Vol. 7, Issue 2, Part J (2025)

This study investigates the moderating effect of the business environment on the relationship between internal firm capabilities and competitive capability within the e-commerce sector. Drawing on the Technology-Organization-Environment (TOE) framework, the research examines how the external context qualifies the impact of Technological Capability and Organizational Capability on the Competitive Capability of e-commerce firms. The study is contextualized within the dynamic and rapidly evolving e-commerce market of Ho Chi Minh City, Vietnam. Utilizing quantitative data from a survey of 398 e-commerce firms, the hypotheses are tested using Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings reveal a significant asymmetric moderation effect: a favorable business environment positively amplifies the relationship between Technological Capability and Competitive Capability. However, the business environment does not exert a statistically significant moderating influence on the relationship between Organizational Capability and Competitive Capability. This research contributes to a more nuanced understanding of the TOE framework by demonstrating that the environment's role is not uniform across different types of internal capabilities. The findings offer targeted managerial implications for firms seeking to optimize capability development and strategic investments in the volatile context of emerging digital economies.