ABSTRACT
One of the most important concepts in strategic management in recent decades is dynamic capability. Dynamic capability has been a growing subject of many theoretical works to understand its concept; however, the lack of empirical work has always been felt since the concept of this field emerged. This chapter is organized in four sections so that it is possible to answer the question, “How do knowledge-based dynamic capabilities (KDC) contribute to a firm’s innovation performance?” In the first part, a KDC construct drawing on the knowledge-based view and dynamic capabilities perspectives are developed. The second part includes a theoretical model linking dynamic capabilities and network embeddedness. Statistical analysis based on a survey of 218 Iranian manufacturing firms using structural equation modeling with AMOS 7.0 is presented in the third part. Discussions and implications are given in the last section. The three steps of the research method are: first, clarifying the meaning and constructing dynamic capabilities from knowledge-based views; second, modeling and investigating the relationship between the KDC and innovation performance and eventually third, examining whether network embeddedness influenced knowledge-based dynamic capability.
