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Purpose Transformative digital technologies and its socio-legal impacts are increasing the rate at which companies change their business interaction architectures from dyadic relationships to ecosystemic value creation. While Industry 4.0 bundles (comprising of Internet of Things, artificial intelligence and blockchain) provide new ways of creating business value, the mechanisms by which the integrated Trust-Tech Capabilities of these bundles create Socio-legal Ecosystem Resilience have yet to be theorized. This study will fill this “black box” by studying the serial mediating effects of Algorithmic Trust, Platform Governance Effectiveness, Interfirm Knowledge Sharing and Value Co-creation in the business and law context. Design/methodology/approach The study draws upon the theories of Dynamic Capabilities Theory and Relational View in business law context. The study uses a census method to obtain quantitative data from 300 knowledge-based firms located within high-tech science parks. To evaluate the complex socio-legal higher order model, the study used partial least squares structural equation modeling to examine both mediation and moderation effects. Findings The findings provided a theoretical and socio-legal contribution referred to as “Tech-Trust Isomorphism,” where Transformative Technological Capability (TTC) has a nearly perfect causal relationship with Algorithmic Trust, providing empirical validation of the “Code is Law” paradigm in Automated Systems. An important finding emerged concerning governance; although TTC increases Platform Governance Effectiveness, governance operates merely as a “Hygiene Factor” that enables knowledge sharing but does not drive Value Co-creation. Rather, resilience occurs via a serial pathway where technology creates social and legal trust, and trust creates the co-creation required for adaptability. In addition, Ethical/Data Governance increased the translation of technology into trust while Opportunism acted as a “dark side” moderator to decrease the conversion of socio-legal trust into resilience. Originality/value This research challenged the long-held dichotomy of technological and relational resources from Code is Law paradigm perspective. In addition, it provides an exact formula for achieving resilience through two types of law and governance; (a) governance (as a safety measure) and (b) algorithmic trust (as a motivational driver) and provides actionable guidelines for orchestrating socio-legal resilience in turbulent environments.
Ghafary et al. (Thu,) studied this question.