Firm innovation and supply chain resilience: a dynamic capability perspective

This paper investigates whether firms that are more innovative are also more resilient to supply chain disruptions, and if so, what capabilities of innovative firms support the firms' resilience. We use the dynamic capability view to examine the relationship between firm innovation and a firm's response to supply chain disruptions. Our findings indicate that a firm with a more innovative environment would be more resilient to disruptions, because innovation, directly and indirectly, helps firms fortify capabilities that positively affect risk management capability. Using a systematic literature review, we show that innovation can enhance the capabilities of knowledge sharing, agility, and flexibility within a firm, and these capabilities in turn have a significant impact on enhancing resiliency. Therefore, we provide evidence for the importance of innovativeness in enhancing firm resilience to supply chain disruption. After identifying the relationship between a firm's resilience and its innovativeness, we develop a conceptual framework that demonstrates this relationship.