Digital innovation network embedding and firm innovation resilience from the perspective of knowledge-based dynamic capability

Abstract The VUCA (volatile, uncertain, complex, and ambiguous) era has imposed unprecedented challenges on firm innovation. This study constructs a theoretical framework of ‘network embedding—knowledge-based dynamic capability—innovation resilience’ to explore how embedding in digital innovation networks affects firm innovation resilience. Using cooperative digital invention patent data to construct digital innovation networks and drawing on panel data of Chinese A-share listed firms from 2012 to 2023, we find that: (1) both structural and relational embedding are significantly positively associated with firm innovation resilience; (2) knowledge-based dynamic capability (acquisition, integration, and reconfiguration) mediates this relationship, with bootstrapped confidence intervals confirming significant indirect effects; (3) the enhancing effect is stronger for firms with digitally-savvy executives, non-high-tech firms, and during economic downturns, with Chow tests verifying significant inter-group differences. Endogeneity checks using instrumental variables and Heckman two-stage methods support the robustness of these findings. This study provides empirical evidence for fostering innovation resilience in the context of digitization and openness.