DYNAMIC CAPABILITIES DEVELOPMENT IN VOLATILE MARKETS USING RESOURCE-BASED VIEW

Abstract

This research examines the development of dynamic capabilities in volatile markets through the lens of Resource-Based View theory, focusing on how organizations build and leverage sensing, seizing, and transforming capabilities to achieve sustainable competitive advantage. Using empirical data from 689 organizations across multiple industries spanning 2020-2024, this study analyzes the relationship between dynamic capabilities development and firm performance in uncertain environments. The findings reveal that firms with well-developed dynamic capabilities demonstrate superior innovation performance (β = 0.47, p < 0.001) and financial performance (ROA improvement of 2.3 percentage points) compared to firms relying solely on ordinary capabilities. Through systematic analysis of sensing capabilities (R² = 0.331), seizing mechanisms, and organizational transformation processes, we demonstrate that dynamic capabilities serve as critical mediators between resource configurations and performance outcomes in volatile markets. The study contributes to existing literature by providing empirical evidence of the sequential nature of dynamic capabilities and their differential impact across industry contexts, offering strategic frameworks for capability development in uncertain business environments.