Strategic Orientation of Digital Innovation Under Developer Social Dynamics and Environmental Uncertainty

Abstract

Digital innovation is central to firms’ competitive strategies, yet research remains fragmented on how such strategies emerge and how their configurations influence firm value. While prior work emphasizes top-down managerial intent, this dissertation introduces a bottom-up perspective by examining how developers’ external interactions shape firm-level strategic orientations and their performance consequences. Study 1 integrates the heterogeneous diffusion model with absorptive capacity theory to examine the formation of digital innovation strategies. Using a longitudinal dataset combining GitHub developer networks with USPTO blockchain patent data, it identifies four strategic orientations: Non-Engagement, Efficiency-Only, Comprehensiveness-Only, and Fully-Engaged. The findings show that developer network structures serve as distinct knowledge channels: role equivalence is associated with Efficiency-Only strategies through comparability-based learning, while infectiousness is associated with Fully-Engaged strategies through signal-based learning. Social cohesion, by contrast, is negatively associated with innovation engagement. These relationships are further conditioned by firm susceptibility and managerial technical expertise. Drawing on the resource-based view and contingency theory, Study 2 shows that innovation volume alone does not robustly explain firm value, whereas strategic orientations matter more consistently. Technological turbulence penalizes Efficiency-Only strategies, while competitive intensity weakens the premium associated with Fully-Engaged strategies. Taken together, this dissertation shows that the competitive value of digital innovation depends on how strategic orientations form, how capabilities are configured, and how they align with environmental conditions.