How do big data analytics capabilities and improvisational capabilities shape firm innovation?

Abstract

Big data analytics capabilities (BDAC) are essential for firms to gain competitive advantages, given its crucial role in facilitating digital innovation. However, practice demonstrates that 59 % of firms fail to reap the expected benefits of big data, thus falling into a "digital dilemma". This study aims to explore how BDAC and improvisational capabilities interact to shape firm innovation. To achieve this research objective, we collected survey data from 228 Chinese firms and employed symmetric (partial least squares structural equation model, PLS-SEM) and asymmetric (fuzzy-set qualitative comparative analysis, fsQCA) methods under the dual perspectives of contingency and configuration. The SEM results show that BDAC positively influences both radical and incremental innovation, with improvisational capabilities mediating the relationships. Additionally, the fsQCA results show that BDAC (including tangible capabilities, intangible capabilities, and human skills), improvisational capabilities, and environmental dynamism (including competitive intensity and technological turbulence) jointly drive radical and incremental innovation. Importantly, we identified both generalized and specialized configurations for radical and incremental innovation. These findings offer valuable insights for firms in developing strategies to address the digital dilemma.