Does adopting Industry 4.0 design principles lead to innovation performance? Moderated mediation effects of dynamic capabilities and environmental dynamism

This research examines the effects of Industry 4.0 design principles on innovation performance within a dynamic capabilities framework. It highlights the mediating and moderating roles of dynamic capabilities and environmental dynamism in the relationship between Industry 4.0 and innovation performance, thus providing a deeper understanding of this interaction. Empirical data from 202 firms in Turkey that are transitioning to or have already adapted to Industry 4.0 are analyzed using structural equation modeling (SEM) techniques, yielding important insights. Findings indicate that Industry 4.0 design principles significantly enhance innovation performance, with dynamic capabilities serving as a mediating variable in this process. Furthermore, this effect is amplified in contexts with high environmental dynamism. In conclusion, the study offers valuable insights that contribute to a deeper understanding of the critical role of Industry 4.0 implementations and dynamic capabilities in fostering innovation performance.