IDEAS home Printed from https://ideas.repec.org/a/plo/pone00/0304471.html
   My bibliography  Save this article

How dynamic capabilities enable Chinese SMEs to survive and thrive during COVID-19: Exploring the mediating role of business model innovation

Author

Listed:
  • Wenjun Huang
  • Takeyasu Ichikohji

Abstract

As a response to the damage caused by the spread of COVID-19, the Chinese government has implemented severe quarantine measures that have greatly affected the operational patterns of small and medium-sized enterprises (SMEs). This paper explores the critical role of dynamic capabilities (DCs) in helping Chinese SMEs manage crises, adjust their business strategies, and mitigate the uncertainty caused by the epidemic. Although the importance of DCs in promoting organizational resilience is well recognized, academic research on their specific contributions to business model innovation (BMI) and SME performance improvement during crises remains scarce. Our study fills this gap by pioneering the development and empirical testing of a microintegrated mediation model linking DCs, BMI and organizational performance. By surveying 257 Chinese SMEs severely affected by a pandemic, we verify our hypotheses using partial least squares structural equation modeling (PLS-SEM). Our results strongly show a positive relationship between DCs and BMI and SME performance. In addition, we found that BMI plays a partial mediating role in the interrelationship between DCs and SME performance. Our findings clarify the critical role of BMI as a channel through which SMEs’ DCs can be transformed into higher performance in the face of sudden crises. Thus, our results not only contribute to the broader discussion of strategic management and organizational theory but also provide theoretical and practical insights into the mechanisms by which SMEs can increase their flexibility and resilience in a crisis. Thus, our results not only contribute to the broader discussion of strategic management and organizational theory but also provide theoretical and practical insights into the mechanisms by which SMEs can increase their flexibility and resilience in a crisis. Importantly, this study suggests policy and market strategies that can support SMEs in leveraging DCs and BMI for sustained performance, thereby contributing valuable insights for policymakers and business leaders aiming to fortify economic stability and growth in the face of global health emergencies.

Suggested Citation

  • Wenjun Huang & Takeyasu Ichikohji, 2024. "How dynamic capabilities enable Chinese SMEs to survive and thrive during COVID-19: Exploring the mediating role of business model innovation," PLOS ONE, Public Library of Science, vol. 19(5), pages 1-26, May.
  • Handle: RePEc:plo:pone00:0304471
    DOI: 10.1371/journal.pone.0304471
    as

    Download full text from publisher

    File URL: https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0304471
    Download Restriction: no

    File URL: https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0304471&type=printable
    Download Restriction: no

    File URL: https://libkey.io/10.1371/journal.pone.0304471?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Sascha Kraus & Matthias Filser & Kaisu Puumalainen & Norbert Kailer & Selina Thurner, 2020. "Business Model Innovation: A Systematic Literature Review," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 17(06), pages 1-20, October.
    2. Samuel Ogbeibu & Charbel Jose Chiappetta Jabbour & James Gaskin & Abdelhak Senadjki & Mathew Hughes, 2021. "Leveraging STARA competencies and green creativity to boost green organisational innovative evidence: A praxis for sustainable development," Business Strategy and the Environment, Wiley Blackwell, vol. 30(5), pages 2421-2440, July.
    3. Akhtaruzzaman, Md & Boubaker, Sabri & Sensoy, Ahmet, 2021. "Financial contagion during COVID–19 crisis," Finance Research Letters, Elsevier, vol. 38(C).
    4. Teece, David J., 2020. "Hand in Glove: Open Innovation and the Dynamic Capabilities Framework," Strategic Management Review, now publishers, vol. 1(2), pages 233-253, June.
    5. David J. Teece & Gary Pisano & Amy Shuen, 1997. "Dynamic capabilities and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 509-533, August.
    6. Bouwman, Harry & Nikou, Shahrokh & de Reuver, Mark, 2019. "Digitalization, business models, and SMEs: How do business model innovation practices improve performance of digitalizing SMEs?," Telecommunications Policy, Elsevier, vol. 43(9).
    7. Ekom Etim Akpan & Eluka Johnny & Waribugo Sylva, 2022. "Dynamic Capabilities and Organizational Resilience of Manufacturing Firms in Nigeria," Vision, , vol. 26(1), pages 48-64, March.
    8. Tino Woschke & Heiko Haase & Jan Kratzer, 2017. "Resource scarcity in SMEs: effects on incremental and radical innovations," Management Research Review, Emerald Group Publishing Limited, vol. 40(2), pages 195-217, February.
    9. Herhausen, Dennis, 2016. "Unfolding the ambidextrous effects of proactive and responsive market orientation," Journal of Business Research, Elsevier, vol. 69(7), pages 2585-2593.
    10. Ameet Kumar Banerjee, 2022. "You sneeze, and the markets are paranoid: the fear, uncertainty and distress sentiments impact of the COVID-19 pandemic on the stock–bond correlation," Journal of Risk Finance, Emerald Group Publishing Limited, vol. 23(5), pages 652-668, September.
    11. Latifi, Mohammad-Ali & Nikou, Shahrokh & Bouwman, Harry, 2021. "Business model innovation and firm performance: Exploring causal mechanisms in SMEs," Technovation, Elsevier, vol. 107(C).
    12. Cynthia A. Lengnick‐Hall & James A. Wolff, 1999. "Similarities and contradictions in the core logic of three strategy research streams," Strategic Management Journal, Wiley Blackwell, vol. 20(12), pages 1109-1132, December.
    13. Forés, Beatriz & Camisón, César, 2016. "Does incremental and radical innovation performance depend on different types of knowledge accumulation capabilities and organizational size?," Journal of Business Research, Elsevier, vol. 69(2), pages 831-848.
    14. Dahles, Heidi & Susilowati, Titi Prabawa, 2015. "Business resilience in times of growth and crisis," Annals of Tourism Research, Elsevier, vol. 51(C), pages 34-50.
    15. Guia Bianchi & Francesco Testa & Sara Tessitore & Fabio Iraldo, 2022. "How to embed environmental sustainability: The role of dynamic capabilities and managerial approaches in a life cycle management perspective," Business Strategy and the Environment, Wiley Blackwell, vol. 31(1), pages 312-325, January.
    16. Wu, Qihan & Yan, Dong & Umair, Muhammad, 2023. "Assessing the role of competitive intelligence and practices of dynamic capabilities in business accommodation of SMEs," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 1103-1114.
    17. Tino Woschke & Heiko Haase & Jan Kratzer, 2017. "Resource scarcity in SMEs: effects on incremental and radical innovations," Management Research Review, Emerald Group Publishing Limited, vol. 40(2), pages 195-217, February.
    18. Banerjee, Ameet Kumar, 2021. "Futures market and the contagion effect of COVID-19 syndrome," Finance Research Letters, Elsevier, vol. 43(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Soluk, Jonas & Decker-Lange, Carolin & Hack, Andreas, 2023. "Small steps for the big hit: A dynamic capabilities perspective on business networks and non-disruptive digital technologies in SMEs," Technological Forecasting and Social Change, Elsevier, vol. 191(C).
    2. Mostafiz, Md Imtiaz & Ahmed, Farhad Uddin & Tardios, Janja & Hughes, Paul & Tarba, Shlomo Y., 2025. "Configuring international entrepreneurial orientation and dynamic internationalization capability to predict international performance," International Business Review, Elsevier, vol. 34(2).
    3. Samuel Ogbeibu & Jude Emelifeonwu & Vijay Pereira & Raphael Oseghale & James Gaskin & Uthayasankar Sivarajah & Angappa Gunasekaran, 2024. "Demystifying the roles of organisational smart technology, artificial intelligence, robotics and algorithms capability: A strategy for green human resource management and environmental sustainability," Business Strategy and the Environment, Wiley Blackwell, vol. 33(2), pages 369-388, February.
    4. Banerjee, Ameet Kumar & Akhtaruzzaman, Md & Sensoy, Ahmet & Goodell, John W., 2024. "Volatility spillovers and hedging strategies between impact investing and agricultural commodities," International Review of Financial Analysis, Elsevier, vol. 94(C).
    5. Baier-Fuentes, Hugo & Andrade-Valbuena, Nelson A. & Huertas Gonzalez-Serrano, Maria & Gaviria-Marin, Magaly, 2023. "Bricolage as an effective tool for the survival of owner-managed SMEs during crises," Journal of Business Research, Elsevier, vol. 157(C).
    6. Sjödin, David & Liljeborg, Alexander & Mutter, Sermed, 2024. "Conceptualizing ecosystem management capabilities: Managing the ecosystem-organization interface," Technological Forecasting and Social Change, Elsevier, vol. 200(C).
    7. Adesuwa Omorede & Juan Francisco Prados-Castillo & Amalia Cristina Casas-Jurado, 2025. "Researching entrepreneurship using big data: implementation, benefits, and challenges," International Entrepreneurship and Management Journal, Springer, vol. 21(1), pages 1-22, December.
    8. Bouguerra, Abderaouf & Cakir, M. Selim & Rajwani, Tazeeb & Mellahi, Kamel & Tatoglu, Ekrem, 2025. "MNEs engagement with environmental sustainability in an emerging economy: Do dynamic capabilities and entrepreneurial orientation matter?," International Business Review, Elsevier, vol. 34(2).
    9. David B. Audretsch & Maribel Guerrero, 2023. "Is ambidexterity the missing link between entrepreneurship, management, and innovation?," The Journal of Technology Transfer, Springer, vol. 48(6), pages 1891-1918, December.
    10. Belitski, Maksmi & Mariani, Marcello, 2023. "The effect of knowledge collaboration on business model reconfiguration," European Management Journal, Elsevier, vol. 41(2), pages 223-235.
    11. Jeandri Robertson, 2020. "Competition in Knowledge Ecosystems: A Theory Elaboration Approach Using a Case Study," Sustainability, MDPI, vol. 12(18), pages 1-19, September.
    12. Bhattarai, Charan Raj & Kwong, Caleb C.Y. & Tasavori, Misagh, 2019. "Market orientation, market disruptiveness capability and social enterprise performance: An empirical study from the United Kingdom," Journal of Business Research, Elsevier, vol. 96(C), pages 47-60.
    13. Úbeda-García, Mercedes & Claver-Cortés, Enrique & Marco-Lajara, Bartolomé & Zaragoza-Sáez, Patrocinio, 2020. "Toward a dynamic construction of organizational ambidexterity: Exploring the synergies between structural differentiation, organizational context, and interorganizational relations," Journal of Business Research, Elsevier, vol. 112(C), pages 363-372.
    14. Miguel Pina e Cunha, 2005. "Bricolage in organizations," Nova SBE Working Paper Series wp474, Universidade Nova de Lisboa, Nova School of Business and Economics.
    15. Ito, Kakeru & Yoshiba, Toshinao, 2025. "Dynamic asymmetric tail dependence structure among multi-asset classes for portfolio management: Dynamic skew-t copula approach," International Review of Economics & Finance, Elsevier, vol. 97(C).
    16. Liu, Zuoming, 2020. "Unraveling the complex relationship between environmental and financial performance ─── A multilevel longitudinal analysis," International Journal of Production Economics, Elsevier, vol. 219(C), pages 328-340.
    17. Banerjee, Ameet Kumar & Dionisio, Andreia & Sensoy, Ahmet & Goodell, John W., 2024. "Extant linkages between Shanghai crude oil and US energy futures: Insights from spillovers of higher-order moments," Energy Economics, Elsevier, vol. 136(C).
    18. Ameet Kumar Banerjee & HK Pradhan, 2024. "Did Precious Metals Serve as Hedge and Safe-haven Alternatives to Equity During the COVID-19 Pandemic: New Insights Using a Copula-based Approach," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 23(4), pages 399-423, December.
    19. Venugopal Gopalakrishna‐Remani & Kyung‐Ah ( Kay) Byun & D. Harold Doty, 2022. "The impact of employees' perceptions about top management engagement on sustainability development efforts and firm performance," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 2964-2977, November.
    20. Hamed Ali Al Azzani & Normal Mat Jusoh & Aamir Abbas, 2024. "Market and Supply Chain Orientation; Dynamic Capabilities Leading to Innovation and Operational Capabilities," SAGE Open, , vol. 14(2), pages 21582440241, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:plo:pone00:0304471. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: plosone (email available below). General contact details of provider: https://journals.plos.org/plosone/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.