Purpose Amid the swift advancement of the digital economy and the pervasive adoption of digital technologies, this study aims to explore how data element security governance (DataGov) influences the dynamic capabilities of enterprises, utilizing data from A-share listed firms in China between 2011 and 2023. Design/methodology/approach By employing text analysis of corporate annual reports, the study quantifies DataGov as the indicator of data element security governance. Findings The findings indicate that DataGov significantly enhances enterprises' innovation capabilities and absorptive capacities. However, within the Chinese context, it does not have a positive effect on adaptive capacity. Moreover, while Chinese enterprises often encounter challenges in achieving coordinated growth of dynamic capabilities, DataGov plays a vital role in fostering such coordination. Furthermore, environmental uncertainty amplifies the positive impact of DataGov on dynamic capabilities. The heterogeneity analysis reveals that DataGov consistently enhances dynamic capabilities across various contexts. However, its positive influence is particularly stronger in firms that are not data-intensive, with lower reputational standing, weaker internal controls, short-term managerial focus and operate in environments with lower degrees of market orientation. Originality/value The study is the first to examine the impact of data element security on enterprise dynamic capabilities, thus contributing to the literature on data governance's economic implications. It evaluates dynamic capabilities across three dimensions: innovation, absorptive capacity and adaptive capacity, and calculates a coupling coordination index to reflect the overall level of dynamic capabilities. It explores how DataGov influences dynamic capabilities under environmental uncertainty.
Tang et al. (Mon,) studied this question.