Causal relationship between supply chain dynamic capabilities, technological innovation, and operational performance

The aim of this study is to empirically examine the impact of supply chain dynamic capabilities on operational performance, and the mediating effect of technological innovation between dynamic capabilities and operational performance. This study is based on empirical data collected from a survey of 206 small- and medium-size firms in Korea. Structural equation modeling is used to test the research questions. The results show that supply chain dynamic capabilities positively influence technological innovation and operational performance of an enterprise. Additionally, structural equation analyses reveal that technological innovation plays a role as a partial mediator of the relationship between supply chain dynamic capabilities and operational performance. In a dynamic and ever-changing environment, the enforcement of dynamic capabilities in a sustainable supply chain is important for the innovation of technology and the improvement of operational performance. Further investigation is required to understand the differences by industries, characteristics of enterprises, and positions in a supply chain.