Organisational Capabilities for Sustainable Production

This study brings together insights from the research literatures on organisational capabilities and learning by doing to examine the response of Irish manufacturers to tightened environmental regulation in the 1990s. Using a fine-grained data set on firms’ technology and management practices, we test whether those practices over time resulted in the creation of learned ‘static’ capabilities, the ability to do certain kinds of things well in a given context. We also examine whether better-performing companies displayed higher levels of ‘dynamic’ capabilities – the capacity to change and adapt through integration of new information internally and from external sources – which we model as fixed during the period studied. Finally, we bring the first two research questions together by exploring whether firms with stronger dynamic capabilities were more likely to develop significant static ones within the time frame of interest.