Asymmetric effects of digital innovation eco-embeddedness on service innovation: evidence from manufacturing firms

Purpose This study aims to examine the asymmetric effects of digital innovation eco-embeddedness (DIEE) on two types of service innovation—incremental service innovation (ISI) and radical service innovation (RSI)—in manufacturing firms, while exploring the moderating role of the top management team (TMT) cognitive diversity. Design/methodology/approach Grounded in the resource-based view, the study draws on survey data from 302 manufacturing firms. Hierarchical regression analyses are employed to test the influence of DIEE on ISI and RSI, as well as the moderating role of TMT cognitive diversity. Findings DIEE positively influences ISI, whereas it demonstrates an inverted U-shaped effect on RSI. Furthermore, TMT cognitive diversity enhances the positive impact of DIEE on ISI and amplifies the inverted U-shaped relationship between DIEE and RSI. Originality/value This study advances current knowledge by focusing on DIEE—a distinct yet underexplored subset of innovation ecosystems—and examining its differentiated impacts on ISI and RSI in manufacturing firms. It further contributes by empirically unpacking how TMT cognitive diversity shapes these relationships, thereby responding to recent calls for incorporating TMT attributes into research on service innovation within digital innovation ecosystems.