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Aim/Purpose: This study analyzes the mechanism of Internet capability (IC) driving knowledge creation performance (KCP). We consider the mediating role of strategic flexibility and the moderating role of informatization density.Background: The key to achieving KCP for firms is to transform knowledge created into new products or services and to realize the economic benefits. However, the research has not paid enough attention to firms’ KCP. Based on dynamic capability theory, this study empirically reveals how firms drive KCP through Internet capability.Methodology: The study uses survey data from 399 organizations in China. Through structural equation modeling, this study assesses the relationship between Internet capability, strategic flexibility, and KCP and uses hierarchical regression to test the moderating role of informatization density.Contribution: First, this study expands research on knowledge creation and focuses on the further achievement of knowledge creation performance. The study also enriches the exploration of KCP in the Internet context and deepens the research on the internal mechanism by which Internet capability influences KCP. Second, this study highlights the important role of informatization density in the Internet context and expands the research on the impact of external factors on the internal mechanism.Findings: First, Internet capability has a significantly positive effect on both strategic flexibility and KCP. Furthermore, Internet capability directly impacts strategic flexibility, yet it affects KCP both directly and indirectly through strategic flexibility, which confirms that strategic flexibility is a partial mediator in the relationship between Internet capability and KCP. Second, strategic flexibility positively influences KCP. Third, informatization density has a significant moderating effect on the relationship between Internet capability and KCP.Recommendations for Practitioners: The results indicate that firms should consider the importance of Internet capability and strategic flexibility for KCP in the Internet context. This study also provides a theoretical basis that could guide the Chinese government’s informatization construction of the industrial chain.Recommendation for Researchers: Researchers could further explore the role of other mediator variables (e.g., business process management, organizational agility) and consider the role of other moderator variables (e.g., resource commitment, learning orientation).Impact on Society: This study provides a reference for enterprises with similar cultural backgrounds in using Internet capability to enhance their competitive advantage.Future Research: Future research could collect data from various countries and regions to test the research model and conduct longitudinal studies to increase the robustness of the conclusions.

The Mechanism of Internet Capability Driving Knowledge Creation Performance: The Effects of Strategic Flexibility and Informatization Density