Dynamic capabilities, environmental dynamism, and competitive advantage: Evidence from China

Some scholars hold that dynamic capability is one of the key in searching for competitive advantage in strategic management. But there are still debates on the definition and effects of dynamic capabilities and the role of environmental dynamism. In the context of Chinese-like emerging economies, from a strategic process perspective, this study defines dynamic capability as the firmsʹ potential to systematically solve problems, formed by its propensity to sense opportunities and threats, to make timely decisions, and to implement strategic decisions and changes efficiently to ensure the right direction, and also explores the relationship between dynamic capabilities and competitive advantage and, the role environmental dynamism plays. With an empirical study of 217 enterprises in China, this study finds that dynamic capabilities do significantly positively affect competitive advantage, and environmental dynamism is a driver rather than a moderator.