Process reference frameworks as institutional arrangements for digital service innovation

•We investigate to what extent the use of process reference frameworks influence the IS organization’s capabilities for digital service innovation.•We conduct a cross-sectional study in the Sweden, Denmark, Finland and Norway.•We find that process reference frameworks influence digital service innovation directly, and indirectly by stimulating a positive digital service climate and digital service co-creation.•We contribute by closing a gap in the literature regarding the nature of institutional arrangements for value co-creation and digital service innovation.•We contribute by revealing how process-oriented frameworks can stimulate organizational changes that increase the innovation capabilities and thus, the success of the IS organization.