When does strategic agility matter more? Absorptive capacity as a moderator of business model innovation

Abstract

Background: State-owned logistics enterprises often struggle to convert resource advantages and digital transformation initiatives into superior performance. Prior research links strategic agility to business model innovation (BMI) and firm performance (FP), but less is known about when agility becomes more performance-relevant in regulated and bureaucratic settings.
Aim: This study examines whether BMI mediates the relationship between strategic agility and FP and whether absorptive capacity strengthens the relationship between strategic agility and BMI.
Setting: The study focuses on Indonesian state-owned logistics enterprises.
Method: A quantitative approach was employed using survey data from managerial-level respondents (n = 427). Partial least squares structural equation modelling was employed to analyse the proposed relationships.
Results: Strategic agility was positively associated with BMI and FP, and BMI partially mediated the relationship between agility and performance. Absorptive capacity significantly strengthened the association between strategic agility and BMI although the moderation effect was small. These findings indicate that agility is more strongly linked to business model renewal when firms possess stronger knowledge-processing capability.
Conclusion: Strategic agility is not a self-sufficient performance mechanism. Its performance relevance depends on whether agile responses are translated into BMI and supported by absorptive capacity.
Contribution: This study extends dynamic capability theory by positioning BMI as a value-conversion mechanism and absorptive capacity as an internal boundary condition in state-owned logistics enterprises.