What Drives Business Model Innovation? Exploring the Role of Knowledge Management Capability in Chinese Top-Ranking Innovative Enterprises

In current increasingly virtual business environment driven by information and digital technology, knowledge management (KM) capability is important for firm's innovative development. However, the research on the role of KM capability in business model innovation (BMI) is scarce. The study therefore explores the role from the perspective of dynamic capability theory (DCT). We empirically analyzed a sample of 115 Chinese top-ranking innovative enterprises by applying hierarchical regression analysis (HRA) and fuzzy-set qualitative comparative analysis (fsQCA). HRA results indicate that both internal and external KM capabilities positively affect BMI, but the effect of KM capability on different types of BMI is heterogeneous. In detail, KM capability promotes novelty-centered BMI, but inhibits efficiency-centered BMI. Furthermore, fsQCA results substantiate and expand the above findings by recognizing the antecedent conditions for high-level BMI. The study enriches the literature on KM and innovation as well as extends the explanatory power of DCT, providing new implications for firm managers to implement BMI.