From digital knowledge strategy to sustainable performance: evidence of a dynamic capabilities pathway in developed vs developing economies

Purpose This study aims to examine digital knowledge strategy through deliberate and emergent planning approaches to build dynamic capabilities (DCs) for innovation and achieve sustainable performance (SUP) gains amid environmental dynamism (ED) in developing and developed economies, particularly under regulatory obligations imposed by mandatory compliance regimes. Design/methodology/approach This study adopts a quantitative research design, gathering data from Brazilian and English firms in the variety sector. A total of 302 responses were obtained and analyzed using structural equation modeling. Findings This study reveals that digital knowledge strategy influences sustainable through DCs in sensing, seizing and transforming into prosperous and emerging economies. The post hoc analysis, using generalized additive models, shows that firms with high levels of digital knowledge strategy to achieve higher DCs and SUP under ED in both countries. However, under these conditions, digital knowledge strategy, innovation-related DCs and SUP appear more developed in the UK than in Brazil. Practical implications This study contributes to practitioners’ understanding of how digital knowledge strategy can help firms achieve better performance outcomes across diverse contexts, reinforcing the importance of investing in digital tools to enable effective strategizing. Originality/value As the first empirical evidence, to the best of the authors’ knowledge, validating the proposed research model, this study suggests that digital knowledge strategy plays an essential role in enhancing SUP through DCs in innovation under ED in prosperous and emerging economies, while also opening pathways for future knowledge management research on the operationalization of digital technologies in knowledge strategy.