Dynamic technological capabilities in leading European R&D firms: a panel data analysis with structural equations

Abstract

The deployment of R&D-driven dynamic technological capabilities (DTCs) is related to firm performance and represents a critical point in global socio-economic development. This is an interesting topic for EU economic, political and business actors confronted with increasingly changing environments. This study analyzed the influence of DTCs on firm performance using a longitudinal approach based on a structural equation modelling technique with a panel dataset with 268 observations from a sample of 67 leading European firms in the Information and Communication Technology (ICT) industry. The results show that firm performance is positively influenced by the deployment of DTCs, and this effect is significant, at least in the subsequent year's performance. These results shed light on the latent learning effect in the development of R&D-driven DTCs in ICT firms.