Shepherd, Neil (2026) The AI Adoption Puzzle : An Integrative Model of Innovation Barriers, Enablers, and Digital Dynamic Capabilities. In: European Academy of Management Conference 2026, 2026-06-16 - 2026-06-19. (In Press)
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Abstract
Despite the transformative potential of Artificial Intelligence (AI), many firms struggle with its adoption, encountering significant barriers that stifle successful AI adoption in their innovation activities. However, existing technology adoption frameworks do not adequately explain why some firms can navigate these factors more effectively than others. This paper addresses this theoretical problem by developing and testing a theoretical model that integrates theory of digital dynamic capabilities. We posit that digital dynamic capabilities—a firm’s ability to digitally sense, digitally seize, and digitally transform—are the crucial organizational engine mediating the relationship between innovation factors and successful AI adoption in product / service innovation. We test our hypotheses using survey-based data collected from senior executives in 101 firms. The results show that digital dynamic capabilities play an important role in the AI adoption for innovation. Further, we find that in organizations with high innovation barriers innovation enablers lose their positive effect on digital dynamic capabilities. These findings allow us to gain a more holistic understanding of the AI adoption process and offer actionable insights for managers.