Title: Dynamic capabilities for socio-economical sustainability management: evidence from international clothing firms in Ethiopia industrial zones

Authors: Fitsum Getachew Bayu; Eshetie Berhan; Frank Ebinger

Addresses: School of Mechanical and Industrial Engineering, Addis Ababa Institute of Technology, Addis Ababa University, 380 Addis Ababa, Ethiopia ' School of Mechanical and Industrial Engineering, Addis Ababa Institute of Technology, Addis Ababa University, 380 Addis Ababa, Ethiopia ' Department of Sustainability-Oriented Innovations and Transformation Management, Nuremberg Campus of Technology (NCT), Technische Hochschule Nuremberg, 90429 Nuremberg, Germany

Abstract: This paper introduces the strategic micro-foundational construct of dynamic capabilities and explores their causal relationship with socio-economical sustainability variables by considering relational capabilities and focusing on the external environment as a mediating factor. The study used a case study approach targeting export-oriented international clothing firms investing in the industrial zones of Ethiopia. Primary data were gathered for the measurement variables and presented with descriptive and multivariate statistics. Moreover, a system dynamics model was applied to model the dynamic relationship and understand the dynamic capability growth for socio-economical sustainability. The findings show that the firm's accumulated operational capabilities have not significantly influenced socio-economical sustainability. However, a firm's dynamic capabilities to sense, seize, and reconfigure sustainability requirements from the external environment through relational capabilities were more influential. In this regard, it was understood that the firms have a good opportunity to adopt a dynamic capability-driven strategic management approach for sustainable development.

Keywords: dynamic capabilities; social sustainability; economic sustainability; Ethiopia industrial zones; international clothing firms; Ethiopia.

DOI: 10.1504/IJBEX.2026.153534

International Journal of Business Excellence, 2026 Vol.38 No.4, pp.521 - 541

Received: 04 Jun 2021
Accepted: 26 Jun 2022
Published online: 13 May 2026 *

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