Dynamic Capabilities, Innovation, and Sustainable Competitive Advantage under Environmental Uncertainty in Textile Industry

Abstract

This study examined the relationship between dynamic capabilities and sustainable competitive advantage through technological and non-technological innovation under environmental uncertainty.  The proposed interactive model has been explained using the dynamic capabilities theory. Data were collected from 246 managers in the textile manufacturing industries in Pakistan through a two-point survey. The measurement model showed excellent psychometric qualities for all variable measures. Findings provide that dynamic capabilities have a significant positive relationship with sustainable competitive advantage mediated by technological and non-technological innovations in parallel and serial ways. Environmental uncertainty accelerated the positive impact of dynamic capabilities on both these forms of innovation, leading to sustainable competitive advantage. Findings emphasize the importance of dynamic capabilities in the manufacturing industry and support investment in developing such capabilities, which enhance industry innovation and competitiveness