Knowledge management capability and sustainable competitive advantage: the mediating roles of organizational agility and innovation capability

Purpose Despite the recognized importance of knowledge management capability (KMC), it remains unclear how KMC affects sustainable competitive advantage (SCA). This study, based on the dynamic capabilities theory (DCT), explores how KMC affects SCA via organizational agility (OrgA) and innovation capability (IC). Design/methodology/approach To estimate and test the linkages outlined in the proposed model, structural equation modeling was used, based on survey data gathered from 242 small- and medium-sized manufacturing enterprises (SMEs) in Yemen. Findings The findings revealed that KMC positively affects SMEs' SCA; intriguingly, this effect is indirect as it is fully mediated by OrgA and IC. The results also demonstrated that the sequential path of KMC, IC, OrgA and SCA is far more significant for achieving SCA. Originality/value This study offers new insight by demonstrating the different mediating roles of OrgA and IC in the nexus between KMC and SCA. The results further emphasize that KMC reinforces SCA when SMEs leverage OrgA and IC. KMC is paramount, but it may not be sufficient to drive SCA if SMEs are unable to develop their OrgA and IC.