Innovation-oriented dynamic capabilities of logistics service providers, dynamic resilience and firm performance during the COVID-19 pandemic

Purpose The purpose of this paper is to use a theoretical framework to investigate the relationships between different innovation-oriented dynamic capabilities, dynamic resilience and firm performance among logistics service providers (LSPs) and in-house logistics departments of industrial companies during the coronavirus disease 2019 (COVID-19) pandemic. Design/methodology/approach The conceptual theoretical framework relies on the dynamic capabilities framework (DCF) and the relational view (RV), which are rooted in the resource-based view (RBV). It is hypothesized that the dynamic capability to innovate reinforces the dynamic capability to adapt and to recover in highly dynamic and vulnerable environments during the pandemic. This allows LSPs to successfully create new services and respond to the changing market circumstances in terms of logistics service quality (LSQ) and firm performance. Data were collected from 83 LSPs and 30 in-house logistics departments via an online survey. The study determined the general strength and direction of the relationships between latent variables. A correlation analysis was utilized to establish statistical significance of the results. Findings In this study, a range of innovation-oriented capabilities for achieving more dynamic resilience were bundled in a conceptual framework and were found to be statistically significant for LSQ and firm performance. They are the capability to distribute new knowledge, to train employees effectively, to develop cross-functional collaboration within the firm, to develop inter-firm relationships with business partners on a long-term basis as well as to learn from rivals, and to pursue a win-win relationship with them. Research limitations/implications The results of the study do not imply that the identified capabilities are the only ones relevant to increasing dynamic resilience during the pandemic. In October 2020, the COVID-19 pandemic was at different stages in different countries, so that the level to which firms were affected varied, and although the data were collected during one month only, due to the high dynamics of the pandemic, data were collected during different stages of disruptions, even among respondents in the same country. This study was set in the context of COVID-19, and it could not be proved whether the conceptual framework is generalizable to other crises or particular industries, but it would be worthwhile to examine this in the future. Finally, it was not tested whether LSQ mediates the relationship between innovative capabilities and firm performance during the pandemic. Practical implications The results help managers with regard to their strategic and operational decisions in relation with COVID-19. These findings are useful for executives and logistics managers to improve these capabilities to gain a competitive advantage during pandemic and to find their strengths and weaknesses to develop critical capabilities for situations with a high turbulence and dynamic in their environment, and therefore provide a path for improvement. Originality/value This paper operationalizes a multi-theoretical conceptual framework in the context of logistics management (LM) and supply chain management (SCM). This conceptual framework was empirically tested.