Cross-laminated timber (CLT) has emerged as a climate-positive alternative to carbon-intensive building materials. However, its full potential remains underutilized, partly due to low levels of and poorly coordinated system-level resource optimization and innovation. Systemic development of CLT-based construction necessitates collaboration across industries. Although collaboration among specialized contractors and suppliers within single projects is supported by established industry practices, sustained inter-firm collaboration across multiple building projects remains under-investigated. While innovation ecosystem (IE) theory offers a promising framework for examining sustained co-innovation through shared value propositions, existing IE research in construction lacks a practice-based understanding of how organizations execute such collaboration across projects. This thesis addresses these gaps through a dual theoretical stance, combining IE theory to explain what needs to be coordinated across projects with dynamic capabilities (DC) theory to explain how firms develop and enact the necessary capabilities to do so. The thesis explores how firms in CLT-based construction collaborate to innovate and to create and capture value from innovation. The research builds on a six-year (2020-2025) longitudinal study on company networks within CLT-based construction, drawing on data from interviews, focus groups, observations and public documents, retrospectively covering events back to 2013. The findings show that the fragmented, project-based nature of construction requires IE actors to commercialize co-innovated products outside the ecosystem, making IE-specific capabilities for value capture central to competitive advantage. The shared value proposition enables co-innovation, observed in this study, as both building project-initiated and supplier-initiated processes. As products matured and the shared value proposition became established on the market, the focal firm began vertically integrating suppliers, consistent with the long product life cycles characteristic of the construction industry. The findings further describe IE coordination as a superimposed structure on conventional building project organization and activities. These superimposed mechanisms for co-innovation and value capture enable collaboration across multiple building projects through the sharing of resources and risks among IE actors. The thesis contextualizes IEs within project-based on-site construction and within industrialized house building (IHB). In doing so, it extends IE and IE life cycle theory by conceptualizing IEs as organizational structures superimposed on individual firms and temporary building project organizations. The thesis contributes to IHB theory by introducing an ecosystem perspective to industrialization and enriches construction management literature with a new perspective on network-based approaches to innovation. It also provides a methodological contribution to DC research in construction through a framework for analyzing DCs via their underlying situated practices, and to IE theory through a contextualized method for identifying ecosystems in the construction industry, as well as by testing a longitudinal process approach to analyzing temporal IE development. The managerial implications offer insights for managers in the construction industry seeking to realize the benefits of co-innovation, as well as guidance for policymakers aiming to support network-building among firms pursuing co-innovation and shared value propositions.