Dynamic Capabilities May Not Be Efficient: A Multiyear Econometric Analysis of Multiple Performance Dimensions Shows the Robust Absence of Systematic Relationships

Although dynamic capabilities (DCs) theoretically constitute the evolution of a firm’s capabilities, the research tends to examine this phenomenon from a static perspective. This paper presents a methodology for capturing dynamic capabilities to understand their longitudinal effect. An analysis of an eleven-year dynamic panel dataset reveals that the effects of dynamic capabilities on several different performance dimensions are predominantly null. The results show that sensing, seizing, and reconfiguration capabilities do not lead universally to superior outcomes, including technological intensity and environmental dynamism, and do not alter the firm’s situation. Notably, null effects were observed for both the general model and when firms were grouped according to different levels of technology intensity. These insights advance DC theory by highlighting the conditional and sometimes contradictory nature of capability‒performance relationships, offering practical guidance for managers navigating strategic investments in dynamic environments.