Alliance orientation and radical innovation of new ventures in emerging economies: The role of organizational agility and digital technology adoption

Abstract

New ventures in emerging economies often face substantial challenges in pursuing radical innovation, particularly under conditions of resource scarcity and environmental volatility. Integrating dynamic capability theory with the capability hierarchy perspective, this study examines the relationship between alliance orientation and radical innovation, considering organizational agility as a potential explanatory pathway and digital technology adoption as a boundary condition. We further articulate a capability hierarchy framework that conceptually links lower-order capabilities, higher-order capabilities, and radical innovation within Chinese new ventures. Based on 295 valid survey responses from Chinese new ventures, the results suggest that the three dimensions of alliance orientation relate to radical innovation in distinct ways. Alliance scanning and alliance learning show inverted U-shaped relationships with radical innovation, whereas alliance coordination shows a positive linear relationship. Organizational agility serves as an explanatory pathway that helps explain how these alliance-oriented capabilities relate to innovative outcomes, and this relationship appears stronger at higher levels of digital technology adoption. In addition, fuzzy-set qualitative comparative analysis (fsQCA) identifies three equifinal configurations associated with high radical innovation, highlighting the configurational complexity of capability combinations in emerging-market settings. Overall, the study contributes contextual insights to capability hierarchy research and enriches understanding of how alliance-related capabilities are associated with radical innovation in Chinese new ventures.