Abstract
Digitalization is essential for supply chain (SC) systems to thrive in the extremely dynamic and competitive business environment of the present day. The purpose of this study is to examine the role and the importance of absorptive capacity (ACAP) on supply chain innovation performance (SCIP), mediated by digital capability (DCAP), supply chain resilience (SCR), supply chain agility (SCA), and digital innovation (DI). The study has been designed to empirically investigate the hypothesized relationships on a sample of 116 firms across industries in Saudi Arabia, using a partial least-squares-based structural equation model (PLS-SEM). Based on the findings, all the hypothesized paths are supported, justifying that ACAP positively and significantly impacts DCAP, SCA, and SCR. Moreover, SCA and SCR partially mediated the relationship between ACAP and SCIP. This study contributes to the resource-based view (RBV) and a dynamic capability (DC) theories by examining how the innovation of digital technologies affects SCIP, providing empirical support to the ACAP and SCIP interaction through numerous mediators to develop SCIP, from which also many practical implications emerged. For instance, especially in the wake of the COVID-19 pandemic, businesses must improve their SC performance by building and integrating their ACAP to make the most of their digital-platform-based dynamic capabilities.