simultaneously contribute to creating social value.

Rauter et al. (2019) revealed that an increase in cooperation based on open innovation helps

firms achieve sustainable innovation performance and economic performance. Several studies

have also found that an open innovation approach (e.g., entrepreneurial orientation and

dynamic capability) helps improve a firm’s environmental sustainability in the business

ecosystems (Roh et al., 2021). Schaefer et al. (2015) suggested that entrepreneurial orientation

plays a crucial role in achieving better financial performance while minimizing environmental

impacts. Jiang et al. (2018) emphasized that proactive orientation is a dynamic capability that

helps firms achieve sustainable growth.

Altogether, we suggest that firms can create economic and social values by accurately

identifying the business ecosystem in which they are located and actively innovating on their

business model through open innovation to achieve sustainable performance.

H3. Open innovation of a firm in the BRI positively affects sustainable performance.

2.5. The moderating role of digitalization capability

Digitalization capability allows firms to better sense and seize business opportunities by

using new digital devices and platforms to collect data on changing customer behavior across

contexts and markets (Nylén and Holmström, 2018). By enabling resource reconfiguration

(Warner and Wäger, 2019), digitalization capability helps firms accomplish more diverse and

quicker reactions (e.g., strengthening current procedures and resource efficiency), rearranges

the relevant business processes involved in developing a new market, and allows firms to grow

and gain extra advantages (Mikalef et al., 2018). For instance, Raut et al. (2019) empirically

confirmed that utilizing big data analytics can affect sustainable business performance among

Indian manufacturers. Paul et al. (2021) showed that blockchain technology has a significantly

positively effect on sustainable performance in the Indian tea industry.

Moreover, digitalization allows businesses to collect real-time operational data for the

remote monitoring of machinery, green practices, forecasting, and greenhouse gas emissions

while strengthening environmental performance (Chiarini, 2021; Li et al., 2020). Nayal et al.

(2022) found that digitalizing supply chains through AI and IoT adoption promotes a circular

economy. Similarly, when firms leverage their digitization capabilities to achieve sustainable

performance, they typically create digital platforms, in the process engaging with divergent

participants and fostering open innovation (Gawer, 2022; Gawer and Cusumano, 2014; Van

Alstyne et al., 2016). Eckhardt et al. (2018) proposed that firms use digitalization capabilities

to design and structure digital platforms that encourage open innovation. Firms can function

better because of the strong open access effect offered by digitization capabilities (Parida et al.,

2019). Some studies have shown that firms promote open innovation based on digital platforms,

and that digitalization capabilities are related to sustainable performance (Guo and Xu, 2021;

Li, 2022). Overall, we hypothesize that firms can distinguish themselves from their rivals more

swiftly through digitalization capabilities, thus leading to better sustainable performance and

open innovation.

H4a. The digitalization capability of a firm in the BRI moderates a positive relationship

between open innovation and sustainable performance.

H4b. The digitalization capability of a firm in the BRI moderates a positive relationship

between coopetition strategy and sustainable performance.

[Insert Figure 1 around here]

3. Research methodology

3.1. Sample and data collection

The aim of the data collection in this work was to find firms that engage in coopetition

across all types of industries that are invested in BRI. According to the China Belt and Road

Initiative Investment Report, there were more than 11,000 firms established in 63 countries

along the BRI route at the end of 2020. Because it is difficult to contact individual firms during

a survey, to obtain the data most efficiently we selected WJX, a specialized research company.

We asked WJX to randomly select 1,000 firms that invested in BRI and to conduct a survey of

firms that co-produce, co-research, and co-market with BRI participants.

We used Chinese questionnaires to collect the data used in this research. The questionnaire

was prepared by modifying it appropriately for this study based on the items used in the

previous study. It was first written in English and then translated into Chinese with the help of

a professional bilingual translator. Once the draft questionnaire was developed, a pilot test was

conducted to check the appropriateness of each question. Top managers from XLY Technology

and Huiyu, along with professors studying the strategies of Chinese firms, participated in the

preliminary investigation. They confirmed that most of the questions were easily understood,

but they also advised us to replace some words with better terms. Their suggestions were

reflected in the final version.

The finalized questionnaires were emailed to firm managers (i.e., CEOs, vice presidents,

general managers, and senior directors) with the help of WJX; telephone contacts were also

made to encourage survey participants to answer and increase response rates. We used only one

response per firm. The survey was conducted over two months from October to November

2021. Altogether, we collected 520 usable questionnaires, thus achieving a 52 percent response

rate.

3.2. Statistical analysis

This study tested the hypothesis using PLS-SEM because it has the following advantages:

First, since the PLS-SEM focuses on the explanation and prediction of endogenous latent

variables, it has the advantage of its application in complex research models being widely

accepted without needing to assume a specific distribution in the estimation. Second, the

prediction of the endogenous latent variable (i.e., dependent variables) is highly plausible since

PLS-SEM estimates the path coefficient to maximize the explanatory power by minimizing the

error term of the endogenous latent variable. Third, no assumptions are made about the sample

distribution, which allows PLS-SEM to easily include both reflective and formative

measurement models. As a result, single or second-order latent variables composed of single

items can be applied without the problem of model identification. Since our study used three

second-order latent variables, PLS-SEM was particularly advantageous.

3.3. Variables and measurement

All questionnaire items were measured using a 5-point Likert scale (1 point: strongly

disagree, 5 points: strongly agree). A coopetition strategy refers to a firm’s management

approach to leverage the benefits of cooperation and competition to achieve a competitive

advantage (Bengtsson and Kock, 2000; Luo, 2007; Nalebuff and Brandenburger, 1997). Here,

we created a new coopetition scale based on previous studies (Czakon et al., 2020; Riquelme-

Medina et al., 2022). Exemplary items regarding coopetition are “we often find valuable

partners amongst our direct competitors.” and “When we establish a relationship with business

ecosystem participants, competing fairly is very important.” Following Yang and Roh (2019),

we have identified eight sources of inbound and outbound knowledge from within a firm and

their effects on open innovation to business ecosystem participants (Chesbrough and Crowther,

2006; Chesbrough, 2006; Chesbrough and Appleyard, 2007). Exemplary items regarding open

innovation are “we license-in the technology (and patents) from outside.” and “we make a

license-out.” To measure digitalization capabilities, respondents’ perceptions were measured

through four items capturing how companies used digital technology (Nasiri et al., 2020).

Exemplary items regarding digitalization are “we aim to digitalize everything that can be

digitalized.” and “we aim at achieving information exchange with digitality.” Finally,

sustainable performance is considered an organization’s achievements regarding stakeholders’

expectations of economic and social performance, including environmental performance

(Carroll, 2021; Duanmu et al., 2018). Five items were used to assess the attainment of economic

performance through financial growth (Vickery et al., 2003; Wang et al., 2015). Social

performance was measured with four items for solving social and environmental problems and

social responsibility activities (Dey et al., 2020a; Long et al., 2017; Seman et al., 2019).

Exemplary items regarding sustainability are “our firm's growth in profit is better compared to

major industry competitors.” and “our firm reduces social inequality.”

4. Results

4.1. Respondent firms’ profile

Table 1 describes the demographic characteristics of the 520 total samples used in this

study. In terms of firm size, the largest group with 175 samples (33.65%) was ‘more than 500

people’, followed in order by ‘less than 50 people’ with 142 (27.31%), ‘50-100 people’ with

90 (17.31%), ‘101-300 people’ with 68 (13.08%), and ‘301-500 people’ with 45 (8.65%). In

terms of firm assets, the groups with ‘less than $1 million’ and ‘$1-$10 million’ were the largest

groups with 172 samples (33.08%) and 141 samples (27.12%), respectively, together

accounting for more than half of all samples. There were 81 (15.58%) for ‘10-$100 million’,

55 (10.58%) for ‘$100 million-$1 billion’, and 71 (13.65%) for ‘more than $1 billion’.

[Insert Table 1 around here]

In terms of firm age, the samples were distributed in a relatively equal manner, with 143

(27.5%) being less than 5 years old, followed by 130 (25%) that were 5-10 years old, 117

(22.5%) that were 11-15 years old, and 130 (25%) that were more than 15 years. Regarding

industry, 299 samples were from manufacturing industries whereas 221 were from service

industries, respectively accounting for 57.5% and 42.5% of all samples. Finally, when the

samples were classified in terms of firm characteristics, private firms were the most common,

with 327 samples, thus accounting for 62.88% of the total samples. There were 121 samples

for state-owned firms, 37 for wholly foreign-owned firms, and 35 for Chinese-foreign joint

ventures, thus accounting for 23.27%, 7.12%, and 6.73%, respectively. By comparing

respondents’ attributes of early and late respondents using Chi2 and t-test to detect non-

response bias (Armstrong and Overton, 1977), we confirmed that there were no significant

differences between them (p > 0.05).

4.2. Measurement assessment

In this study, acceptability was evaluated through reliability, convergence validity, and

discriminant validity verification, and observation variables having a standardized factor

loading of less than 0.7 were eliminated. As a result of this process, 37 observation variables

were selected. Table 2 presents descriptive statistics and confirmatory factor loadings for the

selected observed variables. The minimum value of standardized factor loading for each

observation variable was found to be 0.706, all exceeding the recommended level of 0.7 (Hair

et al., 2009). Therefore, this research model can be judged to have a high level of reliability.

[Insert Table 2 around here]

Table 3 lists Cronbach’s alpha coefficients, composite reliability, rho_A, AVE, and SQRT

(AVE). Cronbach’s alpha and composite reliability values are considered to have proper

internal consistency if they exceed the reference value of 0.7. Moreover, since all correlation

coefficients between latent variables were significantly positive (𝜌 > 0, p < 0.05), nomological

validity was verified (Hair et al., 2009).

[Insert Table 3 around here]

This research model found that Cronbach’s alpha, composite reliability, and rho_A were

all 0.9 or more, thus showing significantly higher values than the reference value of 0.7. Taken

together with the fac that all AVEs exceeded the standard value of 0.731, these results indicate

that our research model can be seen as securing reliability, consistency, and concentration

validity. The square root of the AVE of each latent variable is greater than each coefficient

between latent correlations while all HTMTs are less than 0.85; discriminant validity for all

latent variables is sufficiently obtained (Bentler and Raykov, 2000; Chin, 2013; Hair et al.,

2009; Henseler et al., 2016; Henseler et al., 2015).

4.3. Common method bias test

The dependent and independent variables were measured subjectively and simultaneously

by the same individual. The response may contain respondent’s bias in this scenario, thus

implying the probability or risk of common method variance. To address this issue, we

performed a single-factor analysis before a full-scale statistical estimation to determine whether

there was any common method bias. According to Podsakoff et al. (2003, p. 889), “One of the

most widely used techniques that have been used by researchers to address the issue of common

method bias is what has come to be called Harman’s one-factor (or single-factor) test.” The

principal component analysis on a single factor showed that the largest factor was 43.34%,

indicating that the common method bias of this study was of little concern (Podsakoff et al.,

2003). Second, the risk of multicollinearity in partial least squares caused by the overlapping

of similar variables was verified through VIF. The VIFs between all latent variables we used

ranged from 1.000 to a maximum of 3.048, meaning there were few multicollinearity problems

due to the 3.3 threshold (Kock and Lynn, 2012). Third, using the varied marker method to

examine the association by adding a theoretically irrelevant and statistically insignificant latent

variable as an exogenous variable to a constructed model, its correlation coefficients with our

latents were found to be lower than 0.2 (Lindell and Whitney, 2001).

4.4. Structural model assessment

We used a structural equation to reveal the effect between six first-order and three second-

order structures. The finding that each path’s coefficients and endogenous explanatory power

are greater than 0.8 indicates that coopetition strategy, open innovation, and sustainable

performance could function as second-order reflective latent variables (Becker et al., 2012;

Hair et al., 2018). We used a repeated indicator approach to configure the second-order latent

variables by including all first-order latent variables (Sarstedt et al., 2019).

[Insert Figure 2 around here]

Figure 2 shows the hypothesis, standardized hypothesis path, significance, and

explanatory power of this study. The path of sustainable performance (SP) in the coopetition

strategy (CS) was found to be statistically significant, and H1 was supported (β = 0.319, p <

0.001). The path coefficient from CS to open innovation (OI) was 0.766, the path was

significantly shown at the level of 0.001, and H2 was supported. The path from cooperation

and competition to the second-order structure—cooperation strategy—was significant at the

0.001 level. The path from OI to SP was statistically significant, and H3 was supported (β =

0.323, p < 0.001). The coefficient of the path to OI, in which inward innovation and outward

innovation are both second-order constructs, was statistically significant at 0.001. The

coefficients of the mediating effect of the digitalization capability (DC) on the paths of H1 and

H2 were 0.134 and 0.194, respectively. Although the mediating effect on the path of H1 was

not statistically supported, the mediating effect on the path of H2 was found to be significant

at 0.01. Therefore, H4a was supported whereas H4b was rejected. The explanatory powers (R2)

for endogenous latent variables were 58.6% for open innovation and 79.4% for sustainable

performance. Blindfolding was performed to examine the predictive relevance (Q2) of the

endogenous constructs; Q2 for open innovation is 0.538 and that for sustainable performance

is 0.668. Considering both R2 and Q2, our model’s predictive and explanatory power is

determined to be appropriate (Hair et al., 2017).

Figure 3 illustrates H4a and H4b, which concern the moderating effect of DC on the

positive effect of CS on OI. It shows that, in the positive relationship between CS and OI, the

slope of the graph is steeper when DC is high, while there is little change in the DC’s slope of

the relationship between CS and SP. Therefore, it can be seen that DC has an effective

moderating effect on the relationship between CS and OI.

[Insert Figure 3 around here]

The findings of comparing the direct and indirect impacts of the latent variables employed

were summarized. According to Table 4, CS → OI and OI → SP have direct effects of 0.766

and 0.323, respectively. CS → SP has both direct effects (0.319) and indirect effects (0.247),

and it has a greater direct effect. Table 4 lists the value of effect size (f2) simultaneously. f2

measures the contention of external variables in the research model. The criterion for effect

size of CS → OI and OI → SP path is medium (0.15 < f2 < 0.35).

[Insert Table 4 around here]

In this study, 5,000 replicates were conducted by using the bootstrapping method to verify

the mediating effect inherent in the model (Hair et al., 2017). As can be seen in Table 5, the

mediating effect of the CS→OI→SP path was 0.247.

[Insert Table 5 around here]

As a result of the confidence interval verification, it was found that the bias-correct

confidence interval did not contain 0, and the indirect effect was found to be significant at the

5% level. As a result of verifying partial and complete mediation through Baron and Kenny

(1986)’s three-step test, there was a significant partial mediation effect (p < 0.05). Moreover,

to verify the degree of mediation effect, according to Zhao et al. (2010)’s approach, the degree

of the CS→OI→SP path was 43.6% (i.e., partial mediation).

[Insert Figure 4 around here]

We measured sustainable performance as the second order combined with economic and

social performance. To more deeply examine the various potential effects of the dynamic

relationship between coopetition strategy, open innovation, and digitalization capability within

the BRI, we remeasured economic performance and social performance as first-order. As

shown in Figure 4, most hypotheses were supported. The moderating effect of digitalization

capability on the direct effect of coopetition strategy on social performance was found to be

insignificant, while its effect on economic performance was significant. In other words,

although this finding suggests that the economic performance pursued by the competitive

cooperative relationship increases as the focal firm’s digitalization capability increases, it is

irrelevant to the improvement of social performance. The fact that the moderating effect of

digitalization capability appeared the strongest when the coopetition strategy was oriented

toward open innovation suggests that it is more effective for firms to share digitalized

information rather than using offline meetings and field trips at BRI.

5. Discussion and conclusion

The main research issues of the BRI were linked and addressed in this study to unpack the

relationship between a firm's capability, strategy, and sustainable performance in DCs

perspective. This study also investigated the importance of a coopetition strategy to achieve a

firm’s sustainable performance, the mediating role of open innovation, and the moderating role

of digitization capability. First, we have developed and investigated a series of hypotheses by

exploring BRI, a widely known business ecosystem, to delve into the strategic scenarios

required to achieve a firm’s sustainable performance. In line with prior research demonstrating

that firms can achieve competitive advantages while pursuing growth and profits by pursuing

cooperation rather than solely engaging in confrontation between competitors (Nalebuff and

Brandenburger, 1997; Riquelme-Medina et al., 2022; Walley, 2007), we verified whether the

coopetition strategy of firms running businesses in BRI could enhance sustainable performance.

Our results indicate that the coopetition strategy plays an important role in enhancing

sustainable performance, which means that firms need to strengthen competition based on

cooperation with ecosystem participants to achieve a competitive advantage in BRI. In

particular, this study supplements the existing results concentrated on financial performance

obtained in previous coopetition studies by including social and environmental performance.

Second, we proposed that, given the contemporary shift and tensions encircling the

business ecosystem, applying open innovation approaches connected to various ecosystem

participants can serve as a crucial vehicle for enhancing a firm financial and social performance.

Our findings show that firms in BRI are more likely to obtain sustainable performance when

their coopetition strategies gain momentum through open innovation. This suggests that a

firm’s open innovation plays a vital role in fostering sustainable and cleaner performance based

on the business ecosystem.

Third, firms in BRI are innovating their businesses and improving sustainable

performance by using new digital channels and devices, such as software platforms and web

services (Gawer, 2022; Gawer and Cusumano, 2014; Wen et al., 2021). We suggested that firms

can achieve better sustainable performance and open innovation through digitalization

capability, and empirical results supported the notion that the positive effect of a coopetition

strategy on open innovation is promoted by digitalization capability (Costa and Matias, 2020).

However, digitalization capability is found to have a nonsignificant influence on the effect of

the coopetition strategy on sustainable performance. Cohen (2018) pointed out that the

electricity usage of firms due to digitalization is rapidly increasing every year, which is a major

factor that hinders sustainability. This implies that the effect of digital competence on

sustainability per se may tend to be offset. In this respect, Warner and Wäger (2019)

demonstrated how digitalization capability influences open cooperation because the digital

scouting and agility generated for each function boost the sensing of external information about

the surrounding environment. This therefore indicates that digital transformation is effective

when a firm implements a strategy coupled with external informants to increase sustainable

performance.

5.1. Theoretical implications

This study has the following theoretical implications: First, it adds to the literature on how

a firm can create sustainable performance in BRI. We have demonstrated the importance of a

firm’s coopetition strategy in achieving sustainable performance in a business ecosystem.

Therefore, our findings emphasize the significance of a coopetition strategy for achieving a

firm’s sustainable performance in BRI and confirm previous research that urges business

ecosystems to embrace a coopetition-based type of logic (Dyer et al., 2018; Ranganathan et al.,

2018; Struckell et al., 2021). These results also add to the theoretical literature on sustainable

development by comprehensively measuring social performance (including environmental

value) and economic performance, which is required for firms to improve competitive

advantages (Battamo et al., 2021; Liu et al., 2020). Previous studies examining this relationship

mostly concentrated on achieving goals in finance and innovation rather than considering that

a firm’s competitive advantage may be derived from social and environmental values (Martí

nez‐Ferrero and Frias‐Aceituno, 2015; Santis et al., 2016; Tien et al., 2020). Thus, we enrich

the literature on sustainable competitive advantage by associating social and environmental

values with unexplored antecedents in order to capture and quantify firm-level outcomes.

Second, we contribute to the open innovation literature in the business ecosystem by

identifying how open innovation is positively associated with sustainable company

performance. Our study examines the impact of coopetition strategy on open innovation and

the benefits that such open innovation provides to a firm’s sustainable performance. The

empirical analysis results of firms in BRI showed that the coopetition strategy has a positive

effect on open innovation, and that open innovation has a significant effect on sustainable

performance. This is the result of identifying the importance of open innovation in enhancing

a firm’s sustainable performance in BRI, which contributes to existing literature that

emphasizes open innovation to increase the sustainability of the business ecosystem

(Chesbrough et al., 2014; Vlaisavljevic et al., 2020).

Third, this study confirms that firms can achieve more process innovation in BRI based

on digitization capabilities to achieve sustainable performance. Previous research has argued

that digitalization capacity may help a firm achieve long-term success by helping optimize

resource relocation and increase energy efficiency (Kamble et al., 2020; Lin et al., 2020;

Raguseo and Vitari, 2018), and the results of our analysis support these prior studies.

In this regard, this study examined the impact of digitalization capability on various

aspects of a firm’s sustainable performance by integrating coopetition strategy and open

innovation in BRI.

5.2. Managerial implications

Our research also has substantial consequences for a practical audience. First, this research

reveals that coopetition strategy plays an important role in boosting sustainable performance

in a business ecosystem. In particular, BRI aims to reconnect to East Asia, Central Asia, Africa,

the Middle East, and Europe in terms of the economy, politics, and society, and it prioritizes

cooperation and competition among these regions. Cooperation in the business ecosystem can

help move toward a win-win status, since it allows participants (i.e., competitors and

cooperators) to share their capabilities and resources. Participants would share resources with

competitors as needed and strengthen their competitiveness by compensating for mutual

inadequacies and relocating their knowledge, thus increasing the size of the entire market. As

a result, firms should pursue a coopetition strategy with participants in a wide range of regions

to create sustainable performance in BRI.

Second, it demonstrates how open innovation within a business ecosystem may enhance

a firm’s long-term profitability. Firms can benefit from utilizing open innovation when

conducting operations in the BRI. The governance of BRI establishes five major priorities (e.g.,

policy coordination, infrastructure connectivity, unimpeded trade, financial integration, and

connecting people) to build an open platform for pluralism, inclusive growth, peace, and

harmony as a sustainable business ecosystem based on participant cooperation. In a business

ecosystem in which this coopetition-based is embodied, such as BRI, firms can recognize a

reduced risk of uncertainty, and open innovation can be promoted (Roh et al., 2021).

Third, according to our research, firms can enhance their sustainability performance in

BRI by using open innovation. In particular, it has been confirmed that open innovation

functions as a mediator between coopetition strategy and sustainable performance. Since a firm

that can compete and cooperate simultaneously can increase sustainability through innovative

discussions with other entities, managers should broaden their perspectives to encompass all

possible routes of action rather than thinking solely about either competition or cooperation. In

addition, firms’ managers should recognize that using digitalization capability can contribute

to both coopetition strategy and open innovation. Most importantly, firms should understand

the importance of effectively deploying open innovation in BRI.

5.3. Limitations and future research directions

Despite its multifaceted contribution, our study has the following limitations: First, it

raises the question of how effectively the global business environment can be generalized,

given that our sample is limited to companies established in BRI located in China. BRI is a

considerable business ecosystem that links Asia, Africa, and Europe, starting with China, and

each region may have different strategies and capabilities for firms depending on the business

environment and level of digitalization. Future research can validate the generalizability and

empirical results of the framework by extending the study through the inclusion of samples of

firms in BRI operating in other countries and regions. Second, we employed cross-sectional

data, which limits the ability to infer cause-effect correlations. Considering that business

ecosystems are constantly evolving, future studies might explore longitudinal data to

understand more features of coopetition strategy in firm ecosystems (Cobben et al., 2022).

Additionally, as has been observed by Crick and Crick (2021), the coopetition strategy should

be viewed from the perspective of a changing environment. Although the current study offers

some valuable insights, adding a temporal dimension could enable further research into the role

of cooperation and competition as dynamic elements of a business ecosystem that transforms

sustainable performance and how this helps firms deal with the dual forces of coopetition over

time. Third, this study measured economic and social performance as sustainable performance

using a second-order latent. Although environmental issues were included in measuring social

performance, future studies need to separate environmental performance and more specific

social issues, which are major concerns related to BRI.

As a final remark, our research provides a structured perspective and understanding of

how and why coopetition strategy, open innovation, and digitalization capabilities were

leveraged to achieve a firm’s sustainable performance in the BRI, which is the most novel

contribution of this study. Our findings provide valuable insights for enhancing a firm’s

sustainable performance by helping researchers and practitioners better grasp the significance

of ecosystem management.

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Figure 1. Research model

Figure 2. Estimated results of a structural equation analysis

Notes: ns = non-significant. ** p < 0.01, *** p < 0.001

Figure 3. Moderating effect of digitalization capability

2.5

3.5

Coopetition strategy: Low Coopetition strategy: High

Open innovation

Digitalization capability: Low

Digitalization capability: High

2.5

3.5

Coopetition strategy: Low Coopetition strategy: High

Sustainable performance

Digitalization capability: Low

Digitalization capability: High

Figure 4. Additional analysis using structural equation analysis

Table 1. Sample demographics.

Variable

Category

Frequency (N)

Percentage (%)

Firm size

Less than 50 people

142

27.31

50-100 people

17.31

101-300 people

13.08

301-500 people

8.65

More than 500 people

175

33.65

Firm asset

Less than $1 million

172

33.08

$1-$10 million

141

27.12

$10-$100 million

15.58

$100 million-$1 billion

10.58

More than $1 billion

13.65

Firm age

Less than 5 years

143

27.5

5-10 years

130

11-15 years

117

22.5

More than 15 years

130

Industry

Manufacturing

299

57.5

Service

221

42.5

Firm characteristic

State-owned firm

121

23.27

Private firm

327

62.88

Chinese-foreign joint venture

6.73

Wholly foreign-owned firm

7.12

Total

520

100

Table 2. Descriptive statistics and confirmatory factor loadings.

Constructs

Item

Mean

SFL

Competition strategy

COM1

4.056

0.882

0.912

COM2

4.133

0.855

0.921

COM3

3.969

0.905

0.880

COM4

4.152

0.866

0.910

Cooperation

COOP1

3.958

0.877

0.887

COOP2

4.050

0.824

0.901

COOP3

3.848

0.926

0.865

COOP4

3.940

0.890

0.871

Coopetition*

COM1

3.890

0.872

0.823

COM2

4.104

0.795

0.886

COM3

3.979

0.868

0.883

COM4

4.142

0.794

0.866

COOP1

4.300

0.806

0.706

COOP2

3.738

1.039

0.858

COOP3

3.906

0.944

0.878

COOP4

3.779

1.048

0.878

Inward open innovation

IN_INNO1

4.223

0.802

0.914

IN_INNO2

4.012

0.923

0.849

IN_INNO3

4.150

0.814

0.935

IN_INNO4

4.194

0.806

0.927

Outward open innovation

OUT_INNO1

4.056

0.882

0.847

OUT_INNO2

4.133

0.855

0.861

OUT_INNO3

3.969

0.905

0.835

OUT_INNO4

4.152

0.866

0.851

Open innovation*

IN_INNO1

3.958

0.877

0.841

IN_INNO2

4.050

0.824

0.868

IN_INNO3

3.848

0.926

0.779

IN_INNO4

3.940

0.890

0.783

OUT_INNO1

3.890

0.872

0.766

OUT_INNO2

4.104

0.795

0.834

OUT_INNO3

3.979

0.868

0.848

OUT_INNO4

4.142

0.794

0.825

Digitalization capability

DIG_CAP1

4.300

0.806

0.748

DIG_CAP2

3.738

1.039

0.748

DIG_CAP3

3.906

0.944

0.809

DIG_CAP4

3.779

1.048

0.769

Economic performance

ECON_PER1

4.217

0.796

0.903

ECON_PER2

4.146

0.796

0.882

ECON_PER3

4.288

0.764

0.910

ECON_PER4

4.288

0.769

0.923

Social performance

SOC_PER1

4.225

0.764

0.906

SOC_PER2

4.027

0.814

0.917

SOC_PER3

4.042

0.803

0.911

SOC_PER4

4.075

0.790

0.933

SOC_PER5

4.181

0.784

0.891

Sustainable performance*

ECON_PER1

4.217

0.796

0.849

ECON_PER2

4.146

0.796

0.848

ECON_PER3

4.288

0.764

0.862

ECON_PER4

4.288

0.769

0.863

SOC_PER1

4.225

0.764

0.871

SOC_PER2

4.027

0.814

0.831

SOC_PER3

4.042

0.803

0.820

SOC_PER4

4.075

0.790

0.855

SOC_PER5

4.181

0.784

0.853

Notes: * reflective-reflective second order latent, SD, standard deviation, SFL=standardized

factor loading, all SFLs are significant (p < 0.000).

Table 3. Inter-construct correlations, convergent and discriminant validities.

Constructs

Digitalization

capability

Coopetition

strategy

Open

innovation

Sustainable

performance

Digitalization capability

Coopetition strategy*

0.683

Open innovation*

0.736

0.766

Sustainable performance*

0.799

0.801

0.820

Cronbach’s alpha

0.928

0.937

0.916

0.952

Composite reliability

0.949

0.948

0.932

0.959

rho_A

0.934

0.938

0.919

0.952

AVE

0.822

0.795

0.731

0.723

SQRT(AVE)

0.907

0.892

0.855

0.850

HTMT < 0.85

Yes

Notes: * reflective-reflective second order latent, rho_A= Dijkstra and Henseler’s composite

reliability, AVE=average variance extracted, SQRT=square rooted.

Table 4. Total, direct, and indirect effects.

Effect

Direct

Indirect

Total

CS → OI

0.766

0.350a

CS → SP

0.319

0.247

0.566

OI → SP

0.323

0.254a

Notes: a medium effect, CS=coopetition strategy, OI=open innovation, SP=sustainable

performance.

Table 5. Significance testing of mediating effects with bootstrap.

Path

CS→OI→SP

Statistics

Sobel

Delta

Bootstrap

Indirect effect

0.247

Standard error

0.028

0.036

0.039

z-statistic

8.783

6.920

6.325

p-value

0.000

BCCI

(0.192, 0.302)

(0.180, 0.320)

(0.152, 0.304)

Baron and Kenny (1986)

Partial mediation (p < 0.05)

Zhao et al. (2010)

43.6% partially mediated

Notes: (1) 5000 iterations for bootstrapping, (2) confidence level is 95%, (3) BCCI=bias-

corrected confidence interval, (4) CS=coopetition strategy, OI=open innovation,

SP=sustainable performance.

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The purpose of this paper is to investigate the impact of sustainability innovation and supply chain resilience on sustainability performance and to predict the interrelationship between economic, environmental, and social performances. Using a cross-sectional quantitative study, an online survey was conducted among the Chinese cold chain logistics companies, and 204 valid responses were collected. Data analysis was conducted using the partial least squares structural equation modelling approach. The results indicated that sustainability innovation and supply chain resilience positively affect three pillars of sustainability performance. Within sustainability performance, economic performance has a significant positive correlation with environmental and social performances, while environmental performance has no effect on social performance. The findings made constructive contributions. Theoretically, this study contributes to dynamic capability theory by predicting the direct impact of sustainability innovation and supply chain resilience on sustainability performance in a model that is relatively new in the literature. In addition, this study examines the relationship between economic, environmental, and social performances in a unique context (i.e. the cold chain logistics industry). Practically, this study will guide practitioners in developing innovative and resilient strategies committed to business sustainability and urge policymakers to develop policies such as subsidies, regulation, and training programmes to promote innovation and collaboration in this industry.

MNCs’ Social Innovation in Emerging Markets: A Stakeholder Perspective

Article

Full-text available

May 2024

This study aimed to identify the effects of primary and secondary stakeholders on social innovation practices in local markets by subsidiaries of multinational corporations (MNCs) and to confirm the link between social innovation and the subsidiaries’ capacity to adapt to the local market. By adopting a stakeholder perspective as an overarching theoretical lens and collecting data from China—the world’s largest emerging market—this study reveals the crucial catalytic role that most primary and secondary stakeholders play in enhancing social innovation by MNC subsidiaries in host countries. In addition, we provide strong evidence of a causal relationship between social innovation and adaptive capability in host economies. Our results contribute to current scholarship by identifying theoretical cornerstones and practical managerial implications of social innovation in emerging markets.

Multi-level neo-institutional analysis of pressures and tensions for adopting a digitally driven business model innovation: Responses from a French energy incumbent

Article

Full-text available

Aug 2024
TECHNOL FORECAST SOC

Digitalization is disrupting the energy sector, requiring incumbents to reinvent their strategies by adopting digitally driven business model innovation (BMI). However, external pressures from value networks and institutional environments can constrain this adoption by creating or strengthening internal tensions. Because research on this issue has been limited, this study combines a multi-level approach to BMI with neo-institutional theory to clarify incumbents' strategic and organizational responses to pressures and tensions related to the adoption of digitally driven BMI. According to an in-depth case study of a large energy incumbent, a multi-level approach is key to understanding the interconnection between external pressures and internal tensions. The results show that though acquiescence is still a valid response to institutional demands, it can lead to a lack of consideration of internal tensions, as well as to organizational misfits that hamper BMI adoption. This article contributes to BMI and neo-institutional literature by offering new theoretical insights and makes managerial recommendations related to multi-level issues linked to the adoption of digitally driven BMI.

Competition and cooperation: a coopetition strategy for sustainable performance through serial mediation of knowledge sharing and open innovation

Article

Apr 2024

Ahmed Abubakar

Purpose The purpose of this study is to examine the effect of the coopetition strategy (CS) (the simultaneous pursuit of collaboration and competition) on sustainable performance (SP) through the serial mediation of knowledge sharing (KS) and open innovation (OI). Design/methodology/approach A structured questionnaire was used to gather data from corporate business enterprises, and partial least squares structural equation modeling was used for analysis. Findings Empirical evidence supports the coopetition strategy's role in enhancing KS, which in turn fosters OI, leading to improved SP. It has also been concluded that KS and OI have a significant serial mediation effect on the relationship between CS and SP. Practical implications Through the integration of KS and inward-outward open innovation, the coopetition model enables coopetitors leverage each other’s resources and capacities for mutual sustainability. To fully benefit from it, small and medium-sized enterprises (SMEs) in the Gulf Cooperation Council (GCC) must change their perception of free competition and actively engage in coopetition activities, particularly in the realms of knowledge and OI. Originality/value The most novel contribution of this study to the growing body of knowledge on SP is the establishment of empirical evidence regarding the crucial role of a serial mediation of KS and OI in the relationship between CS and SP. Unlike earlier research, this study provides a structured perspective and understanding of how and why CS, KS and OI were leveraged to enhance the SP of SMEs.

Approaching Open Innovation in Customization Frameworks for Product Prototypes with Emphasis on Quality and Life Cycle Assessment (QLCA)

Article

Apr 2024

Book Partial Least Squares Structural Equation Modeling (PLS-SEM) Using R

Book

Full-text available

Jul 2022

In 2021, the third edition of our introductory book A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM) was published (Hair, Hult, Ringle, & Sarstedt, 2022). The book covers the latest developments in the ield, including recent advances in model evaluation (e.g., inference testing in discriminant validity assessment, predictive power assessments using PLS predict comparisons), improved guidelines for minimum sample sizes, and new complementary methods and concepts such as necessary condition analysis and endogeneity. The book has been highly successful as evidenced in its citation count of more than 24,000 times according to Google Scholar (as of August 2021), and the translations into seven other languages, including in German (Hair et al., 2017), Italian (Hair et al., 2020), and Spanish (Hair et al., 2019). One of the book’s features that has likely contributed to its popularity is our strong focus on pedagogical elements, most notably our reliance on a single running case study and the commercial SmartPLS 3 software (Ringle, Wende, & Becker, 2015), which stands out due to its frictionless design, allowing novice researchers to quickly specify and estimate PLS path models (Memon et al., 2021; Sarstedt & Cheah, 2019).

Dynamic Capabilities and an ESG Strategy for Sustainable Management Performance

Article

Full-text available

May 2022

This research explores the dynamic capabilities required for firms to implement environmental, social, and governance (ESG) strategies, and investigates sustainable management performance that can be created based on them. By using dynamic capabilities theory, we integrate sustainable management and the ESG literature to suggest a research model and identify the factors that act as the catalysts achieving sustainability. The data used for the analysis were collected from 78 firms listed on the Korea Exchange (KRX) with assets totaling more than 2 trillion Korean won. In this study, the partial least squares structural equation model (PLS-SEM) is applied. We found that absorptive capability and adaptive capability significantly affect sustainable management performance through implementation of the ESG strategy as a mediating variable. In particular, a firm’s implementation of an ESG strategy is a significant determinant that impacts sustainable management performance. We also believe our model contributes to the current knowledge by filling several research gaps, and our findings offer valuable and practical implications not only for achieving sustainable growth but also for creation of competitive advantage.

Chez Panisse: Building an Open Innovation Ecosystem

Book

Jan 2014

Circular economy to enhance sustainability of small and medium sized enterprises

Chapter

Aug 2022

Enhancing sustainable development: Innovation ecosystem coopetition, environmental resource orchestration, and disruptive green innovation

Article

Jun 2022

Disruptive green innovation stands out in an important way to achieve corporate sustainable development. Although the general importance of innovation ecosystem has recently been emphasized, little research has considered the influence of innovation ecosystem coopetition on disruptive green innovation. Combining resource‐based view and resource orchestration theory, this study sheds light on the relationships among innovation ecosystem cooperation and competition, environmental resource orchestration, and disruptive green innovation under the moderating role of big data analytics capability. Using data collected from 295 manufacturing enterprises in China, the results show that both innovation ecosystem cooperation and competition have positive effects on environmental resource orchestration，and that environmental resource orchestration has a positive effect on disruptive green innovation. Furthermore, environmental resource orchestration is found to partially mediate the relationship between innovation ecosystem cooperation and disruptive green innovation, and to fully mediate the relationship between innovation ecosystem competition and disruptive green innovation. Moreover, we find that big data analytics capability has a moderating effect on the relationship between innovation ecosystem cooperation and environmental resource orchestration, whereas it does not moderate the relationship between innovation ecosystem competition and environmental resource orchestration. This study opens avenues for understanding the relationship between innovation ecosystem coopetition and disruptive green innovation, which enriches literature on both innovation ecosystem and green innovation. Likewise, this study has important implications for practitioners who attempt to promote market disruption and sustainable development with the help of ecosystems.

Structural relationships of a firm's green strategies for environmental performance: The roles of green supply chain management and green marketing innovation

Article

Jul 2022
J CLEAN PROD

Global climate sanctions are expected to force supply chain affiliates to reduce greenhouse gas and face trade distortions caused by carbon leakage. In this regard, this study examines how internal green activities such as green managerial innovation, green supply chain management, and green innovation facilitate firms to achieve environmental performance. Also, we endeavor to unveil the role of intellectual property rights and incorporate the mediating role of green supply chain management and the moderating role of green marketing innovation. Using the structural equation model technique, we examined hypotheses with 452 South Korean firms sampled through a web-based survey. Our results validated the direct effect of green managerial innovation and intellectual property right on green supply chain management, green supply chain management and intellectual property right on green innovation, and green innovation on environmental performance. In addition, we confirmed the significant mediating role of green supply chain management between intellectual property rights and green innovation and the moderating role of green marketing innovation between green innovation and environmental performance. These findings contribute to the literature on clean production and environmental performance by uncovering a firm's internal green strategies for resource utilization and identifying the contingent roles of green marketing innovation.

Digital transformation and sustainable performance: The moderating role of market turbulence

Article

Apr 2022
IND MARKET MANAG

Lixu Li

As digital technologies disrupt one sector after another, many companies are actively embracing digital transformation. However, the relationship between digital transformation and sustainable performance remains unclear. To fill this gap, based on an integrated perspective of dynamic capability and organizational inertia, this study examines the curvilinear relationships between digital transformation and economic and environmental dimensions of sustainable performance. Survey data from 223 Chinese companies articulate that although digital transformation fosters economic performance at an accelerating rate, it depicts an inverse U-shaped relationship with environmental performance. More interestingly, the accelerating rate of digital transformation on economic performance is quicker under low market turbulence. In contrast, when market turbulence is high, higher digital transformation is associated with worse environmental performance. This study contributes to the literature by providing new theoretical explanations for the inconsistent relationship between digital transformation and sustainable performance. This study also assists companies in re-evaluating their digital strategies.

Impact of Organisational Factors on the Circular Economy Practices and Sustainable Performance of Small and Medium-sized Enterprises in Vietnam

Article

Aug 2022
J BUS RES

Internal organisational factors have been identified as barriers to adopt circular economy (CE) practices in prior research. However, empirical evidence is limited to support this claim. Additionally, their impact on sustainable business performance, especially for the emerging economies and within the small and medium sized enterprises (SMEs) have not been studied adequately. This research bridges these knowledge gaps drawing on from CE, human resource management, innovation and sustainability literature to develop and validate a theoretical model that examines the relationships between organisational factors (leadership, innovation, culture, and skills) and their impact on adopting CE practices to enhance sustainable performance of SMEs. A survey was conducted among 205 SMEs’ employees in Vietnam, and responses were analysed using employing Structural Equation Modelling. Our findings reveal that organisational leadership will facilitate developing the culture and innovation capability to adopt CE practices through a ‘hub and spoke’ strategy for enhancing sustainable performance among the SMEs in Vietnam. In this vein, we recommend creating knowledge sharing strategies, collaborative and cooperative CE working groups within and between SMEs, and information systems capabilities to build sustainable business organisations.

Driving factors behind the development of China's green bond market

Article

Apr 2022
J CLEAN PROD

Green bonds have developed rapidly, over a short period, in China's capital market, making it the world's largest green bond market. However, there is little empirical literature on China's green bond market growth drivers. This paper uses structural equation models to explain the driving factors and mechanism of the top-down development model of China's green bond market. The findings indicate that the local economy and environmental governance impacts growth more in the green bond market, followed by the institutional environment. In contrast, policy support impacts were small and statistically insignificant. Meanwhile, the effects of the local economy and environmental governance are direct, and the institutional environment indirectly promotes economic development. These results suggest that the local economy and institutional and environmental governance are the main driving factors for China's green bond market's rapid development and the reasons for unbalanced regional distribution. Overall, the findings have practical implications for further promoting the coordinated development of the green bond market and building a green financial system.

Coopetition in business Ecosystems: The key role of absorptive capacity and supply chain agility

Article

Jul 2022
J BUS RES

This study aims to shed light on the mechanisms that enable firms to manage the contradictory logics of coopetition (i.e. simultaneous cooperation and competition) in business ecosystems to achieve superior performance. In particular, we examine the relationship between coopetition and performance through the indirect effects of absorptive capacity and supply chain agility. Primary survey data collected from 214 firms hosted in tech-cities is used to test four hypotheses through regression analysis with bootstrapping. Results do not support a direct, positive relationship between coopetition and firm performance. Rather, firms in business ecosystems gain crucial knowledge through coopetition that then positively influences absorptive capacity, which relates to improved supply chain agility and firm performance. To the best of our knowledge, this is the first paper to provide empirical evidence on the impact of coopetition on firm performance through indirect effects. A new validated scale for measuring coopetition is also provided. Article classification: Research paper.

Unpacking the sustainable performance in the business ecosystem: Coopetition strategy, open innovation, and digitalization capability

Abstract

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