Purpose: Existing innovation frameworks suggest that manufacturing firms have traditionally developed a complementary model of technological innovations comprising process and product innovations (e.g. Oslo Manual). This article presents digital service innovation as a novel form of technological innovation that is capable of enhancing the performance of firms in certain manufacturing industries.Design/methodology/approach: Drawing on technological innovation and digital servitization fields of research, this study argues that digital service innovation, in manufacturing contexts, complements traditional sources of technological innovation, so increasing the profit margins of firms. This effect is significant in industries characterized by business-to-business contexts, high presence of link channels and long product life spans (e.g. manufacturing and computer-based industries). Predictions are tested on a unique sample of 423 Spanish manufacturing firms using parametric (t-test) and nonparametric (fuzzy-set qualitative comparative analysis, fsQCA) approaches.Findings: The results of this analysis show that a necessary condition so that manufacturing firms can increase profits is the deployment of simultaneous process and product innovations. It also reveals that optimal configuration requires that digital service innovation be undertaken, particularly in machinery and computer-based manufacturing industries. Hence, all three sources of technological innovation are brought together in order to reach the highest levels of company performance. The evidence suggests that technological innovation and digital servitization are closely interrelated in highly innovative manufacturing contexts.Originality/value: This study's originality and value reside in the fact that it reveals the existence of firms incorporating digital service innovation – a new, technological innovation dimension that challenges existing innovation frameworks – to complement traditional technological innovation sources, namely process and product innovation. Moreover, the study conceptualizes and empirically tests the value-adding role of digital services in firms' technological innovation portfolio.

The growing industrial concern about sustainability challenges has driven vehicle and auto parts manufacturers to adopt service capabilities as a way to maintain competitiveness in compliance with environmental regulations. As a result, automakers have progressively integrated digital and green service initiatives to support operations and address environmental issues effectively. The present study examined the effect of digital and green servitization on the firm’s productivity. To test their effect quantitatively, this study used the ORBIS database to construct a multi-country sample containing 228 companies in the automotive industry. Our findings indicate that implementation of digital and green servitization is positively associated with higher productivity outcomes once the two forms of servitization coexist and operate jointly. Moreover, the results of the study underscore the importance of establishing a successional pathway of implementation priorities. Our evidence suggests that firms willing to offer green services should consider offering digital services first, as this is the only way to obtain productivity gains from green servitization.

Purpose: Global value chains (GVC) incorporate internationally fragmented sources of knowledge so as to increase global competitiveness and performance. This paper sheds light on the role of Industry 4.0 technological capabilities in facilitating knowledge access from international linkages and improving firm productivity.Design/methodology/approach: Drawing on organizational learning research, the present study argues that the relationship between GVC breadth, analyzed in respect to the geographical fragmentation of production facilities and productivity follows an inverted U-shaped pattern that can be explained by the interplay between external knowledge access and the coordination costs associated with GVC breadth. We test our predictions using a purpose-built survey that was carried out among a sample of 426 Spanish manufacturing firms.Findings: Our results indicate that organizations adhering to a traditional manufacturing system are able to benefit from fewer transnational relationships (concretely 11 foreign facilities) in the search for productivity improvements. This can be largely attributed to the marginal value of the knowledge accessed and the costs of coordinating international counterparts' production and knowledge transfer. However, our study reveals that the adoption of Industry 4.0 technologies has the potential to broaden optimal GVC breadth, in terms of the number of linkages to interrelate with (concretely 131 foreign facilities) so as to obtain productivity gains while mitigating the complexities associated with coordination.Originality/value: The study unveils that Industry 4.0 technologies enable management of broader GVC breadth, facilitating knowledge access and counteracting coordination costs from international counterparts.

Purpose: The implementation of Smart Manufacturing (SM) is deemed a key enabler in the enhancement of manufacturing competitiveness and performance. Nevertheless, SM's repercussion on consumer perceptions and the contextualization of SM's performance-enhancement effects remain undetermined and have yet to be clarified. This study analyzes the effect of SM on operational and customer performance. Moreover, this study explores how these relationships change depending on a firm's geography of production (i.e. national/local vs transnational operations) and the relational arrangement adopted (i.e. service-oriented vs transaction-oriented manufacturers).Design/methodology/approach: This research surveys 351 Spanish manufacturing firms operating in an SM environment. The theoretical framework comprises a Multiple-Indicators Multiple-Causes (MIMIC) model and is tested using a Generalized Structural Equations Model.Findings: The results obtained substantiate the positive effect of SM implementation on both of the performance measures analyzed (i.e. operational and customer focused). Moreover, the study reveals that while geography of production moderates the effect on a firm's operational performance, relational arrangement also does so in terms of customer performance.Originality/value: This research clearly differentiates the benefits of SM depending on business context. In this regard, transnational production firms tend to gain in operational performance while service-oriented manufacturers gain in customer performance.