Developing a measurement scale for dynamic capabilities, business model innovation, and business performance: Evidence from Vietnamese enterprises

Abstract

In today’s rapidly changing business environment, firms must develop dynamic capabilities (DC) to sustain competitive advantage through business model innovation (BMI) and improved performance. Despite extensive research on DC, there is a lack of a rigorously validated measurement scale, particularly in the context of Vietnamese enterprises. This study aims to develop and validate a comprehensive measurement scale for DC and BMI in small and medium-sized enterprises (SMEs) in Binh Duong, Vietnam. Using the dynamic capabilities framework, the study conceptualizes DC through five dimensions: absorptive capability, technological capability, adaptive capability, innovative capability, and knowledge management capability. Exploratory Factor Analysis (EFA) is employed to refine and validate the scale, ensuring its reliability and applicability. Unlike previous studies that assess the impact of DC on firm performance, this research focuses on measurement scale development, offering a systematic tool for business leaders, policymakers, and researchers. The findings contribute to both theoretical and practical understandings of innovation-driven strategies, facilitating better decision-making and strategic planning in emerging economies. This study lays the foundation for future empirical research by providing a validated instrument to assess dynamic capabilities and their role in driving business model innovation and firm performance.