Financial performance of firms with supply chains during the COVID-19 pandemic: the roles of dynamic capability and supply chain resilience

Abstract

PurposeThis study proposes an integrated model to explore the relationships between dynamic capability and supply chain resilience (SCRE) and the relationships' impacts on firms' financial performance with supply chains (FPwSC) during the coronavirus disease 2019 (COVID-19) pandemic.Design/methodology/approachBased on resource-based theory and knowledge-based theory, the dynamic capability is classified into resource-based dynamic capability (RBDC) and knowledge-based dynamic capability (KBDC). The study collects 158 useable survey samples from manufacturers in Taiwan and analyzes the samples with the structural equation model.FindingsThe results show that knowledge is power; KBDC is crucial for FPwSC, SCRE and RBDC. In addition, SCRE mediates the relationship between KBDC and FPwSC. Finally, RBDC significantly suppresses FPwSC.Research limitations/implicationsFuture researchers could replicate this study in other industries and expand this to other countries to generalize the results.Practical implicationsA firm with KBDC can adopt and implement strategies that exploit its internal strengths to respond to environmental opportunities, overcome internal weaknesses and mitigate external threats. Furthermore, a firm should fully utilize SCRE with proactive and reactive strategies. Exercising a firm's KBDC could facilitate SC collective intelligence to handle the risk of SC disruption and vice versa.Originality/valueThe study is the first to combine KBDC, RBDC and SCRE into an integrated model for FPwSC. Moreover, this study reveals that resilience relies on knowledge, not resources, as evidenced by SCRE being affected significantly by KBDC but not RBDC.