DO DYNAMIC CAPABILITIES FACILITATE BUSINESS MODEL INNOVATION IN SMALL AND MEDIUM-SIZED CHINESE FAMILY COMPANIES?

This study investigates whether small- and medium-sized enterprises (SMEs) under family influence (FI) can achieve business model innovation (BMI) through dynamic capabilities (DCs) as promoted by prior research. Overall, 259 small and medium-sized family firms in Southeastern China were examined and analysed using the partial least squares structural equation modelling (PLS-SEM) method. The findings showed a direct negative link between FI-DCs (sensing, seizing, and transforming capabilities), sensing capabilities-value capture, transforming capabilities-value proposition/value creation, and a positive link between seizing capabilities-value creation. Additionally, the negative moderation effect of environment dynamism was found between sensing capabilities-value capture, seizing capabilities-value creation, and transforming capabilities-value proposition. This research provides various new insights for practitioners and researchers in small and medium-sized family firms to achieve BMI through DCs. It develops an empirical, multi-dimensional hypothetical model from a micro perspective that includes the moderating role of the influencing relationship.