The Impact of Dynamic Capabilities on Firm Performance: A Longitudinal Study of Polish Manufacturing SMEs in the Era of Digital Transformation

Abstract

This study investigates the impact of dynamic capabilities on the performance of Polish manufacturing Small and Medium Enterprises (SMEs) within the context of ongoing digital transformation. We examine the mediating role of resource orchestration and absorptive capacity in translating dynamic capabilities into improved firm performance. Employing a longitudinal research design and analyzing data collected from a panel of Polish manufacturing SMEs over a five-year period, our findings reveal a significant positive relationship between dynamic capabilities and firm performance. Furthermore, we find that resource orchestration and absorptive capacity partially mediate this relationship, highlighting their importance in effectively deploying and leveraging internal and external resources for competitive advantage. The study contributes to the dynamic capabilities literature by providing empirical evidence from a transitional economy context and offering practical insights for SMEs navigating the challenges and opportunities of digital transformation.