Innovation Ecosystem Engagement and Innovation Performance: The Roles of Dynamic Capabilities and Digital Maturity

In the digital era, innovation ecosystem engagement (IEE) has emerged as a critical strategic imperative for firms seeking to enhance their innovation performance. This study investigates the complex relationship between IEE and firm innovation performance (IP), examining the mediating role of dynamic capabilities (DC) and the moderating effect of organizational digital maturity (ODM). Drawing on resource-based view, dynamic capabilities theory, and innovation ecosystem theory, we developed a comprehensive theoretical model tested through structural equation modeling with data from 354 employees across 44 firms in technology-intensive industries in City M, China. Results reveal that IEE significantly enhances innovation performance through the development of dynamic capabilities, with this relationship being strengthened by higher levels of organizational digital maturity. Specifically, dynamic capabilities partially mediate the relationship between IEE and innovation performance (β = 0.35, p < 0.001), while organizational digital maturity significantly moderates the IEE-IP relationship (β = 0.15, p < 0.001). The model explains 42% of variance in dynamic capabilities and 56% of variance in innovation performance. These findings contribute to innovation management literature by integrating ecosystem, capability, and digital transformation perspectives, providing actionable insights for managers seeking to optimize their innovation strategies in digital contexts.